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Pills and Profits. . . Again

November 6, 2015
Photo of author Susan Craddock
Susan Craddock

Last August, a pharmaceutical company called Turing acquired Daraprim, a drug used for treating a parasitic infection called toxoplasmosis. Almost immediately, Turing raised Daraprim’s price over 5000%, from $13.50 a tablet to $750. An outcry followed this move, with news media, politicians, and physicians protesting the outrageous price gouging for a decades-old drug used to treat a relatively rare infection that occurs primarily in HIV patients. Yet as Andrew Pollack of the New York Times noted, Turing’s action was not committed in isolation.1 In fact, in recent years several older, inexpensive drugs have been bought by pharmaceutical companies and their prices subsequently raised exponentially. Cycloserine is another example. Used to treat multi-drug resistant tuberculosis, Cycloserine was bought by Rodelis Pharmaceuticals and subsequently went from $500 for thirty pills, to $10,800. Cycloserine’s former manufacturer, the nonprofit Chao Center (part of the Purdue Research Foundation), immediately requested that Rodelis return the drug to them, charging that Rodelis had not followed through with their agreement to keep the drug viable and accessible to those patients who needed it. Rodelis did so, but the Chao Center has in turn doubled the original price of the drug. Turing’s CEO and founder, Martin Shkreli, has also claimed he will lower the price of Daraprim in the face of intense backlash, but has not indicated by how much.

 

Outrage from the media has focused on the pharmaceutical companies purchasing these older drugs, and justifiably so. Yet as heinous as these companies’ actions are, they shouldn’t be surprising, and they are only part of a larger problem of how drugs are developed, licensed, and marketed in the United States. Exorbitant prices for new drugs, for example, has become commonplace in the US, even though this doesn’t stop—nor should it—complaints being registered each time a pharmaceutical company rolls out a new cancer drug costing six figures for one year’s supply. What is new about this more recent spate of price gouging is that it is now happening with old drugs. And the reason it shouldn’t be surprising is that the US has a track record of supporting the powerful pharmaceutical industry lobby, at the expense of governments’ and individuals’ ability to access needed drugs. Unlike many governments that put a cap on the price a pharmaceutical company can charge for their drugs, the United States has consistently proven unwilling to do so. Pharmaceutical companies then charge “what the market can bear,” claiming the need to reinvest profits into researching and developing more new drugs.

What makes the examples of Daraprim and Cycloserine even more morally bankrupt is that they are used to treat diseases overwhelmingly found among the poor and marginalized, the vast majority of whom live in low-income countries whose governments cannot possibly afford their price tags. And in the case of Cycloserine, a high price tag is highly unlikely to result in investments in new tuberculosis drugs. Diseases such as TB that almost exclusively burden the poor have long since been designated unworthy of therapeutic research and development by pharmaceutical companies answering first to their shareholders’ demand for a high return on investment, and second (if that) to sick people needing new and better drugs at affordable prices. As one frustrated physician wrote in The Guardian about Cycloserine’s sudden hike in price, it was a double insult to have to scramble for ways to maintain stocks of a suddenly very expensive drug that has serious side effects for those having no other choice but to take it, rather than having a better and cheaper option to provide them.

Pharmaceutical companies should be castigated for their marketing practices, but turning the tide on eye-popping drug prices will take political will and regulation in the absence of corporate humanitarianism. Even universities can play a role: critically important research and development of new drugs happens at most research universities, and when these drugs get licensed to pharmaceutical companies, universities have the leverage to insist upon affordable pricing. But few universities so far have chosen to do this, including the University of Minnesota, in part because most state institutions have come to rely so heavily on other-than-State streams of revenue. Being a land-grant institution, however, comes with a social mission of getting discoveries to those who need them, and in this way, Minnesota and other universities have a critically important role to play. Only, though, if they have the will to do so.

 1 Andrew Pollack, Drug Goes from $13.50 to $750, overnight. New York Times September 20, 2015.

Susan Craddock is a professor in the Department of Gender, Women, and Sexuality Studies and the Institute for Global Studies. She is currently serving as interim director of the University of Minnesota’s Center for Bioethics.