UPDATE 1-Senate panel focuses on toll of Valeant, Turing drug price spikes

(Adds senator, witness comments from hearing)
By Sarah N. Lynch and Bill Berkrot
WASHINGTON/NEW YORK, Dec 9 (Reuters) - A pediatric doctor in
Alabama had to scramble to find a less expensive supply of a
lifesaving drug to treat an infant who was suffering from a
parasitic infection.
In Utah, a hospital has been forced to change the way it
stocks a drug critical to treating heart patients after the cost
skyrocketed from $440 to $2,700 a vial.
These are two of the stories a U.S. Senate panel heard on
Wednesday at a hearing to explore why certain off-patent
prescription medicines sold by companies like Valeant
Pharmaceuticals VRX.TO and Turing Pharmaceuticals have shot up
after they acquired the rights to the drugs.
The Senate's Special Committee on Aging announced last month
it was launching an investigation into drug pricing and the role
mergers and acquisitions may be playing in price hikes.
Dr. Gerard Anderson of Johns Hopkins University in Baltimore
told the committee that consolidation in the generic drug
industry is eliminating competition that keeps prices low.
The committee is reviewing price increases for two Valeant
heart drugs, Isuprel and Nitropress, and Turing's price increase
on Daraprim, used to treat toxoplasmosis, a serious disease that
affects AIDS patients and pregnant women and their babies.
Senator Claire McCaskill of Missouri, the panel's ranking
Democrat, said there is a difference between rewarding
innovation and price gouging, noting that the older drugs in
question were not developed by the companies selling them.
"If this is just greed, we have a duty to figure out how to
protect patients who need these medicines," she said.
Drug pricing has come under wider scrutiny in the last few
months, not only from U.S. lawmakers, but also from U.S.
prosecutors and Democratic presidential candidates.
A different congressional committee is investigating the
high U.S. prices of innovative new branded medicines as well.
Valeant is facing probes from U.S. prosecutors over prices,
distribution and prescription assistance programs, while Turing
is under investigation by the New York state attorney general
for antitrust concerns.
The increased scrutiny over high U.S. drug prices has also
taken a toll on the industry's stocks.
"Let the word go out to investors ... we're paying attention
to this practice," McCaskill said.
Wednesday is the first in what is expected to be a series of
hearings on drug price spikes.
The chief executives of the companies may be called to
testify at a future date, when Congress resumes hearings on the
subject in 2016.
Valeant said it was cooperating with the committee,
including providing requested documents.
"Valeant markets more than 200 prescription drugs ... so
broad conclusions about the company's pricing cannot be drawn
from any one drug or set of drugs," spokeswoman Laurie Little
said in an emailed statement.
McCaskill said Senate research found that "dramatic price
hikes are seemingly business as usual for Valeant."
Committee Chairwomen Senator Susan Collins, a Maine
Republican, said "the companies we're investigating look more
like hedge funds than they do traditional pharmaceutical
companies," and called the price hikes egregious and offensive.
Turing, which is led by a former hedge fund manager, did not
respond to a request for comment.
Wednesday's hearing featured medical professionals who
testified about the impact of price increases on important older
generic medicines.
Erin Fox, a director at the University of Utah Health Care,
said the hospital is struggling to cope with Valeant's price
increases.
"If we continued to purchase the same amount of each drug,
it would cost our organization just over $1.6 million more for
isoproterenol and approximately $290,000 more for nitroprusside
compared to what we paid the previous year," Fox said, using the
chemical names of the Valeant heart drugs.
Dr. David Kimberlin of the University of Alabama,
Birmingham, who treats infants that have contracted
toxoplasmosis from their mothers, said a course of Daraprim
treatment for a baby had been about $1,200. Since the Turing
price hike it is "no less than $69,000."
He said a liquid formulation needed for babies had become
difficult to obtain due to Turing distribution practices.
"Babies' lives literally hang in the balance here," he told
the committee.