Biogen & 6 Other Multiple Sclerosis Drug Stocks in Focus: Here’s Why |

Drug pricing is back in the news with an investigation being launched by Rep. Elijah E. Cummings and Rep. Peter Welch into the skyrocketing prices of multiple sclerosis (“MS”) drugs. MS, an unpredictable and often disabling disease of the central nervous system (“CNS”), interrupts the flow of information within the brain and between the brain and body with symptoms ranging from numbness and tingling to blindness and paralysis.

Letters have been sent to seven companies requesting information about their pricing strategies for their MS drugs. The letters have also raised the issue of “shadow pricing” – when an expensive new drug is launched or the price of an existing drug is raised, other companies follow suit and increase prices to match the higher prices. According to an American Academy of Neurology study, annual sales of MS drugs doubled from $4 billion to almost $9 billion from 2008 to 2012. Meanwhile, information provided by the National Multiple Sclerosis Society shows that the average wholesale price of MS disease modifying therapies shot up from $16,000 in 2004 to $61,000 in 2013 and $83,688 in 2017.

The letters also mention the lack of strong competition from generics with only one generic (for Copaxone 20 mg) being on the market.

There has been a lot of focus on drug pricing over the last couple of years with companies like Mylan, Valeant and Turing among others facing criticism for their pricing strategy. Following the announcement of the investigation, the NYSE ARCA Pharmaceutical Index lost 1.6% over the last two trading sessions while the NASDAQ Biotechnology Index was down 2%.

Here is a look at the seven companies that have been issued letters requesting information about corporate profits and expenses and documents concerning pricing strategies, patient assistance programs, and drug distribution systems. The companies have been asked to provide the required information by Aug 31, 2017.

Life-science company, Bayer AG BAYRY , is among the seven companies to receive a letter for its MS drug, Betaseron. According to the letter, Betaseron’s price has increased 691% since its approval in 1993 and has almost doubled in price over the last five years. Bayer’s shares were down slightly (0.2%) following the news about the investigation. However, year to date, Bayer stock has gained 21.6%, substantially outperforming the 9.3% rally of the industry it belongs to.

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Biogen & 6 Other Multiple Sclerosis Drug Stocks in Focus: Here’s Why –