SeniorSource SENATOR COLLINS WRITES OP-ED ON DRUG PRICING INVESTIGATION

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1 April 2016 SENATOR COLLINS WRITES OP-ED ON DRUG PRICING INVESTIGATION A Newsletter from U.S. Senator Susan Collins Chairman, Senate Special Committee on Aging treatment for their daughter, a cost that would be daunting enough, the Westons would now have to pay over $360,000, an impossible amount for them to afford. Sen. Collins Questions Sudden Price Spikes in Old Prescription Drugs Portland Press Herald Sen. Susan Collins Shannon and Joshua Weston had always wanted a family, and when she gave birth to a beautiful baby girl, they were overjoyed. Their joy quickly turned to anxiety when they learned that their baby had a rare disease: congenital toxoplasmosis. The good news was that a year s treatment with an effective drug called Daraprim, which had been on the market since 1953, would save their infant daughter from death or a lifetime of disability. The bad news? Daraprim had been acquired by a firm called Turing Pharmaceuticals, headed at the time by Martin Shkreli. When Turing acquired Daraprim in 2014, the drug was selling for $13.50 per pill. Turing raised the price of this life-saving medicine to an astounding $750 per pill. Instead of facing a cost of $6,500 for a year s Sen. Collins with Dr. Adaora Adimora, Professor of Medicine, UNC Chapel Hill, and the Westons Last fall, the Senate Aging Committee, which I chair, launched a bipartisan investigation into the sudden, enormous price increases on decades-old prescription drugs, like Daraprim, whose patents had expired. We discovered that certain companies like Turing Pharmaceuticals and Valeant Pharmaceuticals operate more like hedge

2 Page 2 funds than they do traditional pharmaceutical companies. The committee is investigating how these companies devised a scheme to impose and protect egregious price hikes, and what policy changes are needed to respond to their actions. Our investigation has determined that these companies follow a business model with five key elements: First, the companies identify an older, brand-name, sole-source drug. They choose a drug whose patents have long since expired and which has no generic competitor. Second, they select drugs that are the gold standard for the conditions they treat, so that health care providers can t prescribe a substitute treatment or won t feel comfortable doing so. Third, they select a drug that serves a small patient population. Fewer patients mean less scrutiny and less incentive for a competitor to enter the market. Fourth, they put the drug in a closed distribution system, or specialty pharmacy, which gives the companies a monopoly. This move is key because it prevents generic companies in most cases from obtaining the supply required to conduct bioequivalence tests needed for approval of a generic equivalent by the Food and Drug Administration. Fifth, they accomplish their ultimate goal of driving up the price of the drug, in some cases by as much as 5,000 percent, and watch the money roll in. At our recent Aging Committee hearing, we heard the sworn testimony of three Turing insiders one who protested the unjustified price increase and lost his job as a result, and two who stayed and helped carry out the greedy scheme that caused hardship for patients and providers, prevented generic competitors and enriched the company, which had not invested a single penny in the research and clinical trials that led to Daraprim. In fact, Turing did not even exist until 2014, more than 60 years after Daraprim first came onto the market. The decisions made by Turing did not play out in a vacuum, as the experience of the Westons demonstrates. Shannon Weston, who works at Fort Bragg in North Carolina, gave heart-wrenching testimony about her search for funds to save her infant daughter. She explored taking a second mortgage on her home, cashing in her retirement account and going on TV to plead for help. Fortunately, a physician at the University of North Carolina at Chapel Hill connected her with its pharmacy program, which allows her to pay a highly

3 Page 3 subsidized cost of $218 a month for the desperately needed Daraprim. And today, her baby daughter is doing well. Daraprim is not the only drug whose price has soared with no justification for the enormous increase. Thiola, a medicine that treats a rare kidney disease, Isuprel, needed to treat bradycardia, and Nitropress, used for congestive heart failure, are other essential drugs that have been subjected to this price manipulation scheme. Adult Day Centers and Services at the Southern Maine Agency on Aging (SMAA), testified. Ms. Bradley spoke about the importance of adult day services and the effect they have on the members who attend. SMAA operates two adult day centers: the Stewart Center in Falmouth and the Sam L. Cohen Center in Biddeford. The actions of these hedge fund pharma companies may be legal, but their unethical behavior harms patients and hospitals, represents a market failure and is a call to action. Sen. Claire McCaskill, the ranking Democrat on the committee, and I are determined to reform the system so that parents like the Westons do not have to purchase monopoly drugs that cost $13.50 a pill one day and $750 for the exact same pill the next. SENATOR COLLINS CHAIRS HEARING ON FIGHT TO END ALZHEIMER S Sen. Collins meeting with Maine members of the Alzheimer's Association (top) and greeting Polly Bradley (bottom) Senator Collins recently held a hearing on the importance of Alzheimer s research and the need to support family caregivers. At the invitation of Senator Collins, Polly Bradley, the Director of SMAA serves some 200 families with a person-centered approach that encourages social interaction to help maintain physical and emotional health as well as cognitive function. These programs also support

4 Page 4 family caregivers by giving them a muchneeded respite from the 24/7 care of their loved ones with Alzheimer s. In 2011, Senator Collins co-authored the bipartisan National Alzheimer s Project Act with then-senator Evan Bayh. That legislation created an expert council, which determined that $2 billion per year is needed to achieve the goal of preventing and effectively treating Alzheimer s by As one of our nation s strongest voices on behalf of Americans living with Alzheimer s, [Senator Collins] know[s] that more than 5 million Americans are living with the disease, and without significant action, as many as 16 million Americans will have Alzheimer s by Robert Egge, Executive VP, Government Affairs, Alzheimer s Association As a senior member of the Appropriations Committee, Senator Collins has worked to turn that recommendation into action. The spending bill passed last year includes a $2 billion increase for the National Institutes of Health, the largest increase since That includes a $350 million increase for Alzheimer s research, the largest in history, bringing total funding for Alzheimer s disease and related dementias research to $991 million a more than 50 percent increase and almost half-way to our $2 billion-per-year goal. SENATOR COLLINS URGES CONGRESS TO MAINTAIN ITS STRONG COMMITMENT TO DIABETES RESEARCH Senators Susan Collins and Jeanne Shaheen (D-NH), the co-chairs of the Senate Diabetes Caucus, recently joined with Patriots linebacker Dont a Hightower to urge Congress to pass legislation supporting research to prevent, treat, and eventually cure diabetes. Hightower is a member of the American Diabetes Association s Team Tackle. The Senators and Hightower were also joined by patient advocates with type 1 and type 2 diabetes. Since I founded the Senate Diabetes Caucus in 1997, funding for diabetes research has more than tripled, said Senator Collins. The 2016 omnibus spending bill passed late last year continues this progress with an overall $2 billion increase for the National Institutes of Health, the largest since 2003, but there is still much work to be done. I have called on my colleagues to maintain our strong commitment to diabetes research in the 2017 spending bill, and Senator Shaheen and I are determined to require Medicare to cover Continuous Glucose Monitors, just as

5 Page 5 many private insurance companies already do. Today s investments will yield cures and therapies for patients tomorrow. Sen. Collins speaks at diabetes press conference Diabetes is one of the most costly diseases to the health system. According to the Centers for Disease Control and Prevention, the estimated annual total cost of diabetes is $245 billion. SENATE PASSES BIPARTISAN LEGISLATION TO SUPPORT SOCIAL AND NUTRITION SERVICES FOR NEARLY 12 MILLION SENIORS the floor manager of this legislation, which became law on April 19, For more than 50 years, the Older Americans Act has provided funding for critical services that have helped keep our older adults in Maine and across our country healthy and independent, said Senator Collins. This bipartisan legislation will ensure funding continues for some of the most vital and successful programs, such as meals on wheels and caregiver support, that are currently used by nearly 12 million older Americans and their loved ones. The Older Americans Act: Provides services to Americans age 60 and over, targeting those with the greatest social and economic need; Provides home-delivered nutrition services, group meals, family caregiver support, and community service employment; Ensures all long-term care residents have access to the long-term care ombudsman program which advocates and resolves complaints for residents; and Senator Susan Collins applauded the passage of the Older Americans Act Reauthorization Act of 2016, bipartisan legislation to support social and nutrition services for millions of older Americans. Senator Collins is a cosponsor and was Provides services to prevent the abuse and neglect of seniors.

6 Page 6 UPDATE ON JAMAICAN LOTTERY SCAM Sweepstakes scams continue to claim senior victims, who are tricked into believing that they have won or have been entered to win a lottery. Scammers then tell the victims that they need to pay a fee to either collect their supposed winnings or improve their odds of winning the prize. Last Congress, Senator Collins chaired an Aging Committee hearing to investigate the Jamaican lottery scam, one of the most pervasive sweepstakes scams. At its peak, law enforcement and FairPoint Communications estimated that sophisticated Jamaican con artists placed approximately 30,000 phone calls to the United States per day and stole $300 million per year from tens of thousands of seniors. In addition, last month Senator Collins sat down for an interview with a reporter from Television Jamaica. The story, which will air in Jamaica, is intended to raise awareness among Jamaican citizens about how these scammers rob American seniors of their hard-earned savings. Since the Aging Committee began investigating this issue, the Jamaican government passed new laws enabling extradition of the criminals to the United States for trial. In late March, Jamaican law enforcement arrested 19 Jamaican citizens who are alleged to be involved in the Jamaican lottery scam and confiscated $1.8 million. Seven of the 19 Jamaicans who were arrested are likely to face extradition to the U.S. Putting a stop to scams that target seniors is one of Senator Collins highest priorities. Under her leadership, the Aging Committee maintains a Fraud Hotline ( ), which serves as a resource for seniors who wish to report fraud. Senator Collins also released an anti-fraud resource guide earlier this year, which revealed that the Jamaican lottery scam was the second most-common scam reported to the Fraud Hotline in (The IRS impersonation scam was the most-common complaint). If you would like a free copy of the anti-fraud resource guide, please call the Aging Committee s Fraud Hotline. IRS Scam Alert The IRS impersonation scam is particularly prevalent during tax season. The Aging Committee s Fraud Hotline has received a spike in calls reporting this fraud in recent weeks. Over a span of just two days this month, the Fraud Hotline received more than 140 calls from Mainers. The IRS will always mail a bill to a taxpayer before trying to call. Seniors who receive an unexpected call from someone claiming to be from the IRS can report it to the Treasury Inspector General for Tax Administration ( ), the Fraud Hotline ( ) and local law enforcement.

7 Senator Collins Wants to Hear from You! Senator Collins always appreciates hearing from Mainers. If you are having difficulty with a federal agency or if you wish to share your views or concerns, please contact Senator Collins office or one of her Maine Constituent Service Centers. messages can be sent to the Senator through her website: To sign up to receive this newsletter electronically, please contact: Senior_Source@collins.senate.gov Augusta Constituent Service Center: 68 Sewall Street, Room 507 Augusta, ME Lewiston Constituent Service Center: 55 Lisbon Street Lewiston, ME Aroostook Constituent Service Center: 25 Sweden Street, Suite A Caribou, ME Portland Constituent Service Center: 1 Canal Plaza, Suite 802 Portland, ME Bangor Constituent Service Center: 202 Harlow Street, Room 204 Bangor, ME York County Constituent Service Center: 160 Main Street Biddeford, ME Washington, D.C. Office: 413 Dirksen Senate Office Building Washington, DC