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Medicine that costs $1 to make raised in price from $13.50 to $750.00
The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%. Turing Pharmaceuticals acquired the rights to Daraprim in August.
CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments. The drug is used treat toxoplasmosis, a parasitic affliction that affects people with compromised immune systems.
After Turning's acquisition, a dose of Daraprim in the US increased from $13.50 (£8.70) to $750. The pill costs about $1 to produce, but Mr Shkreli, a former hedge fund manager, said that does not include other costs like marketing and distribution.
Cost of Daraprim Medication Raised By Over 50 Times
BBC is reporting on a massive price hike of an essential drug used by AIDS patients:
The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%. Turing Pharmaceuticals acquired the rights to Daraprim in August. CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments.
The drug is used treat toxoplasmosis, a parasitic affliction that affects people with compromised immune systems. After Turning's acquisition, a dose of Daraprim in the US increased from $13.50 (£8.70) to $750. The pill costs about $1 to produce, but Mr Shkreli, a former hedge fund manager, said that does not include other costs like marketing and distribution. "We needed to turn a profit on this drug," Mr Shkreli told Bloomberg TV. "The companies before us were just giving it away almost." On Twitter, Mr Shkreli mocked several users who questioned the company's decision, calling one reporter "a moron".
Why not switch to a generic pyrimethamine tablet? They don't exist right now, according to the New York Times (story includes examples of other recent price hikes):
With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim's distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
The switch from drugstores to controlled distribution was made in June by Impax, not by Turing. Still, controlled distribution was a strategy Mr. Shkreli talked about at his previous company as a way to thwart generics.
The drug is also used to treat malaria and appears on the World Health Organization Model List of Essential Medicines. Toxoplasmosis infections are a feline gift to the world.
(Score: 2, Informative) by SanityCheck on Tuesday September 22 2015, @08:57PM
I think it is slightly more convoluted than that. You could make a similar generic, but in order to sell it you must conduct a study [thefreedictionary.com] that proves your drug is equivalent to the one you wish to replace. However in order to conduct the trail I think you need a control group that would take the original medication... which is priced so ridiculous it will not be worth it to run the trail if you plan to sell the new drug cheaply yourself. Plus even if you could pay for the supply, these schmucks would probably claim they cannot provide you with sufficient doses because of "shortage."
(Score: 3, Insightful) by jdavidb on Tuesday September 22 2015, @09:23PM
I think it is slightly more convoluted than that. You could make a similar generic, but in order to sell it you must conduct a study [thefreedictionary.com] that proves your drug is equivalent to the one you wish to replace. However in order to conduct the trail I think you need a control group that would take the original medication... which is priced so ridiculous it will not be worth it to run the trail if you plan to sell the new drug cheaply yourself. Plus even if you could pay for the supply, these schmucks would probably claim they cannot provide you with sufficient doses because of "shortage."
There it is! There's the real barriers to entry here. It's not that this guy is wrong to charge whatever price he wants for his chemicals. It's the people who won't let you sell an identical chemical in competition with him.
This is not a free market problem, because this is not a free market.
ⓋⒶ☮✝🕊 Secession is the right of all sentient beings
(Score: 2) by RedBear on Wednesday September 23 2015, @03:57AM
There is no such thing as a free market, except as an abstract concept in economics textbooks. Regulations aren't the problem, uncontrolled profit-seeking behavior is the problem. Health care should not be a "market" at all. All of the nations with socialized medicine have all the same medications we have available, at drastically lower costs. For-profit medicine is evil, and does not work for anyone except those with plenty of cash. It's as simple as that. If we deregulated the market the new companies that copied the medication would simply charge whatever the market will bear. If one company is charging $500 per pill for a treatment for a terminal disease, the next company will simply charge $495 per pill, because they can. From a capitalistic perspective they'd be stupid not to wring as much profit out of the product as they can. The fabled free market does not magically fix things like this.
Sometimes I think conservative capitalism-worshippers would even go back to for-profit fire departments and police departments if they could. To fail to understand why these things cannot be privatized without terrible results is a form of insanity.
¯\_ʕ◔.◔ʔ_/¯ LOL. I dunno. I'm just a bear.
... Peace out. Got bear stuff to do. 彡ʕ⌐■.■ʔ
(Score: 0) by Anonymous Coward on Wednesday September 23 2015, @06:21PM
Duh, of course they would. All the conservatives who worship at the Church of Capitalism have more than enough capital and wealth to fully take advantage of the system, and they don't give a fuck about anybody who doesn't; as far as they're concerned, you're not an actual human being until you're a member of the 7 digit club.
(Score: 2) by eof on Tuesday September 22 2015, @10:15PM
Would the new drug trial really need a control group on the old drug? I doubt it, but I don't know. If it can be proven effective and safe, why bring the old drug into it? Direct comparisons to the old drug might be useful if doctors wanted to compare the relative effectiveness. In this case, price might be the largest consideration. Of course, the existence of the old drug helps in the development of a new one since the insights can be borrowed.
(Score: 0) by Anonymous Coward on Tuesday September 22 2015, @10:35PM
It seems that in trying to encourage testing of grandfathered drugs the FDA offered marketing rights for three years. So now a new industry has sprung up to fund a clinical trial and then jack up the price in a bet to make the money back in that three years. In this case, it sounds like Turing Pharmaceuticals bought the rights from a company that recently did the trial.
(Score: 0) by Anonymous Coward on Tuesday September 22 2015, @10:37PM
http://blogs.sciencemag.org/pipeline/archives/2015/04/27/market_exclusivity_is_sometimes_too_much [sciencemag.org]