State Launches  Drug Price Probe

State Launches Drug Price Probe

Photo Courtesy of Wikimedia/Tom Varco

State officials noted that drugs are sometimes the difference between life and death, and an extreme price spike can be a real barrier to lifesaving treatment, particularly during this global health emergency.

By Forum Staff

The State Department of Financial Services’ newly formed Office of Pharmacy Benefits on Thursday announced it has initiated investigations into significant price spikes for six drugs that were connected to the COVID-19 pandemic by sending a demand pursuant to New York Insurance Law Section 111 requiring a statement from the manufacturer explaining the facts and circumstances surrounding the spikes.

The drugs are:

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 percent 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 percent 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 percent 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 percent 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 percent 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 percent.

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 percent.

Each of these manufacturers will now be required to provide information about and a justification for each spike the OPB has identified. Pursuant to the demands sent Thursday, 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.

“It requires extreme greed and cynicism to see a global pandemic costing millions of lives as an opportunity for profit,” said Dr. Howard Zucker, commissioner of the State Department of Health.


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