The hedge fund manager who raised the price on an AIDS drug 3,000 % is being asked to answer for his price gouging efforts by a bipartisan Senate investigation.
By now, we all know who Martin Shkreli is, and if you don’t, he’s the hedge fund millionaire who purchased a drug used to treat AIDS patients and jacked up the price by 3,000 percent to $750 a pill. Shkreli, the CEO of Turing Pharmaceuticals, was notified today of the initiation of an official investigation by the U.S. Senate and told to respond to a request for documentation and information “as soon as practicable.”
U.S. Senators Susan Collins (R-Maine) and Claire McCaskill (D-Mo.), who together lead the Senate Special Committee on Aging, today announced a bipartisan Senate investigation into pharmaceutical drug pricing. The announcement follows a series of media reports detailing dramatic drug price increases—often on older, off-patent drugs—after the acquisition or merger of pharmaceutical companies.
“The sudden, aggressive price hikes for a variety of drugs used widely for decades affect patients and health care providers and the overall cost of health care. These substantial increases have the potential to inflate the cost of health care for Americans, especially our seniors, by hundreds of millions of dollars each year,” said Chairman Collins. “Given the potential harm to patients across our country who rely on these drugs for critical care and treatment, the Senate Special Committee on Aging considers these massive price increases worthy of a serious, bipartisan investigation into the causes, impacts, and potential solutions.”
“Some of the recent actions we’ve seen in the pharmaceutical industry—with corporate acquisitions followed by dramatic increases in the prices of pre-existing drugs—have looked like little more than price gouging,” said McCaskill, former Missouri State Auditor and courtroom prosecutor. “We need to get to the bottom of why we’re seeing huge spikes in drug prices that seemingly have no relationship to research and development costs. I’m proud to help lead this bipartisan investigation so that we can find some answers the public wants and deserves.”
The Senators have requested documents and information from four pharmaceutical companies: Valeant Pharmaceuticals, Turing Pharmaceuticals, Retrophin Inc, and Rodelis Therapeutics. Each request focuses on drugs that have seen recent and significant spikes in price.
“We seek your cooperation with this investigation so that the Committee may better understand drug pricing and related regulatory and public policy concerns. In particular, the Committee wishes to learn more about Turing Pharmaceuticals’ recent acquisition of the rights to sell Daraprim, a drug used to treat and prevent infections, from Impax Laboratories and Turing’s subsequent decision to increase the price of Daraprim from $13.50 to $750 [per tablet],” reads the Senators’ letter to Turing Pharmaceuticals CEO Martin Shkreli.
The Committee’s investigation will include an examination of:
- Substantial price increases on recently acquired off-patent drugs;
- Mergers and acquisitions within the pharmaceutical industry that have sometimes led to dramatic increases in off-patent drug prices; and
- The Food and Drug Administration’s role in the drug approval process for generic drugs, the agency’s distribution protocols, and, if necessary, its off-label regulatory regime.
The Senate Special Committee on Aging has tentatively scheduled an initial hearing on this issue for December 9, 2015 and will hold subsequent hearings, as needed, in the following months.
Seniors account for 13 percent of the population but account for 34 percent of the all prescription medication used. More than 40 percent of seniors take five or more prescription drugs per day.
The letter to Valeant Pharmaceuticals is available on the committee’s website HERE. The letter to Turing Pharmaceuticals is available HERE. The letter to Retrophin, Inc. is available HERE. The letter to Rodelis Therapeutics is available HERE.