Jeb Bladine: Congress dives into drug-cost scandals
Nationwide scandals about rising drug costs are unfolding in two congressional hearings this week.
Wednesday, the House Committee on Veterans’ Affairs began inquiry into profiteering charges involving new drugs that can cure Hepatitis C. Committee members heard an earful about a researcher who developed the underlying drug while working near-fulltime for the Veterans’ Administration, then collected a $400 million profit by selling his on-the-side company to Gilead Sciences.
Gilead mushroomed Sofosbuvir costs to $80,000 or higher per treatment. Even at 50 percent pricing, the VA needs $8 billion to treat an estimated 200,000 veterans with the disease.
The story drips with irony: VA employee enriched beyond propriety for developing drugs now financially out of reach for veterans.
Thursday, the House Committee on Oversight and Government Reform began hearings into price-gauging by Valeant Pharmaceuticals International and Turing Pharmaceuticals.
Valeant is known for acquiring existing drugs and aggressively raising prices. According to The Wall Street Journal, on the same day Valeant purchased rights to two livesaving heart drugs, the company increased prices by 525 percent and 212 percent.
Turing drew investigations for enacting huge price increases after acquiring rights to decades-old medications such as the antiparasitic drug Daraprim. As reported by The New York Times: “Turing, a start-up run by a hedge fund manager … immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.”
Thursday testimony by Valeant CEO Howard Schiller included his disturbing excuse that only hospitals, not patients, would bear the high costs through reduced profits. However, he and others also provided legitimate complaints about how government actions contribute to undesirable drug industry practices.
Former Turing principal Martin Shkreli, since indicted on unrelated federal securities fraud charges, exercised his Fifth Amendment right against self-incrimination.
It’s more evidence that we have inadequate tools to control drug prices. CNN, for example, reported that cancer treatment Gleevec costs $6,214 per month in the United States but only $1,141 in Canada … that rheumatoid arthritis treatment HUMIRA costs of $2,246 in the United States compared to $881 in Switzerland.
By the way, Giliad “suffered” a 2015 slowdown in U.S. sales of its hepatitis drugs because insurance companies, pressing for discounted pricing, are inciting public outcry by denying coverage for the drugs. Still, in the fourth quarter alone, Giliad’s $8.51 billion in revenue produced $4.68 billion in net income.
Not a bad day at the office.
Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.
Comments
Don Dix
These 'miracle drugs' (and many others) are usually accompanied a long list of possible side effects. The patient, it seems, must be a physical and medical specimen to avoid most of those side effects -- nearly an impossible situation. So it's highly possible one medication requires the assistance of one or more other meds to deal with complications ... from the same company that developed the 'miracle'. All profits, all the time!
And some of the profits end up in campaign coffers to elect or re-elect the same government minions that are required to protect the public from such price-gouging. Pretty sweet package, eh?
As for congress -- taking umbrage is quite different than taking action -- umbrage is immediate (and usually just grandstanding), whereas effective action is subject to all sorts of overall discussions, decisions, and determinations. Maybe that's why Shkreli was smirking and smiling during the entire process!