Support NeoGAF

[jgwhiteus]

Saw this in today's paper and couldn't believe it. Also couldn't believe the quotes from the start-up's CEO in justification, wondering why people were upset.

http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html

Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.

The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

Turing’s price increase is not an isolated example. While most of the attention on pharmaceutical prices has been on new drugs for diseases like cancer, hepatitis C and high cholesterol, there is also growing concern about huge price increases on older drugs, some of them generic, that have long been mainstays of treatment.

While some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”

Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.

In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon itself had acquired the drugs from another company in 2013 and had quintupled their prices, according to the lawmakers, Senator Bernie Sanders, the Vermont independent who is seeking the Democratic nomination for president, and Representative Elijah E. Cummings, Democrat of Maryland.

Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014, according to the two lawmakers.

Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy, and also for those with compromised immune systems, like AIDS patients and certain cancer patients.

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other rare disease drugs.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy. He started MSMB Capital, a hedge fund company, in his 20s and drew attention for urging the Food and Drug Administration not to approve certain drugs made by companies whose stock he was shorting.

In 2011, Mr. Shkreli started Retrophin, which also acquired old neglected drugs and sharply raised their prices. Retrophin’s board fired Mr. Shkreli a year ago. Last month, it filed a complaint in Federal District Court in Manhattan, accusing him of using Retrophin as a personal piggybank to pay back angry investors in his hedge fund.

Mr. Shkreli has denied the accusations. He has filed for arbitration against his old company, which he says owes him at least $25 million in severance. “They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money,” he said.

 

[titiklabingapat]

Get the government to slap them all down.

I was on Doxycycline for two weeks this year for an infection, thank FSM it was covered by isnurance.

 

[DragonSworne]

You'd think insurance companies would be the first ones to notice and bitch about the price increases.

 

[RobotHaus]

You'd think insurance companies would be the first ones to notice and bitch about the price increases.

Couldn't they just charge the patient more?

 

[ElRenoRaven]

What a fucking scumbag. That shit boils my blood. These are medicines goddamn it. You're fucking with people's lives.

 

[WAR recon zero]

Medicine parents and pricing are fucked up things.

Capitalism will kill us.

 

[balladofwindfishes]

Get the government to slap them all down.

Not likely. It's why they do it, they know there's no recourse at all, legally or from the public.

 

[The Llama]

Capitalism at work!

What a fucking scumbag. That shit boils my blood. These are medicines goddamn it. You're fucking with people's lives.

Yeah but money is more important brah.

 

[Unknown One]

“They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money,”

You're the one that's trying to swindle money out of people at the cost of their livelihood.

 

[Hackworth]

Fuck this prick and everyone like him.

 

[old]

They'll charge it because they know you'll pay it. What are you going to do? Get the government involved? You're not a socialist are you?

"Capitalism: It's where the money's at." -- Colbert

 

[Stumpokapow]

Even though this particular case is about a generic drug, not a name drug, Congress should empower the FDA or the USPTO to unilaterally revoke patents on drugs in cases of price gouging. If it's USPTO it works great because they already have the power to revoke patents, and they already have an investigation process.

I don't think it should be illegal to extract an exorbitant amount for a drug, but I also don't think society needs to help drug companies to do it. The natural state of the world is no protection for intellectual property: we extent protection to things, including drugs, as part of a bargain with society. In cases where there's obvious price gouging, they aren't upholding the bargain, so neither should we.

Some potential objections...
"What about the risks associated with research, shouldn't companies be able to recoup their risk?!?!" Yep. That's not what's happening in many cases, where we have older drugs. Any research expenses have been recouped or written off.

"But doesn't this drug subsidize the production of other drugs? Shouldn't we let them get away with this because in exchange they'll sell vaccines or some shit as a loss leader" If someone robs a bank and gives the money to charity, the charity should refuse it. We have no reason to allow this either.

"How can we tell what's price gouging and what's a healthy profit?" I don't have exact rules, but if the USPTO was empowered to investigate, they could come up with rules.

"Other solutions would be useful, like allowing medicare to negotiate on prices or single payer" Yes, I agree, but it's also the case that those reforms are more difficult and more deeply structural than simply modifying the category of things the USPTO can vacate.

In the mean time, making it easier for generic companies to produce generics will help in cases like this where it's already generic, it's just production is limited and hoarded by one company. My idea: offer a bounty to generic companies to produce drugs that are currently single-source.

 

[ErasureAcer]

Don't vote for Bernie guys. Capitalism > Socialism.

 

[bebop242]

Couldn't they just charge the patient more?

And thats exactly what happens.

People like this are scum of the earth and a reason why pure capitalism is not the answer for healthcare.

 

[Ziltoidia 9]

This is what happens when less and less people can afford things, they just jack up prices to keep investors happy. The system will break eventually and it won't be pretty, and the outcome will just benefit those that caused it.

 

[liquidtmd]

This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business

 

[Gordon Shumway]

Well..that's fucked up..

 

[DarknessTear]

Looked this guy up and well... yeah, total scumbag. I find it funny that this guy is involved with esports too.

 

[Dan]

Shkreli certainly sounds like a proper asshole.

This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy. He started MSMB Capital, a hedge fund company, in his 20s and drew attention for urging the Food and Drug Administration not to approve certain drugs made by companies whose stock he was shorting.

Yeah, fuck you.

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

Yeah... "No really, trust me. We'll TOTALLY invest in a new, better treatment even though we have minimal incentive to do so."

 

[Javaman]

My son is allergic to peanuts and every year epi pens seem to go up 100 more bucks, despite being a drug that has been around for decades. They're jacking up the price because of the packaging is probably patented. Generics are slowly trickling out and can't come soon enough.

 

[WhateverItTakes]

Ugh. Drugs are too high a price as is, though I'd like to think most of the time it's at least half justified by the sheer amount of effort and cost it takes to put a single product through the process to be on shelves.

Buying an already approved product and jacking up the price by over 5000%? That is really fucking essiential to someone's health? Goddamn that's cold.

 

[HK-47]

Well there is someone which the earth would be better off without.

 

[Bessy67]

I mean, that's shitty but it's insanely expensive to get a new drug to market. Like $5-$10 billion expensive. So not saying it's great but I can see why a company would jack the price on a relatively small existing drug line to fund development of something new.

 

[MasterOfPastures]

Drugs should have a 50 year patent limit before they enter the public domain. That is enough time for a company to recoup it's research costs, make a profit, and then some.
But fuck R&D, just slap old drugs with new prices.

 

[titiklabingapat]

In the mean time, making it easier for generic companies to produce generics will help in cases like this where it's already generic, it's just production is limited and hoarded by one company. My idea: offer a bounty to generic companies to produce drugs that are currently single-source.

I'd let Indian and other foreign generic manufacturers have an easier time in making these drugs, especially the older ones.

 

[smokeandmirrors]

Fuck this guy. We need to banish assholes like this from our country.

 

[Stumpokapow]

I'd let Indian and other foreign generic manufacturers have an easier time in making these drugs, especially the older ones.

I don't pretend to understand the international dimensions of drugs, but my prior would be that foreign companies should have access to the market, yes.

 

[Giant Panda]

If they're old drugs they should be off patent, and thus competitors should come in at some point.

 

[titiklabingapat]

I don't pretend to understand the international dimensions of drugs, but my prior would be that foreign companies should have access to the market, yes.

I forgot to add 'and be able to sell them in the US market without much limitations'.

 

[Angelus Errare]

Seems like our capitalist healthcare system is working as intended.

 

[Slime]

What a fucking scumbag. That shit boils my blood. These are medicines goddamn it. You're fucking with people's lives.

How dare you put people's lives over the profits of this poor ailing corporation, pinko scum

 

[Gareth Bale]

If they're old drugs they should be off patent, and thus competitors should come in at some point.

There's no generics approved at the moment in the US or the UK

 

[HariKari]

$1,849 a bottle for an antibiotic?

 

[Metaroo]

Literally criminal.

 

[zero_suit]

Seems like our capitalist healthcare system is working as intended.

As with most things that should not be privatized..

 

[Dan]

I mean, that's shitty but it's insanely expensive to get a new drug to market. Like $5-$10 billion expensive. So not saying it's great but I can see why a company would jack the price on a relatively small existing drug line to fund development of something new.

But why would they invest in a new drug in the first place?

As he says, there's a small market for it. They're already charging a lot for what they already own. The article points out the company has tight controls over the drug distribution which makes it hard for generics to even attempt to test their own versions against. The article also cites doctors who say there's no real demand for a better drug because the possible side effects of the current one are manageable. They basically own the market for the foreseeable future.

They have minimal, if any, incentive to invest that big sum of money in a second, better drug. He's claiming they could do that as a justification for the price jump, but it's not like that comes with a promise. He's just being sleazy and buying time.

 

[Hoo-doo]

Doxy is 1800 a bottle? The fuck.

Sounds like the american dream at work here. Got mine, fuck you.

 

[Savitar]

Don't fear, the market will solve this.

Right.

Right?!

 

[kirblar]

I mean, that's shitty but it's insanely expensive to get a new drug to market. Like $5-$10 billion expensive. So not saying it's great but I can see why a company would jack the price on a relatively small existing drug line to fund development of something new.

For brand new drugs, its understandable, its part of the incentive process for getting them to market.

For stuff like this, its inexcusable.

 

[shadowsdarknes]

What good are markets if they don't actively serve the people?

 

[Jonm1010]

What good are markets if they don't actively serve the people?

The healthcare market is all types of fucked up, its a case study of a grand scale market failure.

There is a reason we put laws in place during natural disasters like Hurricanes so gas stations aren't allowed to gouge customers with outrageous price increases. Yet for some reason shit like this is completely legal when the consequences can be literally fatal.

 

[MultiCore]

Doxy is 1800 a bottle? The fuck.

Sounds like the american dream at work here. Got mine, fuck you.

Nah, I've taken years worth of Doxy in my day, and there's zero chance the cost is that high.

 

[GJS]

If they're old drugs they should be off patent, and thus competitors should come in at some point.

The market for anti-parasitic's in the US and UK is not large enough. It is likely Daraprim would eventually have been discontinued, just as the combination products such as Fansidar were.

The FDA or MHRA would have to put out a request for manufacturers to start looking at producing a generic, and give them promises of expedited approval.

Daraprim is not supposed to be used alone anyway, it is supposed to be used with a sulphonamide.

The Indian market is full of pyrimethamine/sulfonamide generics which the FDA could easily approve for import also.
It could also just as easily approve import of non-daraprim brand pyrimethamine from abroad if this pricing causes problems.

 

[Gareth Bale]

Even though this particular case is about a generic drug, not a name drug, Congress should empower the FDA or the USPTO to unilaterally revoke patents on drugs in cases of price gouging. If it's USPTO it works great because they already have the power to revoke patents, and they already have an investigation process.

They need to sort out their review process first because of the problem with hedge funds targeting weak patents, or patents that represent a significant proportion of a company's income, and shorting target company stock or holding them to ransom.

 

[BigDug13]

Patents allow corporations to bypass monopoly laws. Having only one company with the right to make a product is the opposite of capitalism.

 

[shadowsdarknes]

The healthcare market is all types of fucked up, its a case study of a grand scale market failure.

There is a reason we put laws in place during natural disasters like Hurricanes so gas stations aren't allowed to gouge customers with outrageous price increases. Yet for some reason shit like this is completely legal when the consequences can be literally fatal.

Yeah I mean.. if you want to preach that laissez-faire capitalism, that's fine. It's applicable to industries where consumers actually have sufficient bargaining power to walk away, shop around, or take their money elsewhere. It does not exactly work for life sustaining goods where people will go to great lengths just to maintain their health.

 

[Aselith]

“They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money,” he said.

Doesn't seem that unlikely

 

[Suikoguy]

I'm confused, is this a patent issue?

 

[nib95]

This is actually disgusting. Get this shit shot down, and the pharmaceuticals in question penalised in a heavy way.

 

[Somnid]

To me it makes sense to just let the government handle the manufacture of such drugs as a public works project.