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Outrage Over Price Gouging by Pharma Companies Reaches New Heights

Worst Pills, Best Pills Newsletter article December, 2015

As 2015 draws to a close, public anger over the unacceptably high prices charged by pharmaceutical companies in the U.S. has escalated to unprecedented levels. Among the many recent events that have fueled this outrage, few drew more widespread public ire than the massive overnight price hike for the little-known drug pyrimethamine (DARAPRIM).

The drug, sold in the U.S. since 1953, is the mainstay of treatment for a potentially life-threatening parasitic infection called...

As 2015 draws to a close, public anger over the unacceptably high prices charged by pharmaceutical companies in the U.S. has escalated to unprecedented levels. Among the many recent events that have fueled this outrage, few drew more widespread public ire than the massive overnight price hike for the little-known drug pyrimethamine (DARAPRIM).

The drug, sold in the U.S. since 1953, is the mainstay of treatment for a potentially life-threatening parasitic infection called toxoplasmosis.[1] This infection is particularly dangerous to newborn babies of women infected during pregnancy and to patients with weakened immune systems due to HIV infection or treatment for certain cancers.

In August, Turing Pharmaceuticals bought the exclusive marketing rights to DARAPRIM, which has no generic competitors. Turing immediately jacked up the price from $13.50 to $750 per pill, a 55-fold increase.[2] Infectious disease experts reacted with dismay, noting that the cost to treat some toxoplasmosis patients under the new price would reach more than $600,000 per year.[3] In late September, national news coverage of Turing’s behavior triggered a firestorm of public rage against the company and its CEO, Martin Shkreli, a former hedge fund manager.[4] In less than a week, Shkreli agreed to lower the price for DARAPRIM but refused to say when or by how much.[5]

Throughout this year, similar stories of soaring prices for both recently introduced brand-name drugs and older generics have captured the attention of federal and state officials and prompted concrete proposals for action. For example, members of Congress have introduced bills that would empower Medicare, for the first time, to negotiate prices for prescription drugs on behalf of seniors enrolled in Medicare Part D,[6],[7] ban brand-name drug companies from paying competitors to delay marketing of lower-priced generics,[8] and require companies to publicly report information that affects drug pricing, including costs for research and development (R&D).[9]

Likewise, lawmakers in some states, including New York and California, have introduced bills that would mandate public disclosure of pharmaceutical companies' R&D costs, profits and pricing rationales for their drugs.[10]

Doctors, fed up with astronomical prices of drugs, also have begun to publicly declare their unwillingness to prescribe high-priced drugs that offer limited benefits.[11]

Perhaps this is just wishful thinking as another new year approaches, but someday we may look back on 2015 and see it as the turning point in U.S. history when public outrage over price gouging by drugmakers crossed a critical threshold, spurring serious efforts to make drugs affordable for all Americans. Let's see if these efforts begin to take hold in 2016.

References

[1] Turing Pharmaceuticals. Drug label for DARAPRIM — pyrimethamine tablet. Revised September 2015. http://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=5368616d-6520-6f6e-2053-686b72656c69&audience=consumer. Accessed October 13, 2015.

[2] Pollack A. Drug goes from $13.50 a tablet to $750, overnight. September 20, 2015. The New York Times. http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html. Accessed October 13, 2015.

[3] Infectious Diseases Society of America, HIV Medicine Association. Letter to Turing Pharmaceuticals. September 8, 2015. http://www.hivma.org/uploadedFiles/HIVMA/HomePageContent/PyrimethamineLetterFINAL.pdf. Accessed October 13, 2015.

[4] Long H. 'Hated' CEO lowering price of $750 AIDS drug Daraprim. September 24, 2015. CNN Money. http://money.cnn.com/2015/09/22/investing/daraprim-aids-drug-price/. Accessed October 13, 2015.

[5] Ibid.

[6] U.S. Senator Amy Klobuchar website. News releases: Klobuchar renews efforts to lower prescription drug prices for seniors. January 6, 2015. http://www.klobuchar.senate.gov/public/2015/1/klobuchar-renews-efforts-to-lower-prescription-drug-prices-for-seniors. Accessed October 13, 2015.

[7] Bernie Sanders website. Press release: Sanders, Cummings introduce comprehensive legislation to lower soaring drug prices. September 10, 2015. http://www.sanders.senate.gov/newsroom/press-releases/sanders-cummings-introduce-comprehensive-legislation-to-lower-soaring-drug-prices_---. Accessed October 13, 2015.

[8] Ibid.

[9] Bernie Sanders website. The Prescription Drug Affordability Act of 2015 fact sheet. http://www.sanders.senate.gov/download/summary-of-prescription-drug-affordability-act?inline=file. Accessed October 13, 2015.

[10] Pollack A. Drug prices soar, prompting calls for justification. July 23, 2015. The New York Times. http://www.nytimes.com/2015/07/23/business/drug-companies-pushed-from-far-and-wide-to-explain-high-prices.html. Accessed October 13, 2015.

[11] Beasley D. U.S. cancer doctors drop pricey drugs with little or no effect. October 8, 2015. Reuters. http://www.reuters.com/article/2015/10/08/us-usa-healthcare-cancer-insight-idUSKCN0S20DG20151008. Accessed October 13, 2015.