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posted by cmn32480 on Monday October 26 2015, @07:47AM   Printer-friendly
from the business-being-good-to-the-common-man dept.

Discussion from a September SoylentNews article.

From the Chicago Tribune:

Stepping into the furor over eye-popping price spikes for old generic medicines, a maker of compounded drugs will begin selling $1 doses of Daraprim, whose price recently was jacked up to $750 per pill by Turing Pharmaceuticals.

San Diego-based Imprimis Pharmaceuticals Inc., which mixes approved drug ingredients to fill individual patient prescriptions, said Thursday it will supply capsules containing Daraprim's active ingredients, pyrimethamine and leucovorin, for $99 for a 100-capsule bottle, via its website.

The 3 1/2-year-old drug compounding firm also plans to start making inexpensive versions of other generic drugs whose prices have skyrocketed, Chief Executive Mark Baum told The Associated Press.

"We are looking at all of these cases where the sole-source generic companies are jacking the price way up," Baum said in an interview. "There'll be many more of these" compounded drugs coming in the near future.

The high price of prescription medicines in the U.S. — from drugs for cancer and rare diseases that cost hundreds of thousands of dollars a year down to once-cheap generic drugs now costing many times their old price — has become a hot issue in the 2016 presidential race.

News that Turing, Valeant Pharmaceuticals International Inc. and other drugmakers have bought rights to old, cheap medicines that are the only treatment for serious diseases and then hiked prices severalfold has angered patients. It's triggered government investigations, politicians' proposals to fight "price gouging," heavy media scrutiny and a big slump in biotech stock prices.

Well, that certainly didn't take long. At $99/100 pills, I expect the profits are slim indeed - but there is probably a profit. The company certainly can't afford to just give the stuff away.

So - if one company can show a profit at $1/pill, how in hell does anyone justify selling the pill for hundreds of dollars?


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  • (Score: 5, Informative) by Jiro on Monday October 26 2015, @09:18AM

    by Jiro (3176) on Monday October 26 2015, @09:18AM (#254595)

    Sort of. The problem is that the FDA is restricting the free market by requiring that generics are shown to be as effective as the non-generic version, but the company that makes the non-generic version won't let you buy any for tests (and the tests are expensive anyway).

    The loophole used here is that if you manufacture pills for an individual patient, you're a "compounding pharmacist" and do not have to obey these rules about testing generics.

    So it's free market in the sense that more people will buy the $1 version than the $750 version, but it's non-free-market in the sense that the guy who made the $750 version only was able to do that because of government interference (FDA testing rules) in the first place.

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  • (Score: 4, Insightful) by Anonymous Coward on Monday October 26 2015, @09:48AM

    by Anonymous Coward on Monday October 26 2015, @09:48AM (#254602)

    Well, the requirement to test your pills is good. So the right fix would be to make sure that those who are required to test are also able to test.

    If you want to sell a new drug, just as you have requirement to test your drug, you should also have a requirement of providing samples to anyone wanting to do tests, and lose your permission to sell your drug if you refuse to sell test samples.

  • (Score: 3, Insightful) by tonyPick on Monday October 26 2015, @10:51AM

    by tonyPick (1237) on Monday October 26 2015, @10:51AM (#254613) Homepage Journal

    If you think the kind of people who we believe could run with the reasoning "If I jack up the price some people will die, but only the unprofitable ones." would see the removal of FDA testing requirements as anything other than an opportunity to sell drugs which will be cheaper to make, but that might not work, you're way more optimistic than me.

    • (Score: 3, Informative) by Thexalon on Monday October 26 2015, @11:16AM

      by Thexalon (636) on Monday October 26 2015, @11:16AM (#254616)

      "If I jack up the price some people will die, but only the unprofitable ones."

      I do think it's worth pointing out that in some jurisdictions, deliberately ignoring the fact that your actions are likely to kill people qualifies as manslaughter. Of course, he's rich thanks to mommy and daddy, so the laws don't apply to him the way they apply to everybody else.

      --
      The only thing that stops a bad guy with a compiler is a good guy with a compiler.
  • (Score: 5, Informative) by gman003 on Monday October 26 2015, @02:03PM

    by gman003 (4155) on Monday October 26 2015, @02:03PM (#254664)

    The pharmaceuticals market has so much regulation already that the free market can't be trusted to handle edge cases like this. And you know what? I'm fine with that.

    The basic idea of the regulation is good. First there's the "your drugs have to actually work" regulation - sure, in an ideal free market, people would just not buy the stuff that doesn't work, but in an ideal free market, everyone has perfect information, which is patently untrue of the real world.

    So then there's the drug patent regulations, which also make sense. It's a tool to promote drug R&D, and it works. The term is limited, especially for something where development can take over a decade.

    But even once the patent runs out, your generic version has to be proven to be equally effective to the one that got full regulatory approval. Again, it makes sense - even though the active molecule is the same, the formulation might not be. What good is a generic drug if, instead of releasing it into your bloodstream, the tablet just goes right on through until you shit it out? So, there's a requirement to prove efficacy - not to the same high bar as developing the drug in the first place, just a relatively basic it-actually-works test.

    Then there's the issue of abandoned drugs. Regulations have gotten stricter over time, and some niche drugs were abandoned rather than pushed through the latest regulations. To combat this, if you go through the work of bringing a lapsed generic drug through tests, you get a sort of limited exclusivity.

    Pyrimethamine is one of those - it was invented in the 50s, and the disease it mainly treats, malaria, is not particularly common in this country. So it was allowed to fall out of approval, and was eventually brought back when a secondary use was found (treating secondary infections in AIDS patients). So it's a generic drug with only one maker, who has limited exclusivity. I honestly don't know what that exclusivity is, because generic versions could still be made, if they could pass approval.

    What current regulations don't cover is that, in situations like this, the one maker of the drug is able to prevent others from gaining approval, by heavily restricting their own distribution. Normally generic drugs are cheap enough that the additional friction costs aren't worth it. But it turns out, in exactly the situation where you most need to approve an alternate formulation (extreme price hikes), those friction costs become negligible.

    And while I'm explaining everything, this solution is an exception to the exception - doctors are given leeway to prescribe literally anything, and "compounding pharmacies" are allowed to make any drug to fill a prescription. This company is just producing pyrimethamine for compounding pharmacies to formulate. However, if a patient is prescribed "Daraprim", they can't fill it with a compounded formulation - the doctors have to explicitly write the prescription for "pyrimethamine". And they aren't allowed to advertise it at all. And even then, this does induce an inefficiency cost - the same drug costs mere pennies in countries where it is produced and consumed in large amounts (in Brazil and India, it can be found for $0.05 per tablet). So, while not the "ideal" solution, it is at least minimizing the damage done by the price hike, and it's a lot faster a reaction than getting a formulation approved for marketing.

    I think a possible solution would be allowing approval studies in other countries to be used for the US. The same drug is available in the UK, from a major company, for about £0.40 a tablet, and I can't imagine their regulations are so vastly different from ours that a basic study of "this shit actually works, right?" is incompatible. That would certainly help avoid both this situation (it's much harder to get complete distribution control in every major country), and in general (by eliminating some redundant costs to bring a drug to market).