The drug many people are talking about this week isn’t a breakthrough biotech blockbuster that cures a deadly disease. It’s a pill that has been around since the 1950s. The medicine, Daraprim, treats a parasitic infection called toxoplasmosis that can affect people with compromised immune systems.
But it’s the cost of Daraprim, not what it does, that has attracted so much attention. In August, startup Turing Pharmaceuticals acquired the drug, whose patents expired long ago. The new owner’s first order of business: raising the price by more than 5,000 percent, from $13.50 to $750 a pill. While Daraprim may represent an extreme example of drug makers selling products at whatever price they believe the market will tolerate, the angry buzz over this formerly obscure treatment is intensifying pressure on regulators, lawmakers, and companies to take aggressive — and overdue — action on drug pricing. Specifically, it may be time to consider allowing Medicare to negotiate discounted prices with companies. The government agency already does that for most medical services and procedures.
A Sunday New York Times story about the staggeringly high increase in the cost of Daraprim ignited a firestorm of criticism, including condemnation by Democratic presidential candidate Hillary Clinton. “Price gouging like this in the specialty drug market is outrageous,” she tweeted.
Turing reacted to the backlash by offering financial assistance to people who need Daraprim, and said it would provide the drug “without charge to qualified, uninsured patients.” About 2,000 people, including HIV patients, depend on it. Turing’s unapologetic chief executive, Martin Shkreli, said the old price was too low to warrant investment in research on a better version of the drug, which is why Daraprim has remained unchanged for 62 years. By late Tuesday, however, Shkreli was giving ground — he promised to drop the drug’s cost by an undisclosed amount. On Wednesday, BBC News suggested he was “the most hated man in America.” But by focusing the political conversation on drug prices — at least for the moment — Shkreli may have unintentionally performed a public service.
Giving Medicare price-negotiation power is part of a somewhat hazy drug-cost plan that Clinton unveiled Tuesday. She also wants to allow Americans to buy lower-cost medicines from outside the United States, limit monthly out-of-pocket expenses to $250, and reduce the amount of time manufacturers have to exclusively sell a new drug. That last measure would make cheaper generic versions of name-brand treatments available sooner.
Some of the provisions in Clinton’s proposal, which caused biotechnology stocks to dive Monday, are similar to those introduced before the Daraprim controversy by Bernie Sanders, her rival for the Democratic presidential nomination. Sanders has in the past called for more radical reform — he supports the single-payer concept that repeatedly has failed to gain traction.
The drug industry this week warned that reforms like those Clinton favors — never mind Sanders’ — would inhibit research into new lifesaving drugs. John Castellani, chief executive of the trade group PhRMA, said they “would restrict patients’ access to medicines, result in fewer new treatments for patients, cost countless jobs across the country, and could end our nation’s standing as the world leader in biomedical innovation.”
Regulation of prices must balance affordability against the expense and risk involved in finding and developing new treatments that offer hope to patients who otherwise would suffer or die. Only about five out of 5,000 experimental drugs make it to human testing, and just one of those ends up in a pharmacy. But some of industry’s longstanding opposition to government intervention is undermined by a history of suspect pricing practices and the massive profit margins pharmaceutical companies reap for successful drugs. The sticker shock caused by Daraprim further weakens the industry’s case against price controls of any kind.