Bernie Sanders isn’t backing down from big pharma. The latest company to draw his ire? ARIAD Pharmaceuticals.
Former Democratic candidate Bernie Sanders may have dropped out of the Presidential race, but he isn’t backing down from big pharma. The Vermont senator has made a name crusading against price gouging practices by major drug manufacturers. The latest company to earn his ire? ARIAD Pharmaceuticals (NASDAQ:ARIA), which recently raised prices for its life-saving leukemia drug.
The drug in question, iclusig, has been subject to four price hikes this year alone. In 2014, the medication cost US$115,000. Now, it runs closer to US$200,000. The increase comes in spite of new evidence showing more risks associated with the medication.
“These outrageous sales tactics indicate that ARIAD is more concerned with its profits than with its patients,” reads Sanders’ letter, which was coauthored with Congressman Elijah E. Cummings. The pair go on to request further information—including the drug’s revenues and its price in other countries.
Meanwhile, ARIAD is standing behind its pricing policies, pointing to the huge expenditure necessary to develop this drug—its first product. “ARIAD has invested more than $1.3 billion in R&D and accumulated losses of approximately $1.4 billion since the company was founded, which has not been recovered,” they said in a public response.
The company also indicated they would comply with the Congressional request from Cummings and Sanders to supply more information. Those documents are expected to arrive in Washington early next month, by November 4, 2016.
Should the requested documents fail to satisfy Sanders and Cummings, ARIAD may have a big problem on their hands. Sanders has a history of taking on major drug corporations—and not backing down.
In August, he and several other senators wrote to Mylan (NYSE:MYL), decrying EpiPen price hikes. That triggered a massive public outcry, congressional hearing and shareholder lawsuit. Indeed, the pharmaceutical giant still hasn’t recovered.
Sanders has been similarly outspoken about the cost of other drugs, including naloxone and tamoxifen.
Given the clout Sanders accumulated during his campaign for the Democratic nomination, his influence may be greater than ever. In fact, one scathing tweet from the senator—“Drug corporations’ greed is unbelievable. ARIAD has raised the price of a leukemia drug to almost $199,000 a year”—triggered a 14.77 percent drop in company’s stock and erased $320 million from their market cap.
What will happen in November? It all depends on those documents. Is ARIAD on course to become the next Mylan? Or will this smaller company find a way to weather the storm?
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Securities Disclosure: I, Chelsea Pratt, hold no direct investment interest in any company mentioned in this article.