In September, Martin Shkreli, the 32-year-old former hedge fund manager who is CEO of Turing, became the face of the industry's greed when he insisted on national television that the $750-a-pill price on the formerly $18-a-pill drug Daraprim — a more than 4000 percent increase — was justified and called a journalist a "moron" on Twitter for asking why. Countless critics — including doctors, patients, and Democratic presidential hopefuls Hillary Clinton and Sen. Bernie Sanders (I-Vt.) — lambasted him and, shortly afterward, even his own brethren booted his company from two different industry groups.
The outcry also prompted scrutiny of other companies that had taken similar actions.
Valeant, in the summer, quadrupled the price of its drug Cuprimine which treats an inherited disorder that can cause liver and nerve damage. The New York Times reported that a user will have to pay approximately $1,800 a month out of pocket as compared with the about $366 he was paying before the increase:
Cuprimine is just one of many Valeant drugs whose prices have spiked as part of the company’s concerted strategy, which has richly rewarded its investors and made it one of Wall Street’s most popular health stocks. But Valeant’s habit of buying up existing drugs and raising prices aggressively, rather than trying to develop new drugs, has also drawn the ire of lawmakers and helped stoke public outrage against the growing trend of higher and higher drug prices imposed by big drug companies. This year alone, Valeant raised prices on its brand-name drugs an average of 66 percent, according to a Deutsche Bank analysis, about five times as much as its closest industry peers.
Retrophin, a public company where Shkreli served as an officer and director before being ousted, has been criticized for hiking the price of an old drug called Thiola more than 20-fold. A University of Pittsburgh School of Medicine professor wrote in The Street about the case:
The drug is used almost exclusively for patients suffering from cystinuria, a particularly nasty disease affecting the kidneys. Without belaboring the science too much, patients suffering from cystinuria have kidneys which excrete cysteine abnormally. This cysteine then solidifies and creates kidney stones. This painful process continues forever. It never stops and there is no cure. Imagine getting a kidney stone every day. That is the life of the uncontrolled cystinuria patient… Thiola is an old drug. The first citation in my urology textbook is from 1975. Last May, Retrophin took over U.S. marketing rights to Thiola from a private company. When Retrophin acquired rights to Thiola, the drug cost about $1.50 per pill. [Patients take multiple pills per day.] Now, Retrophin has decided to charge more than $30 for the same Thiola pill. Retrophin says it has plans to change the Thiola dose and develop an extended release version of the drug, but I have seen none of those changes yet. To my knowledge, Retrophin hasn't yet done any of this work -- except to drastically increase Thiola's price.
Separately, the United States Attorney’s Office for the Eastern District of New York is investigating Shkreli for his actions during his time there. The allegations are complex, and the details of the case haven't been made public, but Newsweek has reported that "the inquiry, according to court records and people with knowledge of the inquiry, involves such a vast number of suspected crimes it is difficult to know where to start."
In October, Rodelis Therapeutics, which specializes in a drug for a rare disease, found itself in the spotlight after its plans to raise the drug's price more than 20-fold were revealed. Only a few weeks after purchasing the rights to the medicine, it agreed to return it to the nonprofit that previously had the rights. According to Bloomberg:
The price for the drug, called cycloserine, briefly soared to $360 per capsule, or $10,800 for package of 30 capsules, after Rodelis Therapeutics acquired the drug in August, according to Dan Hasler, president of the Purdue Research Foundation. Rodelis obtained rights to the treatment from the Chao Center for Industrial Pharmacy & Contract Manufacturing, part of the Indiana-based Purdue Research Foundation. The Chao Center had previously sold the treatment for about $20 a capsule, according to Hasler.
A congressional investigation has seemed almost inevitable since Shkreli — not-so-affectionately known as 'pharma bro' — made his stand. While Shkreli later backed down and said he would roll back some of the price of Daraprim (without being specific about how much), doctors and journalists have reported in recent days that they have not seen any evidence that the price has changed.
On the House side, Democrats have criticized their Republican counterparts for blocking efforts to investigate price hikes.
"Over the past year, Democrats have asked you repeatedly to take action on this critical issue, but you have refused every request," a group of Democrats wrote in a letter to the House Oversight Committee, chastising Chairman Jason Chaffetz (R-Utah), on Wednesday. "Even if you have no interest in investigating these abuses on behalf of your own constituents, we ask that you not block us from investigating them on behalf of ours."
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