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5,000 Percent Increase in Drug Costs Raising Questions


drug costImagine paying $13.50 for a prescription one time and then $750 the next. That increase of over 5,000 percent is just what happened to people who are taking Daraprim, and astronomical increases in drug costs have been reported recently for other medications raising questions from insurance companies, doctors and, of course, patients who need the particular drug and must foot the bill (at least up to their health plan annual out-of-pocket limit).

These are not new drugs requiring a drug manufacturer to charge a lot to recoup its research and development costs. Daraprim is a 62-year-old drug that is regularly prescribed for treating potentially life-threatening infections from parasites. In this situation, Turing Pharmaceuticals, a startup, acquired the drug from Impax Laboratories, who only owned the rights for one year, and then promptly jacked up the price.

Approved by the F.D.A. in 1953, Daraprim or, as it known generically, pyrimethamine is used to treat malaria around the world. In the U.S., it is used mainly to combat toxoplasmosis, which causes serious or life-threatening health problems for babies born to women who became infected while pregnant as well as patients with AIDS, cancer or other immune system compromising issues. There are alternative treatments, but their efficacy has not been widely researched.

Daraprim was made for decades by GlaxoSmithKline and the drug cost about $1 per pill just a few years ago. Glaxo sold American marketing rights to CorePharma in 2010 and the price began to increase. As reported by CBS San Francisco, the drug’s sales totaled $667,000 in 2010 and $6.3 million in 2011 after the price increase. In 2014, after further price increases, sales were $9.9 million, even though the number of prescriptions shrank.

The whopping price increase imposed this past month by Turing is not an isolated example. While pharmaceutical prices on new specialty drugs have drawn a lot of attention, concern is growing about huge price increases on older medications that have long been mainstays of treatment protocols.

Cycloserine is another example. It used to cost $500 for 30 pills. Since a recent acquisition by Rodelis Therapeutics, the drug cost increased to $10,800 for 30 pills.

How are drugs available in generic form becoming high-cost prescriptions? Many are a result of business strategies newer drug companies are employing to make tremendous amounts of money quickly. They are buying old drugs that do not have a lot of alternatives out there, and turning them into high-priced “specialty drugs.” If use remains constant, the drug cost increases net hundreds of millions of dollars from private insurance companies, Medicare and patients.

The patents on these older drugs have expired. So, other companies could develop generic copies, but the testing process is daunting. In addition, some of the drugs, like Daraprim, has controlled distributions and are not available in routine drug stores, which makes it harder to compete. While Turing did not establish the controlled distribution for Dataprim, Martin Shkreli, its founder and chief executive, reportedly talked publicly about controlled distribution being a strategy to thwart generic competition. While raising questions, it is also clear that a 5,000 percent increase in drug costs is a strategy to raise revenue, too.

Written and edited by Dyanne Weiss

New York Times: Drug Goes From $13.50 a Tablet to $750, Overnight
Boston Globe: Huge hikes in prices of drugs raise protests and questions
CBS SF Bay Area: 5,000 Percent Increase In Popular Drug Prompts Protests From Specialists

Photo courtesy U.S. Navy, public domain

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