UPDATE:Sen Kohl Probes Price Differences In Drugs In US, Abroad

Sen. Herb Kohl (D., Wisc.) is pressing pharmaceutical companies such as GlaxoSmithKline PLC (GSK, GSK.LN), Eli Lilly & Co. (LLY) and Pfizer Inc. (PFE) to explain why their drugs often cost four times more in the U.S. than in other countries.

Letters from the Special Committee on Aging, which Kohl chairs, ask the chief executives of six pharmaceutical companies with the most-widely prescribed medicines why products such as heartburn pill Nexium, cholesterol drug Lipitor and depression treatment Cymbalta cost for U.S. patients so much. AstraZeneca PLC (AZN, AZN.LN), Novartis AG (NVS, NOVN.VX) and Sanofi-Aventis SA (SNY, SAN.FR) also received letters from Kohl.

The letters note that U.S. consumers spend an average of $878 a person on prescription drugs, compared with $446 a person in other industrialized countries. AstraZeneca's Nexium, for instance, costs $3.91 in the U.S. for one dose compared with 88 cents in Germany, according to IMS Health Inc. (RX), a health-information company. Nexium is the second most-widely prescribed medicine in the U.S. Pfizer's Lipitor costs $2.82 for one dose, compared with $1.83 in Canada and 71 cents in New Zealand.

"These differentials are dramatic and often put American consumers at a severe disadvantage globally," Kohl said in the letters, sent Tuesday. Kohl also heads the Senate appropriations subcommittee that oversees the U.S. Food and Drug Administration's budget. He said the differing prices can't be explained by differences in how the medicines are produced or manufactured.

AstraZeneca spokesman Blair Hains said the company received the letter and would respond to Kohl's staff. He said the majority of U.S. patients with prescription-drug insurance coverage pay on average less than $30 for a month's supply of Nexium. He said AstraZeneca also has a robust program in place to assist patients who struggle to cover the costs of the medicine.

Eli Lilly spokesman Edward Sagebiel said a variety of factors contribute to the price differences. He said prices may be kept "artificially low" by government controls, and differing currency values may play a role. He said the company hasn't received a copy of Kohl's letter yet.

Representatives from the other companies weren't immediately available to comment.

The letters come as Congress is making a final push to revamp the U.S. health-care system in the hopes of expanding coverage and lowering costs. Kohl has supported a variety of moves aimed at lowering drug costs, including allowing the federal government to negotiate drug prices directly with pharmaceutical companies, and letting consumers buy prescription medicines from abroad. The two issues are controversial and are strongly opposed by the drug industry. The programs appear unlikely to be included in final health-care legislation.

The pharmaceutical industry struck a deal in the summer with the White House, saying they would support health-care reform and contribute $80 billion in health-care cost savings over 10 years, in part by lowering some medicines' prices to close a gap in seniors' Medicare coverage.

The letters also ask the companies what percentage of their operations are based in the U.S. and how much the companies spend annually on marketing the drugs. The U.S. is one of the few countries that allows pharmaceutical companies to advertise prescription drugs directly to consumers. Such spending totals about $4 billion a year.

The Senate Special Committee on Aging will hold a hearing on prescription-drug prices Wednesday. The meeting, entitled "Seniors Feeling the Squeeze: Rising Drug Prices and the Part D Program," will probe how prescription-drug costs affect senior citizens. Sen. Bill Nelson (D., Fla.) will guest-chair the hearing.

-By Jared A. Favole, Dow Jones Newswires; 202-862-9207; jared.favole@dowjones.com

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