The senate focused on the companies who were believed to have abused the orphan status of the drugs granted by the 1983 Orphan Drug Act and engaged in price hikes at levels well beyond the costs of their research, development and manufacturing. The Federal Trade Commission was asked to investigate Ovation Pharmaceuticals after it was alleged that the company engaged in price abuse.
According to Alan Goldbloom, CEO of Minnesota Children’s Hospital, Merck’s drug Indocin that was used to treat patent ductus arteriosus, a condition that can interfere with breathing in newborn and premature babies costed about $108 per unit until January 2006. However, Ovation later acquired Indocin from Merck and hiked its price to $1,500 – a 1,278% increase.
Madeline Carpinelli, research fellow with the PRIME Institute at the University of Minnesota, informed the senate that there were over one hundred such instances since 2002 where the price of a single-source drug more than doubled due to a single price increase. She also contended that these price distortions increasingly led to ever-growing expenditures of private and public drug programs therby adversely affecting public health.
US senators also found that the abnormal hikes in orphan drug prices adversely impacted the public health according to the National Institutes of Health estimates, the total number of American families touched by rare diseases constituted around 30 million people.
PharmaTimes has quoted Democratic senator Amy Klobuchar, as saying: “It’s disturbing that our providers, hospitals and patient are being blindsided by these exorbitant price increases. If we start to monitor this data, there is more of a paper trail, giving use enhanced ability to do something about these companies’ practices.
“When provided with the right information on drug prices, especially in smaller markets, doctors can be alerted of big price increasing, potentially spurring generic alternatives to expensive drugs.”