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Dramatic increases in drug prices spark debate

By Alicia Green, Point Park News Service:

Stuart Fisk has cared for people with HIV/AIDS for 25 years.

The Allegheny Health Network nurse practitioner and director of the Positive Health Clinic said he remembers when the drug Daraprim was much more commonly used because a lot more people were sick and dying of the parasitic disease toxoplasmosis.

Daraprim is used to treat people with weak immune systems, which can be found in patients with HIV/AIDS and cancer, or even pregnant women.

“(Daraprim) saves many lives,” Fisk said. “There are certainly parts of the U.S. and parts of the world where people are still getting quite sick from HIV and developing toxoplasmosis. It’s still a life-saving drug for some people. It’s probably the best drug available at this point.”

After acquiring Daraprim from Impax Laboratories for $55 million, drug company Turing Pharmaceuticals increased the price of the drug overnight in September 2015 from $13.50 a tablet to $750, sparking outrage.

Turing is not the only company to increase drug prices, and that has sparked a national conversation about ensuring fairness in access to drugs.

Turing founder Martin Shkreli was arrested in 2015. Photo courtesy ABC News.
Turing founder Martin Shkreli was arrested in December 2015 and charged with securities fraud. Photo: Associated Press/Tribune-Review.

[Since the controversy surrounding the price of Daraprim, Turing founder and CEO Martin Shkreli was arrested in December 2015 by the FBI. He was charged with securities fraud from crimes committed during his time as a hedge fund manager and running his first biopharmaceutical company, Retrophin. Shkreli has pleaded not guilty.]

“It is easy to criticize the pharmaceutical industry,” Yaroslav Kryukov, assistant professor of economics at Carnegie Mellon University, said. “The prices of drugs are high (and) the U.S. is spending a substantial portion of its GDP (gross domestic product) on healthcare. Moreover, large pharmaceutical corporations earn decent profits, and their advertising spending is on the same scale as their investment into development of new drugs.”

Kryukov said that drugs for rare conditions are a tougher area. While development costs are still the same, they are spread over a much smaller number of doses sold, which pushes up the price.

“If there is a sudden, recent increase in the actual price of drugs (rather than just media attention to them), one potential trigger could be that the Affordable Care Act increased the share of insured people,” Kryukov said. “So pharmaceutical companies no longer have reason to keep the drug affordable for uninsured people.”

When asked about the practice of dramatically increasing and instantly raising prices when a drug is acquired by a new company, Fisk said he has noticed that it’s been happening more often than in the past.

“There’s been several drugs this has happened to in the last few years,” he said.

Fisk cited the drug Naloxone, which works to prevent heroin and opiate overdoses, as another example.

Aspinwall Police officer David Komora shows the nasal Narcan kit he used in February to save the life of someone suffering from a drug overdose. Naloxone is the generic form of Narcan. Tribune-Review.
Aspinwall Police officer David Komora shows the nasal Narcan kit he used in February to save the life of someone suffering from a drug overdose. Naloxone is the generic form of Narcan. Photo: Tribune-Review.

“It’s a drug that was used pretty commonly in emergency medicine,” Fisk said. “But in the last few years it’s become extensively used in community settings in response to this big epidemic of heroine overdose and opiate overdose. It went from being a very cheap drug when only a few people were using it to a much more expensive drug now that its become more commonly used.”

He continued, “You see this kind of thing in healthcare where you will see these kinds of rapid increases in drug prices.”

Valeant Pharmaceuticals has been criticized for increasing the prices of the drugs Isuprel, Nitropress, Cuprimine, and Syprine. Rodelis Therapeutics increased the price for Cycloserine, a drug used to a treat a rare form of tuberculosis, before backtracking. And in the past Ovation Pharmaceuticals was in the spotlight for drug price increases of its own.

After reaching out to each company to find out why it increased prices on certain drugs, only Valeant responded. A spokesperson from Valeant directed the Point Park News Service to a letter the company sent to Sen. Claire McCaskill, a Missouri Democrat.

“There was considerable room to increase the price of both drugs without unduly depleting the funds available to the hospitals from payers,” the letter says. “… Valeant implemented these increases in list prices to ensure that the prices reflected the value of the drugs to the hospitals and patients.”

Kryukov said the listed price of drugs is higher than what most buyers pay.

“Most people get drugs through their insurance plan, and insurance companies often negotiate substantial discounts from makers of the drug,” he said.

Fisk, the HIV/AIDS worker, said he does not think it’s fair for consumers to have to deal with the cost of drugs rising rapidly and dramatically.

“I think that’s one of the problems with treating health care and drugs as commodities that can be traded on the open market like a flat-screen TV or a car,” Fisk said. “If I want to buy a car or a TV, I can shop around. I can pay a lot of money. I can pay a little money for one. I can choose. If my brain has a parasite in it, I am going to die. I don’t get to go shop around.”

He noted that all drug companies have patient-assistance programs and will give drugs cheaply or free to people who really can’t afford them. He said the bigger problem with the price increases has to do with the people who have insurance.

“If the insurance companies are forced to pay these high prices, then they’re just going to pass on those costs,” Fisk said. “It really gets spread out and kind of hurts everybody. It’s one of the reasons why we have such [an] incredibly rapid increase in health care costs and costs for health care insurance in the U.S.”

Imprimis Pharmaceuticals recently announced that it would offer an alternative to Daraprim at only $1 a pill.

“Because of [our CEO’s] past history and having worked and served the AIDS/HIV market for a number of years, he thought it was a bit of a large gap,” John Saharek, chief commercial officer for Imprimis, said about Turing’s 5,000 percent increase on Daraprim, in a telephone interview. “He saw that as a huge disadvantage to patients and wanted to serve that market appropriately.”

Imprimis Pharmaceuticals offers patients Daraprim $1 per tablet. Photo courtesy of LinkedIn.
Imprimis Pharmaceuticals offers patients an alternative to Daraprim at $1 per tablet.

Saharek said he believes that pharmaceutical companies have a responsibility to keep drug prices reasonable for patients, especially when it comes to generic drugs that have been on the market for many years. He noted that Daraprim is a 62-year-old drug.

“In the generic side, there needs to be some changes in terms of some of these drugs where people have acquired the license to the generic and have increased the pricing,” Saharek said. “We need to work within what is allowable. Some policy changes could help across the board.”

Saharek said Imprimis is a “different model than what you would consider your traditional pharmaceutical company.”

“We certainly don’t believe all pharmaceutical companies act that way,” Saharek said. “A couple players have been called out by Congress and by others. I’ve worked in ‘Big Pharma’ as well, and I can’t say everyone has that approach. But there are some folks that have obviously been identified.”

While Imprimis has found and offered an alternative to Daraprim, Saharek said it is currently looking at other drugs too. The company has received emails from patients asking it to look into drugs they take with high prices.

“We’ve gotten tremendous outpouring,” Saharek said. “Out of all the hundreds of emails, probably 75 percent of them were thank yous. Twenty-five percent of them were patients inquiring about other options.”

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