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House Hearing on Drug Prices Gets Heated

— Committee members blast drug companies, FDA

MedpageToday

WASHINGTON -- There was plenty of controversy to go around at Thursday's on rising drug prices.

Things got interesting from the very beginning, when committee chair noted that witness , former CEO of Turing Pharmaceuticals, had not provided any written testimony to the committee. Shkreli became a household word after Turing, under his leadership, bought a 60-year-old drug, pyrimethamine (Daraprim), and raised the price from $13.50 per pill to $750 per pill.

"On advice of counsel, I will not be giving an opening statement," Shkreli said. He then proceeded to invoke his Fifth Amendment right to avoid self-incrimination whenever he was asked a question -- except once.

"Is it pronounced 'Skreli'?" asked . "Yes, sir," Shkreli replied.

"See there? You can answer some questions," Gowdy said. "Not all of your answers are going to subject you to incrimination." Shkreli, who is currently under indictment for securities fraud, still refused to answer any more questions.

But that didn't stop , the committee's ranking member, from talking to him anyway. "I want to plead with you to use any remaining influence you have over your former company to press them to lower the price of these drugs," he said. "You can look away if you like but I wish you could see the faces of these people ... who can't get access to these drugs."

"You have a platform," he continued. "You could use that intention to come clean, right the wrongs, and become one of the most effective patient advocates in the country and one that could make a difference in many people's lives. I truly believe you could become a force of tremendous good."

The two drug company executives who did speak at the hearing took different approaches in their testimony. , chief commercial officer at Turing as well as the company's chief financial officer (CFO), defended her company's moves. "As CFO, I was comfortable with that decision [to raise Daraprim's listed wholesale price] because of our commitment to give access to the drug to every patient who needs it, regardless of their ability to pay," she said.

"It's important to realize the wholesale list price of a drug is not the same price paid by patients, hospitals, health plans, or government programs," Retzlaff continued. "To our knowledge, no patient needs to pay $750 per pill ... About two-thirds of patients receive the drug for the discounted price of one penny per pill, and we fund a patient assistance program that offers Daraprim free to patients with income at or below 500% of the [federal] poverty level, well above the [industry] standard."

Most of the problems with patient access to Daraprim "involved efficiencies in distribution unrelated to the pricing of Daraprim," she said. "We have worked hard to address this including [getting] a new specialty distributor ... I believe the decisions made by the company have been appropriate and strike the right balance between patient access, innovation, and shareholder value."

Also testifying at the hearing was , interim CEO of Valeant Pharmaceuticals; his company raised the prices of nitroprusside (Nitropress) and isoproterenol (Isuprel), two cardiac drugs, by 212% and 525%, respectively. Unlike Retzlaff, however, Schiller did express some contrition for his company's actions.

"Where we've made mistakes, we're listening and we're changing," he said. "Our price increases in the future will be well within industry norms and much more modest than the ones that drew your legitimate concerns."

Valeant has launched a partnership with the Walgreen's pharmacy chain that provides discounts on the company's drugs, and also expects to spend $2 billion in 2016 on patient assistance programs, Schiller added.

Committee members from both sides of the aisle sharply criticized both companies. "Increasing revenue and profits was [your] strategy regardless of costs and impact," said to Schiller. "It's a terrible example of American business, and the American people are tired of paying the price for it."

"I find it repulsive what you've done," said to Retzlaff. "When you come in and rape the public and give this [industry] a black eye, I find it repulsive."

had a suggestion for preventing future massive price hikes. "When anybody acts like Turing is acting, Congress can suspend the exclusivity period for you to produce that drug -- we can eliminate it the next day, and contract with DARPA [the federal Defense Advanced Research Projects Agency] to produce your drugs at no cost to the consumer," he said to Retzlaff. "That's what we can do."

However, he added, "The problem is that will impact the good companies that do the research. And you're trashing the pharmaceutical companies that are doing a great job on a lot of good drugs ... you're going to cause us to put on heavy regulation, and you're probably going to choke off other drugs coming into the pipeline. Think about the impact you're having."

The FDA also did not escape the committee's scrutiny, with citing a Tufts University report finding that it takes an average of 10 years and $2.6 billion for a drug to get FDA approval and go onto the market. "If a small company comes up with some miraculous drug, they'd be forced to sell out to some drug giant to get the drug to market, and that's what many people think has led to this overconsolidation of the drug business."

"It is agreed that it costs a great deal of money and it takes a long time to get an innovative drug to the market," said hearing witness , director of FDA's Center for Drug Evaluation and Research. However, she added, "Last year a large proportion of new drugs were 'orphans' and a number of them came from small companies. So it is doable."