New York investigates drug price spikes during pandemic

New York state regulators late last month launched an investigation into six drug manufacturers over price spikes on medications related to COVID-19.

The recently created Office of Pharmacy Benefits, which is housed in the Department of Financial Services, is demanding the manufacturers justify the price increases under section 111 of the New York Insurance Law—which permits investigations into prescription drug price increases of more than 50% within 12 months.

Three of the manufacturers are based in New Jersey: Hikma Pharmaceuticals saw a 60% increase for its drug Duramorph; Rising Pharmaceuticals, a 98% bump for chloroquine phosphate; and Cipla USA, an over 1,350% boost for budesonide. The other three hail from California: Jaguar Health saw a 230% jump for Mytesi; McGuff Pharmaceuticals, a 110% boost for Ascor; and Nubratori, a 65% bump for Dexonto.

Many of the price jumps appeared to come after announcements about using the drugs in clinical trials related to treating COVID-19. The manufacturers are required to provide written responses as to when the pricing decisions were made, the personnel involved, the analyses conducted leading to the spikes and internal memos. The office is authorized to examine witnesses and issue subpoenas.

A spokeswoman for Rising Pharmaceuticals called the state’s request and suggestion of impropriety “unfortunate.”

A Hikma spokesman said its price increase was unrelated to the pandemic and was made in January last year, even before the first announced COVID-19 case in the U.S.

Cipla USA did not respond for comment. A Nubratori spokesman said the company has never made a sale into New York, and it has never been requested to compound its drug to treat COVID-19. The company did an investigation and did not find evidence of Dexonto being used to treat COVID-19, he said.

A McGuff spokeswoman said Ascor’s price increase was less than 20%, was made in March and has remained unchanged since. “McGuff has always prided itself on ethical and legal practices including product pricing, and we are happy to cooperate as soon as possible with the New York Department of Financial Services to rectify these completely false allegations,” said Ron McGuff, the company’s president.

A Jaguar spokesman referred to a company statement, which said Mytesi’s price increase was made in December 2019, and cited a need to manage increasing costs and reimbursement barriers.

The office will announce its conclusions as to whether the spikes were justified in an upcoming Drug Accountability Board report.

“When drug manufacturers exploit a global pandemic for their own benefit, it cannot go unanswered. DFS will use every power at its disposal to shine a light on the world of drug prices,” said Linda Lacewell, department superintendent.

Fewer Alaska residents had routine cancer screenings in 2020 than in the year before the outbreak of the coronavirus pandemic, doctors said. That finding reflects a national concern.

Some providers said the screening decrease was likely linked to anxiety related to the virus that has lasted through the pandemic, according to a report in the Anchorage Daily News.

The decrease could also be related to a temporary ban on elective medical procedures the state enacted in March to preserve personal protective equipment and potentially reduce COVID-19 cases.

That elective procedure prohibition was lifted in April, although virus cases surged through the fall and winter and kept virus anxiety levels high.

Some providers have shifted to virtual medical care, which is helpful for some types of cancer screenings, but not all.

“Anecdotally, from my personal experience, there have been more cases than normal where there’s a clinical change in the person’s status because of logistics related to the pandemic,” said Dr. Anusiyanthan Mariampillai, an oncologist at the Alaska Native Medical Center in Anchorage.

Mariampillai said it is too early to know whether decreased screening will impact Alaska cancer rates and deaths.

There were 330 fewer mammograms and 28 fewer lung cancer screenings last year than there were in 2019 at Juneau’s Bartlett Regional Hospital, said Paul Hawkins, director of the hospital’s diagnostic imaging center.