Martin Shkreli, an ex-hedge fund manager now with Turing Pharmaceuticals, has outraged the nation by purchasing the rights to the drug Daraprim and instantly raising the price from $13.50 to $750 per pill, while it takes just $1 to make one. This is not the first pharmaceutical scheme to take place in the past few years, yet many went unnoticed by the general public.
Just like Daraprim, which is a critical anti-toxoplasmosis drug used to help AIDS and HIV patients to deal with a parasitic infection that is not nearly as harmful to others, several similar price hikes have happened to drugs used to treat serious, and life-threatening illnesses like cancer, hepatitis C, and others.
This isn’t Shkreli’s first go-around, either.
Under Shkreli as a CEO, his former company Retrophin purchased the rights to the drug Thiola in 2014. The drug used to treat cystinuria, a rare genetic disorder, increased 20 times in price.
A drug to treat tuberculosis called Cycloserine was bought by Rodelis Therapeutics in August this year, and the company promptly raised the price for 30 capsules from $500 to a staggering amount: $10,800.
This received some negative attention, and under pressure the price was later lowered the price to $1,050 after returning to its previous company, reported The New York Times.
Several other exorbitant drug price hikes have been noted by news sources since the Shkreli incident including one particular drug to prevent preterm labor than went up about 7,500% overnight after a company won government approval to be its exclusive provider.
Price-gouging is a serious problem that the pharmaceutical-based medical system has mostly refused to address.
Why Do the Prices Rise?
Interest of investors. In the case of Daraprim, Shkreli posted on Twitter that the price increase happened because of the “investors,” and that he needed to “turn a profit on the drug.” His Twitter account is currently unavailable to view unless you are a follower. Since the outrage that even Hillary Clinton commented on, the biotech stock market prices has been falling.
Interest of insurance companies. Shkreli has also stated that the drug will be cheaper eventually, after the money he makes will be introduced into the hospital and insurance companies’ programs, according to Daily Mail. Turing stated in a press release that the changes in pricing were done under Pharmaceutical Pricing Agreement (PPA) in order to deliver the drug to all the health care facilities that have “encountered challenges securing Daraprim (pyrimethamine) for patients.” Even if the patients who have insurance will not pay the whole price, price hikes like this make the insurance rates go up for everyone.
Monopolization. Pharmacy Times reported that inpatient institutions can no longer order the drug from the usual wholesaler and will now have to deal directly with the Daraprim Direct program. For outpatient patients, the only way to get the drug is now through Walgreens Specialty Pharmacy. Walgreens has declined to comment about the profits this might bring to the company. There is no other drug like Daraprim, so the patients have no other options (other than to try holistic medicine of course).
Profits: Shkreli also have said in an interview that with the old price Daraprim would have saved a patient’s life for “only $1,000,” while other life-saving treatments such as chemotherapy costs $100,000s and other drugs cost half a million dollars, making Daraprim “underpriced” in his opinion. (Shkreli has said that he will lower the price since it has caused an outrage.)
Patients paying for the company’s research. Shkreli said that the high profits will be used for research of a new more effective and “less-toxic” drug to treat this condition. Though the press release from Turing about the price increase mentioned nothing about that, even if Shkreli is telling the truth, does it make any sense to charge more for the only drug available on the market?
It is not the patients’ responsibility to pay for the drug research for the company, which makes all the profits in the end of the day.
“There is no relief in sight because drug companies keep challenging the market with even higher prices. This raises the question of whether current pricing of cancer drugs is based on reasonable expectation of return on investment or whether it is based on what prices the market can bear,” wrote oncologists in the journal Mayo Clinic Proceedings reported by The New York Times.
What It All Means for Alternative Medicine
Considering the outrageous profits drug companies rake in from tactics like these on patented drugs, is it any surprise that research on alternative medicine is lagging so far behind, especially when it comes to serious illnesses?
Comparing the profits made from researching a pharmaceutical treatment that costs $500,000 per cancer patient versus researching a powerful herb that anyone can grow themselves – it is clear where the pharmaceutical companies’ and insurance companies’ loyalties are.