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Company hikes price 5,000% for drug that fights complication of AIDS, cancer

Threegoofs said:
LOL. This is total BS.

This company has no infrastructure to research toxoplasmosis cures. Its a generic drug manufacturer. The company statement is pure bull**** if you had an inkling of the expertise it takes to develop cures for thngs like toxo - especially given the profit motive is minimal, since we have simple effective agents like pyrimethimine.

Being that pharmacy and the drug industry is my field, and I have personally treated several cases of toxo in my career, I'm acutely aware of how uncommon the usage is. I'm also acutely aware of how fantastically cheap the drug is to produce and how its probably not very profitable at 8K people per year, but its certainly not unprofitable - it still brings in millions in revenue.

This is a short term price gouge, nothing more. Eventually, some Indian generic manufacturer will develop a generic, and the price will plummet, leaving Turing to look to another specialty drug to pirate in the short term. Its bad for patients, bad for the health care indusry, bad for virtually everyone but the shareholders of Turing and confused Randians like yourself.
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I guess those needing the treatment will need to wait for someone else to make the drug, or pay the higher price. In the meantime, people can just keep denigrating a company who has no obligation whatsoever to keep supplying the drug.
 
Threegoofs said:
Actually, in 1963, when Daraprim came to market, it didnt cost that much. And Turing didnt pay any of it, it was Beecham Pharmaceuticals (if I remember correctly).

Turing is also not doing any R&D for new drugs. They arent big enough and dont have the expertise. They are trying to repurpose old drugs for rare indications so they can charge up the wazoo for them - thats their business model. Not real hard, not real expensive, but it pays.
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After discussing this with other posters and reading up on it a bit on my own I kind of figured that was what's going on. I think Turing paid something like $55 million for the drug and so probably have a year (?) or so to make that back and their profit before a generic comes out?

Since you're in the field I have a question if you don't mind. How real is that $750 per pill list price? From what I've read pretty much no one pays that. What would the actual price - to insurers or individuals be?

I agree it's sleazy and an abuse of the free market system.
 
ocean515 said:
I guess those needing the treatment will need to wait for someone else to make the drug, or pay the higher price. In the meantime, people can just keep denigrating a company who has no obligation whatsoever to keep supplying the drug.
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They actually do have a social obligation to keep supplying the drug.

If they dont want to do it, sell it. Or announce that manufacturing will stop. But its harmful for health care delivery to stop supplying without notice.

I never thought it would need to be written out like this, or put into law because any ethical drug manufacturer understands this concept. I guess it takes a dick like the owner of Turing to make it a regulation.
 
Gaius46 said:
After discussing this with other posters and reading up on it a bit on my own I kind of figured that was what's going on. I think Turing paid something like $55 million for the drug and so probably have a year (?) or so to make that back and their profit before a generic comes out?

Since you're in the field I have a question if you don't mind. How real is that $750 per pill list price? From what I've read pretty much no one pays that. What would the actual price - to insurers or individuals be?

I agree it's sleazy and an abuse of the free market system.
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Actually, the list price is probably real. The company has no incentive in offering rebates at all - its a drug used for a small population, and there is no competition. There may be a traditional -16% off AWP (avg wholesale price), but maybe not.
 
Threegoofs said:
They actually do have a social obligation to keep supplying the drug.

If they dont want to do it, sell it. Or announce that manufacturing will stop. But its harmful for health care delivery to stop supplying without notice.

I never thought it would need to be written out like this, or put into law because any ethical drug manufacturer understands this concept. I guess it takes a dick like the owner of Turing to make it a regulation.
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There is no social obligation to sell a product that other companies could just as well produce. With only a 8,000+ prescriptions filled last year, it's amazing the drug is produced at all.
 
ocean515 said:
There is no social obligation to sell a product that other companies could just as well produce. With only a 8,000+ prescriptions filled last year, it's amazing the drug is produced at all.
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Yes, there is certainly a social obligation when it comes to health care.

You dont stop selling a single sourced lifesaving drug with no warning based solely on profitability. Its quite obvious for some of us. In fact, I dont think its ever happened before in the industry.

Its not amazing at all that its produced. If I recall, the revenues when it sold in 2010 for about a dollar a pill were $1MM per year. I know plenty of companies that would love a product like that.
 
It appears he has caved to public revulsion, and reduced the price. The increase was not the act of an entrepreneur, but a sociopath.
 
Manc Skipper said:
It appears he has caved to public revulsion, and reduced the price. The increase was not the act of an entrepreneur, but a sociopath.
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At least one person here is celebrating the sociopathologic.

If he didnt bend to public pressure, I wouldnt doubt that this would lead to regulation, or at least the generic and ethical pharma industries to develop a code of ethics around this.
 
Threegoofs said:
Yes, there is certainly a social obligation when it comes to health care.

You dont stop selling a single sourced lifesaving drug with no warning based solely on profitability. Its quite obvious for some of us. In fact, I dont think its ever happened before in the industry.

Its not amazing at all that its produced. If I recall, the revenues when it sold in 2010 for about a dollar a pill were $1MM per year. I know plenty of companies that would love a product like that.
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Perhaps the answer is to have the government get into the drug production business to insure a steady supply. Otherwise, you're advocating for a very slippery slope to be created.

By the position you are taking you are advocating a company remain in business for social reasons, rather than financial ones. I don't see how that would work.

Should a struggling company tell their creditors they can't pay them because they have a social obligation to stay in business? Should the government force suppliers to continue to provide raw materials because their customer has a social obligation to remain in business?

Of course, there is the GM/Chrysler example, so perhaps this ground has already been travelled.
 
Threegoofs said:
Actually, in 1963, when Daraprim came to market, it didnt cost that much. And Turing didnt pay any of it, it was Beecham Pharmaceuticals (if I remember correctly).

Turing is also not doing any R&D for new drugs. They arent big enough and dont have the expertise. They are trying to repurpose old drugs for rare indications so they can charge up the wazoo for them - thats their business model. Not real hard, not real expensive, but it pays.
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Vote for Trump, because he'll give hedge-funders the bump!
 
Threegoofs said:
Actually, the list price is probably real. The company has no incentive in offering rebates at all - its a drug used for a small population, and there is no competition. There may be a traditional -16% off AWP (avg wholesale price), but maybe not.
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I read somewhere that Medicare/caid and most insurers contract for lower prices. That made me think that maybe the whole thing was a red herring because the list price is really vapor. Guess not.

Thanks.
 
ocean515 said:
Perhaps the answer is to have the government get into the drug production business to insure a steady supply. Otherwise, you're advocating for a very slippery slope to be created.

By the position you are taking you are advocating a company remain in business for social reasons, rather than financial ones. I don't see how that would work.

Should a struggling company tell their creditors they can't pay them because they have a social obligation to stay in business? Should the government force suppliers to continue to provide raw materials because their customer has a social obligation to remain in business?

Of course, there is the GM/Chrysler example, so perhaps this ground has already been travelled.
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Social obligation is a common concept in the health care industry. There are just simply things you dont do, and putting the lives of patients at risk needlessly is one of them.

If you have a drug that is relied upon by a subset of patients who have no other option, you need to ensure you are doing your best to ensure those patients have access to the medication, which may mean you alter the market you will stop manufacturing by a certain date to allow other generic companies to ramp up approval/production. If the companies done adhere to these social obligations, then the government WILL step in somehow. Since we all want to avoid this, it makes sense for the industry to live up to its social obligations.
 
Gaius46 said:
I read somewhere that Medicare/caid and most insurers contract for lower prices. That made me think that maybe the whole thing was a red herring because the list price is really vapor. Guess not.

Thanks.
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They do that all the time - most drug prices are pretty significantly discounted to insurers.

But not stuff like this.
 
We seem to be missing the point. Now that we have Obamacare, why does it matter? Everybody has affordable coverage now, is issue is between insurance companies and the pharm company. So it's not an issue.
 
Anomalism said:
Company hikes price 5,000% for drug that fights complication of AIDS, cancer

A drug treating a common parasite that attacks people with weakened immune systems increased in cost 5,000% to $750 per pill. At a time of heightened attention to the rising cost of prescription drugs, doctors who treat patients with AIDS and cancer are denouncing the new cost to treat a condition that can be life-threatening. Turing Pharmaceuticals of New York raised the price of Daraprim from $13.50 per pill to $750 per pill last month, shortly after purchasing the rights to the drug from Impax Laboratories. Turing has exclusive rights to market Daraprim (pyrimethamine), on the market since 1953.
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Some changes in the drug patent laws are needed.
 
tech30528 said:
We seem to be missing the point. Now that we have Obamacare, why does it matter? Everybody has affordable coverage now, is issue is between insurance companies and the pharm company. So it's not an issue.
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Except for the fact that it will increase healthcare cost to insurers, taxpayers, etc.

Also, the way some insurance plans work, this may signfiicantly increase patients OOP cost.

But you really didnt want a real answer did you? You just wanted to show off your ignorance about the workings of the ACA.
 
Threegoofs said:
Except for the fact that it will increase healthcare cost to insurers, taxpayers, etc.

Also, the way some insurance plans work, this may signfiicantly increase patients OOP cost.

But you really didnt want a real answer did you? You just wanted to show off your ignorance about the workings of the ACA.
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So the Affordable Care Act doesn't make health care affordable?
 
Threegoofs said:
Has nothing to do with drug patent laws.
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You can't hike the cost 5000% unless you have a patent on the product. Elsewise someone will just come along and undercut you.

A patent should be granted only on condition that reasonable prices will be charged for the product.
 
tech30528 said:
So the Affordable Care Act doesn't make health care affordable?
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No. And we didn't get to keep our doctor. And we didn't get to keep our plan. And we didn't save $2,500 a year on the premium.
 
LowDown said:
You can't hike the cost 5000% unless you have a patent on the product. Elsewise someone will just come along and undercut you.

A patent should be granted only on condition that reasonable prices will be charged for the product.
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They dont have a patent on the product. Its free to be manufactured by any generic manufacturer.

Soemone will come and undercut them. The problem is with the lead time in pharma, it may take a year or two.
 
Threegoofs said:
LOL. This is total BS.

This company has no infrastructure to research toxoplasmosis cures. Its a generic drug manufacturer. The company statement is pure bull**** if you had an inkling of the expertise it takes to develop cures for thngs like toxo - especially given the profit motive is minimal, since we have simple effective agents like pyrimethimine.

Being that pharmacy and the drug industry is my field, and I have personally treated several cases of toxo in my career, I'm acutely aware of how uncommon the usage is. I'm also acutely aware of how fantastically cheap the drug is to produce and how its probably not very profitable at 8K people per year, but its certainly not unprofitable - it still brings in millions in revenue.

This is a short term price gouge, nothing more. Eventually, some Indian generic manufacturer will develop a generic, and the price will plummet, leaving Turing to look to another specialty drug to pirate in the short term. Its bad for patients, bad for the health care indusry, bad for virtually everyone but the shareholders of Turing and confused Randians like yourself.
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Bingo with the caveat that there will be a generic made. The market is just that small.. and that's why no generic has been offered.

And the caveat that it will get approval.
 
jaeger19 said:
Bingo with the caveat that there will be a generic made. The market is just that small.. and that's why no generic has been offered.

And the caveat that it will get approval.
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Approval isn't hard.

But this situation is not remedied very easily by existing law and profit motives. As I said, if companies stood by their social responsibility, this would be a minor issue. But this hedge fund guy -or types like him- are going to forced he government to hand down regulations.

The industry does a pretty good job policing itself until a clown like this comes by.
 
Threegoofs said:
Approval isn't hard.

But this situation is not remedied very easily by existing law and profit motives. As I said, if companies stood by their social responsibility, this would be a minor issue. But this hedge fund guy -or types like him- are going to forced he government to hand down regulations.

The industry does a pretty good job policing itself until a clown like this comes by.
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I understand that the FDA has been or was cracking down on pharmaceutical companies that had manufacturing in India and China.

Apotex, Sun and Wochhardt have had issues or did.
 
Fletch said:
Or you could go out and develop a replacement drug and pass it out for free. You wont because it is easier to steal the product of someone elses mind than it is to engage your own.
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Hi Fletch,

The rights have expired on this particular drug and anyone can simply copy it and bring it to market. This new company, however, has an active policy of very tight control over these drugs to avoid exactly this from happening. Anyway, it is just a matter of time until there will be a copy of this drug available. Unfortunately, people will have to pay this ridiculous high price until then.

With a return of investment of 5 years which I think would be a normal timeframe for something like that (only purchase the rights, no development costs as such) they bought it knowing fully well that they had to make this price increase in order to get there money back in 5 years. They have paid a ridiculous amount of money for this drug and think (of course) that they will make the money back in time before the competition comes out with a cheap alternative.

Bad practice I think. That is what happens in an open market, but that is not goo in this case.

I hope an alternative will be available very soon so that they do not make their return on investment.. This will help avoiding this from happening in the future.


Joey.
 
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