Chairman Collins Exposes Valeant’s Drug Pricing Model, Reveals Harm Inflicted on Patients, Health Care System

Washington, D.C.--U.S. Senator Susan Collins, the Chairman of the Senate Special Committee on Aging, recently held the third hearing in a series the Committee conducted to investigate the sudden, aggressive price spikes of decades-old Rx drugs.

Through its bipartisan investigation, Senator Collins' Committee uncovered the monopoly business model companies like Valeant Pharmaceuticals use to identify and strategically acquire drugs that they can then exploit at the expense of patients, health care providers, private insurance plans, and federal health care programs. These companies do not spend a penny on research and development for these life-saving drugs; rather, they arbitrarily increase the price of the drugs they purchase knowing that it will take years--if ever--for competitors to enter the market and challenge their outrageous price hikes.

One of the witnesses invited by Chairman Collins revealed how these companies' actions inflict tangible harm on patients' health. For years, Berna Heyman, a retired college librarian who has Wilson disease, took Syprine, one of the very few medicines that can treat this life-threatening disease. After Valeant purchased Syprine and Cuprimine, the other main drug for treating Wilson disease, the company increased the price from $652 for a monthly supply to an egregious $21,267, an almost 3,200 percent increase. Similarly, Valeant increased the price for Cuprimine from $445 to $26,189, an increase of nearly 6,000 percent. Unable to afford the drug that has effectively managed her disease for years, Mrs. Heyman was forced to switch to an alternative, inferior treatment.

"This kind of price manipulation and abuse of pricing has real consequences," Senator Collins continued. "It has consequences for patients who can't take the drug of their choice. It has consequences for doctors who are treating individuals who need these drugs. It has consequences for our hospitals at a time when they are trying to lower health care costs. That is why we are determined to come up with solutions to solve this problem."

Senator Collins recently introduced legislation with the Committee's Ranking Member, Senator Claire McCaskill, that would help ensure that a clear process is in place for the Food and Drug Administration to prioritize the review of certain generic drug applications, incentivizing lower-price generics to enter the market to compete with monopoly drugs.

"This does represent a market failure, and it represents a failure of the processes that we have in the federal government, at the FDA, to try to incentivize lower-price generics to come to market, to compete with monopoly drugs. And that's why the Ranking Member and I have collaborated on legislation to change this. But this is not a 'free market' in any sense of the word. The government is a major payer at both the federal and the state level. Pharmaceutical companies receive protection under out patent laws, for ten to 17 years so that they have exclusive rights to reward them for developing new drugs."

The Committee held the first hearing of the series on December 9, 2015. From the beginning, the bipartisan investigation has focused on pharmaceutical companies that devised their business models to impose and protect egregious price hikes, and what policy changes are needed to respond to their actions. The second hearing, held on March 17, 2016, took an in-depth look inside the monopoly business models of Turing and Retrophin, both formerly headed by Martin Shkreli.

Read this original document at: http://www.aging.senate.gov/press-releases/chairman-collins-exposes-valeants-drug-pricing-model-reveals-harm-inflicted-on-patients-health-care-system