Health Law & Business

New York to Probe Drug Spikes Connected to Covid-19 Pandemic (2)

Jan. 21, 2021, 5:42 PM; Updated: Jan. 22, 2021, 2:52 PM

New York state launched an investigation into a spike in the cost of prescription drugs connected to the pandemic, Gov. Andrew Cuomo announced Thursday.

The probe will focus on six drugs including: Ascor, a Vitamin C formulation for IV injection; budesonide, a corticosteroid; Mytesi, which is used to treat gastrointestinal side effects of therapies used by HIV patients; and chloroquine phosphate, which early in the pandemic was alleged to treat Covid-19 patients.

Prices of the six drugs had increased dramatically during the pandemic, going up more than 1,350% on budesonide alone, Cuomo’s office said in a statement.

Three of the named drug companies say their price increases are unrelated to the pandemic, and McGuff Pharmaceuticals also said Cuomo’s allegation of a 110% price increase for Ascor is “categorically false.”

The manufacturers must provide information about the rise, and justification to the state, according to the statement. They include McGuff, Cipla USA Inc., Nubratori Inc., Jaguar Health, Hikma Pharmaceuticals, and Rising Pharmaceuticals.

Steven Weiss, a spokesman for Hikma, said the price increase was announced in early January 2020, and unrelated to the pandemic.

“The increase addressed our increased costs for purchasing limited raw materials available for pain medication production, and other increased costs of manufacturing, distribution and new fees imposed on hospital-administered opioid-based pain medications,” Weiss said. The company at the same time lowered the price of at least three other medications, he said.

A spokesman for Jaguar Health directed Bloomberg Law to an online statement, which similarly said the price increase took place prior to the pandemic.

“This price adjustment decision was made in December 2019 and is part of a comprehensive patient access program which was developed to ensure that no person living with HIV (PLWH) will be denied access to Mytesi due to cost; in fact, our goal is to expand access and create a pricing structure that supports patients and our unique tree-to-bottle business model,” according to the statement.

McGuff said it learned about the investigation through a press release and its officials haven’t been contacted by any government agency about the price of Ascor. Its statement to Bloomberg Law said Cuomo’s allegation of a 110% price hike after Ascor’s use in Covid-19 clinical trials was announced is “categorically false.” The only price hike for Ascor in the last year, at less than 20%, was in early March, “before the impact of COVID-19 was known.”

“There has been no price increase of any kind after the announcement of any clinical trials,” McGuff’s statement said. “If New York’s Department of Financial Services had contacted McGuff before issuing this press release, McGuff would have been in a position to provide evidence demonstrating that the allegations are completely without merit.”

“We are happy to cooperate as soon as possible with the New York Department of Financial Services to rectify these completely false allegations,” said McGuff President Ron McGuff.

The other three drugmakers didn’t immediately respond to requests for comment.

“Throughout the COVID-19 pandemic, we’ve seen too many instances of pharmaceutical companies taking advantage of those in need and significantly raising the prices on life-saving prescription drugs,” Cuomo (D) said in his statement.

“Companies should be on notice—if you attempt to capitalize on the health needs of New Yorkers, we will investigate you and hold you fully accountable,” he said.

(Updates Jan. 21 article with McGuff denial of allegations, starting in the fourth paragraph.)

To contact the reporter on this story: Keshia Clukey in Albany, N.Y. at kclukey@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

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