ALBANY, N.Y. (NEWS10) – The new Office of Pharmacy Benefits announced it has initiated investigations into significant price spikes for six drugs that were connected to the COVID-19 pandemic. The Office will send a demand, related to New York Insurance Law Section 111, requiring a statement from the manufacturer explaining the causes of the spikes.
“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,” Governor Cuomo said. “This shameful behavior cannot stand and needs to be rooted out at all costs. 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.”
Since these drugs are sometimes the difference between life and death, an extreme price spike can be a barrier to lifesaving treatment, particularly during a global health emergency.
“It requires extreme greed and cynicism to see a global pandemic costing millions of lives as an opportunity for profit,” said Commissioner of the New York State Department of Health Dr. Howard Zucker. “I applaud DFS and Superintendent Lacewell for taking these steps to address the problem of excessive drug prices during this international public health crisis.”
The Department of Financial Services’ (DFS) Office of Pharmacy Benefits (OPB) has examined changes in drug prices during the state of emergency to identify spikes in price worthy of further investigation. On Thursday, the OPB commenced investigations into price spikes for six drugs, including:
- Ascor (ascorbic acid) 25,000 mg/50 mL bulk vial – Ascor is a formulation of Vitamin C for IV injection manufactured by McGuff Pharmaceuticals. McGuff raised the price of this drug by 110% about a week after clinical trials were announced for use of the drug to treat COVID-19 patients suffering acute symptoms.
- Budesonide 0.5 mg/2 mL inhalation (60 mL) – One of two corticosteroids to be investigated, a generic formulation produced by Cipla USA Inc. increased in price by over 1350% in the midst of the first wave of COVID-19 cases in the U.S. and on the heels of an announcement of international clinical trials for its use to treat COVID-19 patients.
- Dexonto (dexamethasone) 5 mL vial of a 0.4% solution – Dexonto is the other corticosteroid under investigation and is a branded generic drug manufactured by Nubratori, Inc. This manufacturer announced a price increase of over 65% at the beginning of the pandemic, just 11 days before clinical trials for treating COVID-19 patients with the drug were announced in China.
- Mytesi (crofelemer) 125 mg delayed release tablet, 60s – Manufactured by Jaguar Health, Mytesi is a drug used to treat gastrointestinal side effects of antiretroviral therapies used by HIV patients. Jaguar increased the price of the drug by 230% just days after it applied for an emergency use authorization for use to treat COVID-19 patients.
- Duramorph (morphine sulfate) 1 mg/1 ml (10 mL 10s) – While most morphine formulations experienced modest increases in price during the early months of the pandemic, this branded product manufactured by Hikma Pharmaceuticals experienced an anomalous increase of nearly 60%.
- Chloroquine phosphate 250 mg tablets – The chloroquine family of drugs has made many headlines during the pandemic, but Rising Pharmaceuticals appears to have attempted to capitalize on unsubstantiated reports of its effectiveness in treating COVID-19 patients early in the pandemic when it raised its price by 97.8%.
Each of these manufacturers will now be required to provide a justification for each spike the OPB identified. Pursuant to the demands, the manufacturers will provide DFS with written responses to questions such as the dates pricing decisions were made, the officers or employees involved in the decisions, any analyses conducted prior to the price spike, and the reasons for the price spike given internally. The OPB is authorized to collect additional information, including by examining witnesses or issuing subpoenas.
The beginning of an investigation does not mean that a price spike was unlawful or even unjustified. It means that DFS has determined the circumstances need a closer look. If the investigation finds that illegal conduct occurred or that a price spike was not justified, it will be memorialized in a report of the Drug Accountability Board.
If it is determined that a valid reason for the spike exists, DFS will announce that development and close the investigation.