Public Outrage Overturning Drug Price Hikes

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Public outrage over the 5000% price increase for Daraprim, a 62-year-old drug purchased by Turing Pharmaceuticals in August, prompted the company to promise it would lower the drug's cost. This is not the first time such an incidence has occurred.

Public outrage over the 5000% price increase for pyrimethamine (Daraprim), a 62-year-old drug purchased by Turing Pharmaceuticals in August, prompted the company to promise it would lower the drug’s cost. A new price has yet to be released.

After Turing bought the rights to Daraprim, a standard of care for life-threatening toxoplasmosis that is also a co-treatment for HIV and malaria, the price per tablet skyrocketed from $13.50 one day to $750 the next.

Turing CEO Martin Shkreli initially justified the price increase by telling CBS News that the drug had been unprofitable at $13.50 per tablet and his privately held startup had to turn a profit.

On Monday, however, Democratic presidential hopeful Hillary Clinton tweeted a takedown of the “price gouging” in the specialty drug market. Later that day, biotech stocks tumbled, causing the Nasdaq to close in the red, according to CNN Money.

Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6h

— Hillary Clinton (@HillaryClinton) September 21, 2015

The next day, Clinton laid out her plan to tackle prescription drug costs. She proposed a $250-per-month cap on out-of-pocket costs for those with chronic conditions, said Medicare should be able to negotiate drug prices, and considered allowing Americans to buy some drugs from Europe.

Clinton’s prescription drug plan is competing against her Democratic presidential rival.

Just 2 weeks earlier, Senator Bernie Sanders (I-Vt), rolled out his drug pricing bill, the Prescription Drug Affordability Act of 2015. Similar to Clinton, Sanders’ bill seeks to give Medicare the ability to bargain on drug prices and also allow US residents to import lower-cost medications from Canada.

Sanders has also co-sponsored the Medicaid Generic Drug Price Fairness Act, which would require drug manufacturers to pay a rebate to Medicaid when increases to their generic prices outpace inflation.

Just like Clinton, Sanders is going after a specific example of price hikes in the pharmaceutical industry. On August 13, he tweeted:

It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs. pic.twitter.com/fxPNu9jPHn

— Bernie Sanders (@BernieSanders) August 14, 2015

The very next day, Sanders and Elijah Cummings, a representative from Maryland, sent a letter to Valeant Pharmaceuticals International, Inc., regarding the escalating prices that the company has charged for 2 drugs it purchased from another drug company.

After Valeant bought heart medications Isuprel and Nitropress, it increased their prices by about 525% and 212%, respectively. Marathon Pharmaceuticals, which sold the drugs to Valeant in February, had increased the price of the drugs nearly 400% in October 2014 after acquiring them from a different company in 2013.

“Isuprel and Nitropress are just two recent examples of drug companies taking money out of the pockets of Americans,” Sanders said in a statement. “We must get to the bottom of the enormous increase in drug prices around the country.”

Although both Sanders and Clinton’s plans will face stiff opposition in the Republican-controlled Congress, they have the public on their side after a number of similar instances where companies have steeply increased drug prices.

Rodelis Therapeutics raised the price of cycloserine for tuberculosis to $10,000 for 30 capsules after it acquired the drug. The company recently gave the drug back to its previous owner, the nonprofit Chao Center affiliated with Purdue University.

While the price of the drug has gone back down, at $1050 for 30 capsules, cycloserine will still cost double its original price, Pharmacy Times reported.

In 2012, Peter B. Bach, MD, MAPP; Leonard B. Saltz, MD; and Robert E. Wittes, MD, all with Memorial Sloan-Kettering Cancer Center, wrote a scathing review of Sanofi’s cancer drug Zaltrap. They explained that center had decided to no longer give the drug to its patients because of its exorbitant price tag—$11,063 for a month of treatment—and the fact that the drug is no better than a similar medicine for advanced colorectal cancer.

Since then, Sanofi has decided to offer a 50% discount to institutions, but the price of Zaltrap still makes it more expensive than its competitor, Avastin.

In another instance where a company caved under public pressure, KV Pharmaceuticals’ slashed the price of pre-term labor drug Makena after protests.

When the company began selling the treatment, the price was $1500 per dose, or $30,000 per patient for the full round. However, compounding pharmacies were already producing the drug for far less: $10 to $20 per dose.

FDA Won't Take Action on Compounding Versions of KV Pharma's $KV.A $KV-A Makena; Shares Sink

— Streetinsider.com (@Street_Insider) March 30, 2011

After some accused the company of price gouging, the FDA announced it would allow compounders to continue making the drug. KV Pharmaceuticals decreased the price of Makena twice, but still ended up filing for Chapter 11 bankruptcy.

Bowing to pressure, KV cutting Makena list price to $690 per shot from around $1,500. Will that be enough? $KV.A

— Scott Hensley (@scotthensley) April 1, 2011

Not all instances of drug price hikes have resulted in cost decreases.

HHS’ Office of Inspector General is still investigating skyrocketing drug prices, including the jump from $20 for a 500-count bottle of 100 mg doxycycline tablets to $1849.

Horizon Pharma acquired the drug from AstraZeneca in 2013, and on January 1, 2014, Horizon increased the price 595% to $959.04 for 60 tablets. At the beginning of 2015, the price increased to $1678.32 (up another 75%), and CVS Caremark and Express Scripts decided not to include Vimovo on their preferred formularies.

To bring this full circle, the Daraprim debacle is not the first time Turing CEO Shkreli has hiked the price of an old drug.

As CEO of Retrophin, he raised the price of an old kidney drug from $1.50 per tablet to $30 per tablet—a 2000% increase. With patients taking the pill several times a day, the monthly cost quickly added up, FiercePharma reported.