Documents detail price hike decisions by Turing, Valeant

“These new documents provide a rare, inside look at the motivations and tactics of drug company executives”, Cummings said in a statement.

According to the documents, the price hikes at Turing led to skyrocketing patient co-pays – some of which had risen to $16,000.

A memo from congressional investigators sheds new light on the inner workings of Martin Shkreli’s Turing Pharmaceuticals after the company jacked up the prices of a decades-old drug used to treat AIDS patients. “Should be a very handsome investment for all of us”. “Let’s all cross our fingers that the estimates are accurate”, Shkreli wrote to an outside contact in August.

Turing Chief Commercial Officer Nancy Retzlaff, who is set testify at the House drug price hearing on Thursday, sent an e-mail to a colleague June 1 talking about the possibility that a doctor might prescribe a cheaper alternative medicine instead of Daraprim.

Shkreli resigned from Turing in December, a day after he was arrested by the FBI amid a federal investigation involving his former hedge fund and another pharmaceutical company he previously headed.

In Turing’s case, that involved plans to divert attention to patient assistance programs and purported R&D efforts, the memo says, pointing out that “internal communications show that Turing officials joked about this strategy and did not in fact intend to lower the price of Daraprim” in response to public outcry.

Mission Pharmacal Co., based in San Antonio, said the price of Lithostat, a drug used for a type of kidney stone, went up more than 10-fold after the supply of a key ingredient ran out and it had to find a new supplier. Selling each bottle of 100 pills in $75,000, would mean $750 a pill.

“Another $7.2 million. Pow!”

Shkeli is reviled for hiking the price of a lifesaving drug.

There was no convincing some hospitals, though. Later in the year, another Turing executive wrote about a single purchase order of Daraprim that was nearly equal to an entire year’s revenue for the drug’s previous owner. “Against their clinical convictions, they are now switching patients to Bactrim”, another anti-infective, the manager wrote to Turing executives.

“You know, his track record is impeccable, and I think we’re going to put our best foot forward”, Shkreli told Fox Business News on Tuesday. “The price drop has to be significant and tied to something …”

The consultant was ignored, but another suggestion was adopted.

Daraprim’s huge price increase isn’t all that extraordinary.

Daraprim is a crucial treatment for many pregnant women and people living with HIV.

Even the few allies that Turing had began turning on the company.

“I think it’s ridiculous that they would actually force me to be there in person when I’ve stated that I will be taking the 5 – in fact I think it’s unethical, the D.C. law manual states it’s unethical to bring someone and subpoena them just to hear them take the 5”. The dog was not covered by insurance and the cost of Daraprim would have been $5,000. – Jon Haas, director of patient access, September 29.

A memo summarizing the documents said the paperwork shows that CEO J. Michael Pearson chose to buy two life-saving heart drugs, Nitropress and Isuprel, to dramatically hike prices and drive up his company’s revenue and profit. “When the company talks about price v. volume, they refer to organic growth, which would have excluded Marathon and other acquisitions”. Valeant employed this strategy for both Isuprel and Nitropress, generating gross revenues of more than $547 million and profits of approximately $351 million in 2015 alone. Moreover, the pricing was justified because Valeant and its consultants determined they would face generic competition during 2016 and 2017. And Valeant said it expects to invest millions in research and development this year and $1 billion in patient assistance programs. The company also attempted to restrict distribution in hopes of boosting insurer reimbursement.

Valeant said in a statement Tuesday that it was now offering discounts of up to 30 percent to hospitals on Isuprel and Nitropress.