Durbin Demands Answers From Novum Pharma On Skyrocketing Drug Prices
WASHINGTON – U.S. Senator Dick Durbin (D-IL) called on Chicago-based Novum Pharma to explain sudden, dramatic price increases for three dermatological gels that treat common skin conditions like acne, dermatitis, and eczema. In a letter to Novum CEO Todd Smith, Durbin expressed concern that price hikes like those of Novum and Mylan, which has recently come under fire for increasing the price of the Epi-Pen, result in higher health insurance premiums for patients and increased costs for federal health care programs, including Medicaid and Medicare. Novum purchased the rights to Alcortin A, Aloquin, and Novacort in 2015 and has since increased prices at least 40-fold.
“There seems to be no justifiable reason for price increases or sales prices of this magnitude for many of these products – and consumers, payors, and members of Congress are fed up,” wrote Durbin. “If the pharmaceutical industry is unwilling or unable to reasonably price their products in a way that both protects access for patients in need and does not place an unnecessary financial burden on our health care system, then Congress must step in and act.”
Senator Durbin has fought to rein in skyrocketing prescription drug costs for American families. He recently joined 19 of his Senate colleagues calling on drug company Mylan to explain sharp price increases for its life-saving EpiPen Auto-Injector. Earlier this Congress, Durbin introduced the Medicare Prescription Drug Savings and Choice Act, which would help lower drug costs for seniors and persons with disabilities by allowing Medicare to negotiate drug prices. Durbin is also a cosponsor of the FAIR Drug Pricing Act, which would force drug companies to provide justification and advance notice before raising prices of certain drugs by more than 10 percent, and the CREATES Act, which would expedite consumers’ access to more affordable generic drugs.
Full text of the letter is available here and below:
October 4, 2016
Chairman and Chief Executive Officer
640 N. La Salle Drive, Suite 670
Chicago, Illinois 60654
Dear Mr. Smith:
I am concerned with the repeated and significant price increases for three of Novum’s skin condition treatments and request further clarification and justification regarding these price hikes.
In March 2015, Novum purchased three topical medications used to treat various skin conditions. It is my understanding that within two months of purchasing Alcortin A – a gel used to treat dermatitis and eczema – your company raised the price for a 48-gram tube from $226 to $2,995. Not content with this 1,225 percent increase, Novum again raised the price in January of this year and then again earlier this month. Today – three massive price hikes later – Alcortin A has a list price of $9,561 per tube. This represents a 4,130 percent price increase since Novum purchased this product a little over a year ago.
Prices for the two other products purchased by your company last year had similar fates. A 60-gram tube of Aloquin – used to treat eczema and acne – went from $241.50 to $9,561. And a 29-gram tube of Novacort – an ointment used to treat skin inflammations – went from $4,186 to $7,142. What is additionally egregious about this particular situation is that your company is charging nearly $10,000 a tube for two products – Alcortin A and Aloquin – that the Food and Drug Administration (FDA) has determined only to be “possibly effective.”
To help better understand the increasing cost of these three products, please provide a response to the following questions as soon as possible, but no later than October 11, 2016:
1) It is my understanding that Novum purchased these three fully developed treatments from Primus Pharmaceuticals last year. Please explain the justification behind your company’s decision to impose enormous price hikes on all three of these products, which have resulted in massive price tags for these treatments.
2) What has been the total cost of Alcortin A, Aloquin, and Novacort to both commercial health insurers and federal health programs for prescriptions filled by consumers since Novum acquired the products?
3) Since its acquisition, what have been Novum’s profits from the sales of Alcortin A, Aloquin, and Novacort?
4) Since its acquisition, how much money has Novum spent on manufacturing, purchasing active pharmaceutical and other ingredients, distribution, marketing and advertising, physician outreach and education programs, and research and development for these three products?
Last year, we saw the price of Daraprim – a 63-year old drug used for malaria and toxoplasmosis often used by HIV/AIDS patients – increase from $13.50 to $750 a pill. Earlier this year, we saw the price of EpiPen – a medical device that, in one form or another, has been around since the 1970s and which is used to combat extreme allergic reactions – rise to more than $600 for a two-pack when it had previously been available for less than $100. We have seen the prices for insulin – used to help regulate glucose levels in diabetic patients – rise from $4.34 per-milliliter in 2002 to $12.92 per-milliliter in 2013. We have seen prices for naloxone auto injectors – used to reverse the effects of an opioid overdose – rise from $690 for a two-pack in 2014 to $4,500 this year. And now, we are seeing huge price increases for dermatology treatments – including ones sold by your company. As I am sure you are aware, these rising prescription drug prices impose huge costs on the health care system overall and directly contribute to rising health insurance premiums.
There seems to be no justifiable reason for price increases or sales prices of this magnitude for many of these products – and consumers, payors, and members of Congress are fed up. If the pharmaceutical industry is unwilling or unable to reasonably price their products in a way that both protects access for patients in need and does not place an unnecessary financial burden on our health care system, then Congress must step in and act. I look forward to your immediate attention to this issue and to receiving your response no later than October 11.
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