Representatives investigating rising MS prices

Reps. Elijah Cummings (D-Md.) and Peter Welch (D-Vt.) launched an investigation into the rising price of multiple sclerosis drugs, citing increases in price of as much as 1002% over the lifetime of a drug despite growing competition. The committee issued a press release Thursday containing letters sent to Bayer AG (Xetra:BAYN), Biogen Inc. (NASDAQ:BIIB), Merck KGaA (Xetra:MRK), Novartis AG (NYSE:NVS; SIX:NOVN), Sanofi (Euronext:SAN; NYSE:SNY), Teva Pharmaceutical Industries Ltd. (NYSE:TEVA; Tel Aviv:TEVA) and Roche (SIX:ROG; OTCQX:RHHBY) requesting information about their profits and pricing strategies.

In the letters, the representatives accuse the manufacturers of "shadow pricing," whereby companies increase their drug prices in response to new more expensive drugs entering the market. As evidence, the representatives cited a 2015 paper published in the American Academy of Neurology. The paper describes increases in the cost of first generation disease modifying drugs that are 5 to 7 times the rate of prescription drug inflation. Specifically, the researchers noted that the cost of first-generation MS drugs Betaferon interferon (IFN) beta-1b from Bayer, Avonex interferon beta-1a from Biogen and Copaxone glatiramer acetate from Teva rose by an average of 21-36% a year, compared to a general prescription drug inflation of 3-5%. Copaxone 20 mg had increased 1002% to a price of $91,401 since its launch in 1996...