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Martin Shkreli’s trial shows just how angry people are about drug prices

Former Turing Pharmaceuticals CEO Martin Shkreli arrives to federal court in New York, Monday. (AP Photo/Seth Wenig)
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Martin Shkreli isn't actually on trial for buying an obscure antiparasitic drug used by AIDS patients and jacking up the price astronomically, but he might as well be.

Three days into Shkreli's trial for alleged securities fraud -- for an issue unrelated to his notorious pharmaceutical price-hike --potential jurors kept circling back to his infamous decision to buy a little-known, little-used drug that was invented before he was born and raise the price overnight, from $13.50 to $750 a pill.

“The only thing I would be impartial about is which prison he goes to," one juror said. That person was dismissed -- as more than 250 were, as my colleague, Renae Merle, reports.

It would be easy to see this courtroom anger as a simple reflection of public outrage about drug prices, something that President Trump tapped into when he said the pharmaceutical industry was "getting away with murder." It certainly seems unlikely, after all, that many of the jurors in that courtroom have been personally touched by Shkreli's price hike -- the drug, Daraprim, is used by only about 2,000 Americans each year.

That leaves two options: Shkreli's smirk has become the face of any high drug price -- or the moral outrage is related to what Shkreli actually did.

Joshua Sharfstein, a professor at the Johns Hopkins Bloomberg School of Public Health, favors the latter interpretation.

"It’s like if somebody increased the price of water during a hurricane; it’s that kind of price-gouging that people really hate," Sharfstein said. "It feels fundamentally unjust and unfair. Think if you needed something for your family and people raised the price because they could."

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Sharfstein says that when you ask lots of people what the right price is for a brand new drug, the answer isn't always clear. People may well think drug prices at large should be lower, but there's far less agreement on the value of an innovative medicine. When a company takes an old drug without any competitors and boosts the price, however, there's near consensus.

"A significant majority of people feel like companies that raise the price of an existing drug just because they can are doing something profoundly unfair -- everyone agrees with that," Sharfstein said. "If you can just buy something and get a monopoly on it, but increase the price to the stratosphere to make more money, that’s not what people consider reasonable."

Less clear is whether Shkreli's public browbeating by incensed potential jurors will renew anger at the pharmaceutical industry. The outrage over his price increase in 2015 spilled over into a larger scrutiny of the pharmaceutical industry that has triggered congressional hearings. The drug industry has been on a mission the last few months to deflect criticism of its pricing by blaming outliers like Shkreli, hoping to convince the public that true pharmaceutical companies act more responsibly. "Less hoodie, more lab coats," is a sentiment that Stephen Ubl, the president of the trade group PhRMA, has repeated many times over the last few months.

Whether that's working is uncertain. Many in the public think drug prices are too high. Although many pharmaceutical companies do invent drugs at great expense, it has also been a widespread industry practice to boost prices of existing drugs over time, without any clear explanation. That practice has come under pressure this year, with some in the industry moderating price hikes -- although pharma giant Pfizer raised the prices of 91 drugs by 20 percent this year, according to the Financial Times.

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Most people in the general public aren't paying attention to those kinds of industry trends. And because the costs of drugs are often split with insurers, even the concept of "drug price" is a nebulous thing -- it could be a person's co-pay or it could be a list price they see printed on their pharmacy receipt, which may represent a number that no one actually pays due to secretly-negotiated rebates. Overall, people on average are actually paying less for their drugs. A recent report from the QuintilesIMS Institute, a research organization, found that patients are, on average, paying less out-of-pocket for medications: their share has dropped from $32 per name-brand prescription in 2013 to $28 in 2016.

Shkreli's day in court may reveal that there is at least consensus about one aspect of drug pricing: little patience for companies that exploit monopoly positions on old drugs to rake in profit.

Maryland recently passed a law to allow its attorney general to challenge "unconscionable" prescription drug price-gouging in court. The Food and Drug Administration recently published a list of old, off-patent drugs that don't yet have an approved generic in the hopes of increasing competition.

Renae Merle contributed to this story.