Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Four Companies - Including Criminal Valeant - Raked Over the Coals for Staggering Price Hikes by Senate Report

Four Companies - Including Criminal Valeant - Raked Over the Coals for Staggering Price Hikes by Senate Report | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Staggering hikes — in some cases higher than 5000%— in prices of prescription drugs threaten the health and economic stability of Americans who can't afford vital medicines, a congressional report warned Wednesday.

 

The findings by the Senate Special on Aging summarize the panel's 2016 investigation of records from four pharmaceutical companies and public hearings that focused on sudden price spikes in decades-old medications and the pricing decisions imposed by drug industry entrepreneur Martin Shkreli and other industry executives.

 

Turing Pharmaceuticals and Retrophin (RTRX), two firms once headed by Shkreli, embattled drugmaker Valeant Pharmaceuticals International (VRX) and Rodelis Therapeutics are among companies that dramatically raised prices on some decades-old, off-patent drugs they acquired and controlled through monopoly business models, the report said.

 

The Committee discovered that each of the four companies followed a business model (with some variation) that enabled them to identify and acquire off-patent sole-source drugs over which they could exercise de facto monopoly pricing power, and then impose and protect astronomical price increases. The business model consists of five central elements:

 

  • Sole-Source. The company acquired a sole-source drug, for which there was only one manufacturer, and therefore faces no immediate competition, maintaining monopoly power over its pricing.
  • Gold Standard. The company ensured the drug was considered the gold standard—the best drug available for the condition it treats, ensuring that physicians would continue to prescribe the drug, even if the price increased.
  • Small Market. The company selected a drug that served a small market, which were not attractive to competitors and which had dependent patient populations that were too small to organize effective opposition, giving the companies more latitude on pricing.
  • Closed Distribution. The company controlled access to the drug through a closed distribution system or specialty pharmacy where a drug could not be obtained through normal channels, or the company used another means to make it difficult for competitors to enter the market.
  • Price Gouging. Lastly, the company engaged in price gouging, maximizing profits by jacking up prices as high as possible. All of the drugs investigated had been off-patent for decades, and none of the four companies had invested a penny in research and development to create or to significantly improve the drugs. Further, the Committee found that the companies faced no meaningful increases in production or distribution costs.

 

Find the Senate report here.

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rob halkes's curator insight, December 23, 2016 12:28 PM

Messing around with prices is the worst marketing intervention to gain trust and sustainability, I'd say! #pharma #hcsm

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Turing Testimony Changes Perception of #Pharma Patient Assistance Programs

Turing Testimony Changes Perception of #Pharma Patient Assistance Programs | Pharmaguy's Insights Into Drug Industry News | Scoop.it

During a recent House hearing on drug pricing, Turing Pharmaceuticals chief commercial officer Nancy Retzlaff, on the stand to testify about a 5,000% price increase on the firm's toxoplasmosis treatment Daraprim, defended the dramatic hike in part by noting that the drugmaker provides access through patient assistance programs. 


Members of the House Committee on Oversight and Government Reform weren't impressed that Turing's strategy, put in place by embattled ex-CEO Martin Shkreli, was good for patients.


“Turing employed a PR strategy to divert attention to patient assistance programs and research and development efforts,” charged Rep. Eleanor Holmes Norton (D-DC), based on disclosures released in documents obtained by the committee. “In other words, instead of keeping the price so it could be purchased by patients and hospitals, you went to patient assistance programs to try to obscure the price.”


The testy exchange signals a shift in the perception of a tactic that industry may once have considered the very essence of what it means to be patient centric. Affordability is no longer an unassailable talking point for industry.


Pharmacy benefit manager Express Scripts was one critic saying that Turing's drug is a poor example of the benefits of patient assistance programs. The medicine has been on the market for decades and was acquired in August by Turing, which raised the price and set off a furor about drug-pricing practices in the US.


“This is an old, simple generic medication, and it shouldn't have a price high enough to even warrant a patient assistance program for low-income patients,” says David Whitrap, a company spokesperson.


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Turing's Patient Assistance Program Better Than Pfizer's, Although...

Turing's Patient Assistance Program Better Than Pfizer's, Although... | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Shocker!


The company says that Daraprim will will be available to hospitals at a discounted rate, and insists that keeping the list price at $750 will not affect patient’s out of pocket costs — the patient will be charged around $10 per pill and the insurance company will cover the rest of the cost.


They also say that they will offer the pill free of charge to “uninsured, qualified patients with demonstrated income at or below 500 percent of the federal poverty level through our Patient Assistance Program.”

Pharma Guy's insight:

Pfizer recently doubled its income eligibility for its PAP program to FOUR times the Federal Poverty Level. For more on that: http://sco.lt/7seJI9 


How many insurance plans refuse to pay for Daraprim? How many have a much higher co-pay than $10? And how many patients qualify for the PAP program?

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Yo! #Pharma Bro' - When You Going to Lower Price of Daraprim?

Yo! #Pharma Bro' - When You Going to Lower Price of Daraprim? | Pharmaguy's Insights Into Drug Industry News | Scoop.it

It's been two weeks since Turing CEO Martin Shkreli announced he would scale back the price of his drug, and so far nothing has really changed.

The biotech leader came under fire last month for his 5,000% price hike of Daraprim, a drug that fights parasitic infections.


The drug, which rose from $13.50 to $750 seemingly overnight, left the biotech and pharmaceutical industries reeling, with corporations such as Valeant facing a lot of criticism for their similar price-hike moves.


In September, he told ABC News, “We’ve agreed to lower the price of Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit." 


That hasn't happened yet. A 30-day, 30-pill supply of Daraprim would cost me $27,006 at my local pharmacy.


That boils down to about $900 a pill, which includes the wholesale cost, along with specific pharmacy fees based on the zip code I gave the pharmacy.


So while the price of the drug hasn't gotten any higher since Shkreli hiked it 5,000%, it hasn't gotten any lower since he promised to reduce it either. Turing did not respond to Business Insider's request for clarification about this price.

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The Real Reason Big Pharma Wants to Help Pay for Your Prescription

The Real Reason Big Pharma Wants to Help Pay for Your Prescription | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Fueled almost entirely by drugmakers’ contributions, the seven biggest copay charities, which cover scores of diseases, had combined contributions of $1.1 billion in 2014. That’s more than twice the figure in 2010, mirroring the surge in drug prices. For that $1 billion in aid, drug companies “get many billions back” from insurers, says Fugh-Berman.
“Drug companies aren’t contributing hundreds of millions of dollars for altruistic reasons,” says Joel Hay, a professor and founding chair in the department of pharmaceutical economics and policy at the University of Southern California. The charities “don’t ever have to scrounge for money. It falls right to them.” Both Hay and Fugh-Berman have served as paid expert witnesses in lawsuits against drug companies.
When Turing bought Daraprim and sought to boost its annual revenue from $5 million to more than $200 million, the use of patient-aid funds was considered essential, internal company documents show. Last May, as the company did its due diligence before the purchase, one executive warned in an e-mail that new, high copays would force toxoplasmosis patients to seek alternative drugs.
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Of Rotten Apples (e.g., Pfizer & Turing) and Rotten Systems (U.S. Drug Prices)

Of Rotten Apples (e.g., Pfizer & Turing) and Rotten Systems (U.S. Drug Prices) | Pharmaguy's Insights Into Drug Industry News | Scoop.it

It's easy to go after bad executives like Martin Shkreli, but much harder to go after bad corporate systems.


The hypocrisy is stunning.


Martin Shkreli, the former hedge-fund manager turned pharmaceutical CEO who was arrested last week, has been described as a sociopath and worse. In reality, he's a brasher and larger version of what others in finance and in corporate suites do all the time.


Federal prosecutors are charging him with conning wealthy investors...Perhaps prosecutors went after Mr. Shkreli because they couldn't nail him for his escapades as a pharmaceutical executive, which were completely legal -- although vile.


Mr. Shkreli took over a company with the rights to a 62-year-old drug used to treat toxoplasmosis, a devastating parasitic infection that can cause brain damage in babies and people with AIDS. He then promptly raised its price from $13.50 to $750 a pill.


When the media and politicians went after him, Mr. Shkreli was defiant, saying "our shareholders expect us to make as much as money as possible." He said he wished he had raised the price even higher.


That was too much even for the Pharmaceutical Research and Manufacturers of America, Big Pharma's trade group, which complained indignantly that Mr. Shkreli's company was just an investment vehicle "masquerading" as a pharmaceutical company.


Maybe Big Pharma doesn't want to admit that most pharmaceutical companies have become investment vehicles. If they didn't deliver for their investors, they'd be taken over by "activist" investors and private-equity partners who would.


While other pharmaceutical companies don't dramatically raise their drug prices in one fell swoop, as did Mr. Shkreli, they would if they thought it would lead to fat profits. Many have been increasing their prices more than 10 percent a year -- still far faster than inflation -- on drugs used on common diseases such as cancer, high cholesterol and diabetes.


Pfizer's new [drug] to treat advanced breast cancer costs $9,850 a month. According to an analysis by the Wall Street Journal, that price isn't based on manufacturing or research costs. Instead, Pfizer set the price as high as possible without pushing doctors and insurers toward alternative drugs.

Pharma Guy's insight:

We are seeing more editorials like this one. Also read this NYT Times editorial: "Are All Pharma CEOs Martin Shkrelis?"; http://bit.ly/pharmabros Also read: "Patients Fear Spike in Price of Old Drugs"; http://nyti.ms/1U4rJtu 

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Senate Invites Turing CEO Shkreli to Visit. Just What He Wanted!

Senate Invites Turing CEO Shkreli to Visit. Just What He Wanted! | Pharmaguy's Insights Into Drug Industry News | Scoop.it
A Senate committee is launching an investigation into prescription drug pricing, responding to public anxiety about companies hiking prices for once-inexpensive medicines.


The Senate’s special committee on aging requested documents and information Wednesday from Turing, Valeant Pharmaceuticals and two other drugmakers already under scrutiny for recent price spikes.


Notably, the senators called for a face-to-face meeting with Turing Pharmaceuticals CEO, Martin Shkreli, “as soon as it is practicable.” A former hedge fund manager, Shkreli has become the public face of the pricing controversy, after his company raised the price of the anti-infection drug Daraprim by more than 5,000 percent. The drug, which Turing acquired in August, is the only U.S.-approved treatment for a deadly parasitic infection that can affect pregnant women and patients with HIV.


Turing said in an emailed statement: “We are reviewing the committee’s request and, as we have and continue to do with similar congressional inquiries, we look forward to having an open and honest dialogue about drug pricing.”

Pharma Guy's insight:

Shkreli taunted politicians on Tweeter on November 3, saying he was "In DC. If any politicians want to start, come at me." (see photo above). Looks like Shkreli was not anywhere near the Senate in the photo.


IMHO, this guy is basking in his 15 minutes of fame. Who knows? He may become the next Trump and run for president some day... Yikes!

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