This leukemia drug's price soared by $80,000 since 2012. Lawmakers wants to know why.

Company cites high research and development costs

Rep. Elijah Cummings (D-Md.) and Sen. Bernie Sanders (I-Vt.) on Thursday sent a letter to Ariad Pharmaceuticals seeking information on what they called "staggering" price increases for the drugmaker's leukemia treatment.

Background

FDA in 2012 approved Ariad's Iclusig to treat two rare types of leukemia. However, the drugmaker temporarily suspended sales of the medication because of concerns about life-threatening side effects. Ariad relaunched Iclusig in December 2013 for a smaller population of patients and with additional warnings. Iclusig now is used to treat chronic myeloid leukemia in some patients.

Since 2012, Ariad has raised Iclusig's price by about $80,000. Data from Truven Health Analytics show Iclusig's list price increased from $114,960 in 2012 to $198,732 as of this month.

Lawmakers seek explanation

Cummings and Sanders have requested documents about the company's revenue and pricing practices. The lawmakers also are investigating whether Ariad attempted to inflate its profits by modifying pill dosages and quantities in a way that would allow the drugmaker to charge insurers and patients more money for lower quantities of the drug.

Ariad's response

Ariad said it plans to respond to the letter's requests.

The drugmaker also cited high research and development costs associated with Iclusig. Ariad said, "We recognize oncology drugs are expensive, but we believe in the importance and efficacy of our products," adding, "Importantly, to achieve its mission, Ariad has invested more than $1.3 billion in [research and development] and accumulated losses of approximately $1.4 billion since the company was founded, which have not been recovered" (Banerjee, Reuters, 10/20; Sullivan, The Hill, 10/20; Jalonick, AP/Sacramento Bee, 10/20).

What providers can learn from the drug pricing debate

We already knew that patients are becoming more sensitive to health care costs. But public uproar over one drug's 5,000 percent "overnight" price hike proves that patients are more discerning—and vocal—than ever. With more of their money on the line, patients are actively deciding when and where to access care based on cost.

We saw it coming—and we laid out concrete tactics for dealing with price sensitivity in your market. The first chapter in our study, The Consumer-Oriented Ambulatory Network, focuses on how you can retain market share by making services more affordable. Download the study to learn more.

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