DeLauro seeks more control over rising drug prices, wants federal board created to curb extreme ‘gouging’
New Haven Register

NEW HAVEN >> Citing prescription drug cost hikes that have sparked widespread outrage, U.S. Rep. Rosa L. DeLauro said Wednesday the federal government has to do more to control the prices of life-saving medications.

Speaking outside East Rock Pharmacy on Orange Street, DeLauro said pharmaceutical company executives have been raking in millions at the expense of working families, sick people and children.

“It’s outrageous,” said DeLauro, D-3. “Pharmaceutical companies are earning record profits while patients and taxpayers face higher and higher costs. … They put life-saving medicine out of reach for so many.”

DeLauro said she plans to introduce legislation to create a national review board that would have the power to curb “extreme price gouging.”

The board would include members from several government agencies, including the Food and Drug Administration and the Veterans Administration. It would collect data on prices and development costs of prescription drugs and medical devices.

If the board were to determine a company is gouging consumers, it would have the power to level fines, charge an excise tax or increase the amount the company reimburses Medicaid.

The board also would be able to shorten the amount of time for which a person or company holds a monopoly on the drug or device.

“Not all companies have engaged in these predatory practices,” DeLauro said. “But we need to hold those who are the bad actors accountable and we need to get prescription drug and device prices under control. That is what this price review board will do.”

DeLauro has also introduced legislation to ban direct-to-consumer advertising of prescription drugs, the costs of which she says have contributed to rising prices for consumers.

Lorraine Lee, executive director of pharmacy services for the Yale New Haven Health System, said rising drug prices affect patients whether they’re getting the drugs at neighborhood pharmacies or in hospitals.

She said DeLauro’s proposal would be a step in the right direction to fix the problem.

“It’s really important that we get this under control,” she said. “Pharmaceutical companies are functioning under the greed umbrella and we really need to stop that.”

As an example of the skyrocketing drug costs, DeLauro pointed to the recent controversy over EpiPens, an emergency allergy treatment device that injects epinephrine to counteract serious reactions.

Mylan, the company that makes EpiPens, came under fire earlier this year for the price of EpiPens — which had risen to about $600 for a twin-pack, up from $100 in 2009.

In response to the recent outcry, Mylan announced it would roll out a generic version for half the price of its brand-name product.

On Oct. 7, Mylan said it would pay $465 million to settle allegations it overbilled Medicaid for EpiPens, which had been incorrectly classified as a generic product since 1997. That misclassification had roughly halved the amount Mylan was obligated to reimburse Medicaid for EpiPens over the years.

DeLauro called the EpiPen price increases “irresponsible, inexcusable (and) dangerous” and said the controversy surrounding that drug hits particularly close to home for her: Her stepson carries EpiPens in case he has an allergic reaction.

She also pointed to the price of Daraprim, which is the only approved to treat toxoplasmosis, a disease that largely affects pregnant women, cancer patients and AIDS patients.

The drug had been widely-used and available for about $13.50 per pill before hedge fund manager Martin Shkreli and his company, Turing Pharmaceuticals, spent $55 million to acquire the U.S. sales rights.

The company then increased the price to $750 per pill, setting off a firestorm of criticism. Shkreli defended the prices hikes as a necessary business move.

Chris Cole, executive director of AIDS Project New Haven, also said he thinks DeLauro’s proposal is a step in the right direction. He said AIDS patients depend on prescription drugs to survive and already have to pay five and six figures for their treatments.

Cole said rising prices for drugs such as Daraprim hit individual patients but also strain government safety nets such as a federal program that helps people get the life-saving drugs.

“Increased costs are putting an increased burden on this program in a time when these funds are more and more scarce,” he said.

New Haven resident Duncan Goodall had just finished dropping off a package at East Rock Pharmacy when DeLauro’s event began.

He stopped to listen and asked the congresswoman about ways the government might be able to more directly affect prescription drug prices, such as empowering states to negotiate drug prices or establishing a single-payer health system.

“If we had a single payer, we’d have some strength in negotiating against the drug companies and as part of that, you could assess the relative efficacy of one drug versus another,” he said.

But he also said he likes DeLauro’s proposal because it would create a “hammer” the federal government could drop if drug companies don’t rein in prices.

DeLauro said her proposed board would consider several factors in determining whether a drug or device price is reasonable. But she said no part of the federal government currently focuses on gouging, essentially giving drug companies free rein.

“These prohibitive costs are driving up health spending and (insurance) premiums and could end up costing lives,” she said.

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