[Joint House and Senate Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 110-797
SMALL MARKET DRUGS, BIG PRICE TAGS: ARE DRUG COMPANIES EXPLOITING
PEOPLE WITH RARE DISEASE?
=======================================================================
HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JULY 24, 2008
__________
Printed for the use of the Joint Economic Committee
JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
SENATE HOUSE OF REPRESENTATIVES
Charles E. Schumer, New York, Carolyn B. Maloney, New York, Vice
Chairman Chair
Edward M. Kennedy, Massachusetts Maurice D. Hinchey, New York
Jeff Bingaman, New Mexico Baron P. Hill, Indiana
Amy Klobuchar, Minnesota Loretta Sanchez, California
Robert P. Casey, Jr., Pennsylvania Elijah Cummings, Maryland
Jim Webb, Virginia Lloyd Doggett, Texas
Sam Brownback, Kansas Jim Saxton, New Jersey, Ranking
John Sununu, New Hampshire Minority
Jim DeMint, South Carolina Kevin Brady, Texas
Robert F. Bennett, Utah Phil English, Pennsylvania
Ron Paul, Texas
Michael Laskawy, Executive Director
Christopher J. Frenze, Minority Staff Director
C O N T E N T S
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Members
Hon. Amy Klobuchar (presiding), a U.S. Senator from Minnesota.... 1
Hon. Charles E. Schumer, Chairman, a U.S. Senator from New York.. 6
Witnesses
Statement of Madeline Carpinelli, research fellow, Prime
Institute, College of Pharmacy, University of Minnesota,
Minneapolis, MN................................................ 8
Statement of Dr. Alan Goldbloom, M.D., president and CEO,
Children's Hospitals and Clinics of Minnesota, Minneapolis, MN. 11
Statement of Danielle Foltz, parent of young patient from Rhode
Island......................................................... 14
Submissions for the Record
Prepared statement of Senator Charles E. Schumer................. 25
Prepared statement of Senator Amy Klobuchar...................... 26
Prepared statement of Representative Carolyn B. Maloney.......... 29
Prepared statement of Madeline Carpinelli, research fellow and
Stephen W. Schondelmeyer, professor and director, Prime
Institute, College of Pharmacy, University of Minnesota,
Minneapolis, MN................................................ 29
Figure 1. Extraordinary Price Increases of Drug Products:
1988 to 2008............................................... 31
Prepared statement of Alan Goldbloom, M.D., president and CEO,
Children's Hospitals and Clinics of Minnesota, Minneapolis, MN. 33
Article: Drug Pricing in Pediatrics: The Egregious Example of
Indomethacin by Alan H. Jobe............................... 36
New York Times article entitled, ``Co-Payments Soar for Drugs
with High Prices'' by Gina Kolata.......................... 39
Prepared statement of Danielle Foltz, parent of young patient
from Rhode Island.............................................. 41
Prepared statement of the National Organization for Rare
Disorders (NORD)............................................... 43
Chart entitled ``Extraordinary Price Increases Are Becoming More
Common''....................................................... 46
Chart entitled ``Pharmaceutical Companies Earn Higher Profits
Than Other Fortune 500 Firms''................................. 46
Chart entitled ``Rare Hodgkins Lymphoma Drug Price Increases
7999%''........................................................ 47
Chart entitled ``Huge Drug Price Increases''..................... 47
SMALL MARKET DRUGS, BIG PRICE TAGS:
ARE DRUG COMPANIES EXPLOITING PEOPLE WITH RARE DISEASE?
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THURSDAY, JULY 24, 2008
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The Committee met at 10 a.m. in room SD-1066 of the Dirksen
Senate Office Building, the Honorable Amy Klobuchar, presiding.
Senators present. Klobuchar and Schumer.
Staff present. Christina Baumgardner, Tamara Fucile,
Colleen Healy, Jeff Schlagenhauf, Marcus Stanley, and Jeff
Wrase.
OPENING STATEMENT OF HON. AMY KLOBUCHAR, A U.S. SENATOR FROM
MINNESOTA
Senator Klobuchar [presiding]. I call the hearing of the
Joint Economic Committee to order. I want to thank you all for
attending this important hearing on rising prices of
prescription drugs.
I'm going to be introducing each panelist after opening
remarks, and I also know there are some other members coming,
but I'd like to thank each of you for taking your time out of
your busy schedule to join us to today and to share your
experiences and your expertise.
I'd first like to thank Danielle Foltz for her courageous
effort to share her family's experience. I know that her family
is there in the front row, very well behaved children, I would
say.
Her passionate advocacy on these drug issues has brought to
light how decisions made in board rooms affect families across
the country.
I would also like to thank Madeline Carpinelli of the Prime
Institute--based in my home State of Minnesota--for her efforts
to provide context and insight into the impact of drug pricing.
She has been working with Dr. Steve Schondelmeyer, who
began collecting cases of enormous data and information on
overnight drug increases since the 1980s, and thank you both
for the work that you've done, and I'm proud to have you doing
that out of the State of Minnesota.
We're kind of a medical mecca in Minnesota, with the home
of the Mayo Clinic and the University of Minnesota, and I thank
you. A lot of the ideas that I've gotten for healthcare reform
have come right from our State.
Finally, I'd like to extend special thanks to Dr. Alan
Goldbloom, the CEO of Children's Hospitals and Clinics of
Minnesota. Since last July, I have worked with Children's
Hospital on a number of issues, including this one, but for me,
the most difficult and important thing was the work that we did
with the Taylor family, a little girl who was severely injured
and later died from a malfunctioning swimming pool, and
Children's did everything that they could for months. Sadly,
she had a transplant at another hospital and it didn't work,
but the care she got there, the discussions I've had with her
parents, and the fact that we're able to pass a bill that
inspired everyone across the country to do something
differently with their swimming pools, is a tribute to her
family and also to the good work of Children's Hospital, so
thank you for that.
I know firsthand. My daughter, when she was born, was sick,
and Children's Hospitals helped her and have helped so many
young children across this country. And thank you, Dr.
Goldbloom, and Children's, for calling this very important
issue to my attention.
We're here today because we're outraged by what some
pharmaceutical companies have been doing with pricing for
important medications that affect all generations.
These are drugs that, because of aggressive pricing
practices, have seen dramatic increases in cost. Oftentimes
because of a limited market or other factors, the drug price is
more likely to remain at this astronomical level.
I first became aware of this issue, as I mentioned, when I
received word from Children's Hospital in Minneapolis that the
price for a drug called Indocin had increased substantially.
It's a medication used to treat patients with ductus
arteriosus, also called PDA, patent ductus arteriosus, a
disorder that prevents holes from healing in the hearts of
premature infants. Since its approval in the 1970s, the drug
has become the most commonly used drug for this type of
condition.
Two years ago, Ovation Pharmaceuticals acquired the rights
to this drug from Merck. This drug had been around since the
1970s, but it was in 2005 that Ovation acquired this drug.
The Company quickly increased the price by more than 18
times, from $100 to $1,875. This is it, Indocin, right here,
this drug which used to be $100, sold from one pharmaceutical
company to another; no more research, no changes, same drug,
the price goes up 18 times.
Even though it's an American company, the price that they
charge in the United States--that Ovation now charges for this
drug--is 44 times higher than they charge for it in Canada.
So here're the facts: You've got a drug that was going for
a hundred bucks that went up to $1,800, and then you have the
fact that they're selling it in the United States for 44 times
the amount that they sell it for in Canada.
And as it happens, the only other drug approved by the FDA
for this heart problem, a formulation of intravenous ibuprofen,
Ovation is also the sole source for that drug in the United
States, and, not surprisingly, the price that it charges for
this medicine is nearly identical to what it charges for this.
A number of other Ovation products have seen similar
drastic price increases; drugs that like Indocin, have been
around for a long time and are the premier treatments for a
number of diseases.
In a recent article in the medical journal, Pediatrics, Dr.
Allen Job of Cincinnati Children's Hospital described Ovation's
pricing of its two drugs for the premature baby's heart
condition as quite extraordinary, and he didn't mean that in a
good way.
He went on to write words such as ``unconscionable,
unethical, and socially irresponsible, come to mind.''
So the issue we have is that an upstart company purchases a
number of drugs from another company and even though these
drugs have been on the market for years, the upstart company
increases the prices drastically.
But Ovation isn't the only company engaged in this
disturbing trend, and we have a chart here that shows what's
been going on when there have been these extraordinary--to use
the Doctor's words--price increases, which are becoming more
common.
[The chart, ``Extraordinary Price Increases Are Becoming
More Common'' appears in the Submissions for the Record on page
46.]
Here, you see a number of branded drug products whose
prices have more than doubled in one single price increase. In
other words, you could maybe imagine a price increase going up
slightly because of factors--research, things like this--but
we've gone from 5 drugs in 1988, where the prices have more
than doubled when there was a price increase, to 64 drugs in
2008.
So something's going on, and I don't think it's the law of
supply and demand. Questcor Pharmaceuticals was once losing
money at a rate of $1 million a month. The Company's fortunes
turned around after they purchased HP-Acthar from Aventis.
This drug was approved in the 1950s to treat multiple
sclerosis, but it is now primarily the gold standard for
treating infantile spasms, a disorder that affects about 2,000
families in the United States. Prior to Questcor's purchase of
the drug, the wholesale price of HP-Acthar was about $2,000 per
vial; once in Questcor's hands, the price of the drug
skyrocketed to $23,000 per vial. That's a fourteenfold
increase.
And, according to the Prime Institute, we're hitting just
the tip of the iceberg, because the problem isn't isolated to
drugs that benefit small numbers of patients.
Abbott Pharmaceutical's increased the price of Norvir, a
drug used to treat AIDS. The drug was often used by other
companies as an ingredient in their drug therapies. In 2003,
Abbott jacked up the price by 500 percent. You can see the
prices before and the prices after.
This was done at the same time that Abbott began marketing
their new product, Kaletra, another AIDS pharmaceutical drug,
that included Norvir and served as a replacement for the
competition's drug therapy. The result forced patients and
providers to turn to Abbott's Kaletra instead of the formerly
cost-effective alternative that used Norvir and competitors'
drugs.
Previously undisclosed documents and e-mails reviewed by
the Wall Street Journal in 2007, show that Abbott's leadership
actively considered ways to promote Kaletra over Norvir.
Now, we also have another chart here, which shows the
changes and a few examples of other price increases. Mustargen,
to treat cancers, a 1,000 percent increase; Cosmogen, to treat
kidney disease, a 3,500 percent increase; and the price
increase for Matulane, which is nearly off the chart, was a
7,999 percent increase.
[The chart entitled, ``Huge Drug Price Increases,'' appears
in the Submissions for the Record on page 47.]
I don't know if they went down a few pennies so they
wouldn't make 8,000 percent, but that's what we're talking
about, Senator Schumer, a 7,999 percent increase.
This appears to me to be simple price-gouging, and I know
firsthand, from this--which we've looked at at length, the one
that we had here that came to my attention in Minneapolis, that
really we have yet to get an answer about why this drug would
be increased 18 times, a drug that saves little babies' hearts.
It not only hurts the hospitals that have to purchase these
expensive drugs, but also the patients who rely on them. An
elderly woman from Park Rapids, Minnesota who suffers from
cutaneous cell lymphoma was forced to pay over $8,000 in out-
of-pocket expenses for Mustargen, the drug sold by Ovation
whose single-dose price increased from around $50 to nearly
$550, after the company acquired the right for the drug.
In March, I had the opportunity to meet with the Benson
family and their twins, Anna and Sophia. Sophia suffered from
PDA and needed Indocin for treatment.
They were able to receive the drug through Children's
Hospital, but with such obscene price increases, it is getting
more and more difficult for providers to meet these runaway
costs.
Remember, this is a drug that is an alternative to much
more expensive surgery.
What is the solution? Well, in America, we have a serious
problem with healthcare inflation and runaway costs, and when
you hear these stories, it is no wonder. When we have
pharmaceutical companies like Ovation and Questcor increasing
prices to astronomical levels because of the lack of
competition in the market, their actions are able to exploit an
extremely vulnerable and captive market.
Now, we have a chart showing how the pharmaceutical
companies earned higher profits than other Fortune 500
companies, while at the same time that we saw these
astronomical increases--doubling increases--of so many drugs
that save children's lives and other lives in this country.
[The chart, ``Pharmaceutical Companies Earn Higher Profits
Than Other Fortune 500 Firms,'' appears in the Submissions for
the Record on page 46.]
It is not like the pharmaceutical industry is withering on
the vine. The chart shows that even when compared to these
other Fortune 500 companies, pharmaceutical companies' profits
are much higher.
The Orphan Drug Act was passed in 1983 to provide
incentives to drug companies to develop innovative drugs for
rare diseases, because without incentives, drug companies may
never be able to recoup research and development costs in niche
markets.
What we have seen, however, is that at least a handful of
drug companies have used this status of orphan drugs to keep
increasing costs well beyond the cost of research development
and manufacturing. No one has ever said there was a bunch of
research done on this drug.
These staggeringly high prices, in turn, threaten the
financial stability of middle class families in relying on
these drugs. Whereas generic drugs have helped to lower the
costs of many prescription drugs on the market, generic
competition is also less likely to happen for orphan drugs.
According to a study published in the Rand Journal of
Economics, the market size for a drug has to be about $32
million in 2007 dollars--adjusted for inflation--to ensure
entry of a generic into the market.
When we're talking about drugs that have been around for a
few decades and treat patient populations of only a few
thousand, there is often just not enough of an incentive for a
generic drug to enter the market.
Beyond hospitals and patients, a dramatic, unforeseeable
increase in price for one of these drugs has a significant
impact on the Federal Government. If the wholesale cost of a
drug goes up, then Medicare or Medicaid has to pay the
increase, so this is also about taxpayers' money.
We're holding this hearing to uncover this practice, but
also to look forward to what we can do to curb the dramatic
increase in drug prices that we've seen in the last few years.
I've asked the Federal Trade Commission to initiate an
investigation into any potential anticompetitive conduct, or
consequence arising out of Ovation's market actions and
dominance in the area of non-surgical treatments for PDA.
We need to ensure that the FTC continues to conduct these
crucial investigations to guarantee competition, keeping costs
low for consumers and encouraging innovation.
It's disturbing that our providers, our hospitals, and our
patients are being blindsided by these exorbitant price
increases.
Our Federal Government should be able to track these trends
in pharmaceutical pricing. 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.
When provided with the right information on drug prices,
especially in smaller markets, doctors can be alerted of big
price increases, potentially spurring generic alternatives to
expensive drugs and keeping the centers for Medicare and
Medicaid services, giving them the tools and information to
better track pricing activity.
Finally, I intend to investigate whether the FDA can fast-
track approval for generic drugs that would be just as safe and
effective, but much less expensive, creating competition in
markets with dramatic price increases.
I understand that we have a market-based economy. It's fine
for companies to make money on the products that they sell, but
when you're dealing with the wellbeing of sick patients, babies
and the elderly and everyone in between, there has to be
special consideration; that if the competitive market isn't
working, if it's not allowed to work, if companies are allowed
to simply jack up prices because they can, on the backs of the
taxpayers and on the backs of the middle class, on the backs of
little babies like the one sitting in this front row, then we
have to do something about it.
I look forward to hearing our witnesses' thoughts on this
important issue, and I hope today marks a starting point for
addressing the problems that accompany such enormous price
increases, problems that have been plaguing doctors and
insurance companies, Medicare and Medicaid programs, and most
importantly, the patients that have gone on for far too long.
I would also want to mention before I turn it over to our
Chairman, Senator Schumer, and then to our witnesses, that we
invited Ovation to participate in this hearing, and they
declined to come.
With that, Senator Schumer.
[The prepared statement of Senator Klobuchar appears in the
Submissions for the Record on page 26.]
OPENING STATEMENT OF HON. CHARLES E. SCHUMER, CHAIRMAN, A U.S.
SENATOR FROM NEW YORK
Chairman Schumer. Well, thank you, Senator Klobuchar. I
want to thank you for your leadership on this issue and for
spearheading and chairing this hearing.
I know most of my colleagues--and many of you know this--
Senator Klobuchar has a unique understanding of things that
hurt average folks, a unique way to solve those problems, and a
unique way to relate to both the people who are hurt and those
who need to change their behavior.
So she is, as I like to say, a natural, and it's perfect
for her to investigate this issue.
Now, yesterday, we had a hearing where we talked about the
middle class squeeze and how American families gather on Friday
nights around their kitchen tables after dinner, and they talk
about the things they care about--their children, their future,
their health--and, more and more, they're talking about how the
heck are we going to pay these bills?
The middle class is squeezed, and it's not just food and
gasoline and college and daycare--which it is--but it's
prescription drugs and healthcare. Today's hearing focuses on
the lack of affordability of potentially lifesaving drugs that
treat rare diseases.
Imagine being a parent and having your child, who you
deeply love, and you know there's a drug out there on the
market that could cure him or her, make them better, take away
their pain, and it's just so exorbitantly priced that you can't
afford it. The instinct of most people would be, they'd want to
rob a bank to save the life of their child.
No one will do that, or very few--let's hope no one--but
that's how you'd feel, where you'd want to go into the drug
company, almost with a gun and go to the CEO and say, I want
that drug for my child. Again, no one would do it, but that's
how you'd feel.
So, this is amazing hearing, and it's heartfelt. And you
know, we all believe in innovation, and we all believe in
profitability, and we all believe in the free market system,
but the prices that Senator Klobuchar showed on her chart and
the dramatic increases show that something is wrong.
Something is wrong in the values of a society when a drug
can go up from $60 to $6,000 and is basically taken away from
families who need that drug for their children's lives.
As I said, these drugs have gone up 100, 500, 3,000
percent, months, weeks, overnight. As Senator Klobuchar said,
that's more than inflation, more than supply and demand, more
even than just reasonable profitability.
And what is our healthcare system doing when things like
that happen? Again in America, what we try to do is start with
the free market and use that as our basis, but it doesn't mean
the free market is always the answer, particularly when you're
dealing with areas where there is not competition.
And you know, I've heard about--I won't be able to stay,
but I heard about your testimony, Ms. Foltz, and the drug
Acthar to treat your little son for life-threatening epileptic
spasms, and you have to pay $29,000 a vial--13 times higher
than the price that it had been 8 months before?
What's the matter? What is wrong? Something, something,
something is wrong with our values, our society, our system,
and our government when things like that are allowed to happen.
And so I'd ask unanimous consent that my entire statement
be read into the record.
[The prepared statement of Senator Schumer appears in the
Submissions for the Record on page 25.]
Chairman Schumer. I'd like to make just another point.
Along with Senator Klobuchar, we've asked the General
Accounting Office to look into the issue of these price
increases and see if they're justified. We're not going to
stop; I want to assure the people here and the people who will
read or listen to this hearing, that we're going to keep at it.
One other thing that's indirectly related. I've been a
leader on generic drugs, and we worked in the Senate with
Senators Kennedy and Clinton and Enzi and Hatch, to create a
pathway for generic versions of biologic drugs, which will make
a huge difference in issues like this.
I'm pleased that the National Organization for Rare
Diseases touted the passage of the Pathway for Followon
Biologics, in their submission for the record in this hearing--
and that's just one of many ways. Not all these drugs are
susceptible to that, but that's one way that we can help.
Generics and market competition work, and we need to build
on these successes and improve our system of approval for
licensing generics. The research shows that it takes at least
two or three generic entrants to seriously lower drug prices
and shows that generic companies are reluctant to enter the
market for rare diseases, since many of these niche markets
aren't large enough to sustain more than one or two competitor
drugs, and therefore, we have to go beyond generics when we
look at this particular situation.
But the bottom line is, we owe it to people like Ms. Foltz
and her family and the thousands and thousands and thousands of
people who are in that position, and there, but for the grace
of God, go you or I, and we really want to help. I want to
thank, once again, Senator Klobuchar for focusing in her usual,
excellent way, a spotlight on this important issue.
I apologize to the witnesses, but I wanted to be here to
lend my support.
Senator Klobuchar [presiding]. Thank you very much, Senator
Schumer, and thank you for leadership, particularly in the area
of getting these generic drugs out, which is one way that we
can put some downward pressure on prices.
But there are other ways, as well, and we want to talk
about those today. First, we're going to hear from Madeline
Carpinelli. Ms. Carpinelli is a research fellow with the Prime
Institute, headquartered at the University of Minnesota.
Her duties include designing and implementing research
projects related to pharmaceutical economics and other public
policy issues.
Before joining the Prime Institute, Ms. Carpinelli served
as co-Chair of the Department of Health and Human Services Drug
Pricing Planning Group. In that capacity, she led a team of
analysts in tracking pharmaceutical industry trends and worked
on issues relating to drug pricing benchmarks and drug rebate
programs.
Ms. Carpinelli.
STATEMENT OF MADELINE CARPINELLI, INSTITUTE FOR PHARMACEUTICAL
RESEARCH IN MANAGEMENT AND ECONOMICS AT THE UNIVERSITY OF
MINNESOTA, MINNEAPOLIS, MN
Ms. Carpinelli. Thank you, Senator Klobuchar, for the kind
introduction and for this opportunity to present on information
and insights regarding pricing trends in the pharmaceutical
market.
As you said, I'm Madeline Carpinelli, and I'm a research
fellow with the Prime Institute--currently. In my previous
life, I was with the Office of the Inspector General, where I
worked on most of the drug price reporting and compliance
issues for about the last 10 years.
I also interfaced with the Department of Justice and the
OIG Office of Counsel with regards to their prosecutions and
investigations.
These remarks present my own findings and views, based upon
my experience in studying the pharmaceutical marketplace for
the last nine years, and upon my observations and ongoing work
in collaboration with Dr. Steven Schondelmeyer with the Prime
Institute.
Today, I will provide an overview and preliminary findings
from research we have been conducting on extraordinary price
increases in the pharmaceutical market.
Through our tracking of prices over time, we have become
aware that certain drug products have experienced extraordinary
price increases that are well beyond what would normally be
expected in a competitive market.
We found hundreds of cases of extraordinary price increases
for branded drug products. We also found that the incidence of
such extraordinary price increases has been rising sharply in
recent years, and today is much higher than it was in the 1980s
and 1990s.
The Prime Institute routinely tracks price changes as part
of our ongoing work, as well as for specific projects such as
tracking the annual inflation rates for the most commonly used
drugs by Medicare recipients, on behalf of the AARP.
As such, we are accustomed to seeing annual price increases
of between 6 and 7 percent for brand-name prescriptions--two
times the rate of general inflation.
We also expect to see the prices for certain commonly used
brand-name products experience price increases that are
substantially higher. For example, in 2007 Ambien had an
annualized price increase of 27.7 percent from 2006, not
surprising since it's one of the most commonly prescribed
products.
In examining the prices of all products that have entered
the market since 1987, we discovered a pattern that challenges
our parameters for acceptable price increases.
In recent years, we've found that some less commonly used
products had one-time extraordinary price increases of 100
percent or greater. This rate of inflation is unacceptable and
has a tremendous impact upon patients, payers, and
policymakers.
To examine and understand the magnitude of these
extraordinary price jumps, the Prime Institute has been
conducting a study of such price increases. Today, we'll
present the findings on our analysis with the specific focus on
brand-name drugs.
To identify extraordinary price increases, we reviewed
increases that were equal to or greater than 100 percent at a
single point in time during 1988 to 2008. In other words, we
identified those drug products whose cost doubled overnight.
Excluded from this particular analysis are those prices
whose percent difference met this criteria--met or exceeded
this criteria, but over time. Instead, we just looked at those
that had a single point in time.
What we found was across all of the drugs, 13.5 percent
have had 1 or more extraordinary price increase in the last 20
years. One in 20 of the brand, single-source products and 1 in
45 of the brand off-patent drugs had seen extraordinary price
increases.
We also looked at the timing of these increases over the
last 20 years. While there were a few extraordinary increases
in the 1990s, the vast majority have been since the year 2000.
The number of these has been growing, especially for brand-
name drugs, especially over the last 4 years. If you refer to
Figure 1 in my written testimony, you'll see this chart.
[The chart entitled ``Figure 1. Extraordinary Price
Increases of Drug Products: 1988 to 2008'' appears in the
Submissions for the Record on page 31.]
A price increase of 100 percent or more at one point in
time is remarkable in its own right, but the size of some of
these extraordinary price increases is staggering. For the
brand single-source drug products, there were 6 price increases
of more than 1,000 percent, with the largest being almost 3,500
percent.
Another 6 brand single-source drugs had an increase between
500 percent and 999 percent. One of the brand off-patent NDCs
had a price increase of over 10,000 percent, and another ten
had extraordinary price increases of greater than 500 percent.
This trend of price increases is not limited to just list
and retail prices. There is a real financial impact on
financial programs, namely Medicare Part D, Part B, Medicaid,
and the Public Health Service's 340(b) Drug Discount Program.
While we intend to investigate this issue on a more
comprehensive basis, a review of the sample of the drugs in our
universe against the Medicare Part B average sales price file
confirms the trend of extraordinary price increases.
For example, the average sales price reported for Acthar
Gel, which we've heard about, in January 2007 was equal to
$1,145, but by January 2008 the ASPs for Medicare-eligible
patients were reimbursing providers $23,540.
The pharmaceutical market is extremely complex and vexing
to most observers. There are many unique institutional and
structural features to the pharmaceutical market that influence
the economic behavior of drugs and drug prices.
The extent and magnitude of drug price increases seen in
our preliminary study of this issue appear to indicate that the
extraordinary price increases are not driven by ordinary
explanations for price increases such as general inflation,
cost of materials, labor and distribution, or the cost of FDA-
required research for approval.
The magnitude of these extraordinary price increases is so
great that these prices do not appear to be the product of an
economically efficient and competitive market.
There are many reasons why these increases could
potentially be explained. We have theorized on a couple of
these issues.
Most of the drug products with extraordinary price
increases are not among the top 100 to 500 drug products on the
market. In part, these drug companies may have been able to
implement these extraordinary price increases because they are
low-volume drugs and they're not often tracked or noticed in
the marketplace.
This point speaks directly to Senator Klobuchar's
discussion about monitoring prices within the Department, which
they do not.
Also, many of these drug products are for conditions that
have a relatively small volume of demand. Some of the products
have such a small market that it would not be profitable for
even two competitors to survive.
Other drug products with extraordinary price increases may
have been in short supply, either before or after the price
increase was taken. The fact that some of these drug products
are sold only through limited distribution channels, for
example, specialty pharmacies, mail order pharmacies, physician
dispensers, dialysis care centers, and others, may also play a
factor in enabling extraordinary price increases.
The Prime Institute plans to continue research in this area
to better understand and characterize the market conditions
that have led to the growth of extraordinary price increases
for prescription drug products.
Our research will look for patterns across firms,
therapeutic categories, market conditions, intellectual
property and exclusivity status, dosage forms, distribution
channels, and other factors.
The continued research will also examine how these
extraordinary price increases have affected private and
Government drug programs, market entry and the market for drug
products, and specific patient populations. Thank you very
much.
[The prepared statement of Madeline Carpinelli appears in
the Submissions for the Record on page 29.]
Senator Klobuchar. Thank you very much, Ms. Carpinelli.
Dr. Alan Goldbloom, who is our next witness, became
president and CEO of Children's Hospitals and Clinics of
Minnesota--which is the eighth largest children's healthcare
provider in the Nation--in January of 2003.
Prior to joining Children's, Dr. Goldbloom served as
executive vice president and chief operating officer of the
Hospital for Sick Children in Toronto, responsible for day-to-
day operations of the Hospital, as well as community
initiatives and partnerships.
Dr. Goldbloom's career is centered on a passion for
providing quality care for children and strengthening pediatric
medicine.
Dr. Goldbloom.
STATEMENT OF DR. ALAN L. GOLDBLOOM, M.D., CEO, CHILDREN'S
HOSPITALS AND CLINICS OF MINNESOTA, MINNEAPOLIS, MN
Dr. Goldbloom. Madam Chair, thank you so much for the
opportunity to testify here today. As you mentioned, I have the
privilege of serving as president and CEO of Children's
Hospitals and Clinics of Minnesota and prior to that--I also
have a background as a pediatrician, but I'm no longer
practicing.
Children's is the largest provider of care to children with
severe prematurity, cancer, heart disease, and complex surgical
conditions in the upper Midwest.
My testimony here today will focus on our experiences at
Children's with two drugs that are used in the treatment of
serious conditions in infants. My testimony is not a criticism
of the pharmaceutical industry as a whole, for this is an
industry that has produced extraordinary advances in healthcare
from which we all benefit; rather, my concern is focused on the
practices of some specialty pharmaceutical companies and the
questionable pricing of some older drugs.
And, while I will refer to two specific companies, they are
in no way unique in this practice.
One condition that we treat in infants is called patent
ductus arteriosus, or PDA, to which you, Madame Chairman, have
already referred. This condition affects about 3,000 infants
annually in the United States and is most common in very
premature infants.
I'll try to explain this in very simple, non-technical
terms. A newborn baby's blood circulation changes within
moments of being born. As adults, our blood circulates to our
lungs to pick up oxygen, and then gets pumped out to bring that
oxygen to the rest of our bodies.
For a fetus still inside the womb, the lungs are not
functioning, so the ductus arteriosus is a blood vessel that
actually diverts the blood away from the lungs. The fetus gets
oxygen from the mother, instead, through the umbilical cord.
Once the baby is born and the lungs begin to function, the
baby takes the first breath, that ductus arteriosus normally
spontaneously closes itself off; it just tightens up and shuts
off so that blood does flow to the lungs.
But in some babies, especially those with prematurity, that
ductus does not close; it remains open or patent, hence, patent
ductus arteriosus.
And while sometimes that will resolve spontaneously, in
some infants it becomes a serious enough condition to cause
congestive heart failure and to interfere significantly with
breathing.
When that happens, we have to treat, and last year for
example, at Children's of Minnesota, we treated about 110
babies with that condition.
For many years, the only way to treat this was through
surgery. The surgeons went in and literally tied off that open
blood vessel.
But over 30 years ago, it was learned that a very common
drug, indomethacin--the brand name is Indocin--when given
intravenously, could often produce the same result without
subjecting the baby to surgery, and Indocin became the standard
initial treatment for PDA.
Until recently, Indocin has been a low-cost, safe, non-
surgical way to treat these babies. In fact, the cost for
Indocin, up until January of 2006, was just over $100 per unit.
About 42 of the Nation's largest freestanding children's
hospitals are members of an organization called Child Health
Corporation of America, or CHCA, which serves as the group
purchasing organization for three-quarters of those hospitals.
And for the members of that group purchasing organization,
the collective annual cost, up until 2006, was just $136,000
nationally.
Well, things changed when the specialty pharmaceutical
company, Ovation, bought exclusive rights to Indocin and
several other drugs from the pharmaceutical giant, Merck, in
August of 2005.
The price for one unit of Indocin jumped from $108 to
$1,500, an over 1200-percent increase.
But Indocin is an old drug. It's been on the market for
over three decades, so this dramatic price increase cannot be
attributed to the high cost of research and development.
As purchasers, our children's hospitals had no other
options. There have been no other manufacturers of Indocin, so
effectively, one company has a monopoly and can use it to
price-gouge.
The effect of this dramatic price increase in our Hospital
totaled nearly $150,000 in the first year of that increase, and
according to CHCA, it cost its member hospitals close to $2
million in that first year, up from $136,000 just a year
earlier.
Like all healthcare providers, we struggle with the issue
of increasing costs. Often, we're not able to immediately
recover these costs from insurers, especially when children's
hospitals rely heavily on Medicaid as the single largest
insurer of children in this country.
Eventually, however, increased costs do get passed on and
are reflected in the premiums that individuals and businesses
pay and in the tax-supported programs like Medicaid; so from
our perspective, that extra $150,000 that we pay to one drug
manufacturer is money we would much rather have spent on
improved services for patients.
The children's hospitals who are part of that group
purchasing organization at CHCA represent only a fraction of
the nearly 600 neonatal intensive care units nationwide. All of
them see babies with PDA, so the overall impact is much higher
than the number I've quoted.
And Indocin is not the only drug Ovation has marked up in
such a dramatic fashion. Three other drugs that were purchased
from Merck--Cosmegen, Diuril Sodium, and Mustargen--have seen
price increases of 3400, 864, and 979 percent, respectively.
Cosmegen is an agent used to treat a variety of pediatric
cancers; Diuril Sodium is a diuretic used to reduced fluid
overload in infants and neonates, and Mustargen is used to
treat brain tumors and certain lymphomas.
A very similar situation developed when specialty
pharmaceutical company, Questcor, bought Acthar Gel from
Aventis. Acthar Gel, as you have mentioned, is used to treat
infantile spasms, a rare, severe, and treatment-resistant form
of seizures that affects very young infants.
Acthar Gel is considered the gold standard for treatment of
infantile spasms and at Children's of Minnesota, we have one of
the largest epilepsy treatment units and have used Acthar Gel
nearly 50 times so far this year.
This drug was originally approved in 1978 for multiple
sclerosis, and its cost has always been high. However, after
Questcor bought the rights to Acthar Gel, the list price rose
from $1,650 per vial to $23,269 per vial. This is a 1400
percent increase, which costs the CHCA hospitals over $21
million per year.
Madam Chair, there are many other drugs, hundreds in fact,
that are priced this way, both pediatric and non-pediatric, and
even with good insurance, a 20-percent co-pay on something like
Acthar Gel is more than many people's monthly mortgage
payments.
Sadly, in this time of skyrocketing healthcare costs, the
burden of expensive healthcare now affects the insured, as well
as the uninsured or under-insured.
The market for many of these drugs is quite limited, so it
is unlikely that other companies will begin to produce or sell
a low-volume specialty product at a reasonable cost. The
resulting monopoly is resulting in windfall profit
opportunities for companies like Ovation and Questcor, and they
appear to be taking full advantage.
I want to reiterate, Madam Chairman, that my testimony
today is not intended as a rant against the industry as a
whole, because it has produced many great benefits, but my
concern is focused on the practices I just described in which
unjustified pricing decisions are taking advantage of some of
the most vulnerable members of our population and driving
health costs up unnecessarily.
Thank you very much for the opportunity to speak with you
today.
[The prepared statement of Dr. Alan Goldbloom appears in
the Submissions for the Record on page 33.]
Senator Klobuchar. Thank you very much, Dr. Goldbloom. We
appreciate your testimony and your good work.
We now have Danielle Foltz, who became a passionate
advocate for families affected by infantile spasms when her
son, Trevor, who is with us today, was diagnosed with the
disorder in November of 2007.
The incident sparked a passion in Ms. Foltz to help
families with IS issues. Prior to 2007, Ms. Foltz worked with a
nonprofit organization, BBF International, for 5 years. She
lived in Tanzania, East Africa, and assisted in the oversight
of the feeding center called Nema House, which helped feed
impoverished children.
Ms. Foltz holds a B.A. Degree from Louisiana Baptist
University.
Mrs. Foltz.
STATEMENT OF DANIELLE FOLTZ, PARENT OF YOUNG PATIENT FROM RHODE
ISLAND
Ms. Foltz. Madam Chair Kobuchar, I would like to thank you
for this opportunity to share our personal story today. I am
Danielle Foltz, as you've already mentioned, from Rhode Island
and the mother of Trevor Foltz, and I would like to share with
you our journey to receive critical treatment for our son.
While I am speaking only on behalf of my own family, I
would like to acknowledge the support of the Epilepsy
Foundation. The Epilepsy Foundation represents the 3 million
Americans who have epilepsy, and their goal is to help those
individuals gain access to the medications they need, like
Trevor. I know they will continue to follow this hearing and
the path from here forward.
I understand that today's hearing is highly political; I
get that, but for us and the 2,000 families that are going to
deal with infantile spasms every year, this is personal.
How do you find the words to describe the most horrific
event in your life, your personal valley of the shadow of
death? Because that is exactly the feeling that clamps your
heart when you are at a place where the medication needed to
rescue your child is out of your reach.
For 7\1/2\ months, we celebrated our beautiful third born,
Trevor. In fact, we were packing our luggage in anticipation of
returning to our ministry in Tanzania, East Africa, when we
noticed him making jerky, odd movements. They resembled newborn
startle reflexes.
Devastated does not begin to touch how we felt when we
learned that those jerky movements were actually seizures.
Trevor was having as many as 20 seizures in a single 60-second
span, up to 5 times a day.
We knew it was serious when his neurologist told us to meet
with him immediately following that first EEG. It was in that
meeting that we were given the devastating news that our
beautiful 7\1/2\-month-old son had the rare and catastrophic
disorder called infantile spasms.
All three neurologists we consulted told us the same thing:
If we did not get control of his seizures immediately, Trevor's
developing brain would be irreparably damaged.
We were told that the only thing between our son and a shot
at a normal life was a drug called ACTH, marketed as Acthar Gel
by Questcor Pharmaceuticals. Our neurologist prepared us that
Trevor's treatment would be pricey. He estimated that it would
be around $10,000 per vial.
As you can imagine, we went numb. We immediately notified
our insurance company. The urgency of providing Trevor's
treatment, was heavy and we needed to move forward as quickly
as possible.
As Trevor's seizures continued to intensify, we read the
information about IS online, and the sorrow of what we were up
against was emotionally overwhelming. What we did not know was
that 4 months prior to Trevor's diagnosis, Questcor
Pharmaceuticals had implemented a new business model.
This business model included raising the price per vial of
Acthar Gel from approximately $1,000 each, to over $30,000 per
vial. And because Trevor was the first child to receive ACTH
treatment after the price increase, not even our neurologist
was aware of how dramatically the price had risen.
What he thought would cost us no more than $50,000, total,
would now be an astounding $150,000 for the medication alone.
In hindsight, we have no doubt the excessive price of this drug
influenced our insurance company against originally approving
it for Trevor.
My husband spent days on the phone fighting for Trevor to
have coverage. We knew there was no way that we could afford
this treatment ourselves. One vial of Acthar was being quoted
at a minimum of $30,000, and Trevor was going to need at least
5.
We could buy a nice three-bedroom colonial in some areas of
the country with that kind of money, but because we had given
our lives to serve a nonprofit ministry in Tanzania, we don't
own that three-bedroom colonial. We didn't have the house to
mortgage as collateral for his treatment, which I've heard some
families have actually been forced to do.
All of our earthly possessions were in Africa. We had
nothing to liquidate to come up with this money, but to wait
was not OK; we needed to save our son.
And so I was frantically looking for other options. I
called the Acthar Support and Assistance Line because I had
learned that Questcor offers the assurance that no child who
truly needs this treatment will go without. I spoke with the
call center representative and was informed that the approval
process included paperwork for ourselves and Trevor's doctors
to submit.
When I asked how long the approval process would take, I
was informed it would be a minimum of 3 business days. When I
asked if approval was a sure thing in a case like ours, I was
told, no.
At that point--I'll be honest--my emotions got the best of
me, and I informed her that I thought it was a sham, that if
Questcor was really about providing a vital medication in a
time of desperation, it wouldn't take 3 business days to reach
the maybe point.
When your infant's body is being racked by 40 seizures
every single day, you do not have 3 business days to play
Russian Roulette, waiting for a medication that could stop his
seizures and right your world again.
Those days following Trevor's diagnosis, for our family,
were the most emotionally dark that we've lived through. My
husband and I were pretty much a puddle on the floor.
Just getting that kind of diagnosis shatters you, but then
to add the guilt of realizing that you may not be able to
rescue your son because you can't afford to, it's unimaginable,
and in my mind, unacceptable.
We literally thought it was possible that our son would go
without treatment, or that he would be forced to use a less
effective medication that could leave him developmentally
challenged forever.
I wonder how many other families are living that same
nightmare right now. How many are being exploited in their
desperation? For our family, finally on Wednesday, November 21,
2007, the day before Thanksgiving--after numerous emotional
phone calls between my husband and our employer--we were told
to move forward with the treatment.
It had already been a week since Trevor's diagnosis, and
each day without treatment was stealing our son from us. We
witnessed his physical regression and the distress as his
seizures became ever more violent.
We were admitted the following day and Trevor's very first
Thanksgiving was spent at Hasbro Children's Hospital.
Because the ACTH must be injected into the thigh, a nurse
was sent to teach us how to administer it for when we went
home. My husband was asked, was he nervous when he gave Trevor
the shot for the first time? And he replied that he was more
nervous holding $5,000 in a single syringe, or worse, dropping
the vial and breaking it.
I know that our family was lucky. Trevor is a miracle, and
our insurance ended up covering the 6-week course that Trevor
needed of ACTH. Trevor has been seizure-free since his fourth
injection, and that's why I brought him with me today.
I believe his face needs to be here, representing all the
other IS faces. He is the poster child for why this drug needs
to be available and affordable.
Today we're celebrating our miracle, and we pray that
Trevor will remain seizure-free, but what if he doesn't? Are we
going to have to fight for coverage again?
I'm going to leave this hearing today, and as you can
imagine, I'm going to go home. I have a 3-year-old daughter
waiting for me. I'll return to my life of loving and advocating
for my son, but my story is inextricably connected to the 2,000
families this year and next year and the next who will live
with this horrific diagnosis.
My heart cannot help but be consumed for those families
devastated by infantile spasms. Will they have access to this
drug, or will they be priced out?
In fact, in preparation for my testimony today, my husband,
Jonathan, researched the current price for a vial of ACTH.
Unbelievably, the escalation has not plateaud. The very same
vial we ended up paying $26,000 to obtain just 6 months ago,
today can cost as much as $40,000.
Where does it end? I can't pretend to understand the many
layers of this issue, but what I can wrap my heart around is
the terror that a young mother faces when she cannot rescue her
baby, not because his treatment or his sickness is untreatable,
but because she cannot financially afford the medication he
needs.
And I implore you today to please consider my thoughts and
to find a way to help families like mine get access to these
medications. I don't want another family to live with the
nightmare of IS and not able to treat their child.
Please help these families dealing with infantile spasmsget
affordable access to the drug that could be their miracle, too.
Thank you.
[The prepared statement of Danielle Foltz appears in the
Submissions for the Record on page 41.]
Senator Klobuchar. Well, thank you very much, Mrs. Foltz,
for that moving testimony and for being willing to have your
family here. As I listened to you, I could relate a little bit
to this in a very small way.
When my daughter was born, she couldn't swallow, and I got
kicked out of the hospital. It was when you could only stay for
24 hours, and just that feeling of trying to--having no control
and trying to come back to find her and help and stand in the
rooms and try to figure out what was wrong, when you really
couldn't stay overnight in the hospital.
Those things were wrong. We changed that and got a 48-hour
mandatory stay in Minnesota, as well as across the country for
new mothers and their babies.
But I just remember that feeling that you're talking about,
where you would go to any length to protect your child and
someone's getting in the way for what is nothing more than
greed.
Did you feel, when this was going on--did you even consider
that you wouldn't pay for that drug if you had to find a way to
do it?
Ms. Foltz. No, no. I mean, we thought, if worse came to
worst, we'd be paying for it for the rest of our lives. I mean,
he needed the medication, and we need to move forward.
The problem is, the hospital where we were only had one
vial, and I'm not sure if they could access it. We were working
with pharmacies and other things, but we needed the medication.
I mean, ACTH is the front-line treatment for infantile
spasms, and he needed it. Obviously, he responded to it within
4 days, so we were going to do whatever it took. It was just,
how were we going to do it?
Senator Klobuchar. He just moved his arms. I think he heard
you.
Ms. Foltz. He hears mommy.
[Laughter.]
Senator Klobuchar. Well, when you said his name, that got a
move, too.
So anyway, so your husband kept pushing on the insurance
company. Did they ever say anything about that it was the price
of the drug, or that's what you thought it was?
Ms. Foltz. I mean, that is total speculation. They said
that because it was not FDA approved or FDA indicated for
infantile spasms--which I do think is a part of the problem--
that was why they officially told us they wouldn't cover it,
but they refused to budge until our neurologist actually sent a
letter telling them that if you don't cover this medication,
this child will be mentally retarded for the rest of his life,
and you'll pay millions more than what you expected to.
Senator Klobuchar. For not covering him?
Ms. Foltz. Yes.
Senator Klobuchar. And you think that made a difference?
Ms. Foltz. That absolutely is what turned the tide with our
insurance company.
Senator Klobuchar. And did you have to go to the doctor and
get the doctor to do it, or how did you get that done?
Ms. Foltz. She was--you know, our neurologist was amazing.
She was handling everything for us. She was on the phone with
the insurance company, I want to say ``duking it out,'' but I
don't know if that's appropriate, but yes, she was----
Senator Klobuchar. Anything's appropriate at this hearing.
[Laughter.]
Ms. Foltz. She was duking it out for us with them, so she
definitely was an advocate for us all the way through.
Senator Klobuchar. And has your son received other medical
treatment for his disorder, besides the Acthar?
Ms. Foltz. Yes and no. He is not currently taking any anti-
epileptic medicine, and that's because he has been seizure-
free, but with infantile spasms, babies are really in a danger
zone, at least until they are school aged, until age 5.
They are at risk of developing other forms of seizures.
From my understanding, infantile spasms is really a symptom of
an underlying condition, and the reason why it's so devastating
is because these babies are having 40 seizures, sometimes
hundreds of seizures a day, in the very essence of their
development. Their little brains are developing.
So Trevor still is monitored by his neurologist. We see her
every 6 months. We're still tracking down his underlying cause,
getting MRIs and EEGs. He's going to have his sixth EEG this
next week, so he still receives treatment, just not medication.
Senator Klobuchar. So the idea here is that this drug isn't
necessarily one he would have to take for a lifetime?
Ms. Foltz. No.
Senator Klobuchar. But it was needed at that moment, at
that time?
Ms. Foltz. Yes.
Senator Klobuchar. To stabilize him.
Ms. Foltz. Exactly.
Senator Klobuchar. And how long did he take it?
Ms. Foltz. He took it for 5 weeks.
Senator Klobuchar. For 5 weeks. It was just for 5 weeks?
Ms. Foltz. Just for 5 weeks.
Senator Klobuchar. And how long was the delay in getting
him the drug?
Ms. Foltz. It was at least 5 days, and we were actually
told that if we--and part of the problem was timing. He was
admitted on Thanksgiving, and no one wants to take their
holiday and rescue a little baby, unless it is, in their minds,
life or death, and this wasn't considered that for them.
But, yes, it took those 5 days to get that treatment.
Senator Klobuchar. Did the treatment have any side effects,
or from your perspective, it went well because then he didn't
have an spasms?
Ms. Foltz. In Trevor's case, we had minimal side effects.
He did have elevated blood pressure, which was monitored at
home by a visiting nurse, and he also took blood pressure
medication, but that was really the only side effect that
Trevor had.
Senator Klobuchar. How is he doing now?
Ms. Foltz. You can see, he's amazing. If he were awake, I'd
let him toddle around for you.
[Laughter.]
Ms. Foltz. Yeah, he is a miracle, and he's thriving, and
he's overcoming, and I can only imagine what is in store for
his future.
Senator Klobuchar. And what advice would you give to other
families who find out that they need a drug where the prices
suddenly had gone up, you know, as we had some examples 8,000
times, 18 times, 1,000 times; how would you tell them to handle
it?
Ms. Foltz. You know, part of the difficulty of that, is
when you're in that crisis moment, your head is not on
straight. I mean, you're not thinking what can I do? And I
mean, I guess, part of my advice would be, and what benefited
me the most, was getting online and joining a community of
other infantile spasm parents who have direct resource to the
different options out there.
And that's where I've learned most of my information about
infantile spasms and courses of treatment, so that would be my
first piece of advice and the second is just keep fighting. You
fight because your baby deserves the coverage and your baby
deserves to get treatment, and don't wait.
Senator Klobuchar. OK, thank you. Now, what's Trevor's
brother's name, there?
Ms. Foltz. That's Toby.
Senator Klobuchar. Hey Toby, thank you for being so good.
All right, we're going to ask some more questions now. They
might not be quite as interesting, Toby, as the ones we asked
your mom.
[Laughter.]
Senator Klobuchar. OK, well, why don't we turn to you, Ms.
Carpinelli, and talk a little bit about just the general state
of this. Were you surprised by Mrs. Foltz's story?
Ms. Carpinelli. I had the opportunity to read her online
blog about it, which was fantastic and just really colorful,
and it told quite a bit. And it really does speak to the
personal side of this issue. I'm here to present the dry,
economic side of things, and I'm glad to hear the experiences
of Dr. Goldbloom and Ms. Foltz.
But this is not surprising. There have been issues with
these types of products for years. It is impacting both private
and public insurers very much.
I know that from previous experience that companies are
going so far as to try to single out individuals that they're
covering, that have rare diseases, and trying to figure out
ways to get them treatment at other places, so they don't have
to cover the cost of their drugs, because it's raising everyone
else's per-month, per-year, or per-member costs.
These people that do have rare diseases or hemophilia, for
example, are getting singled out and asked to get care at a
place, such as a public health service grantee where at least
they can purchase the drug at a discounted price, and maybe
offer you a price break.
But for those cash payers, this is just outlandish.
Senator Klobuchar. So how do--to go back to the
pharmaceutical companies--how do the prices and changes to U.S.
pharmaceutical products compare to external benchmarks such as,
you know, overall inflation in the economy or prices that we've
seen in other countries?
Ms. Carpinelli. Through our research, we found that the
increases for drugs is typically two to three times what the
average rate of inflation looks like.
What's really interesting is that each time the price
trends are examined, there are a handful that have increased
substantially greater than this. But, some of these can be
between 10 and 30 percent of an annual increase, and not
acceptable anymore.
The economic market for pharmaceuticals is so distorted
that it's OK to have a 10 to 20-percent increase, you know,
from month to month or from year to year. Increases of this
magnitude are just viewed as normal now.
This is not acceptable in any other market. I mean,
consider the outrage over gas prices now. This isn't gas; these
are drugs; these are drugs that save people's lives.
Senator Klobuchar. And what impact do you think this has
on--well, I know it's 11 percent of our healthcare
expenditures, pharmaceuticals are totaling about $217 billion.
Ms. Carpinelli. Right.
Senator Klobuchar. What impact does this have on Medicare
and Medicaid?
Ms. Carpinelli. We at the Prime Institute are still
conducting research on this issue, but are challenged by the
amount of confidential data that the manufacturers possess for
the Part D program and for Medicaid.
There are a lot of price components that get reported to
the Government, that are based on actual sales, versus list
prices. In order to get a really true assessment of that, of
how it will impact Medicaid and Medicare, you have to have
access to this data.
I am glad to hear that the Committee has requested further
study from the GAO. They will have access to that confidential
pricing information and will be able to report a much more
accurate figure.
Senator Klobuchar. Very good. In your testimony, you
highlighted drugs that appear to demonstrate effects related to
monopoly pricing. In a normal market, you know, one would
expect that the unit cost would decrease as sales increased.
That's what's supposed to happen, right?
Ms. Carpinelli. Right.
Senator Klobuchar. At least that's what I learned in
Economics 101.
[Laughter.]
Senator Klobuchar. Because the manufacturer can afford to
offer a lower price. However, with some of these products, it
seems like an increased or stable market, actually exists, but
the price suddenly gets jacked up a hundred percent, a thousand
percent.
Ms. Carpinelli. Right. We at the Institute like to say that
each individual values their life as exponential but that does
not mean that the cost for a drug should also be exponential.
In other words, drug companies could not make pricing decisions
on what they think the market will bear.
An individual can't compare the value of their life to how
much a drug product is going to be. In essence, the prices
discussed today could be what we refer to as supra-competitive
prices, or prices above what can be sustained in a competitive
market.
Supra-competitive prices are present when a firm has a
unique position in the market with respect to intellectual
property or legal status, barriers to entry, product features
that offer a competitive advantage, or other factors.
The number and magnitude of these types of price increases
that we've discussed today also raises the possibility that
antitrust issues may be present. Going back to the Norvir case
that you had mentioned, there are several lawsuits that Abbott
is currently engaged in, for that reason, exactly.
Senator Klobuchar. Right, well in fact, the FTC filed a
complaint against Cephalon, in response to its anticompetitive
behavior for its sleep disorder treatment, Provigil. According
to the FTC complaint, Cephalon is paying four generic drug
makers to refrain from selling generic versions of this drug,
until 2012.
Ms. Carpinelli. Right.
Senator Klobuchar. Do you know about that case?
Ms. Carpinelli. Not those specifics, but that doesn't
surprise me. That's been a common reason for cases in the last
years.
Senator Klobuchar. So they are actually paying off generic
drug manufacturers, not to----
Ms. Carpinelli. There is some concern that there are other
financial incentives to companies that are subsidiaries of
other companies, that are waiting, that are kind of in cahoots
with their larger parent company.
Senator Klobuchar. I think you mentioned the drug, PhosLo,
in your testimony, and there the gradual increase, as opposed
to the drastic spike in price that occurs with this particular
drug. How is that drug different?
Ms. Carpinelli. You know, there were two drugs whose prices
we examined that didn't necessarily have a single-point-in-time
increase, rather, their increase was substantial over time.
I'm not exactly sure why that drug would have been
different, but instead, for PhosLo, there were four increases
over a year and a half's time of 40 percent, 40 percent, 40
percent, and 32 percent, equalling 262 percent total.
Once again, it's the same sort of thing that we've
discussed--that this is a product that was on the market, got
bought out by another company, and then suddenly the product
price spiked.
I did want to briefly mention the Orphan Drug Act. As you
mentioned in your testimony, this was an Act designed to help
create products in a market that wasn't necessarily attractive.
And as part of that, manufacturers do get a lot of really
great incentives. In addition to the 7-year market exclusivity,
they also get a waiver from the $500,000 a year user fee from
the FDA, they get grant money to do their clinical studies, and
they also get tax breaks on their clinical investigations.
It's important to note that in addition to the market
exclusivity, that there are other incentives that kind of
offset the costs for the development. I think this furthers
your point that having orphan drug status might not necessarily
be a motivation in terms of price increases.
Senator Klobuchar. Right. Dr. Goldbloom, a July 2008 Wall
Street Journal article discussed the recent implications of
rising pharmaceutical costs in the field of oncology, where
drug prices can cost more than $100,000 per year.
Many health policy experts have started to suggest that
it's time for American doctors to begin reconsidering costs
when assessing treatment options.
Do you think that this is a good practice? Should cost be a
consideration?
Dr. Goldbloom. Senator, I believe that all of us in
healthcare have a responsibility to use our resources as wisely
as we can. That means that decisions are never based on costs
alone.
The first and most fundamental is to use evidence-based
research about which treatments are best and most effective,
most reliable, and cause the least risk. That's always the
number one decision.
When we have two treatments that are equivalent and one is
at a lower cost, then yes, I believe we have a societal
responsibility in those situations to use resources wisely.
And I believe that it's a direct benefit to society,
because the more we can spread those resources, it improves our
ability to provide coverage to others; it improves our ability
to provide treatment to others.
There is not an unlimited pool of resources, so the answer
is, it is a factor, and it's part of our overall
responsibility. It should never be the only factor, and when
there is a single lifesaving, disease-curing treatment that is
available that happens to be expensive, just as we heard in the
testimony of Ms. Foltz, then we have to do what is right for
the patient.
Senator Klobuchar. OK. You, in the case of indomethacin or
Indocin that we've been talking about, you first heard about
this from your pharmacy manager; is that correct?
Dr. Goldbloom. That is correct.
Senator Klobuchar. And why was this so surprising to you
when you heard about this increase?
Dr. Goldbloom. This was a surprise to me because I
reflected back, frankly, to my own days back when I was
training as a pediatrician, and that was in the early 1970s,
and we were using this drug then.
So this is, to me, a very old drug; it's been around a long
time, standard treatment for a long time. I could not imagine
any justification for a sudden change in the price,
particularly a change of the magnitude that we've described
here today.
There's been no new research that I'm aware of, and the
only thing that seems to have changed was the right to
manufacture and sell the drug.
Senator Klobuchar. Did you hear anything that there might
have been a shortage of the drug? That's something we're
hearing from Ovation, that suddenly there was a shortage when
they were producing it.
Dr. Goldbloom. I had not heard that, Madam Chair.
Senator Klobuchar. Did you have a shortage at your hospital
of the drug, like you couldn't obtain it?
Dr. Goldbloom. Not that I'm aware of.
Senator Klobuchar. How does your hospital offset the
increased cost of drugs such as indomethacin and Acthar?
Dr. Goldbloom. In the first year or two, we absorbed most
of that cost because we function under existing contracts with
our payers, with the insurers. So when things change in the
midst of a contract, we simply absorb the cost, which means
that we have to reduce our spending in other services that we
provide.
So, in an indirect way, it does have an impact on other
services to other patients. Eventually, however, if that looks
like a sustained price increase, we build it into the costs
that we use as the basis for our negotiations with payers,
whether insurers or whether Medicaid, which means that the
costs are being passed on, either to the taxpayers or to
individuals and companies.
It's costing society more when we're all trying to reduce
healthcare costs.
Senator Klobuchar. Have the insurance companies or
Medicaid--you wouldn't have Medicare at Children's Hospital--
but Medicaid, the insurance companies talk to you or others
about their concern about these price increases?
Dr. Goldbloom. They have not specifically talked about this
drug, but they certainly are under tremendous pressure to
minimize the annual increases in the contracts. This becomes a
struggle between hospitals and insurers every time a contract
is up for negotiation.
We do face significant increases year after year, some of
them understandable, like when there's a brand-new drug that
has been the result of great and very expensive research and
development and is used, say, in the treatment of childhood
cancer. We do understand some of those price increases.
But it is part of a continuing battle, if you will, in the
negotiations that occur with our payers.
Senator Klobuchar. In your testimony, Dr. Goldbloom, you
mention the Child Health Corporation of America, CHCA, which
serves as a group purchasing organization for many of the
country's freestanding children's hospitals. Does CHCA have any
power in controlling the price of these drugs?
Dr. Goldbloom. Well, they do have the power of numbers, in
the sense of trying to use the group purchasing volume as a
means of negotiating. The problem is, when there is a single
manufacturer, you lose most of your leverage.
Senator Klobuchar. So in other words, it might be a major
drug manufacturer who cares about the fact that you're a
leveraged group, a large group, and you can negotiate with them
because they don't want to lose your business on other drugs?
Dr. Goldbloom. Correct.
Senator Klobuchar. And so when you have a case where
someone just takes one or two drugs and jacks up the prices,
they don't really care, especially if they own both of the
patents for the drug?
Dr. Goldbloom. The negotiation becomes a take-it-or-leave-
it kind of negotiation.
Senator Klobuchar. And then obviously, there's other
hospitals that aren't in your purchasing group.
Dr. Goldbloom. Right.
Senator Klobuchar. That must be like smaller hospitals and
things like that.
Dr. Goldbloom. Yes, that's right.
Senator Klobuchar. OK, all right, well, I want to thank
you, Dr. Goldbloom. I wondered, did any of the three of you
have anything that you wanted to add? I see Trevor is up and
eating now.
[Laughter.]
Senator Klobuchar. And he smiled.
[Laughter.]
Senator Klobuchar. Do you have anything that you'd like to
add, at all?
Dr. Goldbloom. I'd just like to thank you, Senator
Klobuchar, for shedding light on the issue and bringing it to
public attention, because I think that's the first step in
trying to find solutions to the problem.
Senator Klobuchar. Thank you.
Ms. Foltz.
Ms. Foltz. I definitely want to say thank you, thank you
from a family that lived through this, and it's really nice to
see that you guys are paying attention and seeking to help
families like mine.
Senator Klobuchar. Well, thank you. I do want to say that
this is just the beginning. This is one hearing. I know there's
a House Hearing right now, as well, on pharmaceutical pricing,
and what we're trying to get here is to get whatever
information we have, because we know that this has a ripple
effect on not just the hospitals, as Dr. Goldbloom has pointed
out, but on taxpayers, with Medicare and Medicaid, and then on
individual families' finances.
And this is not to say that people shouldn't be able to
make money and it's not to say that we don't want the market to
work. We'd like the market to work because if the market was
working, we probably wouldn't be in this situation with one
company owning both patents on a drug that competes with each
other.
What I think we need to do when we have cases like this of
just outrageous pricing, where the people that are getting
ripped off are families and the citizens of this country, that
we have to give the agencies that regulate this the tools they
need, and if that's not working, then we're going to have to
change the law, because this just can't keep happening like
this.
It's just one example of many of cost overruns and problems
in our healthcare system in this country. When you have a
company like Ovation that can somehow make the cost decision
and think it's OK to sell this drug that saves babies' hearts,
for 44 times the amount an American company in America, than it
sells it in Canada, we have a problem.
And when they can jack up the price 18 times, just because
someone sold it to them, there's a problem. And so I just want
to assure you, Mrs. Foltz and Dr. Goldbloom, from a hospital
perspective, and Ms. Carpinelli, from the academic research
perspective, that we're not just going to let this go.
That's why we've asked the FTC to look at this, and why
we're holding, in Congress, major hearings as we go forward and
gathering ideas about how to stop this from happening and help
the people of this country.
So thank you very much, and our hearing is adjourned.
[Whereupon, at 11:18 a.m., the hearing was adjourned.]
Submissions for the Record
=======================================================================
[GRAPHIC] [TIFF OMITTED] 42773.001
Prepared Statement of Senator Charles E. Schumer
I'd like to thank Senator Klobuchar for holding this important
hearing, and thank our witnesses for being here today.
Yesterday we talked about the Middle Class Squeeze and how American
families gather around their kitchen tables and talk about how they're
going to pay these skyrocketing bills for food, gasoline, college, day
care, and yes--prescription drugs and health care. Today's hearing
focuses on the lack of affordability of potentially life-saving drugs
that treat rare diseases.
And we're not talking about an everyday kind of un-affordability.
We are talking about drugs that have gone up 100, 500, or 3,000 percent
in a matter of months, weeks, or overnight. That's way more than
inflation, and it far outpaces the increases families are paying for so
many of their other household expenses.
Our health care system can, and usually does provide high quality
care, but more and more we hear about significant problems with access
and affordability hurting American patients.
While we are talking about smaller segments of our population when
we discuss rare diseases, the total number of American families touched
by them is quite high. NIH estimates that between 9 and 10 percent of
the American population, or nearly 30 million men, women, and children,
are affected by a rare disease. Approximately half of these people are
children, and many of these rare diseases are present at birth.
Patients with rare diseases and their families suffer from more
than their disease alone. They also have the frustrations of not being
able to find information about their disease and the heartbreak of
finding out that there is no treatment, or in the case of a witness we
will hear from today, that the life-saving treatment she needs for her
child is priced exorbitantly high.
When our panelist, Danielle Foltz, needed the drug Acthar (ACT-
Thar) to treat her infant son for life-threatening epileptic spasms,
she faced paying over $29,000 per vial. That's 13 times higher than the
price had been just 8 months before he was diagnosed. One might. say
that a brand new drug that just hit the market might be pricey because
it had to recoup research and development expenditures, but Acthar has
been on the market for three decades.
And the same is true for the drug Matulane (matt-you-lane), which
treats Hodgkins Lymphoma, and cost less than $70 per dose in late 2004.
Just 6 months later, the price had increased to $5,568! That's an eight
thousand percent increase. And not for a groundbreaking new drug--for a
drug that was put on the market in the 1960s.
Our witnesses today are going to shine a light on practices that
look uncomfortably like an abuse of the pricing power we give to drug
companies. In case after case, it appears that PHARMA companies have
been taking critical drugs that have been on the market for years --
with the costs of their development long since paid for --and
increasing prices to the very highest levels the market will bear.
Our witness from the PRIME Institute at the University of Minnesota
has found over one hundred cases since 2002 where the price of single-
source drugs more than doubled due to a single price increase.
Healthcare reform is on the horizon, and the appropriate pricing of
drugs and all medical services should be a top priority.
We all benefit from incredible innovation of pharmaceutical
companies. Their success is in treating or sometimes curing diseases
both severe and mundane is an important part of American
competitiveness and greatness.
But the testimonies today are disturbing and show that much greater
oversight and perhaps even significant action by the Congress is
needed.
Along those lines, together with Senator Klobuchar I've asked the
General Accounting Office (GAO) to look into the issue of these price
increases and see if they are truly justified.
I also introduced a bill and worked to develop the Senate
compromise with Chairman Kennedy and Senators Clinton, Enzi and Hatch
on creation of a pathway for generic versions of biologic drugs. I am
pleased that the National Organization for Rare Diseases touted the
passage of a pathway for follow-on biologics in their submission for
the record of this hearing. That is one clear way we can help patients
with rare diseases.
Creating this pathway is an important development for American
consumers, and I bet that the next Administration will work with
Congress to make sure that the FDA implements this priority.
Generics and market competition works. We need to build on these
successes and improve our system of approval and licensing for
generics. The research shows that it usually takes at least two or
three generic entrants to seriously lower drug prices. It also shows
that generic companies are reluctant to enter markets for rare
diseases, since many of these ``niche'' markets aren't large enough to
sustain more than one or two competitor drugs.
Of course we realize that there are legitimate reasons why drug
companies may need to raise prices. Price increases can be a normal
cost of doing business. But we can't let the cost of doing business
serve as an all-purpose excuse for excessive pricing that put important
drugs out the reach of many families.
We owe it to all of America's patients to keep a vigilant watch on
this situation.
__________
Prepared Statement of Senator Amy Klobuchar, Presiding
Thank you for attending this important hearing on rising prices of
prescription drugs.
I will be introducing each panelist after opening remarks, but I'd
like to thank each of them for taking the time out of their busy
schedule to join us today and share their experiences and expertise.
First, I'd like to thank Danielle Foltz for her courageous effort
to share her family's experience with us today. Her passionate advocacy
has brought to light how decisions made in boardrooms affect families
across the country.
I would also like to thank Madeline Carpenelli of the PRIME
Institute, based in my home state of Minnesota, for her effort to
provide context and insight into the impact of drug pricing. She has
been working with Dr. Steve Schondelmeyer, who began collecting data on
cases of enormous, overnight drug increases since the 1980s.
It is his work, along with Ms. Carpenelli's expertise from spending
almost a decade at the Health and Human Services' Office of the
Inspector General that has allowed us to examine the big picture of
what these increases have done to patients with rare diseases.
And I'd like to extend special thanks to Dr. Alan Goldbloom, the
CEO of Children's Hospitals and Clinics of Minnesota.
Since last July, I've worked with Children's several times in
connection with the case of Abbey Taylor, the little girl who died
after being seriously injured in a wading pool last summer.
This hospital is dedicated to the care of their young patients.
They know how important it is for children to have access to
affordable, quality health care.
That's why we're here this afternoon.
We are here because we are outraged by what some pharmaceutical
companies have been doing with pricing for important medications that
affect all generations. These are drugs that, because of aggressive
pricing practices, have seen dramatic increases in cost. Often times,
because of a limited market or other factors, the drug's price is more
likely to remain at that astronomical level.
I first became aware of this issue when I received word from
Children's Hospital in Minneapolis that the price for a drug called
Indocin I.V. had increased substantially. It's a medication used to
treat patent ductus arteriosis also called PDA, a disorder that
prevents holes from healing in the hearts of premature infants.
Since its approval in the 1970s, the drug has become the most
commonly used method for treating this condition.
Two years ago, Ovation Pharmaceuticals acquired the rights to this
drug from Merck. The company quickly increased the price by more than
18 times--from $100 to $1,875--for three one-milligram units of the
drug.
Even though it's an American company, the price they charge in the
United States is now 44 times higher than what they sell it for in
Canada, nothing can justify that kind of huge price disparity.
As it happens, there is only one other drug approved by the FDA for
this heart problem--a formulation of intravenous Ibuprofen. Ovation is
also the sole source of that drug in the United States and, not
surprisingly, the price it charges for this medicine is nearly
identical to what it charges for Indocin I.V.
A number of other Ovation products have seen similar drastic price
increases. Drugs that--like Indocin--have been around for a long time
and are the premier treatments for a number of diseases.
In a recent article in the medical journal Pediatrics, Dr. Alan H.
Jobe of Cincinnati Children's Hospital described Ovation's pricing of
its two drugs for the premature babies' heart condition as ``quite
extraordinary.''
He wrote: ``Words such as `unconscionable,' `unethical,' and
`socially irresponsible' come to mind.''
So the issue we have is that an upstart company purchases a number
of drugs from another company, and even though these drugs had been on
the market for years, the upstart company increases the price
drastically.
But Ovation isn't the only company engaging in this disturbing
trend.
Questcor Pharmaceuticals was once losing money at a rate of $1
million a month. The company's fortunes turned around after they
purchased HP Acthar from Aventis. This drug was approved in the 1970s
to treat multiple sclerosis, but it is now primarily the ``gold-
standard'' for treating infantile spasms, a disorder that affects about
2000 families in the U.S.
Prior to Questcor's purchase of the drug, the wholesale price of HP
Acthar was about $1600 per vial. Once in Questcor's hands the price of
the drug skyrocketed to $23,000 per vial--that's a 14-fold increase!
And according to the PRIME Institute, we're hitting just the tip of
the iceberg, because the problem isn't isolated to drugs that benefit
small numbers of patients.
Abbott Pharmaceuticals increased the price of Norvir, a drug used
to treat AIDS. The drug was often used by other companies as an
ingredient in their drug therapies. In 2003, Abbott jacked up the price
of Norvir [''NORE-veer''] by 400 percent.
This was done at the same time that Abbott began marketing their
new product, Kaletra, another AIDS pharmaceutical drug that included
Norvir and served as a replacement for the competition's drug therapy.
The result forced patients and providers to turn to Abbott's Kaletra
instead of the formerly cost-effective alternative that used Norvir and
competitor's drugs.
Previously undisclosed documents and emails reviewed by The Wall
Street Journal 2007 show that Abbott's leadership actively considered
ways to promote Kaletra over Norvir.
This bar graph illustrates the drastic jump in price, an egregious
increase from $257 to $1285.
This chart shows just a few examples of enormous drug price
increases. Mustargen to treat rare cancers, 1000 percent increase!
Cosmegen to treat kidney disease, 3500 percent increase!
And the price increase for Matulane is nearly off the chart with an
8000 percent increase!
This seems to be simple price gouging to me. And it not only hurts
hospitals that have to purchase these expensive drugs, but also the
patients who rely on them.
An elderly woman from Park Rapids, Minnesota who suffers from
cutaneous T-cell lymphoma was forced to pay over $8000 in out-of-pocket
expenses for Mustargen, a drug sold by Ovation Pharmaceuticals whose
single dose price increased from around $50 to nearly $550 after the
company acquired the rights to the drug.
In March, I had the opportunity to meet the Benson family and their
twin girls Anna and Sophia. Sophia suffered from PDA and needed Indocin
I.V. for treatment. They were able to receive the drug through
Children's Hospital, but with such obscene price increases, it is
getting more and more difficult for providers to meet such runaway
costs.
What is the solution?
In America, we have a serious problem with health care inflation
and runaway costs. It's no wonder: When we have pharmaceutical
companies like Ovation or Questcor increasing prices to astronomical
levels because of the lack of competition in the market, their actions
are able to exploit an extremely vulnerable and captive market.
And it's not like the pharmaceutical industry is withering on the
vine. This chart shows that even when compared to other Fortune 500
companies, pharmaceutical company profits are much higher.
The Orphan Drug Act was passed in 1983 to provide incentives to
drug companies to develop innovative drugs for rare diseases because
without incentives, drug companies may never be able to recoup research
and development costs in niche markets.
What we've seen, however, is that at least a handful of drug
companies have used this ``status'' of orphan drugs to keep increasing
costs--well beyond the costs of research, development, and
manufacturing. These staggeringly high prices, in turn, threaten the
financial stability of middle class families relying on the drugs.
Where generic drugs have helped lower the cost of many prescription
drugs on the market, generic competition is also less likely to occur
for orphan drugs. According to a study published in the RAND Journal of
Economics, the market size for a drug has to be $32 million (in 2007
dollars adjusted for inflation) to ensure entry of a generic into the
market.
When we're talking about drugs that have been around for decades
and treat patient populations of only a few thousand, there is often
just not enough of an incentive for a generic drug to enter the market.
Beyond hospitals and patients, a dramatic, unforeseeable increase
in price for one of these drugs has a significant impact on the Federal
Government. If the wholesale cost of a drug goes up, Medicaid or
Medicare has to pay for the increase.
We are holding this hearing to uncover this practice, but also to
look forward at what we can do to curb the dramatic increase of drug
prices we've seen in the last few years.
I've asked the Federal Trade Commission to initiate an
investigation into any potential anti-competitive conduct or
consequence arising out of Ovation's market actions and dominance in
the area of non-surgical treatments for PDA.
We need to ensure that the FTC continues to conduct these crucial
investigations to guarantee competition--keeping costs low for
consumers and encouraging innovation.
It's disturbing that our providers, hospitals and patients are
being blindsided by these exorbitant price increases. Our Federal
Government should be able to track these trends in pharmaceutical
pricing. 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.
When provided with the right information on drug prices, especially
in smaller markets, doctors can be alerted of big price increases,
potentially spurring generic alternatives to expensive drugs and giving
the Centers for Medicare and Medicaid Services (CMS) the tools and
information to better track pricing activity in the market.
Finally, I intend to investigate whether the FDA can fast-track
approval for generic drugs that would be just as safe and effective,
but much less expensive, creating competition in markets with dramatic
price increases.
I understand that we have a market-based economy. It's fine for
companies to make money on the products they sell. But when you're
dealing with the well-being of sick patients--babies and the elderly
and everyone in between--there has to be special consideration.
I look forward to hearing our witnesses' thoughts on this important
issue, and I hope today marks a starting point for addressing the
problems that accompany such enormous price increases. Problems that
have been plaguing doctors, insurance companies, Medicare and Medicaid
programs, and most importantly, the patient, for far too long.
After openings, I will introduce our panelists, and we will hear
their testimony.
[GRAPHIC] [TIFF OMITTED] T2773.001
Prepared Statement of Representative Carolyn Maloney, Vice Chair
Good morning. I would like to thank Chairman Schumer for allowing
Senator Klobuchar to hold this hearing to examine the skyrocketing
prices of certain prescription drugs. I want to welcome our panel and
thank them for testifying here today.
Evidence has been coming to light recently of potential abuses of
the pricing power we give to drug companies in the United States. In
case after case, it appears that some pharmaceutical companies have
been taking critical drugs that have been on the market for years--with
the costs of their development long since paid for--and increasing
prices to the very highest levels the market will bear.
Since some of these drugs are the only available cures for life-
threatening diseases, those prices can be extremely high. One of the
more egregious examples is the drug company Sigma Tau, which increased
the price for Matulane, a key drug for treating Hodgkins Lymphoma, by
an amazing 8,000 percent over 6 months. The research and development
costs for this drug are far in the past--Matulane has been on the
market for some forty years.
These sudden and questionable price hikes are having a devastating
impact on families. In 2007, Questcor Pharmaceuticals increased the
price of Acthar, the best available drug for treating infantile
epileptic spasms, by 1,300 percent. Acthar is a well-known drug that
has been in widespread use since the 1970s. Yet because of this recent
price increase, Danielle Foltz, one of our witnesses today, almost
could not get life-saving treatment for her infant son.
It appears that some companies are making massive price increases
for niche market drugs a critical part of their business strategy. In
2006, Ovation Pharmaceuticals increased the price of four different
drugs it had recently purchased by an average of 1,640 percent.
Nor are these isolated incidents. Recent research by the PRIME
Institute at the University of Minnesota has found numerous recent
cases where the price of single-source drug products more than doubled
due to a single price increase. What's more, they've found that the
incidence of these sudden price jumps increased substantially in this
decade compared to the 1980s and 1990s.
The only protection our system provides against these exorbitant
price increases is competition from generic alternatives. In recent
years we've seen real progress in using generic competition to lower
prices in drug markets for common diseases. We need to build on that
success and improve our system of approval and licensing for generics.
But research shows that generic companies are reluctant to enter
markets for rare diseases, since many of these ``niche'' markets aren't
large enough to sustain significant competition.
Most of the drugs discussed in this hearing are in these ``niche''
markets for rare diseases--markets that can allow drug companies to
raise prices without much competition. These drugs may be obscure, but
they are critical to the patients who need them. And it's our
responsibility to make sure that access to these drugs is maintained.
Going forward, Congress needs to examine ways to do this--and to
address the kind of massive and unnecessary price increases that
endanger access to life-enhancing drugs.
Mr. Chairman, thank you for holding this important hearing.
__________
Prepared Statement of Madeline M. Carpinelli, Research Fellow and
Stephen W. Schondelmeyer Professor and Director PRIME Institute,
College of Pharmacy, University of Minnesota, Minneapolis, MN
Thank you, Chairman Schumer and other members of the Joint Economic
Committee for this opportunity to provide information and insights
regarding pricing trends in the pharmaceutical market.
I am Madeline Carpinelli and I serve as a Research Fellow with the
PRIME Institute at the University of Minnesota. This Institute focuses
its research on policy issues related to pharmaceutical economics and
the distribution and management of drug expenditures at all levels in
the marketplace. Prior to joining the PRIME Institute, I was a senior
policy analyst at the Office of Inspector General (OIG) for HHS, where
I managed a team of analysts in conducting evaluations of government
drug price reporting and compliance issues. During my tenure at the
OIG, I played a significant role in the development of the OIG's annual
Work Plan related to identification of key issues in the pharmaceutical
industry such as the role of AWP, AMP and the Public Health Services'
340B Drug Program. I also interfaced with the Department of Justice and
the OIG Office of Prosecutions and Investigations.
These remarks present my own findings and views based upon my
experience in studying the pharmaceutical marketplace for the past 9
years and upon my observations and ongoing work in collaboration with
Dr. Stephen W. Schondelmeyer, the Director of the PRIME Institute.
Today, I will provide an overview and preliminary findings from
research we have been conducting on extraordinary price increases in
the pharmaceutical market. Through our tracking of drug prices over
time, we have become aware that certain drug products have experienced
extraordinary price increases that are well beyond what would normally
be expected in a competitive market. We found hundreds of cases of
extraordinary price increases for branded drug products. We also found
that the incidence of such extraordinary price increases has been
rising sharply in recent years, and today is much higher than it was in
the 1980s and 1990s.
tracking drug prices and related trends
Tracking changes in the benchmark prices of prescription drugs is
important since it provides an explanation of the role of price changes
in drug expenditures over time. AARP and the PRIME Institute have
routinely tracked the price changes experienced by the brand name and
generic prescription drugs most commonly used by Medicare recipients.
These price change reports are updated quarterly and the reports can be
found on the AARP website (www.AARP.orq). These price trend reports
have shown that a representative market basket of the most commonly
used brand name drugs has experienced price increases from 2006 to 2007
that averaged 7.4 percent. For the same time period, the rate of
general inflation, as measured by the Consumer Price Index for All
Items, was 2.9 percent. In other words, brand name drug prices grew at
more than two and one-half times the rate of general inflation.
Certain commonly used brand name drugs experience price increases
that are substantially greater than other brand name drugs on average.
For example, in 2007, Ambien (5 mg and 10 mg tablets) had an annualized
price increase of 27.7 percent compared to the overall brand name
inflation rate of 7.4 percent. Brand name prices that increase at a
rate of two to three times the rate of general inflation have persisted
for more than a decade. Each time the price trends are examined there
are a handful of brand name prescription drugs that have price
increases substantially greater than the overall brand name inflation
rate. The impact of these prices growing faster than general inflation
has been that prescription drugs have been growing as a share of
national health expenditures and as a share of the gross domestic
product.
While tracking the price changes of the most commonly used brand
name and generic drugs, the prices of other drug products beyond the
top 200 to 300 drugs have also been examined. In recent years, some of
these less commonly used prescription drug products have had
extraordinary price increases.
extraordinary drug price increases
What do we mean by an extraordinary price increase? Extraordinary
is a term that can be understood in contrast to the ordinary.
Ordinarily brand name price increases have been two to three times the
rate of general inflation and this rate of price increase has become
routine. This rate of inflation is not necessarily acceptable, or even
reflective of an economically efficient pharmaceutical market, but it
has come to be expected in recent years. Even the fact that certain
brand name drugs have price increases that are two to three times the
average rate of inflation for most brand name drugs has come to be
expected. Price increases of these certain brand name drugs may be 10
percent to 30 percent on an annual basis.
We should not minimize the impact that these brand name price
increases have on public and private drug expenditures each year, or
the concern that these price increases raise for patients, payers, and
policymakers. Recently, however, there have been other prescription
drug products that have had extraordinary price increases which are far
beyond these already substantial price increases observed for major
brand name drug products.
In order to examine, and understand, the magnitude of these
extraordinary price increases, the PRIME Institute has been conducting
a study of such price increases. For purposes of this study:
Extraordinary price increases are: `any price increase that is
equal to, or greater than, 100 percent at a single point in time.'
A 100 percent increase in price means that the price of a drug has
doubled overnight. In other words, a prescription that costs $100 today
would cost $200 tomorrow. Other levels of price increases may well
deserve the label as extraordinary price increases, but a price that
more than doubles all at once is certainly extraordinary. A price
increase of this magnitude could also be labeled as a supra competitive
price indicating that the price is achieved through some real, or
perceived, monopoly position in the market.
The benchmark prices known as AWP and WAC are set, or influenced,
by the drug firm. These are publicly available prices and changes in
these prices will lead to changes in expenditures of public and private
drug programs. Our work on this study is ongoing, but we have
preliminary descriptive data on the extent of extraordinary price
increases.
The price history of each drug product, at the NDC (national drug
code) level, was examined to determine the direction and amount of
price change in both of the usual benchmark prices (i.e., AWP and WAC).
There was a total of 35,143 NDCs that have been introduced to the
market since 1987 and this set of NDCs was used as the data set for the
study. More than one-half of these drug products (18,124 NDCs) were
manufactured, or at least marketed, by the firm whose name is on the
label. The remaining 17,019 NDCs are drug products that are sold by
firms known as repackagers. An examination of the role, practices, and
pricing of these repackagers will be the subject of a later analysis.
The drug products were grouped by their patent and exclusivity
status into three broad groups: (1) brand single source drugs, (2)
brand off-patent drugs, and (3) generic off-patent drugs. Price changes
for brand name drug products have been the initial focus of our
research. Across all drug product groups, 13.5 percent of all NDCs have
had one or more extraordinary price increases in the period 1988 to
2008. One in twenty (5.3 percent) of the brand single source NDCs and
one in forty-five (2.2 percent) of the brand off-patent NDCs had seen
an extraordinary price increase.
The timing of when these extraordinary price increases occurred was
examined over the twenty year period from 1988 to 2008. While there
were a few extraordinary price increases in the decade of the 1990s,
the vast majority have been seen since the year 2000. The number of
extraordinary price increases has been growing, and especially for
brand name single source and brand name off-patent NDCs, in the past 4
years (See Figure 1).
[GRAPHIC] [TIFF OMITTED] 44974.006
A price increase of 100 percent or more at one point in time is
remarkable in its own right, but the size of some of these
extraordinary price increases is staggering. For the brand single
source drug products there were 6 price increases of more than 1,000
percent with the largest being 3,436 percent. Another 6 brand single
source NDCs had an increase between 500 percent and 999 percent. One of
the brand off-patent NDCs had a price increase of 10,631 percent and
another 10 NDCs had extraordinary price increases of greater than 500
percent.
impact of extraordinary drug price increases
Obviously there have been some extremely high price increases for a
large and growing number of drug products. Because of the magnitude of
these extraordinary price increases, it is hard to imagine that there
has not been a significant impact on the market. These observations
raise questions and concerns.
The questions involve asking:
Why have these extraordinary price increases occurred?
What market forces have led to, or allowed, these extraordinary
price increases?
What patterns are there with respect to types of drug products
involved?
What patterns are there with respect to types of drug firms
involved?
What policy issues are raised by this pricing behavior?
What policy approaches may be appropriate to mitigate or regulate
this behavior?
The concerns raised by these extraordinary price increases include:
What is the impact Medicare Part D and Part B drug expenditures?
What is the impact on Medicaid drug expenditures?
What is the impact on drug expenditures in other government
programs such as the Veterans Administration, the 340 B program, Indian
Health Service, the active military health system, and other programs?
What is the impact on employer and private drug benefit programs?
What is the impact on orphan drug products?
What is the impact on access to medications?
What is the impact on access and affordability to vulnerable
patient populations?
factors driving extraordinary drug price increases
The pharmaceutical market is extremely complex and vexing to most
observers. There are many unique institutional and structural features
to the pharmaceutical market that influence the economic behavior of
drugs and drug prices. The extent and magnitude of price increases seen
in our preliminary study of this issue appear to indicate that the
extraordinary price increases are not driven by the ordinary
explanations for price increases such as the general inflation rate of
the economy, the cost of materials, labor and distribution, or the
costs of FDA required research for approval.
The magnitude of these extraordinary price increases is so great
that these prices do not appear to be the product of an economically
efficient competitive market. In fact, these prices may well be supra
competitive prices, that is, prices above what can be sustained in a
competitive market. Supra competitive prices are present when a firm
has a unique position in a market with respect to intellectual
property, legal status, barriers to entry, product features that offer
a competitive advantage, or other factors. The number and magnitude of
these extraordinary price increases also raises the possibility that
antitrust issues may be present. Determination of the antitrust
implications would require an assessment of the specific and unique
market for each drug product to determine the circumstances and market
forces that enabled these extraordinary price increases to be taken and
sustained.
Most of the drug products with extraordinary price increases are
not among the top 100 to 500 drug products on the market. In part,
these drug products may have been able to implement these extraordinary
price increases because these are low volume drugs that are not often
tracked or noticed in the marketplace. In a sense, these drug products
and their price increases have ``flown below the radar'' with respect
to attention being given to their pricing behavior.
Many of these drug products are for conditions that have a
relatively small volume of demand. Indeed, some of these drug products
are even designated as orphan drugs--meaning that they are for
conditions that have a small target population. Among the drug products
with extraordinary price increases are a number of products that are
unusual dosage forms such as injections, gels, transdermal patches,
sustained release tablets and capsules, and others. Some of these drug
products may have such a small market that it would not be profitable
for two competitors to survive. Other drug products with extraordinary
price increases may have been in short supply either before or after
the price increase was taken. The fact that some of these drug products
are sold only through limited distribution channels (e.g., specialty
pharmacies, mail order pharmacies, physician dispensers, dialysis care
centers, and others) may also have played a factor in enabling
extraordinary price increases.
The intellectual property and exclusivity status of these drug
products may also have facilitated the extraordinary price increases.
Among the drugs found to have these large price increases were old
drugs that have a patent for a new use of the drug, thus providing a
period of market exclusivity for the drug product. Other old drug
products have been prepared in a new dosage form that may be the
subject of a patent, thus preventing the expected generic competition
that is usually seen. In other situations, certain drug firms have a
large number of drug products with extraordinary price increases. This
observation raises the issue of whether or not the extreme price
increases are a matter of a particular corporate strategy. Firms may
acquire drug products that have limited market competition, or that
have high potential for monopoly power with or without intellectual
property rights.
The PRIME Institute plans to continue research in this area to
better understand and characterize the market conditions that have led
to the growth of extraordinary price increases for prescription drug
products. Our research will look for patterns across drug firms,
therapeutic categories, market conditions, intellectual property and
exclusivity status, dosage forms, distribution channels and other
factors. The continued research will also examine how these
extraordinary price increases have affected private and government drug
programs, market entry and the market for drug products, and specific
patient populations.
summary
Extraordinary price increases for drug products have been observed
in recent years. These extraordinary price increases are price changes
of more than 100 percent at a single point in time with some ranging to
more than a 10,000 percent increase in price. About one in every twenty
brand single source drug products (5.3 percent) has had one or more
extraordinary price increases. These enormous price increases certainly
affect the individual patients who are using the medication and in
aggregate these large price increases expand the ever-growing
expenditures of private and public drug programs. The PRIME Institute
will continue to study this issue to improve our understanding of the
issues involved and to identify policy alternatives to address any
societal concerns that may be present.
__________
Prepared Statement of Alan L. Goldbloom, M.D., President and CEO
Children's Hospitals and Clinics of Minnesota
Madame Chairman, members of the committee, thank you for the
opportunity to testify here today on this critically important. issue.
My name is Dr. Alan Goldbloorn; I am president and CEO of
Children's Hospitals and Clinics of Minnesota. We are the 7th largest
pediatric health care system in the Nation and we are the largest
provider of care to children with severe prematurity, cancer, heart
disease, and complex surgical conditions in the Upper Midwest.
Children's of Minnesota is recognized--both nationally and
internationally--for our outstanding outcomes in treating premature
infants.
My testimony here today will focus on my personal experiences at
Children's of Minnesota and two drugs we use in treating premature
babies and a rare seizure disorder in very young infants. My testimony
is not a rant against the industry as a whole, for this industry has
produced extraordinary advances in health care, from which we all
benefit. Rather, my concern is focused on the practices of some
specialty pharmaceutical companies and the questionable pricing of some
older drugs. And though my personal experiences involve two specific
companies, they are in no way alone in this practice nor is it confined
to only pediatric pharmaceuticals.
One condition we treat in infants is patent ductus arteriosus--or
PDA. PDA affects about 3,000 infants annually and is most common in
premature babies. I will explain this in very simple terms. Blood
circulation changes within minutes of a baby's birth. Normally, our
blood picks up oxygen in the lungs and then is pumped by the heart to
bring that oxygen to the rest of our body. However, a baby, doesn't
breath while still in the womb. Instead, a blood vessel called the
ductus arteriosus diverts blood away from the lungs, and the fetus
actually gets oxygen directly from the mother via the umbilical cord.
Once the baby begins to breath alter birth, the ductus arteriosus
normally spontaneously closes, allowing blood to flow to the newborn's
lungs. However, in some babies, especially those who are premature, the
ductus does not close. Often, this is a minor problem that resolves
without treatment. However, in some infants it becomes serious enough
to cause congestive heart failure, and to interfere significantly with
breathing. When that happens, treatment is required. Last year,
Children's of Minnesota treated around 110 babies for this condition.
For many years, the only way to definitively treat this condition
was with surgery, a procedure in which the persistently open artery was
simply tied off. However, over 30 years ago it was learned that the
drug indornethacin (Indocin), when given intravenously, could often
produce the same result without subjecting the baby to surgery. Indocin
is now the standard initial treatment for this condition.
Until recently, Indocin has been a low cost, safe, non-surgical way
to treat these infants. In fact, the cost for Indocin up until January
of 2006 was just over $108 per unit. About 42 of the nation's largest
free-standing children's hospitals are members of an organization
called Child Health Corporation of America (CHCA), which serves as the
group purchasing organization for three-quarters of those hospitals.
For the members of the group purchasing organization, the collective
annual cost prior to 2006 was just $136,426 nationally.
However, when the specialty pharmaceutical company Ovation bought
exclusive rights to Indocin and several other drugs from pharmaceutical
giant Merck in August of 2005, the price for one unit of Indocin jumped
from $108 to $1,500--a 1,278 percent increase. Yet Indocin is an old
drug. It has been on the market for more than three decades, so this
dramatic price increase cannot be attributed to the high cost of
research and development. As purchasers, the children's hospitals have
had no other options. There have been no other manufacturers of
Indocin. Effectively, one company has a monopoly and can use it to
price-gouge.
Madame Chairman, at this time I would like to insert into the
record the article titled ``Drug Pricing in Pediatrics: The Egregious
Example of Indomethacin'' authored by Dr. Alan Jobe of Cincinnati
Children's Hospital in Cincinnati, Ohio which appeared in the journal
of The American Academy of Pediatrics in June of 2007.
On the price increase of Indocin after Ovation acquired the drug
from Merck, Dr. Jobe writes ``This is a rather astounding increase in
price for a drug that has a stable niche market and requires no
advertising, no educational expenses (all neonatologists know how to
use indomethacin), and no further drug development. It is quite hard to
imagine how such an increase in price could be justified.''
(Pediatrics, Volume 119, Number 6, June 2007, pg. 1197). Dr. Jobe also
points out that the cost per milligram of Indocin is 30 to 60 times
higher in the United States than other countries that have similar
health care systems with little explanation as to why this occurs
except for profit motivation. The cost per milligram in the L.S. is
$1,875 compared with $14 iii Canada, $16 in Britain, $22 in Germany and
Holland, and $11 in Australia.
The effect of this dramatic price increase in our hospital has
totaled nearly 150,000 dollars in the first year of the price increase.
And, according to CHCA it cost its member hospitals close to $2 million
that same year--that's up from just over $136,000 just 1 year earlier.
Like all health care providers, we struggle with the issue of
increasing costs. Often we are not able to immediately recover these
costs from insurers, especially when children's hospitals rely heavily
on Medicaid as the single largest insurer of children in the country.
Eventually, however, increased costs do get passed on, and are
reflected in the premiums that individuals and businesses pay, and in
the tax-supported programs like Medicaid. From our perspective, that
extra $150,000 that we paid to one drug manufacturer is money we would
much rather have spent on improved services for patients.
The children's hospitals who are part of the CHCA group purchasing
organization represent only the tip of the iceberg when it comes to the
numbers of patients and costs of Indocin in the nearly 600 neonatal
intensive care units nationwide. Most of these units are not in
children's hospitals, but instead are often in general and maternity
hospitals where the babies are born. So the overall impact is
ultimately much higher than I have quoted here.
Indocin is not the only drug Ovation has marked up in such a
dramatic fashion. Three other drugs that were purchased from Merck--
Cosmegen, Diuril Sodium, and Mustargen have seen price increases of'
3,437 percent, 864 percent, and 979 percent respectively. Cosmegen is
an agent used to treat a variety of pediatric cancers, Diuril Sodium is
a diuretic used to reduce fluid overload in infants and neonates, and
mustargen is used to treat brain tumors and certain lymphomas (another
form of cancer).
Madame Chairman, I would like to insert into the record the
following chart that shows the cost of the four drugs purchased by
Ovation. As you will see, after Ovation purchased these four drugs from
Merck, there was a significant price increase--by as much as 3,437
percent in the case of Cosmegen.
----------------------------------------------------------------------------------------------------------------
Price per unit
Brand Name prior to 01/24/ Price per unit Percent of
06 as of 06/08/06 increase
----------------------------------------------------------------------------------------------------------------
Cosmegen........................................................ $13.43 $475.05 3437%
Diuril Sodium................................................... $12.36 $119.21 864%
Indocin I.V..................................................... $108.88 $1500.00 1278%
Mustargen....................................................... $50.55 $545.28 979%
----------------------------------------------------------------------------------------------------------------
* Information provided by the Child Health Corporation of America.
I would also like to insert the following chart that shows how CHCA
member hospitals have been affected by the price increases in these fur
drugs by Ovation:
----------------------------------------------------------------------------------------------------------------
2005 Total Price per Price per
Brand Name purchased unit prior 2005 Total unit as of 2006 Extended
units 01/24/06 Spend 06/08/06 Volume
----------------------------------------------------------------------------------------------------------------
Cosmegen................................. 5,282 $13.43 $70,937.26 $475.05 $2,509,214.10
Diuril Sodium............................ 12,991 $12.36 $160,568.76 $119.21 $1,548,657.11
Indocin I.V.............................. 1,253 $108.88 $136,426.64 $1,500 $1,879,500.00
Mustargen................................ 42 $50.55 $2,123.10 $545.28 $22,901.76
----------------------------------------------------------------------
Grand total............................ 27,195 ........... 370,055.76 ........... 22,960,272.97
----------------------------------------------------------------------------------------------------------------
* Information provided by the Child Health Corporation of America.
Madame Chairman, the total cost increase for CHCA hospitals in 1
year for these four drugs alone was more than $5.5 million.
One of the best known examples of similar practice in the industry
occurred when the specialty pharmaceutical company Questcor bought
Acthar Gel from Aventis. Acthar Gel is used to treat infantile spasms,
a rare, severe, and treatment-resistant form of seizures affecting very
young infants. Acthar Gel is considered the gold standard in the
treatment of IS. At Children's of Minnesota, we have one of the
nation's largest, most advanced epilepsy treatment units and have used
Acthar Gel nearly 50 times so far this year.
Originally approved in 1978 for multiple sclerosis, the cost of the
drug has always been high. However, after Questcor bought the rights to
sell Acthar Gel, the price went from a list price of $1,650 per vial to
a list price of $23,269 per vial. That's twenty three thousand, not
twenty three hundred dollars. In fact, this more than 1,000 percent
price increase costs CHCA hospitals more than $21 million per year.
Madame Chairman and Members of the Committee, there are many other
drugs--hundreds in fact--that are priced this way--both pediatric and
non-pediatric. And, even with good insurance, a twenty percent copay on
Acthar Gel is more than many people's mortgage payment. What is
frightening is that in this time of skyrocketing health care costs, the
burden of expensive health care now affects the insured as well as the
uninsured or under insured. The market for many of these drugs is quite
limited, so it is unlikely that other companies will begin to produce
or sell a low-volume specialty product at a reasonable cost. The
resulting monopoly is resulting in windfall profit opportunities for
companies like Ovation and Questcor, and they are taking full
advantage.
At this time Madame Chairman I would like to place into the record
an article dated April 14, 2008 by Gina Kolata that appeared in the New
Fork Times titled ``Co-Payments for Expensive Drugs Soar.''
Today, the Nation is in an uproar over $4 dollar a gallon gasoline.
We accuse the nation's oil companies of price gouging and Members of
Congress and the Presidential candidates are working to find solutions
to the problem. But, if you compare the most recent financials for
Exxon Mobil and Questcor--you'll find that one company's profit margin
is much higher--and it's not who you might think. Pharmaceuticals and
specialty pharmaceuticals are the nation's most profitable industries.
I want to reiterate that my testimony today is not a rant against the
industry as a whole which has produced many extraordinary benefits in
health care. Instead, my concern is focused on the practices I just
described, in which unjustified pricing decisions are taking advantage
of some of the most vulnerable members of our population, and driving
health costs up unnecessarily.
Thank you for the opportunity to speak with you today.
[GRAPHIC] [TIFF OMITTED] 44974.003
[GRAPHIC] [TIFF OMITTED] 44974.004
[GRAPHIC] [TIFF OMITTED] 44974.005
[From the New York Times, April 14, 2008]
Co-Payments Soar for Drugs With High Prices
(By Gina Kolata)
Correction Appended
Health insurance companies are rapidly adopting a new pricing
system for very expensive drugs, asking patients to pay hundreds and
even thousands of dollars for prescriptions for medications that may
save their lives or slow the progress of serious diseases.
With the new pricing system, insurers abandoned the traditional
arrangement that has patients pay a fixed amount, like $10, $20 or $30
for a prescription, no matter what the drug's actual cost. Instead,
they are charging patients a percentage of the cost of certain high-
priced drugs, usually 20 to 33 percent, which can amount to thousands
of dollars a month.
The system means that the burden of expensive health care can now
affect insured people, too.
No one knows how many patients are affected, but hundreds of drugs
are priced this new way. They are used to treat diseases that may be
fairly common, including multiple sclerosis, rheumatoid arthritis,
hemophilia, hepatitis C and some cancers. There are no cheaper
equivalents for these drugs, so patients are forced to pay the price or
do without.
Insurers say the new system keeps everyone's premiums down at a
time when some of the most innovative and promising new treatments for
conditions like cancer and rheumatoid arthritis and multiple sclerosis
can cost $1oo,000 and more a year.
But the result is that patients may have to spend more for a drug
than they pay for their mortgages, more, in some cases, than their
monthly incomes.
The system, often called Tier 4, began in earnest with Medicare
drug plans and spread rapidly. It is now incorporated into 86 percent
of those plans. Some have even higher co-payments for certain drugs, a
Tier 5.
Now Tier 4 is also showing up in insurance that people buy on their
own or acquire through employers, said Dan Mendelson of Avalere Health,
a research organization in Washington. It is the fastest-growing
segment in private insurance, Mr. Mendelson said. Five years ago it was
virtually nonexistent in private plans, he said. Now 10 percent of them
have Tier 4 drug categories.
Private insurers began offering Tier 4 plans in response to
employers who were looking for ways to keep costs down, said Karen
Ignagni, president of America's Health Insurance Plans, which
represents most of the nation's health insurers. When people who need
Tier 4 drugs pay more for them, other subscribers in the plan pay less
for their coverage.
But the new system sticks seriously ill people with huge bills,
said James Robinson, a health economist at the University of
California, Berkeley. ``It is very unfortunate social policy,'' Dr.
Robinson said. ``The more the sick person pays, the less the healthy
person pays.''
Traditionally, the idea of insurance was to spread the costs of
paying for the sick.
``This is an erosion of the traditional concept of insurance,'' Mr.
Mendelson said. ``Those beneficiaries who bear the burden of illness
are also bearing the burden of cost.''
And often, patients say, they had no idea that they would be faced
with such a situation.
It happened to Robin Steinwand, 53, who has multiple sclerosis.
In January, shortly after Ms. Steinwand renewed her insurance
policy with Kaiser Permanente, she went to refill her prescription for
Copaxone. She had been insured with Kaiser for 17 years through her
husband, a Federal employee, and had had no complaints about the
coverage.
She had been taking Copaxone since multiple sclerosis was diagnosed
in 2000, buying a 30 days' supply at a time. And even though the drug
costs $1,900 a month, Kaiser required only a $20 co-payment.
Not this time. When Ms. Steinwand went to pick up her prescription
at a pharmacy near her home in Silver Spring, Md., the pharmacist
handed her a bill for $325.
There must be a mistake, Ms. Steinwand said. So the pharmacist
checked with her supervisor. The new price was correct. Kaiser's policy
had changed. Now Kaiser was charging 25 percent of the cost of the drug
up to a maximum of $325 per prescription. Her annual cost would be
$3,900 and unless her insurance changed or the drug dropped in price,
it would go on for the rest of her life.
``I charged it, then got into my car and burst into tears,'' Ms.
Steinwand said.
She needed the drug, she said, because it can slow the course of
her disease. And she knew she would just have to pay for it, but it
would not be easy.
``It's a tough economic time for everyone,'' she said. ``My son
will start college in a year and a half. We are asking ourselves, can
we afford a vacation? Can we continue to save for retirement and
college?''
Although Kaiser advised patients of the new plan in its brochure
that it sent out in the open enrollment period late last year, Ms.
Steinwand did not notice it. And private insurers, Mr. Mendelson said,
can legally change their coverage to one in which some drugs are Tier 4
with no advance notice.
Medicare drug plans have to notify patients but, Mr. Mendelson
said, ``that doesn't mean the person will hear about it.'' He added,
``You don't read all your mail.''
Some patients said they had no idea whether their plan changed or
whether it always had a Tier 4. The new system came as a surprise when
they found out that they needed an expensive drug.
That's what happened to Robert W. Banning of Arlington, Va., when
his doctor prescribed Sprycel for his chronic myelogenous leukemia. The
drug can block the growth of cancer cells, extending lives. It is a
tablet to be taken twice a day--no need for chemotherapy infusions.
Mr. Banning, 81, a retired owner of car dealerships, thought he had
good insurance through AARP. But Sprycel, which he will have to take
for the rest of his life, costs more than $13,500 for a 90-day supply,
and Mr. Banning soon discovered that the AARP plan required him to pay
more than $4,000.
Mr. Banning and his son, Robert Banning Jr., have accepted the
situation. ``We're not trying to make anybody the heavy,'' the father
said.
So far, they have not purchased the drug. But if they do, they know
that the expense would go on and on, his son said. ``Somehow or other,
myself and my family will do whatever it takes. You don't put your
parent on a scale.''
But Ms. Steinwand was not so sanguine. She immediately asked Kaiser
why it had changed its plan.
The answer came in a letter from the Federal Office of Personnel
Management, which negotiates with health insurers in the plan her
husband has as a Federal employee. Kaiser classifies drugs like
Copaxone as specialty drugs. They, the letter said, ``are high-cost
drugs used to treat relatively few people suffering from complex
conditions like anemia, cancer, hemophilia, multiple sclerosis,
rheumatoid arthritis and human growth hormone deficiency.''
And Kaiser, the agency added, had made a convincing argument that
charging a percentage of the cost of these drugs ``helped lower the
rates for Federal employees.''
Ms. Steinwand can change plans at the end of the year, choosing one
that allows her to pay $20 for the Copaxone, but she worries about
whether that will help. ``I am a little nervous,'' she said. ``Will the
next company follow suit next year?''
But it turns out that she won't have to worry, at least for the
rest of this year.
A Kaiser spokeswoman, Sandra R. Gregg, said on Friday that Kaiser
had decided to suspend the change for the program involving Federal
employees in the mid-Atlantic region while it reviewed the new policy.
The suspension will last for the rest of the year, she said. Ms.
Steinwand and others who paid the new price for their drugs will be
repaid the difference between the new price and the old co-payment.
Ms. Gregg explained that Kaiser had been discussing the new pricing
plan with the Office of Personnel Management over the previous few days
because patients had been raising questions about it. That led to the
decision to suspend the changed pricing system.
``Letters will go out next week,'' Ms. Gregg said.
But some with the new plans say they have no way out.
Julie Bass, who lives near Orlando, Fla., has metastatic breast
cancer, lives on Social Security disability payments, and because she
is disabled, is covered by insurance through a Medicare H.M.O. Ms.
Bass, 52, said she had no alternatives to her H.M.O. She said she could
not afford a regular Medicare plan, which has co-payments of 20 percent
for such things as emergency care, outpatient surgery and scans. That
left her with a choice of two Medicare H.M.O's that operate in her
region. But of the two H.M.O's, her doctors accept only Wellcare.
Now, she said, one drug her doctor may prescribe to control her
cancer is Tykerb. But her insurer, Wellcare, classifies it as Tier 4,
and she knows she cannot afford it.
Wellcare declined to say what Tykerb might cost, but its list price
according to a standard source, Red Book, is $3,480 for 150 tablets,
which may last a patient 21 days. Wellcare requires patients to pay a
third of the cost of its Tier 4 drugs.
``For everybody in my position with metastatic breast cancer, there
are times when you are stable and can go off treatment,'' Ms. Bass
said. ``But if we are progressing, we have to be on treatment, or we
will die.''
``People's eyes need to be opened,'' she said. ``They need to
understand that these drugs are very costly, and there are a lot of
people out there who are struggling with these costs.''
This article has been revised to reflect the following correction:
Correction: April 15, 2008
An article on Monday about a large increase in insurance co-
payments for high-priced drugs misstated the way the multiple sclerosis
drug Copaxone is administered. It is injected, not taken in pill form.
__________
Prepared Statement of Danielle Foltz, Parent of Young Patient from
Rhode Island
Chairman Schumer, Vice Chair Maloney, Senator Klobuchar and members
of the distinguished panel. I am Danielle Foltz of Rhode Island and the
mother of Trevor Foltz. I want to thank you for this opportunity to
speak today about our family's experience with Infantile Spasms and our
journey to receive critically needed treatment for our son.
While I am speaking only on behalf of my own family, I would also
like to acknowledge the support of the Epilepsy Foundation. The
Epilepsy Foundation represents the 3 million Americans who have
epilepsy and their goal is to help those individuals get access to the
care they need. I know they will continue to follow this hearing and
the path from here forward. Thank you.
I understand that today's hearing is highly political. But for us--
and the two thousand families devastated by the diagnosis of Infantile
Spasms each year--it's personal.
How do you find the words to describe the most horrific event of
your life; your personal valley of the shadow of death? Because that is
exactly the feeling that clamps your heart when you are at a place
where the medication needed to rescue your child is unattainable.
For 7\1/2\ months we celebrated our beautiful third born, Trevor.
In fact, we were packing luggage in anticipation of returning to our
non-profit ministry & home in Tanzania, East Africa when we noticed the
jerky, odd movements Trevor suddenly started making. It resembled a
newborn startle reflex.
Devastated does not touch how we felt when we learned that those
jerky movements were actually seizures! Trevor was having as many as 20
seizures in a 60 second span; up to 5 times a day. We knew it was
serious when the neurologist told us to meet with him immediately
following Trevor's first EEG.
In that meeting we were given the devastating news. Our beautiful
7\1/2\ month old son had the rare & catastrophic disorder called
Infantile Spasms.
All three neurologists we consulted told us the same thing. If we
did not get his seizures under control immediately Trevor's developing
brain would be irreparably damaged. We were told the only thing between
our son and a shot at a normal life was a drug called ACTH, marketed as
Acthar gel by Questcor Pharmaceuticals.
Our neurologist prepared us that Trevor's treatment would be
pricey. He estimated around $10,000 per vial. We went numb.
We immediately notified our insurance company. The urgency of
providing Trevor's treatment was heavy and we needed to move forward as
quickly as possible. As Trevor's seizures intensified we read the
information about IS online and the sorrow of what we were up against
was emotionally overwhelming.
What we didn't know was that 4 months prior to Trevor's diagnosis,
Questcor Pharmaceuticals had implemented a new business model. This
business model included raising the price per vial of Acthar Gel from
approximately $1000 each to over $30,000 a vial. And because Trevor was
the first child to require ACTH treatment after the price increase, not
even our neurologist was aware of just how dramatically the price had
risen. What he thought would cost no more than $50,000 total would now
be an astounding $150,000 for the medication alone!
In hindsight, we have no doubt the excessive price of this drug
influenced the insurance company against originally approving it for
Trevor.
My husband spent days on the phone fighting for Trevor to have
coverage. We knew there was no way we could afford to pay for his
treatment ourselves. One vial of Acthar was being quoted at a minimum
of $30,000. And Trevor needed 5 vials. We could buy a nice 3 bedroom
colonial is some areas of the country with that kind of money! But
because we had given our lives to serve a non-profit ministry in
Tanzania, we don't own that 3 bedroom colonial. We didn't have a house
to mortgage as collateral for his treatment--which I've heard some
families have been forced to do. All of our earthly possessions were in
Africa. We had nothing to liquidate to come up with the money. But to
wait was not OK. We needed to save our son NOW.
And so I was frantically looking for other options. Any options.
I called the Acthar support & assistance line because I read that
Questcor offers the assurance that no child who truly needs this
treatment will go without. I spoke with a call center representative
and was informed that the approval process included paper-work for
ourselves & Trevor's doctors to submit. When I asked how long the
approval process would take I was informed it would be a minimum of 3
business days. When I asked if approval was a sure thing in a case like
ours--I was told ``no''. At that point, my emotions got the best of me,
and I informed her that I thought it was a sham! That if Questcor was
really about providing a vital medication in a time of desperate need
it wouldn't take three business days just to get a maybe!
When your infant's body is being wracked by forty plus seizures
daily--you do not have THREE business days to play Russian Roulette
waiting for a medication that could stop his seizures and right the
world again!
Those days following Trevor's diagnosis were the most emotionally
dark in our family's life. My husband & I were pretty much a puddle on
the floor. Just getting that kind of a diagnosis shatters you, but then
to add the guilt of knowing that you may not be able to rescue your son
because you can't afford to? It's unimaginable and unacceptable.
We literally thought it was possible that our son would go without
treatment. Or that he would be forced to use a less effective
medication that could leave him developmentally challenged forever. I
wonder how many families are living that same nightmare right now? How
many are being exploited in their hour of desperation?
Finally, on Wednesday November 21st 2007, the day before
Thanksgiving, after numerous emotional phone calls between my husband &
our employer we were told to move forward with the treatment. It had
already been 1 day shy of a week since Trevor's diagnosis. And each day
without treatment was stealing our son. We witnessed his physical
regression and distress as the seizures became more violent.
We were admitted the following day. Trevor's first Thanksgiving was
spent at Hasbro Children's Hospital.
Because ACTH must be injected into the thigh, a nurse had to teach
us how to administer it once we went home. When she asked my husband if
he was nervous about giving Trevor his shot for the first time, he
answered that he was more nervous about holding $5000 in a single
syringe. Or worse, dropping the vial!
I know that we were lucky. Our insurance ended up covering Trevor's
6 week course of ACTH; which has proven to be his miracle drug. Trevor
has been seizure free since his fourth injection. Trevor is the poster
child for why this drug needs to be available & affordable! Today we
are celebrating our amazing miracle boy! We pray that Trevor will
continue to be seizure free. But what if his spasms return? Will we
again have to fight for ACTH?
I will leave this hearing today and go home. I'll return to my life
of loving & advocating for my son. But my story is in-ex-tricably
connected to the 2000 families this year- and the next- and the next--
who will live this horrific diagnosis. What about them? My heart cannot
help but be consumed for the other families that will be devastated by
Infantile Spasms this year. Will they have access to this drug? Or will
ACTH not even be an option for their child because they are priced out
of the drug they desperately need?
In fact, in preparation for this testimony today my husband
researched the current price of a vial of ACTH. Unbelievably, the
escalation has not plateau-ed! The very same vial we ended up paying
$26,000 to obtain 6 months ago, today can cost as much as $40,000.
Where does it end? I'm not going to pretend that I understand the many
layers of this issue. But what I can wrap my heart around is the terror
a mom faces when she cannot rescue her baby. Not because his sickness
is untreatable but because financially she cannot access the medication
he needs!
I implore you today to please consider my thoughts and to find a
way to help families like mine get access to the medications they need.
Please help families dealing with Infantile Spasms get affordable
access to the drug that can give them a miracle too.
__________
Prepared Statement of the National Organization for Rare Disorders
(NORD)
The National Organization for Rare Disorders (NORD) appreciates the
opportunity to provide input on a topic that is extremely important to
our primary constituents--the nearly 30 million Americans affected by
rare diseases.
NORD is widely recognized as the primary public policy advocate for
individuals and families affected by rare diseases in the United
States. It was formed in 1983 by leaders of patient organizations for
specific rare diseases who, at that time, were providing advocacy for
enactment of the Orphan Drug Act.
Today, NORD is a unique federation of voluntary health
organizations and individuals committed to the identification,
treatment, and cure of rare disorders through programs of education,
advocacy, research, and patient services. It provides grants and
fellowships for clinical research on rare diseases. Each year, millions
of Americans visit its Web site or call its information center to
obtain information about rare diseases and referrals to patient
organizations. Through its Patient Assistance Programs, NORD provides
millions of dollars worth of free medication to uninsured or
underinsured patients each year, along with co-pay and premium
assistance for patients who qualify on the basis of financial need.
Through its Washington, DC, office, NORD also provides a voice for
all Americans affected by rare diseases on important public policy
issues of interest to the rare disease community. It is in that role
that we come to you today.
the orphan drug act of 1983
Two months ago, more than 500 people gathered in Union Station here
in Washington, DC, to celebrate the 25th anniversary of the Orphan Drug
Act of 1983 (ODA), legislation that has improved the lives of millions
of Americans and far exceeded original expectations for its impact.
Those present at the anniversary celebration in May included leaders of
patient organizations, academic researchers from universities and
teaching hospitals, staff of the National Institutes of Health (NIH)
and Food and Drug Administration (FDA), physicians and other medical
professionals, and representatives of health-related industries,
including pharmaceutical and biotechnology companies.
The extraordinary piece of legislation that brought this diverse
community together--the Orphan Drug Act--provides financial incentives
that make it possible for pharmaceutical and biotechnology companies to
invest in the development of treatments for small patient populations.
In the decade leading up to 1983, only 10 drugs were developed by
industry for diseases that today would be classified as ``orphan'' or
rare diseases.
In the years since the law was passed in 1983, nearly 330 therapies
for rare diseases have been approved for marketing by the FDA, and the
FDA has estimated that 11 to 12 million Americans now have treatments
for their rare diseases as a result of the ODA.
what is a rare disease?
The definition used today by NIH, FDA, and our organization is that
any disease affecting fewer than 200,000 Americans is considered rare.
NIH estimates there are between 6,000 and 7,000 diseases that fit this
description, including hemophilia, Tay Sachs disease, ALS or Lou
Gehrig's disease, and cystic fibrosis. In addition to these diseases,
which have become fairly well known in the U.S. today, there are
thousands whose names would not be recognized by the average American
but which are equally devastating to the individuals and families
affected by them. Many rare diseases, such as Menkes disease, Castleman
disease, and Lowe syndrome, are named for the physicians who first
identified them. Some are named for their signs and symptoms, or for
the hospital where they were first identified.
NIH estimates that between 9 and 10 percent of the American
population, or nearly 30 million men, women, and children, are affected
by a rare disease. Approximately half of these people are children, and
many rare diseases are present at birth.
Research in recent years, including in the National Human Genome
Research Project, has confirmed that many rare diseases have a genetic
component. It is estimated that this is the case for 80 to 90 percent
of rare diseases. For that reason, early diagnosis and identification
of any possible risks for other offspring can be extremely important
for families.
Unfortunately, getting an accurate diagnosis of a rare disease
often requires several years. A study commissioned by the Federal
Government in 1989, the report of the National Commission on Orphan
Diseases, identified length of time required to get a diagnosis as a
serious problem affecting millions of Americans with rare diseases. At
that time, it took from five to 7 years on average for many people with
rare diseases to obtain a diagnosis. A small study done by our
organization in 2003 in partnership with Sarah Lawrence College found
that these numbers had, unfortunately, not changed greatly over the
years.
Furthermore, most rare diseases have no treatment today. If we
accept FDA's estimate that 11 to 12 million Americans have a treatment
developed since 1983, that leaves nearly 20 million Americans who have
no drug or biologic to treat their rare disease. For those people, it
is extremely important to know that there is at least some hope that a
treatment will be developed in the future.
One of the most heart-wrenching tasks our staff members have to do
. . . and they have to do it frequently . . . is to tell someone newly
diagnosed with a rare disease that there is no treatment for his or her
disease and that, at this time, no one in the U.S. is doing research to
develop a possible future treatment.
What are the incentives provided by the Orphan Drug Act?
Seven years of marketing exclusivity
Exclusivity that can be broken only if another product
for the same indication is proven to be clinically/scientifically
superior to the existing ``orphan'' product
50 percent tax credit for clinical trial expenses
Exemption from application user fees
Opportunities to apply for grant funding for certain
clinical testing expenses
Assistance in clinical research study design
Under certain circumstances, exemption from annual
facility and product user fees
Recognizing that it costs millions of dollars to bring a new
therapy to market today, we are left with the stark reality that
without these incentives, industry would not be able to justify
involvement in development of products for small populations. This was
the case before 1983, and it would be a simple fact of economics today
if the Orphan Drug Act did not exist.
NORD understands the concerns of this committee regarding the high
cost of some orphan drugs and biologics. We share those concerns.
However, we also witness firsthand every single day the positive impact
on the lives of Americans of progress made since 1983 in the
development of drugs, biologics, and medical devices for rare diseases.
Any action that would have a chilling effect on that process, now or in
the future, would be inherently wrong and would result in a very vocal
reaction from the patient community. We would strongly oppose any
action that would reverse the effects of the Orphan Drug Act and
negatively impact the willingness and, in truth, the ability of
industry to continue to invest in research and development related to
products for small patient populations.
In cooperation with all stakeholders, and this includes government
regulatory experts from FDA, NIH officials, academic researchers,
medical economists, industry and--especially--patient organizations and
the patient/family community, we have pledged to work tirelessly to
craft a balanced solution to the pricing of orphan products. We agree
wholeheartedly that it is an issue that must be addressed. However,
this is a complex issue that requires serious discussion in which all
stakeholders are included.
Intellectually, the rare disease community understands why many
orphan drugs are so expensive. The reasons include:
Small patient populations
Geographically dispersed patient populations (Clinical
trials must be international in many cases.)
Limited funding (The small seed-money grants provided by
NORD and other patient organizations attract proposals from highly
qualified researchers and excellent universities and teaching hospitals
because there are so few other sources of funding for rare diseases.)
Few researchers. (Understandably, most scientists are
attracted to fields where it will not be so difficult to obtain
research funding.)
It is estimated that between 80 and 90 percent of rare disease
patients are treated ``off-label'' today because there are not FDA-
approved drugs or biologics specifically for their disease. As the cost
of healthcare continues to rise, insurers, both public and private, are
increasingly refusing to reimburse for off-label therapies. Every day,
we receive phone calls and emails at NORD from patients or family
members struggling to obtain needed drugs or biologics for which a
private insurance company, Medicare or Medicaid is refusing coverage.
For this reason, and to ensure that treatments continue to meet
accepted standards of safety and efficacy in the U.S., companies must
continue to be incentivized to conduct clinical trials.
Some of the other related issues that must be included in a full
and complete discussion of orphan drug pricing include:
The development of follow-on (generic) biologics and
establishment of an unambiguous and transparent regulatory pathway at
FDA that will encourage competition, stimulate innovation, and provide
patients with access to biologics that cost less
Allowing the FDA the flexibility and authority to
determine on a case-by-case basis what data it needs to approve follow-
on biologics
Providing a clear and timely resolution to patent
disputes while prohibiting frivolous lawsuits that restrict access to
follow-on biologics and delay competition in the marketplace
Decoupling litigation between the innovator and generic
manufacturer, and the review and approval of the follow-on biologic
application at the FDA
Guaranteeing predictability to allow scientifically
proven, safe, and effective follow-on biologics to enter the
marketplace
Ensuring that the 7 years of marketing exclusivity
provided by the Orphan Drug Act continues to encourage the development
of new, life-saving drugs and biologics for the treatment of rare
diseases
In addition, the Orphan Products Research Grants Program
administered by the FDA needs to be adequately funded. Legislation
adopted in 2002 provided for increased funding for that program, but to
date significant funding increases have not been authorized.
Also, the Office of Rare Diseases (ORD) at the National Institutes
of Health must be adequately funded. This office, while small in
numbers of staff and dollars, has brought new hope to millions of
Americans through its efforts on behalf of rare disease patients and
patient organizations. In recent years, of specific note, is the
success the ORD has had in encouraging cooperative efforts among the
NIH institutes in research on rare diseases, which frequently are
multi-organ or multi-system diseases.
conclusion
Again, we must reiterate that any action that would have a chilling
effect on the clinical research and development of orphan drugs,
biologics and humanitarian use devices, now or in the future, would be
inherently wrong and would result in a very vocal reaction from the
patient community. We would strongly oppose any action that would
reverse the effects of the Orphan Drug Act and negatively impact the
willingness and, in truth, the ability of industry to continue to
invest in research and development related to products for small
patient populations.
This coming fall, NORD plans to begin working with all
stakeholders, and this includes government regulatory experts from FDA,
NIH officials, academic researchers, medical economists, industry and--
especially--patient organizations and the patient/family community, to
address the cost of drugs and biologics marketed to treat very small
patient populations. We are committed to work tirelessly to craft a
balanced solution to the pricing of orphan products. We agree
wholeheartedly that it is an issue that must be addressed. However,
this is a complex issue that requires serious discussion in which all
stakeholders are included.
The National Organization for Rare Disorders advocates for people
affected by rare diseases because they have the same right that other
Americans have to believe in a better future. . . to believe that their
lives are important. . . and to have faith that in due time medical
researchers will seek safe, effective treatments for their diseases
rather than putting their efforts into duplicating blockbuster drugs
for large patient populations.
We represent patients and their families. The entire history of our
organization has been dedicated to providing a voice for, and
representation of, the patient/family community in all matters related
to rare diseases. And, ultimately, patients and families are the ones
who stand to be most affected by any action taken as a result of this
hearing. We feel strongly that their needs must be kept foremost in
mind and that this complex issue deserves serious discussion and a
serious search for solutions rather than a rush to judgment and speedy
resolution.
Respectfully Submitted,
Diane Edquist Dorman
Vice President, Public Policy
Washington, DC office of the National
Organization for Rare Disorders (NORD)
Office: (202) 496-1296
Cell: (202) 258-6457
E-mail: [email protected]
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