Philly drug company accused of price-gouging

Philadelphia-based drug company URL Pharma is accused of price-gouging after raising the price of a drug used to treat gout, an inflammation of the joints. The drug used to sell for a few cents a pill and now costs about $5 per pill.

U.S. Sen. Sherrod Brown, an Ohio Democrat, this week sent a letter to the company urging it to reconsider its pricing. He has also asked the federal Centers for Medicare and Medicaid Services to investigate.

“Yet again, a pharmaceutical company is taking advantage of FDA approval to price-gouge their customers and pad their profits,” Brown said in a release.

URL sells the drug Colcrys, the brand name for colchicine, which the American College of Rheumatology says has been used for centuries as a treatment for gout. Until recently, many companies made the drug and sold it for a few cents a pill. About five years ago, the FDA ruled that old, unlicensed drugs must go through modern clinical trials. In, 2009, URL Pharma won exclusive rights to sell the drug after it conducted those trials.

Dr. Stanley Cohen, past president of the American College of Rheumatology, said his organization has been lobbying Congress to do something about the unintended impact of the FDA rule for years.

“I would say that universally the rheumatology community is very angry and very upset with the Pharma company,” Cohen said.

In a statement, URL said it poured tens of millions of dollars into the research necessary for FDA approval, but Cohen said that does not justify the new price.

“They did ID some potential drug interactions, which was useful, but nothing to justify or support raising the price of the pill from 10 cents to $5 a pill,” Cohen said.

In a statement responding to the letter, the company said its research resulted in discoveries about safe dosing and interactions with other drugs.

“These health benefits naturally have economic costs associated with them,” the statement continued. “We recognize that expensive and valuable research of this kind, and the intellectual property rights it confers, result in higher prices for patients versus unapproved, unstudied versions of colchicine, which were accompanied by dosing guidance that could be toxic to many patients.”

The statement also highlighted a price-break system that provides free drugs to uninsured patients and those covered by Medicare Part D. It also provides the medication for $25 per month or less for patients under a certain income level.

Cohen said those price breaks help those who qualify, but he is hoping another application of the same drug is approved soon so competition will drive the price back down again.