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.”

