Yet another drug maker is under scrutiny for its pricing.
The US Department of Justice last Thursday sent grand jury subpoenas to Taro Pharmaceuticals and two of its senior commercial officers in its US unit seeking documents about generic pharmaceuticals and pricing, according to a filing that Taro made with the US Securities and Exchange Commission.
The filing was very brief, but noted that the feds are also looking for “communications with competitors and others” regarding the sale of generic drugs. In its filing, the company said it plans to respond and cooperate with the investigation. A Taro spokesman declined further comment.
There was no mention of specific drugs, although the company has gained notice for raising the price on clobetasol, a steroid that is sold as a topical ointment, cream, and gel, by substantial amounts between July 2011 and June 2014.
For instance, 15 grams for a 0.05 percent topical ointment increased to $124.36 from $5.75, according to Truven Health Analytics. At the same time, the list price for 15 grams of the 0.05 percent topical cream increased to $102.58 from $5.75. And the list price for the 15 grams of the 0.05 percent topical gel climbed to $133.07 from $9.07.
In general, prices for dermatology drugs have been rising. A study earlier this year in JAMA Dermatology found that the mean price increase for 19 brand-name drugs rose 401 percent between 2009 and 2015. (One large purveyor of these medicines is Valeant Pharmaceuticals, which has been widely criticized for its pricing policies). But prices for some generics increased a mean of 279 percent between 2011 and 2014. These rising prices have prompted pharmacy benefits managers to tighten coverage.
The subpoena arrives as the cost of prescription medicines, in general, has become a topic of national outrage.
In recent years, new drugs for hepatitis C and cancer have hit new heights. Besides Valeant, Turing Pharmaceuticals, which used to be run by Martin Shkreli, bought older drugs and jacked the prices to sky-high levels. And Mylan Pharmaceuticals is being skewered over the price of its Epipen device, which is used to treat life-threatening allergic reactions.
And some generic drugs have also generated attention. Two years ago, Senator Bernie Sanders (D-Vt.) and Representative Elijah Cummings (D-Md.) began investigating more than a dozen generic drug makers for price hikes that, in some cases, topped 1,000 percent and even exceeded 17,000 percent. The effort generated considerable attention but ultimately did not yield much information.
Antitrust issues involving the pharmaceutical industry are a growing concern.
The US Federal Trade Commission has long argued that patent litigation between brand-name and generic drug makers sometimes spawns deals that result in payments that delay the availability of lower-cost generics, which raises health care costs. A 2013 US Supreme Court ruling noted that such deals may merit antitrust scrutiny.
Last month, New York Attorney General Eric Schneiderman opened an investigation into whether Mylan used anticompetitive methods to crowd out EpiPen competition. The company had offered its device to school districts, but required that any additional purchases for a 12-month period could not be made with a rival company. Mylan has denied violating antitrust laws. Several Washington lawmakers have asked the FTC to open its probe.