Was Turing Pharmaceuticals’ 5000% price increase a tipping point?

Closeup Money rolled up with pills falling out, high cost, expensive healthcareThere are no regulatory checks and balances on U.S. prescription drug prices. That fact was brought home again after Turing Pharmaceuticals significantly jacked up the price of a 60-year-old drug after it acquired the rights. (USA Today‘s Christine Rushton appears to be the first major media reporter to have covered the story on September 18.) Initially, Turing CEO Martin Shkreli defended the 5,000% increase but eventually blinked under all the pressure, stating he wouldn’t let the pill be priced over $700 a tab and insisting that insurers and charities would cover the cost of the drug if patients can’t afford it. (However, Business Insider notes that as of this writing, two weeks after announcing the price reduction, Turing has yet to actually lower the price of the drug.)

Fortunately, a number of health care reporters have jumped on the story and in elevating it, have become an essential partner in bringing focus to the public health impact of soaring drug prices. Not letting the story disappear as has been done in the past means that 2016 presidential candidates and even congressional committees are giving the issue more than passing attention.

The latest drug getting all the headlines is Daraprim, originally developed by Burroughs Wellcome in 1953 as a treatment for malaria. Today it is mostly prescribed to patients with toxoplasmosis (a disease caused by a parasite) and compromised immune systems from HIV/AIDS and certain types of cancer. The whopping price increase – from $13.50 to $750 per pill – after Turing acquired the drug drew the ire of public health experts, patient advocates and politicians, and some very thoughtful coverage of the unregulated pharmaceutical industry by health media.

As Marcia Angell pointed out in her great analytical piece in the Washington Post:

“Unlike every other advanced country, the United States permits drug companies to charge patients whatever they choose. (In this case, with Daraprim’s patent expired, Turing is probably in a hurry to make as much as possible before a generic version can enter the market. It announced after the fury over the increase that it would lower the price again, but you can bet it won’t fall all the way back to $18 a pill.) In Britain, in contrast, GlaxoSmithKline sells the drug for 66 cents a pill, and in India, it costs even less. The new U.S. price grabbed public attention because it was so sudden and extreme. But exorbitant charges for drugs that treat serious diseases are hardly unusual.”

Again, unregulated drug costs isn’t a new story at all. In July 2015, the Wall Street Journal was one of several media organizations reporting that more than 100 oncologists from top U.S. cancer hospitals were calling for new regulations to control cancer drug costs. As the story pointed out, cancer drugs are growing at a compounded annual growth rate of 11.6%.

Back in September 2010, shortly after gaining FDA approval for its new biologic drug, Gilenya, for treating relapsing-remitting multiple sclerosis, Novartis AG announced the wholesale price for the therapy would be $4,000 a month, or about $48,000 a year. This, too, caused a lot of consternation.

Marv Shepherd, PhD, director of the Center for Pharmacoeconomic Studies at the University of Texas in Austin, spoke with me at the time for an article published in Annals of Neurology:

“The rapid climb of MS and other drug costs illustrates how difficult it is to control health care spending while maintaining market protections for drug companies. No one set out to create the current environment, it has evolved over time.

When there are a limited number of drugs on the market and a new drug comes along to compete in the same category, all the drugs in that category jump in price. ‘Even generic drugs rise in price when a new branded drug comes on the market,’ says Shepherd. ‘If there’s more competition, drug companies will sell less product, and will raise the price to maintain profit margins as long as they can.’

Drug prices were also the subject of an excellent how-to webinar presented this fall by USC Annenberg’s “Reporting on Health.” The presenters’ slides are still available for review on the Reporting on Health website.

Thanks to the sustained focus of health care writers bringing the drug cost story to different audiences, the pricing scandal is finding its way into Congress and the 2016 presidential campaign. Coverage of the Turning story has given momentum to an effort by Rep. Elijah Cummings (D-MD) and Democratic presidential candidate Sen. Bernie Sanders (I-VT) to pass the Prescription Drug Affordability Act of 2015. The bill would allow Medicare to negotiate pharmaceutical prices, allow consumers to import cheaper drugs from Canada and require companies to disclose the prices they charge overseas. Cummings and Sanders have also announced an investigation into the Turing price hike and asked that the company’s financial records be handed over by Friday, October 9. Congressional hearings are expected to be scheduled.

Democratic presidential candidate Hillary Clinton has also weighed in, saying she’d make the pharmaceutical industry give up billions in tax breaks, reduce prices and increase their spending on research.

In addition, CREDO Action, a citizen’s advocacy group, has started a petition and is urging people to support the Cummings-Sanders bill.

Notable drug price media coverage:

Forbes — My Lunch With Shkreli: What We Should Learn From Pharma’s Latest Monster

WIRED – How Prescription Drugs Get So Wildly Expensive

Crains – Pfizer upped prices on over 100 drugs this year: Attention focused on the 5000% increase from Turing Pharmaceuticals ignores other drug companies raising costs.

Washington Post – Why Do Drug Companies Charge So Much? Because they can

NYT – Drug Goes From $13.50 a Tablet to $750, Overnight

USA Today – Hillary Clinton unveils plan to lower prescription drug costs

Wall Street Journal – Doctors Object to High Cancer-Drug Prices: More than 100 oncologists call for new regulations to control soaring patient costs

Kathlyn Stone is an associate editor for HealthNewsReview.org based in Minnesota.

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Comments (1)

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Diogenes Cousteau

October 11, 2015 at 4:23 pm

Is it just me or does anyone else understand that deliveratelty putting to risk the life of hundreds, thousands and even millions of people to get a profit is an anti social behaviour comparable to genocide? Why there is nobody prosecuting these companies and their directors?