Two American Democratic lawmakers, Elijah Cummings of Maryland and Peter Welch of Vermont, have called for pharmaceutical companies to reveal their strategies for the pricing of Multiple Sclerosis (MS) drugs.

The pair who sits on the House Committee on Oversight and Government Reform, have written to Bayer AG, Biogen, EMD Serono, Novartis AG, Sanofi, Teva and Roche Holding AG asking them to share documents on corporate profits, expenses, patient assistance programs and drug distribution systems.

“We are launching an in-depth investigation,” wrote Cummings and Welch in their letters. The disease MS, “often has devastating and disabling effects on patients,” they remarked.

How severe have the price hikes been?

According to a study following the trajectory of MS drug pricing by researchers from Oregon State University and published by the American Academy of Neurology, the prices for certain MS drugs have quadrupled since 2004.

The average annual cost for therapy per patient has risen from USD16,050 in 2004 to more than USD60,000 in 2015. Cumming and Welch said the companies had been “shadow pricing” or “setting new, higher prices in lockstep with competitors.”

In such a market, when one company introduces a new, highly expensive therapy, other companies raise their prices to match. This is augmented by the fact that there is no generic competition for the specific therapies that the companies offer.

Biogen, for example has increased the price of four of its drugs with Avonex seeing a price hike of 889%. Bayer, meanwhile has increased the price of its drug Betaseron by 691% since 1993.

A few of the pharmaceutical companies have responded

In response, Bayer has said that it is not responsible for the price patients pay at pharmacies. They say that insurers and in America, pharmacy-benefit managers are to blame. Pharmacy-benefit managers are third-party administrators of prescription drug programs for commercial health plans, self-insured employers and federal and state government employees.

A spokeswoman for Bayer, Sasha Damouni said, “We take a lot of care when pricing a medicine.” Teva’s spokeswoman has said the company is “analysing the request in-depth and plan to respond accordingly and fully cooperate with the Committee.”

Roche, too has agreed to work with the lawmakers and said they “do not intend to follow the pattern of aggressive price increases that are typical for MS medicines. We believe these are the best steps that we can take to help address the increasing cost of treating MS.”

Cummings and Welch have faced setbacks in their mission

On the other hand, the Pharmaceutical Research and Manufacturers of America, who represent all the companies written to except for Roche, have pushed back against the investigation, saying that the companies use the higher prices to invest back into research for new treatments.

Some in the industry believe that American taxpayers must foot the cost of this R&D in order for low and mid-income countries to obtain less expensive drugs. In addition, R&D costs more than the entire National Institutes of Health operating budget.

“Focusing solely on the list prices of MS medicines misrepresents the dynamics of the marketplace where large powerful insurers and pharmacy benefit managers have been increasingly able to negotiate discounts and rebates,” a spokeswoman for the company said.

According to them, the overall prices of drugs for MS have fallen by 10% over the past year thanks to these discounts and rebates. Both Cummings and Welch have been vocal on the need for legislation that lowers the price of prescription drugs.

In their bid to achieve this, they have met with President Trump in March; but have since criticised the president for lack of action. In May of this year, legislation was passed that prevents pharmaceutical companies from rising prices without first informing taxpayers. MIMS

Read more:
Pharmaceutical companies refuse calls for transparency in price hikes
Pharma companies under the spotlight for bribing doctors and fixing drug prices
Pfizer fined £84.2m by UK’s competition regulator for overcharging NHS

Sources:
https://www.bloomberg.com/news/articles/2017-08-17/house-democrats-start-probe-into-multiple-sclerosis-drug-prices
https://www.statnews.com/2017/08/17/lawmakers-push-drug-makers-explain-soaring-prices-ms-drugs/