Wall Street Journal - Lawmakers Probe "Staggering' Price Hikes for Generic Drugs

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By Ed Silverman

In response to recent reports that the cost of some generic drugs has been unexpectedly rising at a rapid clip, two members of Congress have launched an investigation and asked 14 generic drug makers to providing data about what the lawmakers called the "escalating prices they have been charging" for generic medicines.

A recent analysis, for instance, found that half of all generics sold through retailers became more expensive over the past 12 months. And prices paid by pharmacies more than doubled for one out of 11 generics. In some cases, price hikes exceeded 1,000% and even topped 17,000%.

The reports added to growing concern about the increasing cost of prescription drugs, which has largely been confined to brand-name drugs -- such as expensive new treatments for cancer, hepatitis C and certain rare diseases. A firestorm erupted earlier this year, for instance, over the Sovaldi treatment for hepatitis C that is sold by Gilead Sciences GILD -0.54% and costs $1,000 a pill, or $84,000 for a 12-week regimen.

In a letter to the drugmaker, the lawmakers pointed to the price hike for Albuterol Sulfate, which is used to treat asthma and other lung conditions. The average cost for a bottle of 100 pills was $11 last October, but rose to $434 by this past April. And the doxycycline hyclate antibiotic cost $20 last October for a bottle of 500 tablets, but by April, the price was $1,849, according to their pricing chart.

"It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs," says U.S. Sen. Bernard Sanders (I-Vt.) in a statement. "Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs. We've got to get to the bottom of these enormous price increases."

And U.S. Rep. Elijah Cummings, (D-Md.) says "in some cases, these outrageous price hikes are preventing patients from getting the drugs they need." He cited a report by IMS Institute for Health Informatics showing generics account for 29% of prescription drug spending and 86% of drugs dispensed in the U.S.

Among the companies that were sent letters: Actavis, Dr. Reddy's Laboratories, Endo International, Mylan Laboratories, Heritage Pharmaceuticals, Sun Pharmaceutical and Teva Pharmaceuticals. [EDITOR'S NOTE: Click on the company name to read the letters sent by the lawmakers].

A Sun Pharmaceutical spokesman declined to comment and an Actavis spokesman says the letter is being reviewed. We will return to post any responses from the other drug makers.

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