9 ms·

The Most Unconscionable Drug Price Hike I Have Yet Seen

54 points by tshtf 12y ago

rickdale 12y ago
I needed some anti fungal cream this summer. My doctor informed me that the cream used to be under $10, but the big pharmaceutical company bought up all the generics and now the cream is $120. More interesting, I got the same story from the pharmacist at rite aid. She couldn't believe I was going to pay for that and then she said, "People are up in arms over lots of stuff, but this right here is a crime that no one notices. 5 months ago you would have paid a lot less."
- jisaacks 12y ago
  > and now the cream is $120. What about tinactin, lamisil, lotrimin, monistat? They are all anti fungal creams OTC for about $10. Is this prescription you had 12x as potent?
  - nutmeg 12y ago
    I can't speak to the author, but I have a loved one with a serious skin condition who has tried just about everything under the sun. Only recently have they found an ointment that works and it is ~$70/oz. Not all anti-fungals are created equal.
    - deleted 12y ago
      [deleted]
  - GFK_of_xmaspast 12y ago
    Antifungals are like antibiotics or insecticides, in that the pathogen can develop resistances. Also the mechanisms of action differ (again, just like antibiotics or insecticides).
  - ceejayoz 12y ago
    As with antibiotics, OTC anti-fungals are often ineffective due to resistance from over/improper use.
    - Symmetry 12y ago
      If that's the case then it sounds like a higher price is a good thing.
      - ceejayoz 12y ago
        No, that's why we have prescriptions, and education for doctors and patients on when to get one. Making them expensive means poor people don't do their full course of treatment because they can't afford it (or want to save some for next time), increasing resistance.
- deleted 12y ago
  [deleted]
- refurb 12y ago
  Usually the FTC would not allow a company to acquire all competitors. Hell, plenty of drug companies have been forced to divest assets because they are acquiring a company that has a competitor. What may have happened is a drug shortage. Generic companies run on razor thin margins and sometime stop manufacturing drugs that become unprofitable for them. If enough companies do that and you're left with only one manufacturer, price increases are typical.
  - eli 12y ago
    Cephalon came up with a cute idea. Rather than acquire generics makers, they buried them with bogus patent lawsuits. Then they offered to settle: a bunch of cash up front in exchange for delaying production of generic drugs for a few more years.
    - refurb 12y ago
      Generic companies play the same game. Attack the branded drug makers patents and then settle out of court. It's just how the generic industry works, it all comes down to patents. I remember a quote from the CEO of Apotex (one of the biggest generic manufacturers in the world). The CEO said "I don't care about scientists, I just need the best lawyers).
holyjaw 12y ago
All the text and comments are crossed out with no visible explanation as to why.
- bluthru 12y ago
  "Because they can" Without oversight, this behavior is completely expected.
  - GFK_of_xmaspast 12y ago
    Oversight by who?
    - bluthru 12y ago
      Oh, I thought that user was talking about the article. My bad.
- refurb 12y ago
  I read that blog all the time. The blog host has terrible software and the site is often down. What you're seeing is typical. Try to reload the page.
antidaily 12y ago
From linked article: "Thiola, currently sold for $4,000 a year per patient, will be priced closer to rival drug penicillamine, which costs $80,000 to $140,000, Chief Executive Martin Shkreli said on a conference call on Friday."
- lotsofmangos 12y ago
  I just thought I'd compare this with information from the NHS on Penicillamine. "Penicillamine 125mg or 250mg tablets. Cost per 28 days treatment for 500mg or 750mg/day: £9.96- £14.94." - https://www.newdevonccg.nhs.uk/file/?rid=101735&download=true https://www.newdevonccg.nhs.uk/file/?rid=101735&download=tru... edit - this is the dosage for arthritis and works out to £180, or around $290 per year. I don't know the dosage for Wilson's disease, but I am guessing it is unlikely to be several hundred times larger.
  - DanBC 12y ago
    And that's not the cost that patients would pay. Current prescription charges are £8.05 per line item per month. About 80% of prescriptions are free because the patient is exempt from charges. http://www.nhs.uk/nhsengland/Healthcosts/pages/Prescriptioncosts.aspx http://www.nhs.uk/nhsengland/Healthcosts/pages/Prescriptionc...
- HillRat 12y ago
  Penicillamine is another example of a pharmaceutical scam; in 1995, the cost to treat rheumatoid arthritis using it as a second-line therapy was $550/year. Even a few years ago the pricing was in the thousands, not tens of thousands. When Valeant purchased Aton, it appears that the first thing it did was jack up the price of orphan drugs. But, hey, if you've got Wilson's Disease, you have no choice but to pay whatever they demand....
  - HarryHirsch 12y ago
    And this is why in situations like this you need one large buyer (like the British NHS) to negotiate pricing. If you have one, suddenly the market price becomes much close to the cost to provide the item.
drpgq 12y ago
As a Canadian, I'm wondering what the drug goes for here.
- pascalmemories 12y ago
  You still need to pay for drugs in Canada but they are generally cheaper than in the US. However, go to the real home of 'socialist medicine' [who thought up that name?] in Europe or the UK, you pay a fixed price (8 pounds in England - completely FREE in Scotland) for drugs. Drug companies get to charge a fee which differs but if they rip the piss out of the pricing then the NHS gets to set a price (the Pharmaceutical Price Regulation Scheme - it's complicated but it's discussed here https://www.ucl.ac.uk/european-institute/analysis-publications/analysis/healthcare/Jo_Wolff.pdf https://www.ucl.ac.uk/european-institute/analysis-publicatio...). Now, countries like India are even more aggressive - rip the piss there and they just license a local company to make the drug and you get a kick in the nuts for your price gouging ways. The result is companies really rip off US patients and elsewhere they are a lot more careful and can charge dramatically lower prices (but still as much as they possibly can) to avoid regulation or enforcement measures. Americans really need to rethink healthcare - starting by dropping all the pejorative stuff like 'Socialist Medicine' would help refocus peoples minds. People in Europe don't focus all their attention on getting healthcare like people in the US - I have a friend who uses his measly 1 week vacation every year to come to Europe and purchase his year's supply of medication as it's way cheaper than even his co-pay, including flights, accommodation etc, to buy over the counter in Europe. That's just nuts.
c0ur7n3y 12y ago
https://twitter.com/MartinShkreli https://twitter.com/MartinShkreli
bedhead 12y ago
Okay, so the price of the Thiola is ridiculous and unjustified. Who's agreeing to pay it??? I don't know how this works, do insurance companies simply roll over any time a company raises the price of some obscure drug by ten fold? Why haven't the insurers (I'm guessing no one pays for Thiola out of pocket) balked at this?
- refurb 12y ago
  The pricing power of a drug is related to a number of factors: (1) competition, (2) size of patient population, (3) severity of disease. Payers (insurers) balk at the price of drugs all the time. When there are competitors, they have the ability to say "no, you can't have drug A, but you can have drug B". Also, when a drug treats a disease that isn't that severe (erectile dysfunction), they can also say "no, you can't have that drug". When it comes to a disease like the one Thiola treats (only a few therapies, serious disease, small patient population), payers don't have much choice but to pay whatever the company charge. They can't deny patients a critical therapy. I'll bet that insurance companies will complain about the price increase, but in the end just pay it. Sure it's ridiculous, but the overall impact to payers is limited since the disease is so rare. They have bigger fish to fry.
StavrosK 12y ago
Can't you get generics?
- mikeash 12y ago
  About as easily as you were able to read the article.... Sarcastic quip aside the "Update" part of the article discusses the various legal maneuvers the company is using to inhibit the production of generics. Apparently it is possible in some cases for the original manufacturer to deny access to the drug to potential producers of generics, which prevents them from doing the necessary testing needed to get regulatory approval.
  - StavrosK 12y ago
    Thanks, the update wasn't there when I read it.
    - mikeash 12y ago
      Funny how the mutable nature of the web can transform a reasonable question into what looks like a stupid one, through no fault of your own. Have an upvote to compensate.
exelius 12y ago
This is an example of an arbitrage opportunity. It's a necessary evil of capitalism, and unfortunately, our government has decided that free market capitalism is an appropriate system to use for health care. Arbitrage can be explained as thus: you have an opportunity to buy $1 for $0.75. How many dollars do you buy? The correct answer is "all of them". In this case, a drug had a sale price of $3 and a market value of $150 per pill (established by its competitor), so an investor basically purchased "all of them" and resold them at a higher price. If your goal is maximum economic efficiency, arbitrage is necessary. It allows companies to make decisions with the goal of maximizing profit (i.e. maximum economic efficiency) in moral hazard situations: if something is legal but morally dubious, if they don't do it, someone else will force them to. This is necessary because every individual has a slightly different idea of what is "right" and what is "wrong". Businesses don't have morals because they're not people. They are amoral, and arbitrage is the means by which that amorality is maintained. If a person wishes to exercise their moral calculus, they are free to do so when making investment decisions. I don't believe that to be the case with healthcare. In my opinion, healthcare is a sector that really shouldn't operate along capitalist principles because the goal of a national healthcare system should not be to maximize economic efficiency: it should be to maximize the health and well-being of its citizens. I know that's hard to quantify, but it's certainly not quantified by the dollars spent on health care. IMO government price controls on healthcare are the only solution to the problem. I don't know how that gets implemented, but I do know that the pendulum needs to swing towards socialized medicine if we expect things to get better.
- refurb 12y ago
  What needs to happen is a better connection between drug prices and the outcomes they produce. The EU does not have price controls on their drugs (only in limited circumstances). What the EU does (particularly the UK and DE) is evaluate drugs based on their own metrics to determine what a reasonable price is. If a drug is priced too high, they don't cover it. Right now the system for determining how much value a drug brings is broken (understandably since it's not easy to do). The best example I can provide is Sovaldi (used to treat hepatitis C). The manufacturer priced the drugs at $84K for a course of therapy. Insurance companies in the US screamed blood murder. The UK, which has a system to evaluate the utility offered by drugs (called QUALY - quality-adjusted life year) approved Sovaldi without any complaints. The drug is cheaper in the UK, but not by much.
JonnieCache 12y ago
Why has this been flagged off the front page?

54 points by tshtf 12y ago

I needed some anti fungal cream this summer. My doctor informed me that the cream used to be under $10, but the big pharmaceutical company bought up all the generics and now the cream is $120. More interesting, I got the same story from the pharmacist at rite aid. She couldn't believe I was going to pay for that and then she said, "People are up in arms over lots of stuff, but this right here is a crime that no one notices. 5 months ago you would have paid a lot less."

jisaacks 12y ago
> and now the cream is $120. What about tinactin, lamisil, lotrimin, monistat? They are all anti fungal creams OTC for about $10. Is this prescription you had 12x as potent?
- nutmeg 12y ago
  I can't speak to the author, but I have a loved one with a serious skin condition who has tried just about everything under the sun. Only recently have they found an ointment that works and it is ~$70/oz. Not all anti-fungals are created equal.
  - deleted 12y ago
    [deleted]
- GFK_of_xmaspast 12y ago
  Antifungals are like antibiotics or insecticides, in that the pathogen can develop resistances. Also the mechanisms of action differ (again, just like antibiotics or insecticides).
- ceejayoz 12y ago
  As with antibiotics, OTC anti-fungals are often ineffective due to resistance from over/improper use.
  - Symmetry 12y ago
    If that's the case then it sounds like a higher price is a good thing.
    - ceejayoz 12y ago
      No, that's why we have prescriptions, and education for doctors and patients on when to get one. Making them expensive means poor people don't do their full course of treatment because they can't afford it (or want to save some for next time), increasing resistance.
deleted 12y ago
[deleted]
refurb 12y ago
Usually the FTC would not allow a company to acquire all competitors. Hell, plenty of drug companies have been forced to divest assets because they are acquiring a company that has a competitor. What may have happened is a drug shortage. Generic companies run on razor thin margins and sometime stop manufacturing drugs that become unprofitable for them. If enough companies do that and you're left with only one manufacturer, price increases are typical.
- eli 12y ago
  Cephalon came up with a cute idea. Rather than acquire generics makers, they buried them with bogus patent lawsuits. Then they offered to settle: a bunch of cash up front in exchange for delaying production of generic drugs for a few more years.
  - refurb 12y ago
    Generic companies play the same game. Attack the branded drug makers patents and then settle out of court. It's just how the generic industry works, it all comes down to patents. I remember a quote from the CEO of Apotex (one of the biggest generic manufacturers in the world). The CEO said "I don't care about scientists, I just need the best lawyers).

holyjaw 12y ago

All the text and comments are crossed out with no visible explanation as to why.

bluthru 12y ago
"Because they can" Without oversight, this behavior is completely expected.
- GFK_of_xmaspast 12y ago
  Oversight by who?
  - bluthru 12y ago
    Oh, I thought that user was talking about the article. My bad.
refurb 12y ago
I read that blog all the time. The blog host has terrible software and the site is often down. What you're seeing is typical. Try to reload the page.

antidaily 12y ago

From linked article: "Thiola, currently sold for $4,000 a year per patient, will be priced closer to rival drug penicillamine, which costs $80,000 to $140,000, Chief Executive Martin Shkreli said on a conference call on Friday."

lotsofmangos 12y ago
I just thought I'd compare this with information from the NHS on Penicillamine. "Penicillamine 125mg or 250mg tablets. Cost per 28 days treatment for 500mg or 750mg/day: £9.96- £14.94." - https://www.newdevonccg.nhs.uk/file/?rid=101735&download=true https://www.newdevonccg.nhs.uk/file/?rid=101735&download=tru... edit - this is the dosage for arthritis and works out to £180, or around $290 per year. I don't know the dosage for Wilson's disease, but I am guessing it is unlikely to be several hundred times larger.
- DanBC 12y ago
  And that's not the cost that patients would pay. Current prescription charges are £8.05 per line item per month. About 80% of prescriptions are free because the patient is exempt from charges. http://www.nhs.uk/nhsengland/Healthcosts/pages/Prescriptioncosts.aspx http://www.nhs.uk/nhsengland/Healthcosts/pages/Prescriptionc...
HillRat 12y ago
Penicillamine is another example of a pharmaceutical scam; in 1995, the cost to treat rheumatoid arthritis using it as a second-line therapy was $550/year. Even a few years ago the pricing was in the thousands, not tens of thousands. When Valeant purchased Aton, it appears that the first thing it did was jack up the price of orphan drugs. But, hey, if you've got Wilson's Disease, you have no choice but to pay whatever they demand....
- HarryHirsch 12y ago
  And this is why in situations like this you need one large buyer (like the British NHS) to negotiate pricing. If you have one, suddenly the market price becomes much close to the cost to provide the item.

drpgq 12y ago

As a Canadian, I'm wondering what the drug goes for here.

pascalmemories 12y ago
You still need to pay for drugs in Canada but they are generally cheaper than in the US. However, go to the real home of 'socialist medicine' [who thought up that name?] in Europe or the UK, you pay a fixed price (8 pounds in England - completely FREE in Scotland) for drugs. Drug companies get to charge a fee which differs but if they rip the piss out of the pricing then the NHS gets to set a price (the Pharmaceutical Price Regulation Scheme - it's complicated but it's discussed here https://www.ucl.ac.uk/european-institute/analysis-publications/analysis/healthcare/Jo_Wolff.pdf https://www.ucl.ac.uk/european-institute/analysis-publicatio...). Now, countries like India are even more aggressive - rip the piss there and they just license a local company to make the drug and you get a kick in the nuts for your price gouging ways. The result is companies really rip off US patients and elsewhere they are a lot more careful and can charge dramatically lower prices (but still as much as they possibly can) to avoid regulation or enforcement measures. Americans really need to rethink healthcare - starting by dropping all the pejorative stuff like 'Socialist Medicine' would help refocus peoples minds. People in Europe don't focus all their attention on getting healthcare like people in the US - I have a friend who uses his measly 1 week vacation every year to come to Europe and purchase his year's supply of medication as it's way cheaper than even his co-pay, including flights, accommodation etc, to buy over the counter in Europe. That's just nuts.

c0ur7n3y 12y ago

https://twitter.com/MartinShkreli https://twitter.com/MartinShkreli

bedhead 12y ago

Okay, so the price of the Thiola is ridiculous and unjustified. Who's agreeing to pay it??? I don't know how this works, do insurance companies simply roll over any time a company raises the price of some obscure drug by ten fold? Why haven't the insurers (I'm guessing no one pays for Thiola out of pocket) balked at this?

refurb 12y ago
The pricing power of a drug is related to a number of factors: (1) competition, (2) size of patient population, (3) severity of disease. Payers (insurers) balk at the price of drugs all the time. When there are competitors, they have the ability to say "no, you can't have drug A, but you can have drug B". Also, when a drug treats a disease that isn't that severe (erectile dysfunction), they can also say "no, you can't have that drug". When it comes to a disease like the one Thiola treats (only a few therapies, serious disease, small patient population), payers don't have much choice but to pay whatever the company charge. They can't deny patients a critical therapy. I'll bet that insurance companies will complain about the price increase, but in the end just pay it. Sure it's ridiculous, but the overall impact to payers is limited since the disease is so rare. They have bigger fish to fry.

StavrosK 12y ago

Can't you get generics?

mikeash 12y ago
About as easily as you were able to read the article.... Sarcastic quip aside the "Update" part of the article discusses the various legal maneuvers the company is using to inhibit the production of generics. Apparently it is possible in some cases for the original manufacturer to deny access to the drug to potential producers of generics, which prevents them from doing the necessary testing needed to get regulatory approval.
- StavrosK 12y ago
  Thanks, the update wasn't there when I read it.
  - mikeash 12y ago
    Funny how the mutable nature of the web can transform a reasonable question into what looks like a stupid one, through no fault of your own. Have an upvote to compensate.

exelius 12y ago

This is an example of an arbitrage opportunity. It's a necessary evil of capitalism, and unfortunately, our government has decided that free market capitalism is an appropriate system to use for health care. Arbitrage can be explained as thus: you have an opportunity to buy $1 for $0.75. How many dollars do you buy? The correct answer is "all of them". In this case, a drug had a sale price of $3 and a market value of $150 per pill (established by its competitor), so an investor basically purchased "all of them" and resold them at a higher price. If your goal is maximum economic efficiency, arbitrage is necessary. It allows companies to make decisions with the goal of maximizing profit (i.e. maximum economic efficiency) in moral hazard situations: if something is legal but morally dubious, if they don't do it, someone else will force them to. This is necessary because every individual has a slightly different idea of what is "right" and what is "wrong". Businesses don't have morals because they're not people. They are amoral, and arbitrage is the means by which that amorality is maintained. If a person wishes to exercise their moral calculus, they are free to do so when making investment decisions. I don't believe that to be the case with healthcare. In my opinion, healthcare is a sector that really shouldn't operate along capitalist principles because the goal of a national healthcare system should not be to maximize economic efficiency: it should be to maximize the health and well-being of its citizens. I know that's hard to quantify, but it's certainly not quantified by the dollars spent on health care. IMO government price controls on healthcare are the only solution to the problem. I don't know how that gets implemented, but I do know that the pendulum needs to swing towards socialized medicine if we expect things to get better.

refurb 12y ago
What needs to happen is a better connection between drug prices and the outcomes they produce. The EU does not have price controls on their drugs (only in limited circumstances). What the EU does (particularly the UK and DE) is evaluate drugs based on their own metrics to determine what a reasonable price is. If a drug is priced too high, they don't cover it. Right now the system for determining how much value a drug brings is broken (understandably since it's not easy to do). The best example I can provide is Sovaldi (used to treat hepatitis C). The manufacturer priced the drugs at $84K for a course of therapy. Insurance companies in the US screamed blood murder. The UK, which has a system to evaluate the utility offered by drugs (called QUALY - quality-adjusted life year) approved Sovaldi without any complaints. The drug is cheaper in the UK, but not by much.

JonnieCache 12y ago

Why has this been flagged off the front page?