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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: 4, Informative) by takyon on Tuesday September 22 2015, @09:20PM
I was also confused in writing my part of the summary. The sampling issue doesn't seem like an insurmountable barrier.
My interpretation is that when the company was selling at $13.50, there was no incentive for other manufacturers to step in and make a generic version of a niche trademarked drug. Now with the sudden 5000% price increase, generic manufacturers are unprepared to step in, and patients are screwed in the meantime. I assume that those drug manufacturers need to acquire samples of the drug to compare their versions to and ensure FDA approval. The NYT story claims that controlled distribution is a way to thwart generics.
From NYT:
It doesn't look like anyone will die because of this, because doctors can badger the company to get charity access to the drug. But some patients will be hurt.
The situation is a failure of both free market principles and government regulation. Regulations (safety standards rather than patents) make it harder but not impossible to make a generic version of the drug, but the market can't quickly adapt to a situation where the monopoly making a low-demand, low-cost drug jacks up the price from reasonable levels to over 50 times more. With future technologies like "chemical printing", maybe it would be harder to pull off the price increase for such a cheap drug, but in today's world you need to pay the initial costs of starting production and meet regulatory concerns.
I want to know what it will cost for generic competitors to set up dedicated production lines for pyrimethamine. Even if they made every batch of tablets on demand and shipped them directly to the customers, while increasing the price to cover initial costs to start making the drug, I bet the price would come far under $750 per dose.
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(Score: 2) by jdavidb on Tuesday September 22 2015, @09:32PM
I assume that those drug manufacturers need to acquire samples of the drug to compare their versions to and ensure FDA approval.
And yet the FDA has already approved it. Anybody should be able to sell an identical chemical. But it sounds like the requirements are much more onorous:
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."
source [soylentnews.org]
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(Score: 2) by Rivenaleem on Friday September 25 2015, @11:07AM
Other Pharma companies are not going to jump in and invest all the money needed to produce and test the drug, and get FDA (and worldwide) approval to release in all the various markets, when Turing can simply drop the price back down to 13.50 again where it won't be profitable for a generic to make.