​Is this fair, or foul? Drugmaker hikes pill's cost by 5,000% overnight

Price increase is 'unjustifiable' and 'unsustainable,' groups say

Experts are worried that the price increase of a decades-old drug could force providers to use less effective treatments and say it represents an alarming trend in the industry, Andrew Pollack reports for the New York Times.

The 62-year-old drug—Daraprim—is used to treat malaria, and is the standard of care for treating toxoplasmosis, the second-most common food-borne disease. The parasite infection—which CDC says may be carried by about 60 million Americans—can be life-threatening for people with compromised immune systems, such as AIDS or cancer patients, and for infants born to women infected during pregnancy.

While there are alternative treatments for toxoplasmosis, Pollack writes, there is not as much data supporting their effectiveness.

Several years ago, the drug cost about $1 per tablet, but the price went up when CorePharma acquired its marketing rights in 2010. But when Turing Pharmaceuticals acquired the drug last month, it immediately increased its price by more than 5000%, from $13.50 a tablet to $750 a tablet. As a result, the annual treatment cost for some patients is now hundreds of thousands of dollars.

Under federal rules, some hospitals and Medicaid will be able to procure the drug at a discounted rate. But Medicare, private insurers, and some hospitalized patients will need to pay closer to the drug's list price, according to Pollack.

While other companies may be able to make generic copies of the drug, since the patents have expired, Pollack says that Daraprim's tightly controlled distribution could discourage competitors from doing so.

Debate over price increase

Earlier this month, the HIV Medicine Association and the Infectious Diseases Society of America sent Turing a joint letter bashing the price increase as "unjustifiable for the medically vulnerable patient population" and "unsustainable for the health care system."

Judith Aberg, chief of the Icahn School of Medicine at Mount Sinai's division of infectious diseases, says that price hike could cause hospitals to use alternative therapies that are potentially less effective, or decide not to keep Daraprim in stock, which could lead to treatment delays.

But Rima McLeod, the medical director of the University of Chicago's toxoplasmosis center, says that the increase in price has not yet resulted in delays in patient care, and that the situation "seems workable."

A Turing spokesperson told USA Today that the company is working with providers to help every patient receive the drug, including providing no-cost options for uninsured patients and offering copay assistance programs.

And Turing CEO and founder Martin Shkreli says that the drug is rarely used, and therefore the price increase would have little effect on the U.S. health system. Shkreli says Turing will use the profits it gains from the price increase to develop better treatments—with fewer side effects—for toxoplasmosis.

"This isn't the greedy drug company trying to gouge patients," Shkreli says. "It is us trying to stay in business." He adds, "It really doesn't make sense [for Turing] to get any criticism for this."

But some physicians question whether there is a large need for a better drug to counter toxoplasmosis, and say that while Daraprim has potentially serious side effects, they can be managed.

"I certainly don't think this is one of those diseases where we have been clamoring for better therapies," says Wendy Armstrong, professor of infectious diseases at Emory University.

Part of a trend

The price increase for Daraprim is representative of a trend in the industry of companies buying old medications and increasing their prices, Pollack writes.

The five drugs that cost Medicare $11 billion per year

For instance:

  • After Rodelis Therapeutics acquired the drug Cycloserine, which is used to treat multidrug-resistant tuberculosis, it increased its price per 30 pills from $500 to $10,800. Scott Spencer, the company's general manager, says the price increase was needed to ensure the reliability of the drug's supply; and
  • After Valeant Pharmaceuticals acquired the heart drugs Isuprel and Nitropress, it increased their prices by 525% and 212%, respectively. That prompted an inquiry from Sen. Bernie Sanders (I-Vermont) and Rep. Elijah Cummings (D-Maryland) (Pollack, New York Times, 9/20; Rushton, USA Today, 9/18).

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