Dr Reddy's, Sun Pharma Among 14 Firms Probed by US Congress Over Drug Price

Washington: Indian pharmaceutical majors Dr Reddy's Laboratories and Sun Pharma are among 14 drug makers being probed by the US Congress over price escalation of generic drugs.

In letters sent by Elijah E Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Senator Bernard Sanders, 14 companies have been asked to share "information about the escalating prices they have been charging for generic drugs".

Mr Cummings and Mr Sanders are investigating price increases for drugs used to treat everything from common medical conditions to life threatening illnesses and to identify measures to help reduce costs for patients, healthcare providers, and hospitals across the country (US), said a statement on the US House of Representatives website.

In their letters, both cited data from the Healthcare Supply Chain Association on recent purchases of 10 generic drugs by group purchasing organisations over the past two years.

"When you see how much the prices of these drugs have increased just over the past year, it's staggering, and we want to know why," Mr Cummings said.

"In some cases these outrageous price hikes are preventing patients from getting the drugs they need," he added.

The members asked the companies to provide information from 2012 to the present day, including total gross revenues from sales of the drugs, prices paid for the drugs, factors that contributed to decisions to increase prices, and the identity of company officials responsible for setting drug prices.

Commenting on the price rise of the generic medicines, Mr Sanders, who is chairman of the Sub-Committee on Primary Health and Aging, Senate Committee on Health, Education, Labor and Pensions, said, "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."

When contacted, a Dr Reddy's spokesperson said, "The company is in the process of responding to the notice and is confident of addressing these queries successfully. It did not initiate any price increasing activity for the products mentioned in the notice."

Sun Pharma spokesperson declined to comment.

The other companies which have been asked to share information are Actavis, Apotex Corp, Endo International, Global Pharmaceuticals, Heritage Pharmaceuticals, Lannett Company, Marathon Pharmaceuticals, Mylan, PAR Pharmaceutical, Teva, West-Ward Pharmaceutical and Zydus Pharmaceuticals.

The share prices of Dr Reddy's and Sun Pharma dropped by 4.37 per cent to Rs 2,963.65 per scrip and 4.31 per cent to Rs 800.75 per share respectively on close of day's trade on the BSE.

Citing examples of increased prices of generic drugs, the US Congress statement said albuterol sulfate, used to treat asthma and other lung conditions, increased 4,014 per cent for a bottle of 100 (2 mg) tablets. Doxycycline Hyclate, an antibiotic used to treat a variety of infections, increased 8,281 per cent for a bottle of 500 (100 mg) tablets.

"Glycopyrrolate, used to prevent irregular heartbeats during surgery, increased 2,728 per cent for a box of 10 (0.2 mg/mL, 20 mL vials)."

The statement further said, "A survey by the National Community Pharmacists Association found that 77 per cent of pharmacists reported 26 or more instances over the past six months of a large upswing in a generic drug's acquisition price, and pharmacists also reported that patients are 'declining their medication due to increased co-pays'."

Citing a report by the IMS Institute for Health Informatics, it said generic drugs now accounted for 29 per cent of pharmaceutical spending and 86 per cent of drugs dispensed in the US.