The drug pricing controversy is showing no signs of dying down with Medivation, Inc. and Astellas Pharma, Inc. (ALPMY - Free Report) being the latest to come under the scanner.
Yesterday, 12 members of Congress including Democrat presidential candidate, Bernie Sanders, asked the Department of Health and Human Services and the National Institutes of Health (NIH) to hold a public meeting related to the pricing of Medivation and Astellas’ prostate cancer drug, Xtandi.
According to a petition filed with the NIH, Americans have to pay $129,000 for Xtandi, while the drug is sold for $39,000 in Sweden and Japan, and $30,000 in Canada.
The group of lawmakers believes a public hearing will help determine if “march-in rights” should be used to lower the price of the drug.
While the high price of drugs has always been a matter of concern, political and media focus on this issue has increased significantly since last September following Hillary Clinton’s “price gouging” tweet.
Since then, several pharma and biotech companies with high-priced drugs have seen their share prices falling reflecting investor concerns regarding their profitability if drug prices are cut.
Valeant Pharmaceuticals International, Inc. was among the hardest hit due to its strategy of acquiring companies and selling their drugs at higher prices.
With drug costs remaining a major concern, healthcare companies may find it a bit difficult to justify their high prices by citing the years and funds that go into bringing new treatments to market and the need to invest in R&D to bring additional treatments to market.
Irrespective of who wins the presidential race, drug pricing will remain a topic of discussion among policymakers, the media and the general public.
Both Medivation and Valeant are Zacks Rank #5 (Strong Sell) stocks. Actelion Ltd. is a better-ranked stock in the healthcare sector with a Zacks Rank #1 (Strong Buy).
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