HIV Drug Price Increase Brings ‘Price Gouging’ to the Forefront

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HIV Drug Price Increase Brings ‘Price Gouging’ to the Forefront

Martha Kempner

Reports that a drug that treats toxoplasmosis went from $13.50 to $750 per pill caused outrage among medical experts, politicians, and the public.

Pharmaceutical company Turing came under fire last week after the New York Times reported Turing had raised by about 5,000 percent the price of an old drug used to treat an infection that can be life-threatening in those with HIV or AIDS or with otherwise compromised immune systems.

The founder and CEO of the company, Martin Shkreli, initially defended its decision by saying Turing needed to make the drug profitable and planned to use the profits to make a newer, better drug. After being vilified in the press, however, Shkreli said on September 23 that Turing would lower the cost of Daraprim, though he did not say by how much. The controversy gave both medical professionals and politicians an opportunity to discuss the rising prices for drugs that treat myriad conditions.

Daraprim was approved by the Food and Drug Administration (FDA) in 1953 to treat toxoplasmosis, a parasitic infection that can come from eating undercooked meat or unwashed fruits and vegetables. It can also be contracted from cat feces when cleaning litter boxes. The parasite is common and most people never get symptoms, but it can be very dangerous to pregnant women and those with compromised immune systems, such as the elderly, infants, certain cancer patients, and people with HIV or AIDS.

The Centers for Disease Control and Prevention (CDC) estimates that about 4,400 people are hospitalized with the infection and more than 300 die each year. Most people who get sick from toxoplasmosis can be cured with a six-week dose of Daraprim. Those who are immunosuppressed, however, may have to take the drug continually.

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Not long ago, Daraprim cost about $1 per pill. But after GlaxoSmithKline sold the drug in 2010, its price has steadily increased. That year there were about 12,700 outpatient prescriptions for total sales of $667,000. In 2014, however, the number of outpatient prescriptions for the drug dropped to 8,821, but sales of the drug totaled $9.9 million.

There is some disagreement over the exact price of the drug in August when it was sold to Turing. Most reports say it cost about $13.50 per pill, but Shkreli told the Washington Post that each pill was $18 at the time. Either way, the price hike was alarming as Turing began to sell the drug for $750 per pill; an increase of at least 4,000 percent.

This meant that the standard six-week, two-pill-a-day course of treatment went from $1,130 to $63,000. For patients over 132 pounds who have to stay on Daraprim, the drug could cost as much as $634,500 every year.

The medical community called this move unconscionable and pointed out that making the drug so expensive might mean hospitals could not keep it in stock, which would, at the very least, delay treatment for some patients. The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing calling the move “unjustifiable for a medically vulnerable patient population” and “unsustainable for the health care system.”

Shkreli defended his company’s price hike saying that the previous manufacturer was practically giving the drug away and that his company couldn’t afford to do that. He argued that the drug is so rarely used that the new price would not impact the health-care system and promised that Turing would put a lot of its profits into researching newer and better drugs to treat toxoplasmosis. He told the Los Angeles Times: “We’re not going to take this money and put it in our pocket or pay ourselves a dividend. We’re not going to stop until we’ve eliminated toxoplasmosis.”

But this rationale was not satisfactory, as research into toxoplasmosis does not appear necessary. Dr. Carlos del Rio, an HIV and AIDS specialist at Emory University, told NBC News: “This is a drug that has no major side effects … it’s usually very well tolerated. It’s not a patient population that is clamoring for a better drug.”

Politicians got in on the outrage. Democratic Presidential candidate Hillary Clinton called the move “price gouging” and “outrageous” and used the story as a hook for releasing her drug pricing plan. Sen. Bernie Sanders (I-VT), who is also vying to be the Democratic candidate for president, and Rep. Elijah Cummings (D-MD) announced that they were requesting information from Turning on the “astronomical price increase.”

The two have spearheaded congressional investigations into drug prices. “The enormous, overnight price increase for Daraprim is just the latest in a long list of skyrocketing price increases for certain critical medications,” Sanders and Cummings said in a statement. “Americans should not have to live in fear that they will die or go bankrupt because they cannot afford to take the life-saving medication they need.”

There are many other examples of companies raising drug prices for no apparent reason other than bolstering the profit margin.

Doxycycline, a common antibiotic used to treat everything from urinary tract infections and chlamydia to Lyme disease and anthrax exposure, went from $20 a bottle in 2013 to $1,849 in 2014. When Rodelis Therapeutics acquired the rights to manufacture Cycloserine, which treats multidrug-resistant tuberculosis, the cost went from $500 a bottle to $10,800. When Valeant Pharmaceuticals bought two heart medications from Marathon Pharmaceuticals, it raised the price of one by 212 percent and the other by 525 percent. This was particularly startling because Marathon had already quintupled the price of the drugs when it acquired them.

Those price hikes are part of the congressional investigations. Those increases did not, however, capture the public’s attention as much the story of Daraprim. Much of the anger seemed to be directed as Shkreli, a 32-year-old former hedge fund manager, who initially said he would not consider lowering the price and called a journalist who questioned his decision “a moron” on Twitter.

Journalists pointed out that this was not the first time Shkreli drastically raised prices on a medication. His former company, Retrophin, bought the rights to a drug called Thiola, which can prevent or reduce the frequency of kidney stones in some patients who are prone to them. When Retrophin acquired the drug, it raised the price from $1.50 per pill to more than $30, meaning that annual treatment for patients who have to stay on the drug went from $2,700 to $54,750.

Urologist Benjamin Davies of the University of Pittsburgh accused Shkreli of having “grabbed an old drug, made no changes to it at all, and hiked the price exorbitantly.”

Shkreli was ousted from and is currently being sued by Retrophin for unrelated issues.

The public pressure seems to have forced Shkreli to reconsider.

“Yes it is absolutely a reaction—there were mistakes made with respect to helping people understand why we took this action, I think that it makes sense to lower the price in response to the anger that was felt by people,” he told NBC News.