Today’s Managing Health Care Costs Number is $750
We’ve long known that there is no good way to constrain costs of unique branded pharmaceuticals. It’s hard not to cover a drug for which there is no substitute, and drugs covered by patents are rarely subject to substitution. The price the market will bear is pretty high, especially for oncology drugs.
We’ve also seen single and dual manufacturer generic drug manufacturers hiking prices like crazy in recent years. We’ve seen colchicine go from a low-priced commodity made by over a dozen manufacturers to a pseudo-brand made by a single generic manufacturer. Colcrys debuted at a scandalous $5 a pill. It’s now between $6 and $11 a pill, unless you use a coupon. As I’ve noted, coupons are a subterfuge to allow manufacturers to charge high prices for a drug while still successfully selling to more cost-conscious purchasers who are paying the bill out of pocket.
Today’s New York Times reports that Turing Pharmaceuticals has just hiked the price of pyramethamine from $13.50 a pill to $750 a pill. Pyramethamine is an antimalarial first licensed in 1953, and is critical to the treatment of the parasitic infection toxoplasmosis. The drug cost just a dollar a pill several years ago, before it was involved in multiple financial transactions which hiked the price. The manufacturer has also moved to “controlled distribution” which makes it difficult for competing generic companies to obtain samples necessary to bring a competing product to the market.
The Times quotes the CEO of Turing:
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.
But let’s be frank. We tolerate high costs of “orphan drugs” to encourage pharmaceutical companies to bring new agents to the market. Why should we pay specialty drug rates for a pharmaceutical product licensed in 1953?
Ezekiel Emanuel opined earlier this month that we might need price caps or government purchasing for specialty drugs, and there were angry letters to the editor decrying his proposals (including from former VT governor Howard Dean(!)). Price hikes like this make it more likely that the move to restrict drug prices will gain momentum.
