Dive Brief:
- In yet another round of sharp criticism directed at high-priced drug makers, lawmakers — this time former presidential contender Sen. Bernie Sanders and Rep. Elijah Cummings — have not-so-politely asked Ariad Pharmaceuticals for detailed information about its "repeated and staggering price increases" and "outrageous sales tactics" concerning its chronic myeloid leukemia (CML) drug Iclusig (ponatinib).
- In the crisply worded letter to Ariad, dated October 20, the lawmakers cited four price hikes that caused the price of the drug to jump from $115,000 per year in 2012 to $199,000 per year now. Sanders is asking for documents about the Massachusetts-based company’s revenues, expenses and sales contracts.
- Ariad defended its actions, outlining its significant investment in research and development, but the congressional anger is reminiscent of recent probes into Mylan, Valeant and Turing, and the skyrocketing costs of their drugs.
Dive Insight:
Ariad added a total of $80,000 to the price of its drug, which targets a type of bone marrow cancer, making it no surprise that congressional probers added it to their growing list of companies being investigated for setting exuberantly high costs. "These outrageous sales tactics indicate that Ariad is more concerned with its profits than with its patients," the Senator and Congressman said in their letter asking the company for explanations.
From the tone of the lawmakers’ letter, it appears likely that it will target Ariad President and CEO Paris Panayiotopoulos for questioning. The former Merck KGaA executive assumed the post at Ariad last January. "Over your short tenure as CEO, the price of Iclusig has already jumped several more times to reach $16,561 per month, or nearly $199,000 per year," the lawmakers charged.
In addition, the letter charges that the company took other measures to boost profits by discontinuing a 6-day supply of the 15 mg dose and charging more for the 30-day supply of the same dose.
Ariad issued a statement justifying its expenses, noting that it spent a significant investment of $1.3 million on research and development but isn’t making a profit. The company said it has a commitment to patients and "recognizes the high cost of innovative oncology drugs and believes in the importance and efficacy of its products."
Ariad's journey toward development of Iclusig has not been smooth. Since the FDA approved the drug in 2012 for patients with CML who no longer responded to traditional therapy, the agency found safety problems with the medication and had to suspend sales and halt clinical trials a year later. The FDA then required new safety measures to keep the drug on the market.
The lawmakers said they wanted documents and other information by November 4.
So begins another showdown between Congress and a drugmaker, which has been a common occurrence within the past year. This month, Mylan reached a settlement with the Justice Department for $465 million over classification of its drug. Lawmakers grilled its CEO Heather Bresch over its $608 price tag for an EpiPen two-pack.
Earlier this year, Martin Shkreli, former CEO of Turing Pharmaceuticals, who is to be tried on security fraud charges in June, and former executives from Valeant also testified before Congress about huge price hikes.