Bernie Sanders demands to know why leukemia drug costs $200,000 a year – leading to fall in stock price

Sanders sent a letter to the company co-signed by Representative Elijah Cummings

Ankur Banerjee
Thursday 20 October 2016 21:51
<em>Justin Sullivan/Getty</em>
Justin Sullivan/Getty

Former Democratic presidential candidate Bernie Sanders and U.S. Representative Elijah Cummings issued a letter on Thursday seeking information from Ariad Pharmaceuticals Inc on the “staggering” price increases for the company's leukemia drug.

Ariad's shares reversed course to trade down 6 percent at $10.17 after rising more than 4 percent earlier on Thursday.

The letter was sent a week after Sanders tweeted that: “Drug corporations' greed is unbelievable. Ariad raised the price of a leukemia drug to almost $199,000 a year.”

Ariad's drug, Iclusig, was approved in December 2012 and is used to treat chronic myeloid leukemia, a type of bone marrow cancer in which marrow makes too many white blood cells.

Iclusig generated sales of $65.3 million in the second quarter.

The company's pricing strategy came under scrutiny after the TheStreet reported earlier this month that the company had raised the price of the drug. (bit.ly/2dcBAmg)

“In the interest of patients and taxpayers, we are interested in learning more about the impact that the escalating price and restrictions on product availability have had,” Sanders and Cummings, a Maryland Democrat, said in the letter.

Ariad did not immediately respond to request for comment.

Criticism of Ariad, led by Chief Executive Paris Panayiotopoulos, comes at a time when Mylan NV is being lambasted by consumers and lawmakers for raising prices on its lifesaving EpiPen six-fold to over $600 for a package of two in less than a decade.

Mylan said earlier this month it would pay $465 million to settle questions over whether it underpaid U.S. government healthcare programs by misclassifying the EpiPen anti-allergy drug delivery device.

Aggressive drug pricing has come under intense scrutiny after Democratic Presidential candidate Hillary Clinton tweeted her intent to tackle high prices last year.

Clinton's tweets have hit shares of Mylan and Valeant Pharmaceuticals International, whose pricing strategy has been investigated by U.S. regulators and lawmakers.

Drug companies are already responding to political pressure. Botox maker Allergan Plc recently committed to keeping price increases below 10 percent.

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