[Congressional Record (Bound Edition), Volume 161 (2015), Part 11]
[Senate]
[Pages 15643-15645]
[From the U.S. Government Publishing Office, www.gpo.gov]




               PHARMACEUTICAL COMPANIES AND DRUG PRICING

  Mr. BROWN. Mr. President, we have seen this movie before. It was 4 
years ago that a drug company in St. Louis raised the price 
dramatically on a drug that was administered to pregnant women, a shot 
they took once a week for 20 weeks that significantly reduced the 
incidents of low birth weight babies. Now we see a headline on the 
front page of the New York Times today which reads ``A Drug Company's 
Price Tactics Pinch Insurers and Consumers.'' Two weeks ago another New 
York Times headline read ``Drug Goes From $13.50 a Tablet to $750, 
Overnight.'' In April the Wall Street Journal ran an article titled 
``Pharmaceutical Companies Buy Rivals' Drugs, Then Jack Up the 
Prices.'' The reporters who did the investigating in these articles all 
found the same thing: Pharmaceutical companies buy up the rights of 
older existing drugs where all the costs from research have been 
recouped and raise prices dramatically overnight.
  In its most recent article, the Times investigated Valeant 
Pharmaceuticals, a company that recently raised the cost of the 
lifesaving drug Cuprimine more than fivefold. The Times interviewed Mr. 
Bruce Mannes, a 68-year-old retired carpenter in Michigan who has

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relied on Cuprimine for 55 years to treat his Wilson's disease. In May 
Mr. Mannes was paying $366 a month for Cuprimine. Today he is forced to 
pay $1,800 a month just to stay alive. It is the same drug and the same 
dosage. It was $366 a month not too long ago. Today it is $1,800 a 
month just to stay alive.
  It is not just Mr. Mannes who is left on the hook to pay for his 
medicine, which has more than quadrupled in cost. The taxpayer-funded 
Medicare Program will now be spending $35,000 a month to cover its 
portion of his pills because current law prohibits Medicare--because of 
the power of the drug companies in this institution--from negotiating 
more favorable drug prices.
  Cuprimine is not a cure for Wilson's disease. Mr. Mannes must take 
this drug for the rest of his life. It doesn't cure him, but it keeps 
him alive.
  Valeant did nothing to improve this drug. They don't claim that. It 
has been around for decades. They have done nothing to invest in a 
cure. Instead, the company bought the rights to an existing medicine 
and raised its price.
  Remember, I said that in May Mr. Mannes was paying $366 a month. 
Today he is paying $1,800 a month.
  This story, unfortunately, is outrageous, and it is not an isolated 
story. The Times reports that this year alone Valeant has raised the 
price of its drugs by an average of 66 percent. When Valeant acquired 
Salix Pharmaceuticals earlier this year, it raised the price of its 
diabetic drug Glumetza by 800 percent. These are drugs that have been 
out there. They don't need to recoup their costs of research and 
development. These are drugs that have been used for many years at a 
significantly lower price. They buy these companies--these drugs and 
jack up the price. After Valeant acquired the drug Isuprel, which 
treats slow or irregular heart rate, it raised the price by more than 
$30,000.
  Valeant's investors and its billionaire CEO are, of course, getting 
rich but always on the backs of America's seniors and American 
taxpayers, who pay the price. Seniors on Medicare face skyrocketing 
bills for lifesaving drugs they cannot afford. Insurance companies 
sometimes stop covering drugs altogether.
  Janis, from Lower Salem in Washington County, OH, wrote to me about 
the drug Glumetza. She wrote:

       My husband has gotten the drug Glumetza for $10 each refill 
     of 180 pills. When he re-ordered this prescription this 
     morning the pharmacy called him to say that Glumetza now 
     costs $3,000 for a 15-day supply. His insurance has a limit 
     of $3,000.
       The pharmaceutical companies are beginning to look like the 
     drug cartels of Mexico.
       The insurance companies are being forced to cut benefits or 
     increase their cost to consumers who have worked hard all 
     their lives and earned their health care benefits. He and I 
     cannot continue to afford to pay these out of pocket expenses 
     on a fixed income.

  We know that Janis in Washington County, OH, isn't alone. We also 
know that all Americans face higher health care premiums when insurance 
companies and hospitals are forced to absorb the cost of this price-
gouging.
  Jeffrey Rosner of the Cleveland Clinic told the Times that the nine 
drugs with the worst price increases cost that hospital alone an 
additional $11 million a year and that Valeant's products made up 80 
percent of that. Yet their billionaire CEO is doing very well.
  Valeant is not the only company that profits from its business of 
buying up old drugs and jacking up the price. We remember the coverage 
last month about Turing Pharmaceuticals, which raised the price of a 
drug called Daraprim, which is used to treat a life-threatening 
parasitic infection, from $13.50 to $750 a tablet overnight. The 
company Rodelis Therapeutics recently raised the price of a drug to 
treat multidrug-resistant tuberculosis from $500 to over $10,000 for 
the same number of pills.
  These are not scenarios of pharmaceutical companies charging higher 
prices to finance the development cost of new drugs. Take Valeant for 
example. Valeant spends 3 percent of its sales on research and 
development. Traditional drug companies tell us they spend 15 to 20 
percent. Traditional drug companies will tell you they spend 15 to 20 
percent of their revenues on research and development. That is why they 
need to charge high prices at the beginning, at least during their 
patent protection period--to recoup, they will say, the $500 million, 
$600 million, whatever it costs, in research and development. Valeant 
is buying drugs where that research and development have already been 
recouped. They spend only 3 percent of their sales on research and 
development.
  So where does Valeant's money go? One might hope it would support 
American pharmaceutical manufacturing jobs or pay back into our tax 
system to support lifesaving biopharmaceutical research at the National 
Institutes of health. But, no, what actually is happening is 
infuriating. Valeant, which shifted its profits overseas in 2010 to 
avoid its U.S. tax obligation, buys up the rights to existing 
pharmaceutical companies, lays off workers, hikes prices by eight-, 
nine-, tenfold, and then expects patients, hospitals, and taxpayers to 
pick up the tab. It is not right.
  As I said at the outset, we have seen this before. Valeant, Turing, 
and Rodelis are not the first companies to try this shady--and 
``shady'' is too kind a word--business model. They won't be the last. 
In 2011, KV Pharmaceutical created an overnight monopoly on the 
lifesaving drug 17P, a preterm labor-prevention drug--a progesterone--
for pregnant women. KV Pharmaceutical didn't invent the drug. It spent 
no money on R&D. It spent no money on clinical trials, which are also 
expensive but not for them. The drug had been around for decades. It 
was normally compounded at pharmacies and at hospitals to treat 
pregnant women. What did it do? It applied to the FDA for 7 years of 
exclusive coverage under the Orphan Drug Act and changed the name from 
17P to Makena. That is it. They proposed raising the price by almost 15 
percent overnight. It was a $10 drug initially--$10, taken 20 times, so 
it cost about $200 for the regimen, and they raised the price to 
$30,000. Imagine that.
  We have thousands of pregnant women who have had a history of preterm 
births, and their doctors say to these women: You should take this 
compound, this progesterone, P17. The cost is only $200. You will get a 
shot every week for 20 weeks in a row.
  Then all of a sudden the price of $200 is raised to $30,000. What 
happens? Some places, Medicaid won't pay. Other places, private 
insurance won't pay. In many cases, women simply wouldn't take this 
progesterone, and the problems of low birth weight babies increases.
  The potentially devastating impact on our country is already too high 
for the preterm birth rate. Fewer women are able to afford the drug. 
When that happened 4 years ago, I wrote to the company's CEO asking 
them to consider the price increase. The senior Senator from Minnesota, 
Ms. Klobuchar, and I sent a letter to the FTC urging an investigation. 
Together, we kept the pressure on the company. Frankly, we embarrassed 
them, as they deserved. So far the drug has stayed more affordable. We 
need to do the same thing today. Valeant and companies like it must not 
be allowed to get away with fleecing consumers and taxpayers.
  I am calling on my colleagues on the HELP Committee to hold hearings 
on this price-gouging. We must work together--Congress, the media, the 
public--to expose this kind of behavior, maybe a little shame. I don't 
normally like to do that, but when a CEO makes this kind of money by 
fleecing so many people--especially when it comes to low birth weight 
babies but also where people need these moderately priced drugs to stay 
alive--I think it is time to out them and put pressure on these 
companies.
  One thing we can also do, if my colleagues would wean themselves off 
of drug company contributions, is give Medicare the authority to 
negotiate drug prices. Many of these drugs with massive price increases 
are taken by large numbers of seniors who are on Medicare. We know the 
Veterans Administration uses the buying power of

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millions of American veterans to negotiate directly with drug companies 
to bring down significantly the cost of these drugs. For too long the 
pharmaceutical companies have profited off of their ability to charge 
more vulnerable Medicare beneficiaries higher prices for their drugs. 
Current law expressly bans Medicare from negotiating with 
pharmaceutical companies--again showing the power of drug companies 
lobbying my colleagues in this body--even though the government can 
negotiate bigger discounts with private insurance companies.
  This summer I helped introduce the Medicare Prescription Drug Savings 
and Choice Act, which would allow seniors to enroll in a Medicare Part 
D plan administered directly by Medicare instead of a private insurance 
company. This legislation requires the Secretary of Health and Human 
Services to negotiate directly with drug companies to get the best 
prices for our seniors. Seniors should be able to get drug coverage 
directly through Medicare and not be forced to buy from a middleman.
  The purpose of lifesaving drugs is that--to save lives, not to line 
the pockets of Big Pharma executives and investors. We owe it to the 
people we serve--the people who elect us--to put a stop to the price-
gouging that is bankrupting patients and overcharging Medicare, 
straining hospitals, and fleecing taxpayers.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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