How top Valeant & Turing execs defended their drug prices to Congress on Thursday
- Lawmakers on the House Committee on Government Reform and Oversight grilled executives from Valeant Pharmaceuticals and Turing Pharma (interim CEO Howard Schiller and chief commercial officer Nancy Retzlaff, respectively) on Thursday, lambasting them for hiking the prices of old medications like Nitropress and Daraprim.
- Former Turing CEO and biopharma gadfly Martin Shkreli was also present at the proceedings but refused to answer any questions. Shkrekli repeatedly invoked his Fifth Amendment right against self-incrimination before he was finally dismissed. He soon after broke his silence and took to Twitter to rail against his questioners, calling them "imbeciles." A number of committee members openly posited whether Shkreli could be held in contempt for not answering questions, and several angry lawmakers referenced Shkreli's tweet while aggressively questioning Retzlaff.
- Schiller sounded a contrite yet firm tone, saying that Valeant had learned from its mistakes and taken public criticism over its pricing practices to heart, and would not pursue such formidable increases going forward.
- Retzlaff said that Turing wasn't planning exorbitant price hikes and that more than half of the money derived from the company's sales is funneled into R&D. She also reiterated that patients don't actually pay the list prices associated with Turing's drugs which have incited such sticker shock.
Thursday's hearing was part kabuki theater, part political grandstanding, and an overwhelming dollop of bipartisan frustration lobbed at the pharmaceutical industry and high drug prices.
Both committee chair Rep. Jason Chaffetz (R-UT) and ranking member Rep. Elijah Cummings (D-MD) scrutinized Valeant's and Turing's pricing practices, while other committee members launched into sometimes-jumbled tirades against pharmaceutical sales strategies and the nature of the medical business chain.
Cummings made sure to note that Turing and Valeant were far from the only offenders when it comes to problematic pricing. "These [price hike] tactics are not limited to a few bad actors," he said, pointing specifically to pharmaceutical giants such as Pfizer, Allergan, and others. In a pointed exchange later on, Rep. Carolyn Maloney (D-NY) asked Schiller if 80% of Valeant's Q1 profits last year stemmed from price increases rather than increased sales, to which Schiller responded in the affirmative.
Chaffetz took particular exception to Retzlaff's claim that Turing is still losing money and that its ostensible greed is overblown. "You're not losing money," he said. "You're making money hand over fist." Chaffetz then pointed to the example of a lavish yacht party that the company had thrown which included fireworks and a cigar roller.
Schiller and Retzlaff took different tacts in responding to the shots. Schiller, who has been on a determined mission to rehabilitate Valeant's image in the public eye by showing remorse and a promise to change, said that any future drug price hikes would be far less extreme and in line with industry norms. He also cited Valeant's distribution deal with Walgreens and patient co-pay rebate programs as positive steps that the firm is taking to reduce pricing pain, and advocated for expanding such rebate programs under government payers.
Retzlaff attempted to explain the convoluted path from list price to the price patients actually pay. She noted that the closed Daraprim distribution network was already in effect when Turing purchased the drug and hiked its price, and that it was this (rather than the price increase) that had prevented some patients from accessing the drug. The senior exec also noted that her firm has negotiated discounts with hospitals.
Several lawmakers proposed regulatory and legal changes which they said might whip the industry into shape on pricing. Rep. Stephen Lynch (D-MA) went so far as to suggest a "poison pill" arrangement in which the government could unilaterally revoke exclusivity in the case of massive price hikes and have the drugs manufactured through entities such as DARPA. Several other committee members advocated for expedited pathways and incentives for generic drugs in therapeutic spaces where there isn't much existing competition.
None of these proposals are likely to make it past a divided Congress anytime soon. And it's hard to tell how long the current outrage over drug prices will persist since it's likely driven in large part by the ongoing Congressional and presidential election cycle. But for the time being, it doesn't seem like this issue will be brushed under the rug.