Drug Company That Raised Life-saving Pill’s Price by 5,000% is Under Senate Investigation

© Regis Duvignau / Reuters

The Senate’s Special Committee on Aging wants to know more about how four drug manufacturers came to raise prices of their products. One of the companies, Turing Pharmaceutical, hiked the price of a rare pill by 5,000 percent.

Led by Chairwoman Senators Susan Collins (R-Maine) and Claire McCaskill (D-Missouri), the panel sent letters to Turing Pharmaceuticals, as well as Valeant Pharmaceuticals, Retrophin Inc, and Rodelis Therapeutics.

“The sudden, aggressive price hikes for a variety of drugs used widely for decades affect patients and health care providers and the overall cost of health care,” Collins said in a statement.

Also on Wednesday, House Democrats from the investigative committee asked their Republican counterparts to hold a vote on whether to sue Valeant and Turing.

Turing made a big splash in the news in September when it raised the cost of a toxoplasmosis drug by 5000 percent. The price of the anti-infective medication known as Daraprim, which is used to treat AIDS and cancer patients, went from $13.50 per pill to $750 in one fell swoop.

Bernie Sanders rejects donation from Martin Shkreli,
 head of Turing Pharmaceuticals

Meanwhile, Valeant upped its blood pressure treatment’s price over 600 percent in February. 

They say higher profits lead to better access for patients and progress in creating newer, better medical care.

The companies’ stock prices haven’t been going up though. Retrophin’s stock tumbled 14 percent while Valeant lost 2 percent after the government investigations were announced.

The Senate panel’s letter to Valeant Chief Executive Mike Pearson mentions several cases of price hikes for drugs that concerned them. The high blood pressure drug Nitropress’ price shot up 625 percent to $1,346.62 per vial. Isuprel, a heart medicine, went up 820 percent, costing $36,811 for 25 pills. Cuprimine, a rheumatoid arthritis capsule, jumped 2,949 percent in price to $26,189 for 100.

I wonder why Alexion, maker of Soliris, wasn't included in the list?

“The cost of development and acquisition and complexities in the health care cost reimbursement system,” goes into the cost of the medication, Valeant spokeswoman Laurie Little emailed Reuters.

Nice try, lady. None of those costs change when a hedge fund takes over a pharmaceutical company; yet, that's when prices suddenly sky-rocket. If that's the best defense you have, you are going to be very uncomfortable before the Senate committee.

Sen Claire McCaskill

Sen Susan Collins

 Retrophin’s kidney disease drug, Thiola, which went from $1.50 to $30 a tablet, is the subject of another Senate panel letter. The investigative committee wants to know more about what it takes to manufacture the drug and what’s in it, to see if the price change was justified.

Senators Collins and McCaskill, you are my heroes today. God bless you. 

Pharmaceutical Company All About Profits - CEO

Valeant Pharmaceuticals CEO: 

We’re in Business of Shareholder Profit, not Helping the Sick

— October 9, 2015

J. Michael Pearson - Shrewd or Greedy blood-sucking leech

Ring of Fire
Martin Shkreli might be the present poster boy for Big Pharma’s psychopathic greed; however, he is only the most public face of a problem that is drawing increasing scrutiny from lawmakers whose constituents are sick and tired of an industry that is literally murdering people in the name of profits. Recently, the Progressive media turned its spotlight on yet another blood-sucking corporate vampire: J. Michael Pearson, the smirking, self-satisfied CEO of Valeant Pharmaceuticals.

Pearson’s company is not in the business of curing disease and easing suffering. It exists to make big money for its shareholders, something that Pearson readily acknowledges: “[If] products are sort of mispriced and there’s an opportunity, we will act appropriately in terms of doing what I assume our shareholders would like us to do.” In “acting appropriately,” Valeant has raised the prices on several drugs this year – in some cases, as much as 800%.

How are they justifying these price increases? We know it doesn’t have one damn thing to do with the cost of research and development, because this is done primarily at public universities at taxpayers’ expense. Nope – what Valeant and other drug companies are doing is setting their prices “based on a range of factors, including clinical benefits and the value they bring to patients, physicians, payers and society.” There is also stated concern about potential competition from generic versions that may come on to the market in coming months.

The bottom line, however, is that pharmaceutical companies will charge whatever they think they can squeeze out of patients and government programs. It’s a new industry trend, unique to America’s profit-driven health care “system,” which still underlies the Affordable Care Act. Like the vulture Shkreli, Valeant buys up established pharmaceutical companies with older products, then raises the prices to astronomical levels, figuring that insurance companies and programs like Medicare and Medicaid will simply pay whatever they have to.

The insurance companies won’t. If they do, they will raise their co-pays to levels that patients cannot afford. As for those government programs, it is possible that Valeant and the rest of the industry has finally overreached itself. Price gouging by the pharmaceutical industry is finally getting some attention from Congress. Of course, Bernie Sanders has been on this issue for some time. Now, Sanders’ Democratic colleagues are calling for a formal investigation into Valeant’s pricing practices. The House Committee on Oversight and Government Reform is planning to issue a subpoena for information on recent price increases.

The ironic aspect here is that, instead of increasing shareholder returns, government scrutiny over those obscene price increases is having the opposite effect. Valeant’s stock price has dropped by 27% since mid-September, partially because of the impending investigation.

One is reminded of the old German folk tale of The Fisherman’s Wife. Published by the Grimm Brothers in the 19th Century, it tells of a woman for who was never satisfied with her blessings. She demanded more and more – and finally wound up with nothing as a result. Big Pharma has become just like the fisherman’s wife…and its insatiable greed will (hopefully) prove to be its own undoing.

For Democracy and Free Enterprise to work, it requires people of good-will making decisions. It seems there are fewer and fewer such men in America today. Can the system survive their spectacular greed and lack of conscience?

US Pharmaceutical Company Defends 5,000% Price Increase

Daraprim now sells for $750 (£485) a dose despite 

costing $1 to produce

Generic image of pharmaceuticals Thinkstock

From BBC US & Canada

The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%.

Turing Pharmaceuticals acquired the rights to Daraprim in August.

CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments.

The drug is used treat toxoplasmosis, a parasitic affliction that affects people with compromised immune systems.

After Turning's acquisition, a dose of Daraprim in the US increased from $13.50 (£8.70) to $750.

The pill costs about $1 to produce, but Mr Shkreli, a former hedge fund manager, said that does not include other costs like marketing and distribution.

"We needed to turn a profit on this drug," Mr Shkreli told Bloomberg TV. "The companies before us were just giving it away almost."

On Twitter, Mr Shkreli mocked several users who questioned the company's decision, calling one reporter "a moron".


Turing now joins Alexion, Pfizer and Flynn as soulless dispensers of death. People in countries without pharmacare programs will simply have to stop taking it. The industrialized countries with pharmacare help will find their health care budgets ballooning. Health care budgets are, of course, funded by tax-payers. What this means is that a company like Alexion with only a few thousand customers, can now collect money from every single taxpayer in the industrialized world.

In August, Britain's competition watchdog accused Pfizer and Flynn Pharma of breaching UK and European law by ramping up the cost of an epilepsy drug, given to more than 50,000 British patients, by as much as 2,600 percent.

The Competition and Markets Authority (CMA) said its provisional view was that Pfizer and Flynn Pharma each abused a dominant position by charging "excessive and unfair" prices for phenytoin sodium capsules.

Pfizer and Flynn said they were cooperating fully with the CMA and noted a final decision on any infringement of the law had not yet been made.

The CMA can fine companies up to 10 percent of annual worldwide sales if they are found to have breached competition law.

'Cost is unjustifiable'

The Infectious Diseases Society of America, the HIV Medicine Association and other health care providers wrote an open letter to Turning, urging the company to reconsider.

"This cost is unjustifiable for the medically vulnerable patient population in need of this medication and unsustainable for the health care system," the groups wrote.

Dr Wendy Armstrong of HIV Medicine Association also disputed the need to develop new treatments for toxoplasmosis.

"This is not an infection where we have been looking for more effective drugs," she told Infectious Disease News.

On Wall Street, biotech shares fell sharply on Monday after Democratic presidential candidate Hillary Clinton pledged to take action against firms hiking prices for specialty drugs.

"Price gouging like this in the specialty drug market is outrageous," Mrs Clinton said, citing Daraprim.

There is no indication in this unfortunate article about the patent on Daraprim. One would think that it having been around for 62 years there would be no patent. But how does that make sense for Turing to raise their price ridiculously if there is no patent?

I'm with Hillary, something needs to be done, pharmaceuticals should not be operating on a supply/demand basis because it is governments who have to pay. Those who do should lose their patent rights. 

Supply and demand marketing only works when its participants have some measure of conscience, and some small amount of control over their rampant greed. Big pharma appears to be completely devoid of both. Turing bought the rights to Daraprim for the express purpose of gouging every health care system in the world.

If You Think Pfizer and Flynn are Overcharging - You Ain't Seen Nothin' Yet, Meet Alexion

Pfizer and Flynn Pharma accused of overcharging by CMA

But wait 'til you read about Alexion 

BBC section Business

Pharmaceutical firms Pfizer and Flynn Pharma have been accused by the UK's competition watchdog of charging "excessive and unfair" prices for an anti-epilepsy drug.

Phenytoin sodium capsules, used by 50,000 people in Britain, are made by Pfizer and sold by Flynn.

Pfizer said it was co-operating with the Competition and Markets Authority.

When Pfizer made the drug under its Epanutin brand name, the NHS spent about £2.3m on the drug, the CMA said.

This amount soared to £50m in 2013.

The CMA said Pfizer sold UK distribution rights to Flynn in 2012, but continued to make and supply the drug to the company.

Analysis: Hugh Pym, health editor

This is a provisional report, with allegations made by the Competition and Markets Authority. The companies now have a chance to give formal responses and a final ruling may not be made until next year.

But it comes at a time of intense debate about NHS finances, as patient demand and the cost of treatment rise faster than budget increases. NHS England is grappling with the need for ambitious efficiency savings. It has been under fire for reducing the number of treatments available to patients through the Cancer Drugs Fund.

So today's provisional findings, with renewed scrutiny of drug spending, are the last thing the pharmaceutical industry needs.

It was after this deal that prices rose, said the watchdog in a provisional finding.

"The CMA's findings on dominance and abuse are provisional and no conclusion can be drawn at this stage that there has, in fact, been any breach of competition law. We will carefully consider any representations from Pfizer and Flynn Pharma before deciding whether the law has been infringed.," said Ann Pope, CMA senior director of anti-trust enforcement.

Companies can be fined as much as 10% of annual sales for abusing a dominant position in a market, depending on the seriousness of the abuse.

Pfizer and Flynn can now supply their own views and evidence before the watchdog makes a decision, it said.

"Ensuring a sustainable supply of our products to UK patients is of paramount importance to Pfizer and was at the heart of our decision to divest the product," said Pfizer in a statement. "Pfizer is co-operating fully with the CMA's ongoing investigation."

A message left with Flynn Pharma was not immediately returned.

Alexion sets prices for Solaris to what the market will bear, and then shames governments into paying as much as half a million USD per year for one patient's treatment.

And get this - Solaris costs only pennies to make!

Cost of one of world's most expensive drugs shrouded in corporate secrecy

Kelly Crowe
Medical science
CBC

What if your life depended on a drug that cost half a million dollars a year, every year, for the foreseeable future?

That's the price of Soliris, one of the world's most expensive drugs.

It is the only medicine available for people suffering from two ultra-rare diseases: paroxysmal nocturnal hemoglobinuria  (PNH) and  atypical haemolytic uremic syndrome (AHUS).

In both cases, the body attacks and destroys red blood cells, causing anemia, organ failure and ultimately death.

And for both diseases, Soliris is not a cure, but it can stop the attack on the body's tissue and organs, and patients can go back to living normal lives.

But only if they can get the drug, and many can't, because it is priced beyond the reach of almost everyone.

So how can one drug cost more than the annual income of all but a tiny percentage of households?

The reason is locked in the so-called "black box" of orphan drug pricing, where actual research and development costs are carefully guarded secrets known only to drug company executives.

Orphan drugs

"Orphan" in this context refers to rare diseases that languished untreated for decades because the patient population was too small to attract the interest of drug companies.

But now medications to treat these ultra-rare diseases are becoming more profitable than traditional drugs, because of government incentives, increased patent protection and a business model based on extreme pricing.

Most people assume the drug companies are charging sky-high prices to recover their research, development and manufacturing costs, because the patient population for rare diseases is so small.

But in reality, the extreme prices of these new orphan drugs are largely arbitrary, and have very little to do with the development and manufacturing costs, according to industry analysts and academic researchers who have studied the issue.

 I think the public science is well over 80 or 90 per cent of the work.
- Sachdev Sidhu, University of Toronto

In the case of Soliris, most of the research and development was done by university researchers working in academic laboratories supported by public funds.

"I think the public science is well over 80 or 90 per cent of the work," said Sachdev Sidhu, a University of Toronto scientist who is also in the business of drug development.

"Public resources went into understanding the molecular basis of the disease, public resources went into the technology to make antibodies and finally, Alexion, to their credit, kind of picked up the pieces."

Misconception

Sidhu spent years researching monoclonal antibodies, the underlying elements in Soliris, for a U.S. biotech company. Now he's started his own company, developing drugs that are similar to Soliris.

He says it's time to correct the impression that without high drug costs there would be no new drugs.

Sachdev Sidhu says drugs prices should be based on transparent knowledge of actual
 costs and how much public science went into the development. (Kelly Crowe/CBC)

"I think that's a major misconception," he said. Most drugs are based on scientific discoveries made in publicly funded research labs, by academic scientists.

"The real story is it's all connected back to students, post-doctoral fellows, people doing very, very basic research accumulating that knowledge," Sidhu said.

The extreme price of Soliris also can't be explained by the manufacturing costs, he went on, because monoclonal antibodies are much less expensive to make than people think.

"We know roughly what that costs, and it's far, far, far less than the cost of the drug," he said. "It probably costs less than 1 per cent of the price of the drug to make the drug, so there's a lot of wiggle room on how to price the drug."

Unique framework

CBC asked Alexion for an interview to talk about why the drug costs so much. But the company refused. Gee, I wonder why?

In a short statement, it said drug pricing depends on a "unique decision-making framework" that takes into account "the rarity and severity of the disease, the absence of effective alternative treatments, indirect medical and social costs, and clinical data that demonstrate the impact of the drug on patients who desperately need it."

In other words, Alexion set the price of Soliris at half a million dollars a year, because that's what it thinks the market will bear, based on the fact that the drug works and patients have no other treatment options.

Alexion knows that individual patients can't afford to pay half a million dollars a year for the rest of their lives.  The business model depends on public health-care systems and private insurance companies reimbursing the million-dollar drug bills.

But how many million dollar drugs can a public health system afford?  Not many, according to health economist Michael Law, at the University of British Columbia.

"As more and more of these expensive drugs like Soliris come along," he says, "we're going to have a reckoning, in terms of how we make those decisions."

Soliris is Alexion's only drug, but it's a blockbuster, earning revenues of more than $6 billion in just eight years, and making Alexion one of the fastest growing companies in the world.

What this report leaves out, but was in Kelly's TV version of this story, is that when patients are refused the drug because the country, or province, or insurance company won't cover it, the patient often seeks help to publicize the fact to garner sympathy and maybe embarrass the government or insurance company to change their mind. They often do; but here's the kicker, these patients are often helped with their media blitz by media experts paid for by Alexion! That's practically criminal!

It's certainly immoral! Kids in New Zealand are refused treatment so that Alexion can make truckloads of stinking, filthy money. Children suffering all their lives and even dying because of boardroom greed of biblical proportions.

Alexion's patent should be nullified for having been exceedingly abused, then the price will come down. Similarly, Pfizer and Flynn should be warned. Governments should reduce the length of drug patents dramatically if companies are going to charge the maximum the market can bear.


Countries pushing back

So far, Alexion has refused to justify the high price, even when asked by national health officials in the U.K., who were struggling with the decision about whether to recommend that the British government cover the drug.

Despite that refusal, the drug was approved for coverage in Britain last year.

But in New Zealand, the drug was denied government coverage, because of "the very high price being demanded by Alexion," according to the decision document. That decision leaves New Zealand patients with no access to a drug that could save their lives.

In Canada, there are also patients who can't get access to the drug, although some provinces will cover the cost for some patients based on certain criteria.

In the meantime, Canada's watchdog on drug prices is accusing Alexion of charging more for Soliris in Canada than anywhere else in the world: around $700,000 per patient per year.

This drug is forcing us to have to rethink how we say yes and how we say no when it comes to prescription drugs
- Michael Law, University of British Columbia

The Patent Medicine Prices Review Board held a preliminary hearing this week in Ottawa, the first step in a process aimed at forcing Alexion to lower the price, and even repay some money.

Alexion is disputing the allegation.

"This drug is forcing us to have to rethink how we say yes and how we say no when it comes to prescription drugs," said Law.

Soliris is among the first of what will become a wave of new therapies for rare diseases, based on developments in monoclonal antibodies.

"We will be getting a lot more drugs like this," said Sidhu. "The basic rule of thumb, if a drug costs more than an average household income, then it's unsustainable. Something has to be done about that. Clearly it's not what the system was designed to handle."

Governments do not have the power to force drug companies to justify the price of drugs that will be covered by public health-care systems. And industries claim that they need complete confidentiality to protect trade secrets.

But Sidhu says there are ways to respect that need and still have greater transparency in drug pricing, including an accounting of how much of the research was done in the public domain.

"I think we should decide what drugs cost based on a transparent knowledge of how much effort went into it, and who that effort came from. I'm always surprised how little knowledge there is of that."

In the meantime, governments should be bracing themselves for more million dollar drugs that are making their way through the pipeline.

It's estimated there are 7,000 orphan diseases that need some kind of drug therapy, and new developments in biotechnology are creating many new opportunities.


It's the dawn of an era when it might be the lack of money, rather than the lack of drugs, that will block access to treatment for rare diseases.

Kelly Crowe is a medical sciences correspondent for CBC News, specializing in health and biomedical research. She joined CBC in 1991, and has spent 25 years reporting on a wide range of national news and current affairs, with a particular interest in science and medicine.