Lunch Date with Martin Shkreli

OK, the “bad boy of pharma” wasn’t there.

Actually, he’s no longer the CEO of Turing Pharmaceuticals since he resigned last December after being indicted for securities fraud. The beleaguered pharmaceutical company, presumably wanting to rebrand itself, contacted my office to set up a lunch to talk to about their anti-Toxoplasmosis drug Daraprim. At first, I balked.

Let’s rewind to September 2015 when Turing and their then-CEO Martin Shkreli made headlines after they purchased the rights to the generic drug pyrimethamine (Daraprim) and jacked up the price nearly 6000% overnight ($13.50 to $750 per pill).

Since the mid 1950’s, pyrimethamine has been one of oldest drugs used to treat a common parasitic infection that can cause blindness in immunocompetent patients and possibly death in immunocompromised patients, such as those with AIDS.

Since the price hike, the backlash has been fierce, and reasonably so. Patients, doctors, and just about anyone who cares about our health care system went up in arms. They cried bloody murder. Excoriated the pharma industry. Myself included.

After initially telling the sales rep, “No thank you,” I ended up agreeing to the meeting. Why? I had questions. How could a pharmaceutical company be so heartless? I wanted answers.

I also wanted to chew the drug sales rep out. Tell him that it is because of companies like Turing that have led to soaring healthcare costs.

So this is what I learned…

He explained that when pyrimethamine was priced at a “penny a pill,” it nearly fell off the planet. You couldn't get it anywhere. No pharmaceutical company was making it anymore because it was simply unprofitable.

He explained, in the pharma business, the only way you can make it available and distribute it was if there was money to be made: simple distribution economics 101.

I remember the last time I tried to prescribe pyrimethamine about 9 years ago when I was in fellowship caring for a patient with ocular toxoplasmosis. I called multiple pharmacies in San Francisco and sure enough, it wasn’t available.

But why so much of a price hike?

Turing was going to use the proceeds to fund their R&D pipeline. I fact checked it on their website, and they’ve actually got a couple of drugs in their pipeline and for a small company, they needed money quickly.

Unfortunately, this is how the pharmaceutical business works. A large portion of profits from drug sales go back into R&D. It happens at Pfizer. It happens at Roche, Bayer, Allergan, and the list goes on.

Today’s profits often lead to tomorrow’s treatments. Fair enough.

Why so quickly?

If they can, most pharmaceutical companies try to hike up the price of their drugs, just not so quickly and dramatically. Remember the EpiPen® crisis of last month? Mylan raised the price of EpiPen®, a potentially life-saving dose of epinephrine packaged in a convenient, easy-to-use, injection device from $100 to $600 from 2008 to 2016.

It happened relatively slowly over years, so until very recently, the public hardly knew.

Like gas prices, a slow creep of a couple of cents a gallon each week is not nearly as noticeable as a huge upshoot. Who could forget when gas shot up to over $3 a gallon right after Hurricane Katrina wiped out 95% of the Gulf’s oil production?

So how do drug price hikes happen? In this case, Industry Consolidation

With a series of mergers and acquisitions, generic drug makers are consolidating to maintain profitability. By buying the competition or acquiring the rights to create and market a generic drug, a company can control the supply chain.

If no one else is making and selling it, you can ask whatever market forces allow- supply and demand.

With generics, it’s worse as there is no real pricing ceiling.

As a retinal specialist, industry consolidating is really hitting our practice’s bottom line. We dilate our patients’ pupils with drops so we can adequately examine the back of their eyes where the retina sits. One of those drops is phenylephrine, a generic eyedrop.

The price of phenylephrine went up from $8.85 for a 15 ml bottle to nearly $140 over the past 2 years, and we can go through several cases a week. We’ve looked everywhere for less costly alternatives in the US without much luck.

The same goes with tetracycline, a common antibiotic that rose from just over 3 cents to $2.36 a tablet in a 12 month period from November 2013 to 2014.

What next?

I left our lunch date rather disappointed, and I don’t plan on making a second one. Out of principle, it would be hard for anyone to prescribe Daraprim.

Fortunately, ophthalmologists have alternatives to treat ocular toxoplasmosis such as oral Bactrim DS (sulfamethoxazole/trimethoprim), available at $3 a pill. In severe cases when central vision is threatened, we can inject compounded clindamycin (~$45 per dose) into the eye given once or twice over several weeks.

As both are reasonably priced generics, Bactrim and clindamycin can treat toxoplasmosis at a fraction of the cost… for now.

Disturbing realization

I became more disheartened, not so much because of daraprim specifically, but because as health care consumers, we have become helpless against the rise of prescription drug costs.

Generics are supposed to be our defense against more costly branded drugs. For the most part, they still are. But if this trend continues across other generic medications, drug expenditures will continue to cut into our paychecks.

Solution?

Increased awareness through drug pricing transparency is a must. Outrage through social media and public outings through our 24-hour news cycle seem to work.

The recent public outcries forced Mylan CEO Heather Bresch to make available a generic epinephrine auto-injector (which is the same as their branded EpiPen® only packaged in a different box sold at half the price) days after its unfolding.

It was a small, but not insignificant victory against drug price hikes.

Perhaps we can use the #drugpricehike thread to serve as a consumer driven watchdog where anyone can post for all to see.

With increased transparency, maybe then we can help control runaway drug pricing.

#transparency #drugpricehike #medicaltransparency #medicine #bigpharma #FDA

Robert Wong, MD
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