How some news outlets help perpetuate drug industry price gouging

Trudy Lieberman is a veteran health care journalist and regular blogger for HealthNewsReview.org. She tweets as @Trudy_Lieberman.

Last week the FDA approved two more pricey new drugs labeled “breakthroughs” by some news outlets. Ocrevus, which treats a type of multiple sclerosis, comes with an annual price tag of $65,000 while Dupixent, a drug for severe eczema, costs $37,000.  Yet so far, the price of those “breakthroughs” has not captured widespread national attention or ignited national outrage over drug prices the same way two notorious pharmaceuticals, Daraprim to treat acute malaria and the EpiPen that stops fatal allergic reactions, did.

When pharma “bro” Martin Shkreli made Daraprim infamous after his company raised the price for one pill from $135 to $750 overnight and Mylan Pharmaceuticals raised the price for a package of two pens that cost $103 in 2009 to $608 in 2016, that was very big news.

Shkreli’s chutzpah and Mylan’s brazen decision to squeeze as much profit as it could from a must-have drug for millions of people, including kids, fired up public opinion against high pharmaceutical prices – at least for awhile.

Some gouging sparks outrage, other cases don’t resonate

There have been many more pharmaceutical companies boosting their prices since Gilead Sciences set the example in 2014 when it priced Sovaldi, its hepatitis C drug, at $84,000 for a course of treatment and didn’t back down in the face of heavy criticism. Perhaps the public is becoming so accustomed to large five-figure increases that they are becoming blasé about the subject and shrug off prices like those announced for the MS and eczema drugs.

Or was there something more?

Villains and heroes always make good stories no matter the subject, and there was no villain in the price hikes for the MS and eczema medications. The tale of Daraprim offered a villain – a young, bold, in-your-face executive who was later charged with securities fraud. The story of the EpiPen had heroines – anxious moms worried they wouldn’t be able to afford life-saving medicine for their kids. It doesn’t get better than that to call attention to high prices.

But are certain drugs more acceptable subjects for public outrage and therefore more deserving of media attention?

Naloxone story reflects victim-blaming culture

Vox senior health correspondent Julia Belluz explored this in a recent  piece about the drug naloxone approved by the FDA more than 40 years ago that reverses a heroin or opioid overdose. Belluz reported that the price of Evzio, a branded version of the drug delivered via an auto-injector, jumped from $690 for a package of two doses when it came on the market three years ago to $4,500 today, a nearly 500 percent increase.

Other versions of the drug experienced similar price increases like a nasal spray that now costs $39.60, 95 percent more than it did in 2014, or an injectable that cost $62.29 in 2012 but now sells for $142.49. Belluz also reported an alarming statistic. Drug overdoes kill more people than car accidents and gun violence in the U.S., but the price of drug overdose antidotes like naloxone is becoming too high for people whose deaths they can prevent. “Unlike EpiPen,” she wrote, “the naloxone price increases haven’t garnered much attention or outrage, maybe because of the stigma that comes with opioid addiction.”

In other words, blaming the victim may justify a 500 percent price increase for drugs like those for opioid overdoses and treating diabetes.  “The public might think these are issues people brought on themselves. With Type 2 diabetes, you ate too much,” Belluz told me. “It’s a less sympathetic story.” And while there has been significant coverage about the devastation opioid addiction has caused in small communities across the country as well as some good coverage of the naloxone pricing issue, no one is organizing marches to protest the high price of naloxone. “Addiction touches so many people it’s kind of funny we’re not there yet” in making high prices a newsworthy story, she added.

Journalists continue to fall for empty drug industry promises

While those reasons go a long way to explain why some price increases grab attention and others don’t, the PR tactics of the drug industry may explain even more. The Pharmaceutical Research and Manufacturers of America (PhRMA) have dusted off their old tactics for smothering public outrage. “PhRMA is skilled at neutralizing the debate over high prices. They come out and make dramatic announcements and pledges that they will hold the line on increases,” says Ceci Connolly, who heads the Alliance of Community Health Plans, a managed care trade association.

The New York Times last week showed what Connolly means. The story introducing Ocrevus reported that Genentech, which makes the drug, said the industry needed to start reversing the high price trend and believes “pricing Ocrevus 25 percent less than the comparator in our trials is an important first step.” Never mind that the drug is close cousin to an effective, cheaper generic that Genentech also makes but chose not to develop for multiple sclerosis treatment, arguably because there wasn’t enough profit in it. The same day in its story about Dupixent, the Times reported the price “is a bit lower than many other commonly used biologic drugs that treat other skin diseases” and noted that drug maker Regeneron took the “unusual step of directly negotiating with insurers over price and other details ahead of time “ as a way to head off another public battle over the soaring price of drugs.

Pledges to hold down prices rehash Clinton-era rhetoric

Connolly also told me those announcements about holding the line on prices are nothing new in the drug industry. Pledges are made, but prices continue to rise. Last year in what STAT called a “bold move,” Allergan’s chief executive Brent Saunders promised to avoid price gouging as part of a “social contract” with the public. Allergan pledged his company will limit price increases on branded drugs to single digit percentages per year in most cases.” He told STAT, “Somebody had to take the first step.”

But was this really the first step?

In November 1991 the Times reported that Merck and Pfizer favored moderating price increases to fend off criticism. The Times also noted in a story published a month earlier that some drug companies saw price controls ahead. University of Minnesota professor Dr. Stephen Schondelmeyer told the paper many companies have raised their prices “hoping to get all they can before the threatened price control might come into play. But if they followed the Merck pattern of restraint, it would take a lot of the steam out of the proposals for controls.” Apparently some did follow Merck and Pfizer.

In February 1993, The New York Times reported:

The latest criticism from Washington came yesterday in a report by the Senate Committee on the Aging. It said that despite the promises of many drug companies to keep their prices from rising faster than inflation, 19 of the 31 largest manufacturers had increased prices in 1992 by more than double that rate. Seven large drug companies, including Merck and Pfizer, had pledged to hold down price increases to no more than the general inflation rate.

The drug industry pronouncements and subsequent behavior in the early 1990s parallels the pickle we’re in today. Once the outrage dies down it’s a good bet high prices will remain. As CNN reported that last year, Daraprim still costs $375 a pill, 178 percent more than it cost before Martin Shkreli grabbed the headlines.

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ed silverman

April 6, 2017 at 5:03 pm

Trudy,
Thanks for reading that Q&A with Saunders. And you raise a good point – and I noted that point in the opening question. I mentioned the commitment by pharma in the early 1990s and while I wasn’t explicit about the outcome, the implication should have been clear – the companies resorted to raising prices again, and again..

“Pharmalot: So your plan is a voluntary effort. Why should we believe it will stick? In the 1990s, pharma CEOs agreed to keep price increases at or below inflation, and we see what happened.”
Cheers,
ed at pharmalot