Wednesday, December 2, 2015 // The Statement
6B
University reacts to surging specialty drug prices
by Irene Park, Daily Staff Reporter
T
he University’s prescription drug
plan currently supports more than
100,000 beneficiaries, including
faculty, staff and retirees. And the price
has been climbing, increasing about 11
percent in 2014 and about 17 percent in
2015.
Keith Bruhnsen, manager of the
University’s prescription drug plan, said
the increase in the cost reflects multiple
factors, such as inflation, increased new
products and utilization.
This rise, however, rests close to the
national average, which was 13.1 percent
in 2014, evidence of the impact that
national trends in drug pricing can have
on a regional level.
Among
these
factors,
Bruhnsen
pointed to specialty drugs as those most
responsible for the rise in the cost. The
cost of specialty drugs for University’s
drug plan rose more than 37 percent in
2015.
Specialty drugs are ones designed to
treat complex and chronic conditions. One
specialty drug, Sovaldi, treats hepatitis C
and cures more than 90 percent of those
who are treated with it. But the 12-week
course treatment costs $84,000 in the
United States, averaging to about $1,000
a pill.
Sovaldi is just one example, however.
Daraprim: A case study
Earlier this year, controversy over the
anti-parasite drug Daraprim prompted
political proposals from 2016 presidential
candidates like Hillary Clinton and
Bernie Sanders, and debate over the
current healthcare system and antitrust
laws.
In September, Martin Shkreli, the
CEO of Turing Pharmaceuticals, which
acquired the rights to Daparim for $55
million, raised the price of the drug from
$13.50 to $750 a tablet overnight — a
5,500-percent increase.
Daraprim is an FDA-approved drug
used
to treat toxoplasmosis, a disease
resulting
from
parasitic
infections
that can cause serious complications
for
immune-compromised
patients,
such as those who have gone through
chemotherapy or have AIDS, pregnant
women
and
children.
According
to Centers for Disease Control and
Prevention, toxoplasmosis is a leading
cause of death from foodborne illnesses.
Unlike many medications like allergy
or heartburn medicine, there are no
generic alternatives for Daraprim. When
the drug’s patent expires — usually 20
years after filing — other companies
can produce the generic version using
the same active ingredient found in the
original drug.
Since Daraprim first came to market
in 1953, its patent has long expired. But
Daraprim is not widely used — only
8,000 to 12,000 prescriptions in the
United States each year compared to
25 million for statins, drugs that lower
cholesterol — and it is unattractive for
new pharmaceutical companies to invest
in developing a generic drug because it
may not be as profitable as investing in a
bigger market.
Robert Winfield, chief health officer
and director of University Health Service,
said this creates no competition in smaller
markets for companies like Turing
Pharmaceuticals, allowing the companies
to set the price “as high as the market will
bear” while abiding to the law.
He saw an opportunity to take
advantage to make profit, added Public
Health Prof. Richard Hirth. He also said
unfortunately there is not much that can
be done under the current regulations, but
implementing changes to help companies
pursue generic drug research can help
create competitions to prevent such
exploitations in the future.
“(Shkreli)
realized
there
is
an
opportunity to be exploited,” Hirth said.
“There really isn’t a lot that can be done
under the current regulations.”
Marianne
Udow-Phillips,
director
of the Center for Healthcare Research
& Transformation, said raising prices
of drugs like Daraprim probably will
not cause a significant increase in the
healthcare cost by itself because of the
small market, and that is how many
companies like Turing Pharmaceuticals
get away with an exorbitant price.
However, Udow-Phillips added that
this controversy has brought the issue to
Congress, generating discussions.
“(The
controversy)
has
brought
considerable
federal
scrutiny
and
discussions in Congress whether there
should be more price controls and limits
for older drugs with expired patent,”
Udow-Phillips said.
Amid
the
controversy,
Shkreli
appeared on multiple news platforms and
was active on social media to explain his
actions. On CBS News, he said the price
raise was to generate reasonable, not
excessive, amount of profit.
Shkreli furthermore said the higher
profit earned from the price raise could
help with developing a new drug to treat
toxoplasmosis.
Erik
Gordon,
clinical
assistant
professor of business, questioned why
Turing
Pharmaceuticals
should
be
“rewarded” with the profit since the
company was not involved with the initial
research and development of Daraprim.
Gordon said drug companies that
actually do the high-risk drug research
should
be
rewarded,
but
Turing
Pharmaceuticals
and
other
similar
companies are not “entitled” to them.
One
such
company
called
Valeant
Pharmaceuticals also raised price for its
cancer-related dermatology drug by about
1700 percent over the last six years.
“If we don’t let (companies that do
high-risk research) make enough money,
they can’t keep doing the research,”
Gordon said.
Hirth noted, however, that Shkreli’s
statement about using Daraprim’s profits
toward new drug research had little
credibility, as Turing Pharmaceuticals
is not a research company, and Shkreli
has little background in pharmaceutical
research (he is a hedge fund manager).
Last week, Turing Pharmaceuticals
announced that the company would
offer a 50 percent discount on Daraprim
for hospitals, bringing down the cost
to $375 per tablet. The company also
announced that it would provide the
drug free of charge for uninsured, low-
income patients, contribute to Patient
Services Inc., a charity that financially
assists Medicare patients, and participate
in federal and state drug price discount
programs.
In a statement, Nancy Retzlaff, the
company’s
chief
commercial
officer,
attempted to easy the concerns of some
patients: “We pledge that no patient
needing Daraprim will ever be denied
access.”