February 2, 2016—Two drug companies under congressional investigation for price gouging used tactics that “are not limited to a few ‘bad apples,’ but are prominent throughout the industry,” the ranking Democrat on the House Oversight committee said today upon releasing summaries of more than 300,000 pages of documents from the companies in advance of a Feb. 4 hearing. [ms-protect-content id=”2799”]
The summaries by the committee’s Democratic staff say the documents show that Turing Pharmaceuticals and Valeant Pharmaceuticals bought off-patent drugs lacking competition expressly to jack up their prices and quickly make hundreds of millions of dollars.
Turing’s former CEO Martin Shkreli and Valeant’s interim CEO Howard Schiller have been called to testify before the House committee this Thursday. Shkreli has been charged with securities fraud for activity prior to founding Turing. Last month, Shkreli invoked the Fifth Amendment in response to a subpoena to produce documents about Turing’s drug pricing issued by the Senate Select Committee on Aging.
House Oversight Ranking Member Elijah Cummings (D-Md.) said the documents obtained from Turing and Valeant “provide a rare, inside look at the motivations and tactics of drug company executives.”
“They confirm what Americans across the country have experienced firsthand for years—that many drug companies are lining their pockets at the expense of some of the most vulnerable families in our nation,” he said.
The committee staff’s summary says that “before Mr. Shkreli purchased Daraprim for $55 million, the drug was affordable, readily available, and very effective at treating toxoplasmosis in people with HIV/AIDS, cancer, and other conditions that cause compromised immune systems.”
“However,” the staff continued, “as a direct result of Mr. Shkreli’s actions, Daraprim has now become prohibitively expensive, hospital budgets are straining under the huge cost increases, patients are being forced to pay thousands of dollars in co-pays and are experiencing major challenges obtaining access to the drug, and physicians are considering using alternative therapies…. The documents obtained by the committee include numerous communications from hospitals, clinicians, and healthcare providers across the country warning Turing directly about the negative impacts of its massive price increases.”
The committee staff reached similar conclusions about Valeant and its purchases. “Valeant employed a public relations strategy used by other drug companies to distract public attention away from its price increases to focus instead on patient assistance programs, particularly with respect to several Valeant drugs that treat small patient populations,” the staff noted. “In fact, the documents indicate that Valeant used its patient assistance programs to justify raising prices and to generate increased revenues by driving patients into closed distribution systems.” [/ms-protect-content]