Big pharma answers tough questions at US drug pricing hearing
Pharmaceutical industry executives came under intense scrutiny at a Congressional hearing in the US as the debate over the spiralling cost of prescription drugs deepened.
Perhaps the most well-known name in this debate, Martin Shkreli, had been compelled to attend the hearing of the House Oversight and Government Reform Committee. But the former Turing chief executive refused to testify, pleading the Fifth Amendment on the advice of his newly-appointed legal team. Shkreli is currently facing fraud charges unrelated to drug pricing, and did not wish to reveal anything that might incriminate him in this case.
In his absence, Turing’s chief commercial officer Nancy Retzlaff bore the brunt of the committee members’ ire. She faced questions over to what extent the company was aware that raising the price of Daraprim could limit patient access and lead to inflated insurance premiums.
Maryland Representative Eugene Cummings also raised his voice at Retzlaff over Shkreli’s conduct, the 32-year old having appeared to smirk and roll his eyes at questions, before Tweeting shortly after leaving the hearing that the members were ‘imbeciles’.
Retzlaff insisted Daraprim was “priced far below its market value” when the company acquired it, and repeated the company’s established line that Turing intended to invest profits into research and development for alternative and more modern treatments for its target disease Toxoplasmosis, and other conditions.
Retzlaff added that she was comfortable with the price increase, as the company had provided patient access schemes and offered discounts and other measures to hospitals, including a smaller and cheaper bottle of Daraprim. She said the impact of Turing’s price increases on payers and patients would have been very small, as so few people use the drug, and described Turing as an ‘ethical pharmaceutical company’.
One representative did manage to land something of a blow on Retzlaff when asking about the measures to company took to avoid negative PR over Daraprim. She confirmed that Turing – like under-fire Valeant – had paid substantial amounts to PR firms for this purpose, and that a consultant has suggested the need to tie the increase to a tangible factor, which they suggested should be R&D costs.
Also in the firing line along with Retzlaff as something of a deputy was Valeant interim chief executive Howard Schiller, who was questioned in particular over what one member termed the company’s ‘exponential’ price increases for Isuprel and Nitropress.
The member questioned Valeant’s (and other companies’) claim that this is necessary to fund research and development, saying Schiller had already admitted there is a nominal spend for R&D on these drugs, so this claim should not apply to Isuprel and Nitropress.
Illinois Representative Ladda Tammy Duckworth also asked Schiller if he thought price increases had hit hospital budgets, to which Schiller replied in the affirmative, admitting that some of the company’s increases had been ‘too aggressive’. Duckworth also asked him how many other drugs the company had levied price increases on, to which Schiller replied he was unsure, as the company has a broad portfolio of some 1,800 products. “You have come to testify and you don’t even know how badly you’ve socked it to patients!” was the angry response.
Schiller said Valeant had frozen the prices of the majority of its drugs, and that the company “will change, will be a responsible corporate citizen.” He was contrite, adding: “We have made significant changes and will continue to do the right thing.”
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