If you had a valuable drug under patent, what price would be needed to induce you to part with it? But is the anger being directed at pharma actually misplaced? He recently hiked the price of Daraprim, a lifesaving drug used to treat AIDs patients, from $13.50 to 0 a pill.
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Now his administration is rightly pushing legislation to allow Medicare officials to negotiate drug prices with the manufacturers, which is, oddly, prohibited by current law. And yet, the prices are increasing. Why? The U.S. apparently faced over 195 drug shortages in that year. Profits from successful medicines are also used to fund future research. Once only one or two companies make a drug, the price usually shoots up.
But would her plan work or make the situation worse? In this case the pundit comments were out even quicker than the public’s outrage.
What Shkreli did was unusual, for a number of reasons. Her plan’s announcement came just after a New York Times story highlighted Turing’s plans to raise the cost of drug called Daraprim overnight a whopping 5,000%.
However, it should be mentioned that several foreign pharmaceutical companies who have previously burnt their fingers on the pricing issue, have introduced differential pricing for the Indian market for their patented medicine. That dispute led to an unparalleled global public outburst against the big pharmaceutical companies.
Clinton, taking questions on Facebook, called on Turing and its Chief Executive Officer Martin Shkreli to lower the cost of the 62-year-old treatment for a risky parasitic infection.
The spend on insulin and other diabetes medications is projected to rise 18.3 percent over the next three years – a rate that’s 60 times greater than the income growth rate of 0.3 percent across all households. Perhaps realizing that large swatches of America were affixing his photo to their dartboards and creating their own Martin Shkreli voodoo dolls in which to stick pins, the “pharma bro” CEO backed off, saying he would reduce the price of Daraprim, though he didn’t specify by how much.
“He still hasn’t said how much the drug will cost going forward, and in the meantime, sick patients still have to wait and worry and continue to pay $750/pill”. That’s a more than 900% increase from 83 cents a capsule.
Maybe we need a little more Shkrelis in our midst – if only to shake things up and get people thinking. I am immediately reminded of a conversation I had with Ash Stevens CEO Dr. Stephen Monk two years ago. According to IMS Health, a company that provides information and services for the health-care industry, Daraprim sales revenue totalled about $600,000 in 2010. No surprise that in India there are many suppliers.
Alex Tabarrok, writing for the website Marginal Revolution, notes the USA should have as vigorous a market in generic pharmaceuticals as does India or Europe.
It’s time for drug companies to be approved in Canada.
But an easier FDA approval process alone will not solve the problem either.
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What has rightly made drug costs a political issue, however, are the astronomical prices of a few specialty medicines. Unfortunately, he agreed to side deals with pharmaceutical companies to keep them from using their considerable clout to block his signature health care initiative. Bernie Sanders (I-VT), who is also vying to be the Democratic candidate for president, and Rep. Elijah Cummings (D-MD) announced that they were requesting information from Turning on the “astronomical price increase”. But what is again unknown is the unintended effect that shorter life might have on research and innovation. This was particularly startling because Marathon had already quintupled the price of the drugs when it acquired them.
