As if AVANIR Pharmaceuticals
This seems kind of ridiculous to me. AVANIR got the drug approved for pseudobulbar affect, a disease for which there wasn't any other approved treatment. The company should be rewarded accordingly.
But investors shouldn't ignore the action in D.C. There's at least a small risk that AVANIR could be pressured to lower its average cost, which currently stands at about $4,365 per patient each year. Nuedexta is a mixture of two unpatented drugs. Compounding pharmacies were combining the two before the approval for 1/30th the cost.
Congress wants information about how much it costs to develop the drugs from AVANIR and another company, URL Pharma, which is in a similar situation. As if that should have any bearing on what price the market should pay for the drug.
It seems to me that Congress is setting a dangerous precedent that drug investors should keep a close eye on. It starts with already discovered drugs being expanded into new indications, but what's to keep it from extending to patented drugs. High-priced cancer drugs like Dendreon's
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.