The recent wave of increases in the cost of prescription drugs is straining hospital budgets and squeezing patients, hospital and other health care witnesses Dec. 9 told the Senate Aging Committee at a hearing on “sudden price hikes” in off-patent drugs.
Witnesses cited huge cost increases for some commonly used generic drugs, with prices surging 15 or 25 times what they were just two years ago.
Erin Fox, the Salt Lake City-based University of Utah Health Care’s director of drug information, pointed to tactics like Valeant’s purchase earlier this year of the rights to a pair of life-saving heart medications, isoproterenol and nitroprusside. Following the acquisition, nitroprusside’s price rose from $215 to about $650, and isoproterenol went from $440 to about $2,700, she said. “This type of arbitrary and unpredictable inflation is not sustainable in our hospitals,” she added.
“If we continued to purchase the same amount of each drug, it would cost our organization just over $1.6 million more for isoproterenol and approximately $290,000 more for nitroprusside compared to what we paid the previous year,” Fox told the committee.
Prescription drugs represent the fastest growing component of health care spending. The Centers for Medicare & Medicaid Services recently reported that retail prescription drug spending increased 12.2% last year.
“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,” said committee Chairman Susan Collins, R-Maine.
Fox told the committee that these “unpredictable and dramatic” increases in the price of medications can lead to drug shortages for hospitals and patients. And she said physicians are “extraordinarily frustrated by having to make decisions about whether to use these critically important but extremely expensive medications in emergency situations, especially when they have been using these drugs for years.”
When patients have limited access to prescription drugs due to high prices, “they often end up in the hospital with a worsening medical condition,” noted Gerard Anderson, a professor of health policy and management at Johns Hopkins University in Baltimore. He said the pharmaceutical industry needs more transparency in pricing and more competition through measures that could include restricting new mergers or acquisitions. Consolidation in the pharmaceutical industry is “having an adverse impact on access and allowing generic companies to raise prices,” he said.
Children’s of Alabama, a Birmingham-based pediatric medical care center, is struggling with a more than 5,000% increase in pyrimethamine, said David Kimberlin, M.D., a pediatric infection disease physician at Children’s. The drug is marketed as Daraprim and used to treat toxoplasmosis, a parasitic disease that afflicts people with weakened immune systems.
Before Turing Pharmaceuticals purchased the drug in August, it cost $54 to provide the monthly supply of four tablets needed to treat a baby with the disease, Kimberlin said. Turing jacked up the price to $3,000 per month.
“Babies with congenital toxoplasmosis need to be treated for 12 months and the dose of the drug increases as the baby grows, so the total treatment cost before the Turing purchase was approximately $1,200 and now is estimated to be $69,000,” Kimberlin told the committee.
He urged Congress to take action against such aggressive price hikes, saying “babies’ lives literally hang in the balance.”