Big Pharma

Overheal

Next on the social issues docket...

"There isn't anything unusual about the strategy, and certainly nothing illegal."

For decades, Daraprim (pyrimethamine), an anti-parasitic used to treat malaria and toxoplasmosis, had been made by GlaxoSmithKline and sold for as little as $1/tablet until not that long ago. Then in 2010 GSK sold the drug to CorePharma, which began to raise the price. Within a year, revenue from Daraprim jumped nearly ten times even though the number of prescriptions written remained flat. [$13.50/tablet]

Then last month, a company called Turing Pharmaceuticals acquired the U.S. marketing rights to Daraprim and the retail price for the drug skyrocketed.

According to GoodRx.com’s current listings, getting 60 Daraprim tablets from the pharmacy will cost you at least $45,600. That’s around $760 per tablet. Thus, a patient on Daraprim — already paying thousands of dollars in a year for the drug — now faces paying the prospect of paying several hundred thousand for the same treatment.

http://consumerist.com/2015/09/21/doctors-not-happy-after-drug-goes-from-13-50table-to-750-overnight/

http://www.fiercebiotech.com/story/why-would-martin-shkreli-hike-old-drug-price-5000-only-moron-would-ask/2015-09-20

Free market capitalism has allowed a 750-fold increase in the last 5 years on the cost of a ubiquitous pharmaceutical drug that has been around since the 1950s.

Explaining the move to USA Today, a spokesperson for the company said the company needed to raise prices in order to fund its research work on toxoplasmosis, along with new education programs for the disease. Toxoplasmosis is a common food-borne disease that can afflict people with weakened immune systems, which is why the AIDS community has become alarmed.

...

Back when Martin Shkreli was CEO of Retrophin, he managed to grab a few headlines by buying an old rare-disease drug, Thiola, and raising the price 2000%. Now that he's on to his next company, Turing Pharmaceuticals, he's done himself one better, by buying another old drug and boosting the price 5000%.

Now I don't pretend to be a pharmaceutical legal eagle... but that's all horsesh!t that shouldn't be allowed to happen.

[Senator Bernie Sanders and Rep. Elijah Cummings] have introduced legislation in Congress to force companies like Martin’s to pay rebates to the Medicaid program if generic prices grow faster than inflation. Patients taking Daraprim just saw their costs skyrocket to over $20,000 a month, so it’s clear their legislation targets this type of abuse.

President Obama also recently asked Congress to allow Medicare officials to curb the growing, and disturbing trend of drug profiteering, but GOP lawmakers were quick to defend the “free market,” rejecting more ‘unnecessary government regulation which only increases costs for businesses.’

USA Today reports “The University of Minnesota … found that new cancer drugs commonly cost more than $100,000 a year per patient.” The Infectious Diseases Society of America and the HIV Medicine Association estimate patient costs will fall between $350-600 thousand each year. It’s clear the “free market” isn’t really free when pharmaceutical companies have a medically vulnerable patient/customer base.

There is no law that says Turing Pharmaceuticals of New York can’t charge whatever they like for Darapim, a drug designed to combat common food-borne diseases in patients with immune systems affected by AIDS or chemotherapy. Democrats, including Senator Sanders, Representative Cummings, Secretary Clinton (who called the story “outrageous” via Twitter) and President Obama — all think there should be.

http://americannewsx.com/politics/this-750-cancer-pill-is-hard-to-swallow/

One thing that is already clear from the reporting is Martin Shkreli is not well liked by the media; sued by his previous company Retrophin just last month for $65 million and getting into childish twitter arguments with reporters. Oh and apparently the lawsuit centers around the fact that Retrophin was founded as company only to provide stock to his hedge fun, which he was the manager of, when that hedge fund became insolvent. Woot. http://www.forbes.com/sites/arleneweintraub/2015/08/18/retrophin-sues-founder-martin-shkreli-for-65m-his-reply-preposterous/

Amerika

My, that is quite a jump in price. But, how do you propose companies fund research and development into curing disease and other medical conditions with new life saving and miracle drugs? Or would you be in favor of the position that we stop all/most R&D, and just be satisfied with the drugs we currently have, so we can provide the drugs cheap? Hell, who needs a cure for the Common Cold, Aides, Cancer, Autism, Alzheimer's disease, etc, anyway! Unfortunately, last I heard money doesn’t grow on trees, you know... but that all could have changed because nobody tells me nothin’

Pat Mustard

Amerika wrote: »

My, that is quite a jump in price. But, how do you propose companies fund research and development into curing disease and other medical conditions with new life saving and miracle drugs? Or would you be in favor of the position that we stop all/most R&D, and just be satisfied with the drugs we currently have, so we can provide the drugs cheap? Hell, who needs a cure for the Common Cold, Aides, Cancer, Autism, Alzheimer's disease, etc, anyway! Unfortunately, last I heard money doesn’t grow on trees, you know... but that all could have changed because nobody tells me nothin’

This is a false dichotomy.

You suggest that it is a choice between allowing funding for R&D and stopping funding. Well, that is simply not the case.

It's not a case of the price of the tablet falling from what it had been to a level where the company can only break even and not make a profit. The company has increased the cost of the drug exponentially, obscenely even, to the point where it is realistically beyond the reach of the vast majority of people to the extent that taxpayers would have to cover the cost.

This Martin Shkreli has previously cherry-picked rare-disease drugs and raised the price by 2000%, according to one article. Now, the same thing has happened again. The excuse is that this is to cover R&D. I can understand that pharmaceutical companies want to make a profit but to suggest that the price of one drug in a rare-disease treatment category must be increased by thousands of percent in order to fund R&D in new drugs in that area is simply not credible. Pharmaceutical companies do not necessarily have to fund R&D for new drugs from other drugs which have been used for treatment in similar areas. Why would they restrict themselves in that way? It wouldn't make any sense.

This is a monopoly profit situation. The fact is that that nobody else is producing the drug because of the low volume of sales, so this pharmaceutical company can charge what it likes.

I would agree that the free market has taken us to this situation and I would concede that government intervention or multi-government intervention is probably required in order to bring these prices under control. I'd suggest that either supply of the drug needs to be increased by government introduction of incentives for production or else a fair price needs to be fixed, by law, taking into account costs of R&D and production and standing of patents.

Amerika

Pat Mustard wrote: »

This is a false dichotomy.

You suggest that it is a choice between allowing funding for R&D and stopping funding. Well, that is simply not the case.

It's not a case of the price of the tablet falling from what it had been to a level where the company can only break even and not make a profit. The company has increased the cost of the drug exponentially, obscenely even, to the point where it is realistically beyond the reach of the vast majority of people to the extent that taxpayers would have to cover the cost.

This Martin Shkreli has previously cherry-picked rare-disease drugs and raised the price by 2000%, according to one article. Now, the same thing has happened again. The excuse is that this is to cover R&D. I can understand that pharmaceutical companies want to make a profit but to suggest that the price of one drug in a rare-disease treatment category must be increased by thousands of percent in order to fund R&D in new drugs in that area is simply not credible. Pharmaceutical companies do not necessarily have to fund R&D for new drugs from other drugs which have been used for treatment in similar areas. Why would they restrict themselves in that way? It wouldn't make any sense.

This is a monopoly profit situation. The fact is that that nobody else is producing the drug because of the low volume of sale, so this pharmaceutical company can charge what it likes.

I would agree that the free market has taken us to this situation and I would concede that government intervention or multi-government intervention is probably required in order to bring these prices under control. I'd suggest that either supply of the drug needs to be increased by government introduction of incentives for production or else the price needs to be fixed at a fair price, by law, taking into account costs of R&D and production and standing of patents.

Odd, you say I'm wrong, but everything you stated indicates I'm correct.

Overheal

Odd, you say I'm wrong, but everything you stated indicates I'm correct.

What you read must be different to what I'm getting somehow.

Manach

From a course I had done on patents, it was pointed out the price on such drugs are a result both of a need to generate profits to cover R&D, gain a return on investment and to cover the costs of the legislated oversight by such as the FDA to ensure the drugs have no side effects. The impetus of the latter is at all levels of the drug lifecycle and has had the effect of ensuring only correctly calibrated drugs reach the marketplace (in a vast number of cases). So if a cost of driving down prices might undercut some of these safeguards or need a recalibration of such risks?


As well, again from the course, my understanding is that the time to live of many pharma patents, as opposed to trade name of such, are limited and generic versions of the same drug under name say Brand X, can be sold and imported from manufacteurs from say India. So should this not be the case in this instance?

Brian?

Manach wrote: »

From a course I had done on patents, it was pointed out the price on such drugs are a result both of a need to generate profits to cover R&D, gain a return on investment and to cover the costs of the legislated oversight by such as the FDA to ensure the drugs have no side effects. The impetus of the latter is at all levels of the drug lifecycle and has had the effect of ensuring only correctly calibrated drugs reach the marketplace (in a vast number of cases). So if a cost of driving down prices might undercut some of these safeguards or need a recalibration of such risks?


As well, again from the course, my understanding is that the time to live of many pharma patents, as opposed to trade name of such, are limited and generic versions of the same drug under name say Brand X, can be sold and imported from manufacteurs from say India. So should this not be the case in this instance?

I was wondering that myself. Generic drugs are ubiquitous these days. Why not this one?

Pat Mustard

Amerika wrote: »

Odd, you say I'm wrong, but everything you stated indicates I'm correct.

No.

What you said was they need to gouge people in order to pay for R&D.

What I said is that they don't need to charge anything like what they are charging and that they shouldn't be allowed to get away with it.

These are completely contradictory viewpoints.

Amerika

Pat Mustard wrote: »

No.

What you said was they need to gouge people in order to pay for R&D.

What I said is that they don't need to charge anything like what they are charging and that they shouldn't be allowed to get away with it.

These are completely contradictory viewpoints.

They probably charged too much in this example, but we agree that these companies need to charge a price on current drugs in the marketplace that allows them to fund R&D and still make a level of profit, right? Or should pharm companies all forced to become non-profits?

Pat Mustard

Amerika wrote: »

They probably charged too much in this example, but we agree that these companies need to charge a price on current drugs in the marketplace that allows them to fund R&D and still make a level of profit, right? Or should pharm companies all forced to become non-profits?

Again, what's with this?

Nobody here is suggesting that they should become non-profit organisations.

This really is a strawman argument.

Overheal

Even if they were nonprofit or PBC, they would still have reasonable costs.

Amerika

Pat Mustard wrote: »

Again, what's with this?

Nobody here is suggesting that they should become non-profit organisations.

This really is a strawman argument.

No it’s not a strawman argument. Okay, for debate sake, let's forget the non-profit thing altogether. Everyone condemns big pharm for charging so much for medications, yet we ignore the elephant in the room. The Tufts Center for the Study of Drug Development (CSDD) pegs the cost of developing a prescription drug that gains market approval at $2.6 billion. Where in the world do you all think companies get the money to bring a new drug to market?

Skylinehead

Amerika wrote: »

No it’s not a strawman argument. Okay, for debate sake, let's forget the non-profit thing altogether. Everyone condemns big pharm for charging so much for medications, yet we ignore the elephant in the room. The Tufts Center for the Study of Drug Development (CSDD) pegs the cost of developing a prescription drug that gains market approval at $2.6 billion. Where in the world do you all think companies get the money to bring a new drug to market?

http://www.bbc.co.uk/news/business-28212223

The vast majority of revenue is already not spent on R&D, that's not the problem at all.

draiochtanois

This post has been deleted.

Overheal

No it’s not a strawman argument. Okay, for debate sake, let's forget the non-profit thing altogether. Everyone condemns big pharm for charging so much for medications, yet we ignore the elephant in the room. The Tufts Center for the Study of Drug Development (CSDD) pegs the cost of developing a prescription drug that gains market approval at $2.6 billion. Where in the world do you all think companies get the money to bring a new drug to market?

Which is a LOT of money, but here's the thing. If you were planning to R&D an improved version of an existing drug, you would logically raise money through consumption of the current drug (especially if your company would only produce that one drug, or few other drugs). As an aside, there are other sources of incomes (tax breaks, grants, etc). If there is so little consumption of the current drug that you need to raise prices 5000% to attempt to cover R&D costs on an improved "Pepsi-Clear" version of the drug, then economically speaking that is not worth pursuing, imho. If this were more widespread - eg. let's say the latest and greatest in birth control. There is a lot of BC consumption, so you could stand to raise prices far less to yield the same targeted increases in revenue.

In normal economic circumstances this would be a useless thought experiment as consumers of Product X would stop buying product X as cost far outstripped the demand. But, this is a lifesaving drug and theres a minimum baseline of consumers that have no other alternatives.

Pat Mustard

draiochtanois wrote: »

It's off patent, you can make it yourself if you like.

And in any case there are better and cheaper alternatives.

It's a non story.

Why are they making enormous profits selling it if I can make it myself?

draiochtanois

This post has been deleted.

Pat Mustard

draiochtanois wrote: »

This post has been deleted.

I think that the real reasons may be closer to the fact that I don't have the means of production and sale of the drug; funding, professional staff, technicians, marketers, salesmen, components or a pharmaceutical plant.

Nor do I have US FDA clearance.

There are many barriers to entry to the pharmaceutical industry, apart from patents to drugs.

Pat Mustard

Amerika wrote: »

No it’s not a strawman argument.

Yes, it is. The reason is that nobody was making that argument about pharmaceutical companies becoming non-profits. You introduced the point so that you could knock it down. It's a classic strawman. I don't know why you are denying it now.

Amerika wrote: »

Okay, for debate sake, let's forget the non-profit thing altogether. Everyone condemns big pharm for charging so much for medications, yet we ignore the elephant in the room. The Tufts Center for the Study of Drug Development (CSDD) pegs the cost of developing a prescription drug that gains market approval at $2.6 billion. Where in the world do you all think companies get the money to bring a new drug to market?

Look, can we be clear about this. There is no elephant in the room. Nobody is saying that pharmaceutical companies shouldn't be allowed to build R&D costs into the costs of their drugs.

This is a discussion about the increase of the price of a drug by a factor of thousands of percent in order to make obscenely supernormal profits for a pharmaceutical company.