Drug Pricing Debate Heats Up as Turing Pharma Raises Price 5,000%

Joseph Gaspero

9:30

Drug pricing continues to be a prevalent issue affecting many Americans’ daily lives. In fact, high drug costs are one of the most important issues affecting Americans. This issue recently made headlines after Turing Pharmaceuticals acquired the rights of Daraprim and raised prices from $13.50 a tablet to $750 overnight. That’s a 5,000% increase – Imagine if the price of a $4 gallon of gasoline rose to $222 per gallon. Daraprim is used to treat a parasitic infection called toxoplasmosis that can be life-threatening for people with weakened immune systems like newborns and those with cancer or AIDS. The drug has been on the market and approved by the FDA since 1953, so many are outraged that, after six decades, a drug price suddenly surges more than 5,000%. Even with insurance, people could be paying around $150 per pill, according to the HIV Medicine Association.

Two Democrat presidential hopefuls, Bernie Sanders and Hillary Clinton, both expressed outrage over this sharp drug price hike and have proposed plans to reduce drug costs and to prevent seemingly drastic arbitrary drug price increases if elected.  Sanders drew Turing into an ongoing congressional investigation of drug price increases as Daraprim is not an isolated case of drug price spikes. Sanders along with his colleague, Elijah E. Cummings, stated that “Americans should not have to live in fear that they will die or go bankrupt because they cannot afford to take the life-saving medication they need.” Clinton echoed this sentiment by stating, “nobody in America should have to choose between buying their medicine and paying their rent.” Even industry representatives showed outrage.  In what was perhaps one of the most stinging criticisms, John J. Castellani, President and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade group, disavowed the company and Shkreli.  “PhRMA typically does not comment on matters related to individual company products or product pricing decisions,” he said in a statement. But, “Turing Pharmaceutical is not a member of PhRMA and we do not embrace either their recent actions or the conduct of their CEO.”

Turing CEO Martin Shkreli defended the new pricing of the drug by stating that the increase in revenue will be used to further research treatments for toxoplasmosis with fewer side effects, as well as allowing the company to invest in marketing and education to raise awareness of the disease. “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business. 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.” He went on to say that Daraprim only has about an 80% success rate for treating toxoplasmosis, with also some possible toxic side effects. With increased funding for research and development, he believes that Turing can make a better drug with a higher success rate.  He went on to argue in an interview with CBS News that there “hasn’t been one pharmaceutical company focused on [the disease] for 70 years,” and this increase in funding will help the company dedicate itself to finding a cure to toxoplasmosis. He further stated that it would be losing money if it didn’t raise the drug price and now at the current price they are making “a reasonable profit, not excessive at all.”

Other professionals in the industry vehemently disagree. “Patients shouldn’t be taxed and charged for future research and development. Patients should pay for the drug they’re getting and what they need in the situation that they are” Oncologist Dr. David Agus said. He further added that “it’s predatory practice and it’s inappropriate.”

Shkreli emphasized the importance of the profitability success of his drug company which can be applied to other companies as well. “There’s no doubt, I’m a capitalist. I’m trying to create a big drug company, a successful drug company, a profitable drug company,” he said. “We’re trying to flourish, but we’re also — our first and primary stakeholders are patients, there’s no doubt about that.” However, the NASDAQ biotech index went down 4.41 percent on Monday September, 21st after headlines regarding this issue spread.

Questions of how the patients using the life-saving drug before or new users can obtain it if they cannot afford the new prices were prevalent immediately following Shkreli’s decision. After facing backlash, Shkreli made an announcement that if someone cannot afford the drug, the company will “give it away totally for free,” according to Bloomberg. He went on to state that the company would not deny someone a drug based on their inability to pay for it.

Dr. Judith Aberg, Chief of the Division of Infectious Diseases at Mount Sinai, raised concerns that hospitals may find the drug too expensive now after the price increase to keep in stock, which could result in treatment delays. She went further to say that “this seems to be all profit-driven for somebody and I just think it’s a very dangerous process.”

The case of Turing demonstrates that drug pricing still remains a hot bed issue. In December 2013, the FDA approved a new drug, Sofosbuvir, for the treatment of Chronic Hepatitis C.  The drug, commonly known as Sovaldi, was developed by Gilead Sciences, a U.S. biotechnology company.  The initial price tag of a 12-week treatment of Sovaldi was reported as approximately $84,000, or nearly $1,000 per pill.  This resulted in considerable media attention and an ensuing pricing controversy.  Editorials and op-eds sprung up around the country debating Sovaldi’s price tag and the broader debate over fair drug pricing.  Some politicians expressed outrage over the cost of new drugs, while others argued for free market pricing and rewards for the considerable R&D costs that biopharmaceutical companies incur when bringing a new drug to market.  The often niche drug pricing debate had officially spilled over into the mainstream conversation.  Payers, policymakers, pharma, patients, and providers all voiced strong— and sometimes contrasting— opinions.

To be sure, the issue of drug pricing is a hotbed issue that won’t go away anytime soon.

Joseph Gaspero

About Joseph Gaspero

Joseph Gaspero is a non-profit founder, healthcare thought-leader, serial entrepreneur, and diversity leader. He is passionate and committed to making healthcare and our world a better place. He is the President and Co-Founder of the Center for Healthcare Innovation (CHI), a non-profit research and educational institute that helps patients and providers increase their knowledge and understanding of the opportunities and challenges of maximizing healthcare value to improve health and quality of life. His leadership stems from a wide array of experiences, including founding and operating several non-profit and for-profit organizations, serving in the U.S. Air Force in support of 2 foreign wars, and deriving expertise from his time spent in the healthcare, financial services, and media industries. His skills include strategy, management, entrepreneurship, healthcare, clinical trials, diversity & inclusion, life sciences, research, marketing, and finance. He has lived in 6 countries, traveled to over 30 more, and speaks 3 languages, all which help him view business strategy through the prism of a global, interconnected 21st century. When he is not immersed at the Center for Healthcare Innovation, he spends his time snowboarding backcountry, skydiving, mountain biking, and rock climbing. He is a passionate volunteer for the causes that he cares most deeply about.

Leave a Reply