Senator Bernie Sanders (I-VT) and Congressman Elijah Cummings (D-MD) delivered a letter to Ariad Pharmaceuticals (NASDAQ: ARIA) and its CEO Paris Panayiotopoulos.
The two politicians are demanding Panayiotopoulos explain why the company has overseen multiple price increases to its therapy called Iclusig which is used to treat myeloid leukemia which is a rare type of bone marrow cancer.
The company first received FDA approval to market Iclusig back in December 2012 at a cost of $115,000 per year. However, the company’s authorization to sell the therapy was suspended after the U.S. Food and Drug Administration (FDA) observed that one in four patients developed blood clots or narrowing blood vessels – something which wasn’t observed in pre-approval clinical trial data.
The FDA allowed Ariad to sell Iclusig in December 2013 but only to a limited subset of patients who are suffering from a genetic mutation which makes them resistant to other drugs available. The company was also forced to add new safety warnings on the drug’s label and undertake additional post market investigations.
Despite the drug having shown a greater safety risk to patients a full year after it was initially introduced in the market, Arias raised the price of Iclusig several times to its current $199,000 per year. Moreover, management made the decision to discontinue selling a kit of tablets good for two months and replaced it with a one-month supply kit but didn’t adjust the price accordingly.
The letter continued and noted that Panayiotopoulos joined the company in January of this year after the largest shareholder, Sarissa Capital Management, led a successful campaign to oust the former CEO Harvey Berger.
“Over your short tenure as CEO, the price of Iclusig has already jumped several more times to reach $16,561 per month, or nearly $199,000 per year,” the letter read.
Finally, Sanders and Cummings included a list of demands from the company, most notably: 1) total gross and net revenue and profit from the sales of Iclusig since 2012, 2) all dates, quantities, purchasers and prices paid for all sales of the drug, 3) total expenses since 2012 relating to the development and sales of the drug, and 4) purchase agreements for active pharmaceutical ingredients used in the fabrication of the drug.