Beyond Martin Shkreli, pharma price hikes are common
Pharmaceutical hikes shocked patients for decades before hedge fund manager Martin Shkreli jacked up the price of a common prescription drug last week. Will this round of public outrage bring real change?
Martin Shkreli, a former hedge fund manager and current CEO of Turing Pharmaceuticals, sparked public and official outrage recently after raising the price of Daraprim, a drug commonly used by AIDS and cancer patients, 5,000 percent overnight. The Infectious Diseases Society of America detailed the shift from $13.50 to $750 per pill in a letter addressed to Turing, urging the company to reverse the decision.
Daraprim is not the first drug Mr. Shkreli has attempted to increase in price. In September of 2014, Retrophin, a pharmaceutical company run by then-CEO Shkreli, came under fire for increasing the price of Thiola, another prescription drug. The price increase was from $1.50 to $30.00 per pill.
Both times Shkreli has led companies in a major price hike of prescription drugs, public outrage has ensued. But he is not the only one to utilize the tactic. In 2011, the price of a medical drug was raised 7,500 percent overnight, and Shkreli had nothing to do with it.
In 2011, KV Pharmaceuticals won government approval to be the exclusive supplier of makena, a drug that aims to prevent preterm labor. The price for makena immediately increased from $10 to $20 per injection to $1,500 per injection.
Dr. Roger Snow, deputy medical director for Massachusetts’ Medicaid program, told TwinCities.com, "That's a huge increase for something that can't be costing them that much to make. For crying out loud, this is about making money.”
Earlier this month, the price of cycloserine went from $15 per pill to $360. Cycloserine has been produced since the 1960s affordably. The rights to produce the drug were given to Rodelis Therapeutics a month before the price increase.
"Everyone in the TB community in North America has been going crazy over the last week or so when they realized the price had gone up by over 2,000 per cent," said Amir Attaran, a professor of law and medicine at the University of Ottawa, to CBC News.
In 2014, The Times of India reported Sofosbuvir, a Hepatitis C medicine, was being sold in India for $300 per bottle, or 1 percent of the price of the same drug in the US. Most baffling, Gilead, the pharmaceutical company selling the drug in India, is the same company selling the drug in the US. Gilead also offered voluntary licensing deals to seven other small pharmaceutical companies in India.
Pharmaceutical companies are quick to offer rationales for price hikes and differentiations between countries.
Shkreli said in an interview with CNBC News by rising prices Turing Pharmaceuticals is “dramatically increasing the access to daraprim, lowering co-pays, giving more drugs away for free.”
Uwe Reinhardt, a health-care economist from Princeton University, disagreed with Shkreli, saying to the Washington Post, "He bought this patent and he's milking it for all it's worth. In a way, I thank him…. Sometimes you need some sentinel effect that wakes people up."
In at least two cases, public attention has caused a partial reverse in pricing decisions. Rodelis Therapeutics, which raised the price of cycloserine by 2000 percent, gave the rights to the drug back to the nonprofit Chao Center, which produced the drug since 2007, according to International Business Times. Turing Pharmaceuticals has also announced an undisclosed price decrease for daraprim, according to NBC News.
Democratic presidential candidate Hillary Clinton unveiled a plan to lower prescription drug costs Tuesday. Fellow presidential candidate and US Sen. Bernie Sanders is currently sponsoring legislation to allow Medicaid to negotiate for lower drug prices.