House Democrats Elijah Cummings of Maryland and Peter Welch of Vermont, who sit on powerful congressional committees, on Aug. 17 opened what they said was an "in-depth" probe into the price hikes by seven drugmakers of their multiple sclerosis treatments.
In letters to Bayer AG, Biogen Inc., Merck KGaA's EMD Serono unit, Novartis AG and its Sandoz unit, Roche Holding AG, Sanofi and Teva Pharmaceutical Industries Ltd., the two lawmakers said the companies appeared to be engaging in so-called shadow pricing of their multiple sclerosis medicines, in which drugmakers increase the prices of their older products to match those of newer expensive therapies.
"We believe no American should be forced to struggle to afford lifesaving medical treatments, especially when drug companies increase prices without warning, cause or justification," Cummings and Welch said in a statement. Cummings is the ranking member on the Oversight and Government Reform Committee and Welch is a member of the panel and the Energy and Commerce Committee.
They noted that a recent study in the American Academy of Neurology found that the annual sales of multiple sclerosis drugs doubled from $4 billion to nearly $9 billion from 2008 to 2012.
The cost of the average annual disease-modifying multiple sclerosis therapy was $16,050 per patient in 2004, while the average annual cost of the disease-modifying therapy interferon increased to more than $60,000 in 2015, the lawmakers noted.
Many of those drugs now cost over $85,000 per year, Cummings and Welch said.
The price of one drug, the 20-milligram dose of Teva's Copaxone, has increased by more than 1,000% since it was approved in 1996 — jumping from $8,292 to $91,401 currently.
Biogen's Avonex, also approved in 1996, has gone from $8,723 to $86,308 — an 889% hike.
Another older multiple sclerosis medicine whose price has sharply increased is EMD Serono's Rebif, which has gone from $15,262 in 2002 to $91,005, a rise of 496%.
In their letters to the seven drugmakers, Cummings and Welch requested information to evaluate the substantial price increases of multiple sclerosis medicines, including information about corporate profits and expenses and documents concerning pricing strategies, patient assistance programs and drug distribution systems.
Other efforts
Cummings and Welch have been working on bringing down drug prices for the past few years.
In March, both men met with President Donald Trump, who they said was "enthusiastic" about the lawmakers' proposal to permit Medicare to negotiate directly with drugmakers for lower prices for the Part D program.
The White House, however, had a very different take on the meeting, saying it was more about reforming the U.S. Food and Drug Administration and "reducing the regulatory burdens on drug manufacturers so as to enhance competition will help accomplish those goals."
Trump had promised to follow up with the two congressmen but has not done so yet.
The president has been working on his own proposals, with plans to potentially issue an executive order — actions the consumer watchdog Public Citizen said would be inadequate.
He even convened a White House working group made up of drug industry insiders and administration officials to help him outline his proposals.
So far, though, Trump has not taken any actions.
Insulin makers targeted
Multiple sclerosis drugs are just the latest group of medicines to be probed by Democrats looking into potential shadow pricing practices.
In November 2016, Cummings and Sen. Bernie Sanders, I-Vt., asked the U.S. Department of Justice and the Federal Trade Commission to investigate whether Eli Lilly and Co., Sanofi and Novo Nordisk A/S had coordinated their insulin product price increases.
"We are concerned that the potential coordination by these drugmakers may not simply be a case of 'shadow pricing' but may indicate possible collusion," the lawmakers wrote in their Nov. 3, 2016, letter to the agencies. "We believe this egregious behavior warrants a thorough investigation."
In July, Sen. Amy Klobuchar, D-Minn., demanded the same three drugmakers explain why the prices of those diabetes medicines have skyrocketed, tripling over the past 10 years.
She noted that those companies had raised the list prices of insulin "in near lock step, without providing evidence of increased production costs."
From 2010 to 2015, the U.S. price of Sanofi's Lantus went up by 168% while the cost to Americans for Novo's Levemir rose 169%, the senator pointed out. The price of Lilly's Humulin R U-500 jumped by 325% during the same period.
The simultaneous price increases of those insulin products raises questions about whether the companies had coordinated those actions, said Klobuchar, the ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.
Senate Minority Leader Chuck Schumer, D-N.Y., last month said Democrats were targeting drugmakers that price gouge — particularly those that significantly raise the costs of older medicines — as part of the party's new "Better Deal" strategy aimed at more clearly communicating their economic agenda to Americans ahead of the 2018 elections.