If the price of your morning Starbucks fix jumped from $3.45 to $142, you’d probably take your business to Dunkin’ Donuts or swear off caffeine altogether.
If the price of your morning Starbucks fix jumped from $3.45 to $142, you’d probably take your business to Dunkin’ Donuts or swear off caffeine altogether.
But patients who rely on a drug called Daraprim don’t have the option of discontinuing their meds or switching to another brand. And last month, the price of Daraprim jumped from $13.50 a pill to $750. That’s an increase of more than 5,000 percent.
There’s nothing new-and-improved about Daraprim, which has been on the market for 62 years. What’s changed is the company that owns the marketing rights to the drug.
Daraprim is the standard treatment for toxoplasmosis, a potentially life-threatening parasitic infection. The drug’s patent expired long ago, but there’s no generic version in the U.S. because the market isn’t big enough to support a competitor. Only about 2,000 U.S. patients were treated with Daraprim last year.
When Turing Pharmaceuticals bought the rights to Daraprim in August, it essentially had its hands on a monopoly. So it jacked up the price as high as it dared.
Doctors, patient advocacy groups and politicians howled. In a letter to Turing, the Infectious Diseases Society of America said treating a patient with Daraprim would cost hundreds of thousands of dollars a year — a price it called “unjustifiable” and “unsustainable for the health care system.”
Biotech stocks had a very bad week as investors worried about rumbles of government interference in drug pricing.
Turing CEO Martin Shkreli eventually said the company would roll back the price, but he hasn’t said how far.
Why is that $750 pill so hard to swallow? The high cost of many prescription drugs is a reflection of the lengthy, expensive and risky process of bringing a new medicine to market. That’s not the case with Daraprim.
The business model adopted by Turing and others is to identify drugs that are “undervalued,” buy them and raise the prices. Often they are older or generic drugs that can command a higher price because consumers have few or no alternatives.
As recently as 2010, Daraprim was priced at $1 a pill. That was three owners ago.
In a story about the trend in April, The Wall Street Journal reported that Valeant Pharmaceuticals International had purchased two lifesaving heart drugs and raised the prices by 212 percent and 525 percent the same day.
Last month, another company bought the tuberculosis-fighting drug cycloserine and raised the price of 30 capsules from $500 to $10,800 — to the dismay of the previous owner, a nonprofit research foundation affiliated with Purdue University. When the nonprofit objected, Rodelis Therapeutics agreed to return the rights.
U.S. Sen. Bernie Sanders, the Vermont independent running for president, and U.S. Rep. Elijah Cummings, D-Md., sent a letter last week to Turing, calling its deal “the latest in a long list of skyrocketing price increases for certain critical medications.”
Democratic presidential hopeful Hillary Clinton capitalized on the controversy by hawking her plan to lower prescription drug costs. It includes capping costs for patients, requiring drug companies to invest more of their profits in research and development instead of marketing, and reducing the time during which companies can produce their new drugs exclusively. If you want to stifle medical innovation, that’s the way to do it.
But hiking the price of a drug by 5,000 percent just because you can invites that sort of government meddling, which is why the pharmaceutical industry isn’t happy with Turing. The Pharmaceutical Research and Manufacturers of America, a trade group, made that clear on Twitter: “TuringPharma does not represent the values of PhRMA member companies.”
How can such opportunistic pricing be curbed? Instead of over-regulating the drug companies, the government could promote competition by allowing Americans to buy prescription drugs from other countries if they’re manufactured in an environment that meets U.S. standards. Generic versions of Daraprim are available in Europe for as little as $1 a pill.
Public pressure (and Internet shaming) proved effective against Turing. After two days of pushing back hard against the criticism — including calling the editor of a biotech newsletter a “moron” on Twitter — Shkreli said the company would lower its price “in response to the anger that was felt by people.”
Before he backed down, he’d insisted the hike would net the company “a reasonable profit, not excessive at all,” and said the company planned to use those earnings to develop better treatments for toxoplasmosis.
The medical community replied that Daraprim works just fine, thank you. Patients already have an effective treatment. What they need is one they can afford.