While many biopharma companies are holding the line on U.S. drug prices during the COVID-19 pandemic, a few are providing more fuel to fire up lawmakers over prescription drug prices.
The latest flames were stoked by last month’s 220% increase in the price of Jaguar Health Inc.’s Mytesi (crofelemer), a botanical drug used to treat the gastrointestinal side effects of HIV antiretroviral treatments. Two days after the FDA denied an emergency use authorization (EUA) for the drug to be used to treat diarrhea in COVID-19 patients who were given antivirals, Jaguar raised the price of Mytesi from $688.52 per bottle to $2,206.52 per bottle.
Rep. Carolyn Maloney (D-N.Y.), chair of the U.S. House Committee on Oversight and Reform, wrote to Jaguar CEO Lisa Conte Monday, urging the San Francisco-based company “to reverse this drastic price increase to ensure everyone who may need Mytesi is able to access it.”
Maloney questioned the timing of the price increase, saying it raised “questions about whether this decision was connected with the company’s expectation that it eventually could market Mytesi to treat coronavirus patients.”
While Mytesi isn’t approved to treat side effects caused by coronavirus therapies now, the potential is there for such an approval in the future, as more than 15 drugs currently approved to treat HIV are being evaluated against SARS-CoV-2, the coronavirus responsible for the pandemic, Maloney said.
The congresswoman noted that the price hike came just days after she wrote to the Pharmaceutical Research and Manufacturers of America urging its industry members to commit to setting affordable prices for drugs that may be used to prevent or treat COVID-19. In her letter to the trade association, Maloney stated, “No drug company should be allowed to profiteer, especially during this public health emergency.”
As part of an Oversight and Reform investigation into the Mytesi price hike, Maloney requested all communications “between or among all executives, employees, investors, board members or other agents of Jaguar Health regarding the decision to increase the list price of Mytesi.”
Before hiking the list price in April, Jaguar announced that its wholly owned subsidiary, Napo Pharmaceuticals Inc., was expanding its patient assistance program for Mytesi by raising income limits on patients eligible for its uninsured, free-drug program. The expansion also increased the copay support for commercially insured patients.
"We want to do what we can to help all Mytesi patients – and the fact that our expanded patient support program is launching during the COVID-19 pandemic should especially benefit Mytesi patients who may have lost jobs or health insurance during the crisis," Conte said April 2. About a week later, Jaguar raised the price of the drug 220%.
Profiteering or poor financial health?
The timing of the price increase is not a good optic for the company. But optics are not always facts. While the price hike was planned back in December, the company said it held off on raising the price in case the FDA approved the EUA. If the EUA had been granted, Jaguar said it would have delayed the pricing adjustment until after the EUA ended.
The increase is not about profiteering from the pandemic. It’s about the financial health of a young company seeking to develop its pipeline with little revenue coming in, Jaguar said. Founded in 2013, the company has yet to break even, and Mytesi, its only approved product, had net sales of less than $6 million last year.
In its 2019 annual report filed with the SEC, the company said, “We believe there is substantial doubt about our ability to continue as a going concern as we do not currently have sufficient cash resources to fund our operations.”
Jaguar posted net losses of $38.5 million last year and $32.1 million in 2018. By the time 2019 wrapped up, it had an accumulated deficit of $133.1 million, with total stockholders' equity of $10.7 million and $3.5 million in unrestricted cash, according to its 10-K filing. A year ago, Jaguar (NASDAQ:JAGX) was trading at a high of nearly $14.90. On May 5, it hit a high of 54 cents .
In March, Jaguar sold $500,000 of future royalties on Mytesi to Iliad Research and Trading LLC for $350,000. The funding was intended to extend Jaguar’s cash runway as it designed a pivotal trial to test the drug in cancer therapy-related diarrhea.
Conte said the company she founded “embodies the challenges faced by a small pharmaceutical company with a novel product and pipeline and a long-standing commitment to sustainability in a reimbursement environment that is rarely conducive to supporting innovation.”
She committed to responding to Maloney’s request for information and said she welcomed “the opportunity to share our perspective on how we can continue to provide [people living with HIV] access to Mytesi and how to encourage a sustainable environment for emerging pharmaceutical companies that support innovation in both drug development and commercialization.”
Fretting over remdesivir price
Jaguar isn’t the only drug company on the hot seat with lawmakers. Even though Gilead Sciences Inc., of Foster City, Calif., has yet to price its antiviral remdesivir, which received an EUA last week to treat acute COVID-19 in hospitalized patients, some lawmakers continue to fret over what that price will be.
Ten Democratic House members, led by Reps. Lloyd Doggett (Texas) and Rosa DeLauro (Conn.), wrote to Gilead CEO Daniel O’Day this week requesting answers to how Gilead will secure the remdesivir supply chain, what purchase and pricing arrangements it’s making for future supplies of the drug and how much public money has been invested in remdesivir’s development.
“Without an investment by American taxpayers, remdesivir would apparently have been abandoned,” the lawmakers said in the letter. “We are particularly concerned about the affordability of this treatment both because taxpayer investment made the difference and because of Gilead’s troubling history including attempted misuse of orphan drug status for remdesivir.”
(Gilead said it initially applied for orphan drug status for the drug to speed approval time so it would be available as quickly as possible. The resulting public backlash led to the company rescinding the request and waiving all the benefits that come with that designation.)
However, according to the lawmakers, Gilead’s “troubling history” also includes pricing its hepatitis C drug Sovaldi (sofosbuvir) beyond the reach of some public health programs and many patients, and delaying a safer HIV drug to maximize monopoly profits on its HIV drug Truvada (emtricitabine/tenofovir disoproxil fumarate).