At a time when Americans are cutting spending to pay for prescription drugs, companies are increasing the price of medication by hundreds of dollars overnight.
In one highly publicized case of rising drug costs, Turing Pharmaceuticals spiked the price of a drug called Daraprim to $750 per pill, up from $13.50. Daraprim, known generically as pyrimethamine, has been available on the market since 1953 and is mainly used to treat toxoplasmosis, a common foodborne illness that can be lifethreatening to patients with weakened immune systems. Though the drug is also used to treat malaria, Turing essentially holds a small monopoly in treating toxoplasmosis in the United States, as there are no other brands for pyrimethamine and alternative methods of treatment may not be as effective.
After the price of Daraprim effectively increased by more than 5,000 percent overnight, Martin Shkreli, Turing’s CEO, was quickly met with hefty backlash. Multiple companies have criticized and distanced themselves from Turing publically following the price hike. Pharmaceutical Research and Manufacturers of America distanced itself from Turing in a tweet, stating “@TuringPharma does not represent the values of @PhRMA member companies.” Collect Records, a record label Shkreli was an investor in, severed all ties with Shkreli due to pressure from artists, despite the fact the company may close from lack of funds without his financial backing.
Turing is also being decried by the medical industry. The HIV Medicine Association and Infectious Diseases Society of America wrote Turing a letter that stated the price increase was unjustifiable for the medically vulnerable and unsustainable for the healthcare system.
Even presidential candidates have weighed in on the issue. Hillary Clinton described the cost increase as price gouging and proposed a plan to limit out of pocket drug costs for families to $250/month for covered medications. Donald Trump described Shrkeli’s actions as a disgrace, though he did not offer a plan on how to fix the situation, apart from saying that the public would get him to reduce the price. Bernie Sanders, alongside Rep. Elijah Cummings, sent a letter to Turing asking for information as part of an investigation on drug price increases by the House Committee on Oversight and Government Reform. Sanders and Cummings also weighed in on the gravity of the issue, saying that patients could experience organ failure without fast access to the drug.
Shkreli has defended his actions in interviews, saying he intended to turn a profit in a relatively small industry in order to research and develop better versions of the drug and other drugs. Shrkeli also vowed to give the pills away for free to patients who could not afford it. Even giving it away for free could pose problems, however. Vanity Fair reported that Dr. Wendy Armstrong, professor of infectious diseases at Emory University, said giant hurdles, such as paperwork and income statements, can delay patients from being treated due to the cost increase.
This is not the only notable drug price spike in recent times, nor is it the only price increase for Daraprim. Darparim cost only about $1 per pill several years ago, but its price rose after being acquired by CorePharma, which in turn rose again after being acquired by Turing. In fact, there is a pattern of companies buying drugs and raising their prices. Two heart drugs, Isuprel and Nitropress, were recently acquired by Valeant Pharmaceuticals who raised their prices significantly. Isuprel’s price was raised from $215 to $1,300 a vial, while the price of Nitropress increased from $257 to $800 a vial. In another case, Cycloserine, a drug used to treat a rare form of tuberculosis, was recently acquired by Rodelis Therapeutics, which raised the price from $500 to $10,800 for 30 pills.
Some of the negative attention has caused the companies to backtrack on some of their decisions. Shrkeli has vowed to reduce to price of Daraprim, though the new price is not yet known. Meanwhile, Rodelis Therapeutics returned the rights to cycloserine to the previous owner, the Chao Center, a non-profit associated with Purdue University. The Chao Center, on its part, reduced the price to $1,050 for 30 pills, about double what it charged before.
The price of cycloserine is still rather high by international standards, as it costs about $20 for 100 pills from companies overseas. However, Americans cannot buy many drugs from abroad, cycloserine included, due to regulations from the FDA, as foreign companies do not wish to incur the costs of inspection that would be necessary in order to legally export to the United States.
Costs do seem to be rather important, as more Americans are prompted to cut corners in medical care due to price hikes. Dr. Joel Zonszein, an endocrinologist at Montefiore Medical Center in New York, said she sees patients every week who can’t afford their medication, according to an article by Kaiser Health News.
There seems to be a need for a solution to possible price gouging, and Craig Garthwaite, a health economist at Northwestern University’s Kellogg School of Business proposed three in an interview with Vox: price regulation, a public trust (such as a government nonprofit) that produces generic drugs, or changes to allow importation of drugs from abroad.
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