Name Your Price: Daraprim Experiences an Up-pricing
JEAN PHILLIP SHAMI—With one purchase in August 2015, a 62-year-old drug used to treat a rare and deadly infection called toxoplasmosis experienced a drastic 5,000% price increase from $13.50 a pill to $750 a pill. Daraprim, which AIDS/HIV patients often take because of weakened immune systems, became the center of a greater controversy regarding “price gouging” in the biotech industry in the United States.
The cause? Martin Shkreli, a former hedge-fund manager turned CEO of Turing Pharmaceuticals, A flood of outcry resulted from the media, health professionals, and presidential candidates. Mr. Shkreli became the “most-hated man in America,” with critics decrying his actions as a call for regulation of the drug market, and demanding that he reverse the price of the drug. Mr. Shkreli’s response was less than noble as he took to Twitter and the media to boast of his actions.
Price Gouging: The Unregulated Weapon of the Drug Industry
Mr. Shkreli’s actions are not new to the biotech industry, but rather reflect a recent trend among pharmaceutical companies of purchasing the rights to older drugs and drastically raising the price per pill. It is a dangerous business mechanism in the greater framework of the monopolization and profiteering of drugs
For Mr. Shkreli, this is not his first go at price gouging. During his tenure as CEO of Retrophin, the company purchased the rights to Thiola, a kidney medication approved by the Food and Drug Administration in 1988, and raised the price from $1.50 per pill to $30 per pill. Other pharmaceutical companies have also engaged in price gouging. For example, Rodelis Therapeutics drastically increased the price of Cycloserine, a drug for treating multidrug-resistant tuberculosis, from $500 for 30 pills to $10,800 after acquiring the rights to the drug. At first blush, this trend appears to be a way for pharmaceutical companies and big name actors in the American drug industry—like Mr. Shkreli—to apply
At the Cost of Whom?
But who is paying the highest price for these exploitative acts? To the cynical eye, these refurbished “specialty drugs” cater to a small subset of the population and require a huge expenditure to produce for the pharmaceutical companies. However, this view is short-sighted: not only do these senseless acts of profiteering impact individual buyers, the American system of accountability and access to care as a whole is impacted. Pharmaceutical companies have fashioned a way to profit from patients who have no choice but to pay any named price to protect their health—another day to live—under the guise of a legal system that allows such acts.
Price gouging has serious public health implications for many patients who depend on medication to survive. If the 5,000% price increase of Daraprim does not speak volumes enough, imagine diabetics in need of insulin. Allowing price gouging to continue would permit major pharmaceutical companies to simply increase the price of insulin, leaving diabetics no choice but to pay the price to survive. At a certain point, our moral sensibilities must question such an alarming act left unregulated in the name of capitalism and innovation.
In effect, by exploiting flaws in our legal and regulatory system, actors such as Mr. Shkreli are benefiting from patient’s dependence on medication to price gouge and profiteer. The result is a market economy with a faulty price regulation scheme that allows corporate entities to charge exorbitant prices for inexpensive medications. Such a system is concerning for our country’s sick, who pay higher costs for medications in comparison to other countries where, for example, Daraprim costs no more than $20 per pill.
The United States needs a solution that limits the price of drugs and institutionalizes “rules of play” for pharmaceutical companies engaged in price setting. Simply put, the price of drugs in the United States needs to be regulated. Just as we regulate the quality and the path to market entry of drugs, we need to regulate the manipulation of drug costs to ensure patient access to needed health treatments. Regulation is not a call for “socializing medicine” or a green light for government encroachment. Rather, it is a recognition that limits exist to economic exploitation, and an individual’s life and health should not be the victim of corporate greed.
But when corporate greed meets ethical concerns in the realm of health, where do we as a society say “STOP” and begin to consider acceptable limits? Do we turn a blind-eye to the numerous lives affected by these selfish acts of price gouging in the drug industry? Or do we motivate ourselves to advocate for changes in policy in such a manner that allow for healthy competition, within limits. While the market economy and the system of competition through which it thrives has long driven America to success, we must be present to the reality that certain sectors of the economy—certain areas of our life—cannot be left to the devise of competition in the marketplace.
