Big Pharma Companies Also Being Questioned About Drug Prices

Earlier this week, we told you how a Senate committee was investigating huge price hikes on a handful of niche-market prescription drugs. The companies involved in those probes are generally newer, smaller operations — but it looks like two much bigger names in the pharmaceuticals industry are also being asked about the prices of their drugs.

In a new quarterly filing [PDF] with the Securities and Exchange Commission, Merck discloses that it has received a civil investigative demand from the U.S. Attorney’s Office in Philadelphia, seeking information “relating to the Company’s contracting and pricing of Dulera Inhalation Aerosol with certain pharmacy benefit managers and Medicare Part D plans.”

Dumera is Merck’s name brand for an inhaled asthma medication that’s a combination of formoterol and mometasone. According to the Wall Street Journal, year-over-year sales for this drug were up nearly 17% for the nine months ended Sept. 30.

The journal also notes that another big pharma biggie, Eli Lilly, recently disclosed [PDF] that the same U.S. Attorney’s office is conducting an inquiry concerning Eli Lilly’s “treatment of certain distribution service agreements with wholesalers when calculating and reporting Average Manufacturer Prices in connection with the Medicaid drug rebate program.”

Under that program, drug manufacturers with products covered by the government-run low-income insurance plan agree to pay quarterly rebates that offset the overall cost of prescription drugs under Medicaid. The value of these rebates is calculated based on the average price a manufacturer charges to wholesalers.

Eli Lilly contends it did nothing wrong in calculating its rebates.

by Chris Morran via Consumerist