Ariad Pharmaceuticals (NASDAQ:ARIA) is coming under fire for boosting the price of one of its drugs by more than $80,000 for a year’s supply. Iclusig, a drug used to treat leukemia patients, had a list price for a year’s supply of $114,960 when it was approved in 2012. The medication now has a $200,000 price tag. The company raised the cost of the drug four times in 2016 alone.
Lawmakers are demanding to know the justification for the price increase. Sen. Bernie Sanders, I-Vt., and Rep. Elijah Cummings, D-Md., sent a letter to Ariad Pharmaceuticals demanding details about the company’s profits and any programs it offers to cut patient costs. In the letter, Sanders and Cummings wrote, “These outrageous sales tactics indicate that Ariad is more concerned with its profit than with its patients.”
Cummings is senior Democrat on the House Oversight and Government Reform Committee. Sanders made the fight against escalating drugs costs part of his platform as he campaigned for the Democratic nomination for president. Democrat presidential nominee Hillary Clinton has pledged to put an end to “unjustified price hikes” of drugs.
A tweet by Sanders decrying the price increase sent the drugmaker’s stock into a steep decline last week. Sanders tweeted: Drug corporations’ greed is unbelievable. Ariad has raised the price of a leukemia drug to almost $199,000 a year. The company’s stock fell more than 7 percent after the tweet, wiping nearly $330 million from the company’s market value.
Ariad stated it had received the letter and would be responding to the politicians. According to a statement from the company, the price hikes were justified because Iclusig “addresses an area of high unmet medical need in an ultra-orphan patient population of around 1,000-2,000 patients per year.”
An orphan disease is one that affects fewer than 200,000 patients in the country. It has become a common justification for high list prices for drugs that serve a small market. An analysis by LifeSci Capital found that most drugs used to treat diseases that afflict fewer than 10,000 patients have price tags of $200,000 or higher per year.
Ariad’s statement also detailed the expenditures made by the company to bring Iclusig to market. Those expenditures included “more than $1.3 billion in R&D [research and development] and accumulated losses of approximately $1.4 billion,” according to the statement.
Other pharmaceutical companies have also come under fire from Congress for price hikes. Turing Pharmaceuticals was called to account last fall for hiking the price of a life-saving AIDs drug, Daraprim, by more than 5,000 percent. Earlier this year, Mylan CEO Heather Bresch was asked to account for a more than 500 percent hike in the list price of the company’s EpiPens.