PhRMA Accepts Price Gouging #Pharma Companies Into Its Tent - Who'd a Thought It? | Pharmaguy's Insights Into Drug Industry News | Scoop.it

At every turn, the Pharmaceutical Research and Manufacturers of America [PhRMA] has worked hard to convince lawmakers and the public that its members are not the equivalent of “hedge funds” that exist to set sky-high prices while failing to sufficiently invest in developing new medicines.

 

But earlier this month, the trade group made a curious move.

 

Among five companies that were just added to its roster, two of them — Jazz Pharmaceuticals and Horizon Pharmaceuticals — have also relied on excessive pricing to fuel their growth, while investing much less than other drug makers in research and development.

 

This is “intriguing given their pricing strategies and (the) PhRMA effort to distinguish its membership from sharp pricers,” Sanford Bernstein analyst Ronny Gal wrote to investors last week.

 

Intriguing is one way to describe it. Hypocritical might be another.

 

Consider Horizon.

 

In late 2013, the company bought the Vimovo pain reliever from AstraZeneca and, in January 2014, on the first day it could sell the pill, Horizon raised the list price for 60 tablets to $959, a 597 percent increase from $127, according to Truven Health Analytics. This is the same tactic for which Valeant and Turing were criticized. And Horizon has since boosted the price six more times; it’s now at $2,250.

 

There’s more. Gal also pointed out that Vimovo is actually a combination of two older medicines. So while the company sells the drug at expensive brand-name prices, patients could actually purchase the generic components separately at a more modest cost. The drug is Horizon’s second-biggest seller, by the way, and contributed 22 percent of overall sales last year.