Lawmakers Criticize Pharmaceutical Companies for Large Price Increases for Brand-Name Medications for Rare Diseases

Lawmakers on Thursday during a hearing of the Joint Economic Committee criticized pharmaceutical companies for large price increases for brand-name medications for rare diseases, CQ HealthBeat reports. According to recent analyses conducted by AARP and the PRIME Institute at the University of Minnesota, brand-name medications often undergo price increases of two or three times the rate of inflation, but the number of treatments that have undergone "extraordinary" price increases -- any increase of at least 200% overnight -- has increased significantly over the past four years.

Some brand-name medications in recent years have undergone price increases that have exceeded the rate of inflation by as much as 500% to 8,000%, Sen. Amy Klobuchar (D-Minn.) said. "Something's going on, and I don't think it's the law of supply and demand," she said, adding, "This seems to be simple price gouging to me" (Parnass, CQ HealthBeat, 7/24). In addition, she said, "If we start to monitor this data, there is more of a paper trail, giving us enhanced ability to do something about these companies' practices."

Madeline Carpinelli, a pharmacy research fellow at the University of Minnesota, said that, over the past 20 years, one in 20 brand-name medications from a single manufacturer underwent price increases of more than 100% at a single point in time. During the same period, six brand-name medications underwent price increases of 1,000% to 3,400%, she said (Kaiser, Minneapolis Star Tribune, 7/24). Carpinelli said, "The economic market for pharmaceuticals is so screwed up that it's OK to have a 10% to 20% increase from month to month or year to year. That's not acceptable in any other market."

Rx Industry Testimony
Sally Benjamin Young -- a spokesperson for Ovation, which manufactures brand-name medications for rare diseases -- said that large price increases for such treatments are necessary because of the financial investments required to allow them to reach and remain on the market. Such investments include the extensive research required to obtain FDA approval, acquisitions of medications, the complex manufacturing process required to produce treatments, capital expenditures, global safety monitoring and staffing, according to Benjamin Young.

Billy Tauzin, president and CEO of the Pharmaceutical Research and Manufacturers of America, in a statement said, "We recognize that innovative medicines do no good if they sit on pharmacy shelves and out of reach of patients who need them most" (CQ HealthBeat, 7/24).