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House panel aims to advance bill to battle drug price gouging

A bill aimed at stopping drug price gouging got the backing on Feb. 2 of a key House committee chief, who told companies intent on exploiting markets where there is little or no competition that their days were numbered.

"We all remember recent situations where bad actors jacked up the price of older, off-patent drugs because there was no competition. We want to make sure that doesn't happen again," said Rep. Greg Walden, R-Ore., chairman of the House Energy and Commerce Committee.

The bipartisan bill, H.R. 749, sponsored by Reps. Gus Bilirakis, R-Fla., and Kurt Schrader, D-Ore., would require the FDA to prioritize and expedite the review of generic-drug applications for medicines in shortage or where there are few, if any, competitors.

The FDA started taking such action last year, but the Bilirakis-Schrader legislation would mandate that practice.

The legislation also calls for the creation of a voucher that could be awarded to manufacturers that introduce a generic drug where there is no such alternative. The holders of the voucher could use it to gain a six-month priority review of a future generic drug application, or the company could sell it to another firm.

The generic priority review voucher program, which is based on similar ones for medicines to treat tropical diseases and rare pediatric conditions, would sunset in 2023.

The Bilirakis-Schrader bill, however, imposes an additional requirement for tropical disease product vouchers to provide reports of new clinical investigations, other than bioavailability studies, essential to the approval of the application and conducted or sponsored by the applicant. The inclusion of that requirement, however, may get some pushback from supporters of the program.

Walden, whose comments came during a Feb. 2 House hearing, said his committee plans to take up the legislation next week.

Bilirakis and Schrader said their legislation is aimed at reining in companies like Turing Pharmaceuticals, Valeant Pharmaceuticals International Inc. and Mylan NV, which recently all came under fire for significantly hiking the prices of their products.

Turing increased by more than 5,000% the price of Daraprim, a drug used to treat toxoplasmosis, a parasitic infection that strikes pregnant women, children and patients with weakened immune systems, like those with HIV infection. The cost of the drug went from $13.50 per pill to $750 overnight in August 2015.

After Valeant acquired a drug to treat lead poisoning, known as Calcium EDTA, from Medicis, the Canadian company boosted the product's price from $950 for a package of vials to nearly $27,000 — a 2,700% increase.

Mylan most recently was in the spotlight for charging $600 for its allergic reaction medicine EpiPen. The company had been raising EpiPen's price since it acquired it in 2007, when it was sold for about $50.

In each of those instances, there was no generic competitor on the U.S. market at the time, Bilirakis and Schrader said in a Jan. 30 statement.

At a Jan. 31 White House meeting with biopharmaceutical executives, President Donald Trump demanded more competition and lower drug prices, Walden noted.

"That is precisely what this measure will accomplish," said the E&C Committee chairman, who attended the White House meeting.

Merck & Co. Inc. Chairman and CEO Kenneth Frazier, who also was at the White house meeting, said Trump plans "regular check-ins" with the executives "to ensure that there was good communication between us and the administration."

Trump "recognizes the importance of this industry and he doesn't want to interfere with the incentives in the marketplace for us to continue to take risks and make the kinds of investments that are needed to discover and develop long-term innovation," Frazier said during Merck's Feb. 2 earnings call.

Like the other industry executives, the Merck chief said he came away from the White House meeting feeling confident Trump understands the challenges drugmakers face with growing their companies.

"What I heard from Mr. Trump was a concern less around the cost of drugs in the aggregate, but more around how patients need to be able to afford their copays and things of that nature," he said.

Frazier said the conversation led him to believe Trump does not think the solution solely revolves around Medicare drug price negotiations, although the Merck CEO acknowledged he did not know what the administration had in mind beyond that Jan. 31 discussion.