This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Avanir: Congress Gripes About Drug Price

WASHINGTON. D.C. ( TheStreet) -- Avanir Pharmaceuticals (AVNR) has been asked to justify the pricing of its newly launched drug Nuedexta by four members of Congress.

The U.S. Senate Special Committee on Aging, chaired by Wisconsin Democratic Sen. Herb Kohl, sent a letter to Avanir Wednesday in which it expresses concern about the high price of Nuedexta, a drug used to treat pseudobulbar affect, a neurological condition that causes involuntary emotional outbursts.

Avanir shares fell 6% to $4.35 in early Wednesday trading.

Avanir received U.S. approval for Nuedexta last year and launched the drug commercially in January. Nuedexta is a proprietary and higher priced combination of two relatively inexpensive and generically available drugs -- quinidine and dextromethorphane.

"Although we recognize that we all benefit when FDA approves a new, safe and effective formulation, it is not clear that the significantly higher prices charged for this drug are justified given that it is merely a combination of long-used and inexpensive generic medications," the letter to Avanir states.

The letter from the congressional committee goes on to request information from Avanir on how Nuedexta was priced and how much the company plans to spend on marketing, among other items. Avanir has until June 10 to submit the requested information.

Nuedexta treatment costs approximately $5,800 a year, or $4,800 a year with customary discounts.

Avanir executives could not be reached for comment.

Wedbush drug analyst Greg Wade, in a research note to clients, called the congressional inquiry into Nuedexta pricing "a waste of taxpayer dollars" that will have no material impact on Nuedexta sales. He urged investors to buy the stock on any weakness.

"The timing of this inquiry is 'interesting', in our opinion, considering the recent run up in the stock and the high short interest in the name," Wade added.

On May 10, Avanir announced lower-than-expected sales of Nuedexta in the first quarter, prompting analysts, including Wade, to sharply cut sales and earnings forecasts.

The U.S. Senate Special Committee on Aging has oversight responsibility for certain healthcare related matters, including drug pricing. In addition to raising concerns about Avanir's Nuedexta, the committee sent a similar letter to URL Pharma regarding its gout drug Colcrys.

--Written by Adam Feuerstein in Boston.

>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AVNR $16.96 0.00%
AAPL $109.49 -1.20%
FB $92.40 0.00%
GOOG $638.31 -0.63%
TSLA $226.00 -2.60%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs