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Thread: Pharma Industry Greed

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    Frozen Chosen A.J.'s Avatar
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    Pharma Industry Greed

    I almost put this in Morality and Ethics but because it's secular, I'm putting it here.

    Femme posted this on FB and in the light of some discussion we've had here about Big Pharma, I thought some people might find it an interesting read. I know I sure did. And while the article focuses on one man, it gives other examples of drug price increases. It's all just plain greed.

    Drug Goes From $13.50 a Tablet to $750, Overnight
    By ANDREW POLLACKSEPT. 20, 2015

    Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.

    The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

    "What is it that they are doing differently that has led to this dramatic increase?" said Dr. Judith Aberg, the chief of the division of infectious diseases at the Icahn School of Medicine at Mount Sinai. She said the price increase could force hospitals to use "alternative therapies that may not have the same efficacy."

    Turing's price increase is not an isolated example. While most of the attention on pharmaceutical prices has been on new drugs for diseases like cancer, hepatitis C and high cholesterol, there is also growing concern about huge price increases on older drugs, some of them generic, that have long been mainstays of treatment.

    Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced "specialty drugs."

    Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.

    In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon had acquired the drugs from another company in 2013 and had quintupled their prices, according to the lawmakers, Senator Bernie Sanders, the Vermont independent who is seeking the Democratic nomination for president, and Representative Elijah E. Cummings, Democrat of Maryland.

    Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014, according to the two lawmakers.

    The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase for Daraprim "unjustifiable for the medically vulnerable patient population" and "unsustainable for the health care system." An organization representing the directors of state AIDS programs has also been looking into the price increase, according to doctors and patient advocates.

    Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy, and also for people with compromised immune systems, like AIDS patients and certain cancer patients.

    Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

    "This isn't the greedy drug company trying to gouge patients, it is us trying to stay in business," Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

    "This is still one of the smallest pharmaceutical products in the world," he said. "It really doesn't make sense to get any criticism for this."

    This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy. He started MSMB Capital, a hedge fund company, in his 20s and drew attention for urging the Food and Drug Administration not to approve certain drugs made by companies whose stock he was shorting.

    In 2011, Mr. Shkreli started Retrophin, which also acquired old neglected drugs and sharply raised their prices. Retrophin's board fired Mr. Shkreli a year ago. Last month, it filed a complaint in Federal District Court in Manhattan, accusing him of using Retrophin as a personal piggy bank to pay back angry investors in his hedge fund.

    Mr. Shkreli has denied the accusations. He has filed for arbitration against his old company, which he says owes him at least $25 million in severance. "They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money," he said.

    Daraprim, which is also used to treat malaria, was approved by the F.D.A. in 1953 and has long been made by GlaxoSmithKline. Glaxo sold United States marketing rights to CorePharma in 2010. Last year, Impax Laboratories agreed to buy Core and affiliated companies for $700 million. In August, Impax sold Daraprim to Turing for $55 million, a deal announced the same day Turing said it had raised $90 million from Mr. Shkreli and other investors in its first round of financing.

    Daraprim cost only about $1 a tablet several years ago, but the drug's price rose sharply after CorePharma acquired it. According to IMS Health, which tracks prescriptions, sales of the drug jumped to $6.3 million in 2011 from $667,000 in 2010, even as prescriptions held steady at about 12,700. In 2014, after further price increases, sales were $9.9 million, as the number of prescriptions shrank to 8,821. The figures do not include inpatient use in hospitals.

    Turing's price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.

    Some doctors questioned Turing's claim that there was a need for better drugs, saying the side effects, while potentially serious, could be managed.

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

    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.

    Some hospitals say they now have trouble getting the drug. "We've not had access to the drug for a few months," said Dr. Armstrong, who also works at Grady Memorial Hospital, a huge public treatment center in Atlanta that serves many low-income patients.

    But Dr. Rima McLeod, medical director of the toxoplasmosis center at the University of Chicago, said that Turing had been good about delivering drugs quickly to patients, sometimes without charge.

    "They have jumped every time I've called," she said. The situation, she added, "seems workable" despite the price increase.

    Daraprim is the standard first treatment for toxoplasmosis, in combination with an antibiotic called sulfadiazine. There are alternative treatments, but there is less data supporting their efficacy.

    Dr. Aberg of Mount Sinai said some hospitals will now find Daraprim too expensive to keep in stock, possibly resulting in treatment delays. She said that Mount Sinai was continuing to use the drug, but each use now required a special review.

    "This seems to be all profit-driven for somebody," Dr. Aberg said, "and I just think it's a very dangerous process."

    http://www.nytimes.com/2015/09/21/bu...ests.html?_r=0

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    So if the Son sets you free, you will be free indeed. John's Avatar
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    Far be it from me to defend the Pharma Industry BUT the guy pulling that off is a hedge fund psychopath driving a truck through some loopholes. He isn't really an "industry guy" just a parasite who went a bit too far.

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    Frozen Chosen A.J.'s Avatar
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    Quote Originally Posted by John View Post
    Far be it from me to defend the Pharma Industry BUT the guy pulling that off is a hedge fund psychopath driving a truck through some loopholes. He isn't really an "industry guy" just a parasite who went a bit too far.
    You're right... sorry, I have a nasty headache today and read some of it wrong. However, this whole thing of companies selling to each other, the rights to one drug for of millions of dollars says something too. (That's if I'm reading that part correctly through my brain fog)

    Daraprim, which is also used to treat malaria, was approved by the F.D.A. in 1953 and has long been made by GlaxoSmithKline. Glaxo sold United States marketing rights to CorePharma in 2010. Last year, Impax Laboratories agreed to buy Core and affiliated companies for $700 million. In August, Impax sold Daraprim to Turing for $55 million, a deal announced the same day Turing said it had raised $90 million from Mr. Shkreli and other investors in its first round of financing.

    Daraprim cost only about $1 a tablet several years ago, but the drug’s price rose sharply after CorePharma acquired it. According to IMS Health, which tracks prescriptions, sales of the drug jumped to $6.3 million in 2011 from $667,000 in 2010, even as prescriptions held steady at about 12,700. In 2014, after further price increases, sales were $9.9 million, as the number of prescriptions shrank to 8,821. The figures do not include inpatient use in hospitals.

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    Senior Member Colonel's Avatar
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    That's what you get in a world ruled by a free, unregulated market. With a monopoly on something that people have great need for one can simply squeeze the lifeblood out of them for it and make trillions.

    Then some will claim that the free, unregulated market regulates itself automatically for the benefit of the consumer. Yeah, right. That's not even a political view, that's a religion.

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    So if the Son sets you free, you will be free indeed. John's Avatar
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    Quote Originally Posted by Colonel View Post
    That's what you get in a world ruled by a free, unregulated market. With a monopoly on something that people have great need for one can simply squeeze the lifeblood out of them for it and make trillions.

    Then some will claim that the free, unregulated market regulates itself automatically for the benefit of the consumer. Yeah, right. That's not even a political view, that's a religion.
    Regulations cause those anomalies, it's just playing loopholes.

    In a free market no one would pay 1/10th the current price of pharmaceuticals.

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    Senior Member scottae316's Avatar
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    I am the first to say that big pharmaceutical companies have issues. When most of the cost of many drugs isn't R&D but marketing there is a problem. But there is a flip side to consider. For every drug that is developed and works, how many attempts are made and fail for others? Again, I am the last to justify the costs and profits but there needs to be a balance. In this case, it is pure greed IMO.

    The heavy regulation by many countries and the price controls caused many European drug companies to buy or merge with US drug companies and develop drugs here in the US because it is more of an open market and it was not as profitable or no profit in Europe or other parts of the developed world. I don't favor regulations but, if a drug costs $400 million dollars to develop and a country with price controls only wants to pay $2.00 per pill, then let them wait until a generic is available or the company recoups its cost at market prices in markets willing to pay.

    I am on several prescriptions for various health issues, but if one of my doctors wants to prescribe a high cost drug, I'll ask why, are there any older less costly alternatives? Recently my PCP prescribed a drug that was covered, but only after samples of my nails were gathered, and analyzed. Well, I did some research and found I could purchase this drug by buying a drug club card from my pharmacy. It was cheaper than a Doctor visit and labs costs. Am I happy at paying about $35, no. I met my drug deduction already and the costs for my othe drugs is $0.00 from March/April on. But, if I want this I have to work it out for the best cost for me.

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    this guy is so young and arrogant, he's heading for a fall.

    I can't say I'll be sad when it happens.

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    Senior Member Colonel's Avatar
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    Quote Originally Posted by scottae316 View Post
    The heavy regulation by many countries and the price controls caused many European drug companies to buy or merge with US drug companies and develop drugs here in the US because it is more of an open market and it was not as profitable or no profit in Europe or other parts of the developed world.
    Right. They head for where they are allowed to make an enormous profit. Which contributes heavily to the following data :



    Where Americans pay much more for health care in general and enormously much more for private health care even though the public health care cost is near the top. The data seems to be adjusted for currency differences, meaning it reflects actual purchasing power (PPP).

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    I would point out that the 20-year monopoly on the production of a newly-developed medication, created and enforced by the U.S. government via patent law, is itself a form of intervention in the free market that is anti-libertarian in the sense that it prohibits individuals from producing and selling what they want, and in the sense that it represents a government-enforced monopoly.

    While the power to grant patents and copyrights is specified by the U.S. Constitution, and does promote the public good by encouraging innovation and creativity, I would say that in the case of a non-cosmetic medication, it would be beneficial to the public to limit the price that the monopoly-holder can charge while the monopoly is in effect.

    Certainly the drug manufacturer should recoup its R&D costs and in addition earn a very handsome profit. But in the absence of limits, for the case of a life-saving drug, a drug manufacturer could easily charge whatever it feels like charging, thereby bleeding the public of billions while the government-created monopoly is in effect.

    Since the 20-year monopoly is a creation of the government, it seems logical and reasonable to me that the government should have some say over the prices that are charged during this monopoly period.

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    Senior Member Colonel's Avatar
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    "a very handsome profit" is sometimes what they do make in Europe but since they make 10 times as much in the US on the same drug they choose to call that "small profit" or "no profit". Some of their claims is marketing towards the public or sections of the public in order to create a certain impression that they can then use as a basis for lobbying.

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