
A Huge Overnight Increase in a Drug’s Price Raises Protests - davidf18
http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html
======
jkimmel
It appears Martin Shkreli has tried this a couple times before.

[http://blogs.sciencemag.org/pipeline/archives/2015/02/20/mor...](http://blogs.sciencemag.org/pipeline/archives/2015/02/20/more_price_hikes_on_obscure_medication)

In the past, he actually planned to limit access to the existing drug (ie. the
one he increased the price on) to prevent a competitor from creating a new
generic formulation and gaining FDA approval. It appears he modeled this
heinous approach on a maneuver by Celgene to prevent production of generic
thalidomide.

[http://blogs.sciencemag.org/pipeline/archives/2014/09/11/the...](http://blogs.sciencemag.org/pipeline/archives/2014/09/11/the_most_unconscionable_drug_price_hike_i_have_yet_seen)

It seems to me that the FDA needs sharper teeth in this arena to ensure access
to an existing drug is not a limiting factor in the approval of generics.

~~~
DanBC
Celgene are currently engaged in shenanigans in the UK.

There are currently two main chemotherapies used for pancreatic cancer in
England. First line is folfirinox. But that can have nasty side effects, so
the less effective gemcitabine is used because it has less side effects.

Celgene make abraxane. Abraxane (by Celgene's own data) isn't as good as
current first treatment; and has many side effects so can't be used as second
line treatment.

Celgene's data shows median life extension on abraxane as two months.

A charity - pancreaticcanceraction.org - has started a petition to get NICE to
change the decision. The petition states abraxane gives two years extra life
which is true for a few people. Equally true would be "abraxane gives two days
extra life".

The shenanigans come from the amount of funding and campaigning material
Celgene has provided to pancreaticcanceraction.org, while making it seem like
they don't have any connection.

[https://www.nice.org.uk/news/press-and-media/the-cost-of-
nab...](https://www.nice.org.uk/news/press-and-media/the-cost-of-nab-
paclitaxel-is-not-justified-by-its-limited-benefit-says-nice-in-draft-
guidance-2)

[https://pancreaticcanceraction.org/news/english-patients-
nic...](https://pancreaticcanceraction.org/news/english-patients-nice-decides-
fund-abraxane/)

------
jonknee
My first thought was generics since it's so old, but this is simply amazing:

> With the price now high, other companies could conceivably make generic
> copies, since patents have long expired. One factor that could discourage
> that option is that Daraprim’s distribution is now tightly controlled,
> making it harder for generic companies to get the samples they need for the
> required testing.

> The switch from drugstores to controlled distribution was made in June by
> Impax, not by Turing. Still, controlled distribution was a strategy Mr.
> Shkreli talked about at his previous company as a way to thwart generics.

How can this be true?

~~~
cjlars
>“This is still one of the smallest pharmaceutical products in the world”

What Turing is doing is exploiting the natural monopoly that has formed for
this drug. I was able to find only two global producers of this drug after a
quick search (Turing and a generic Alibaba listing), which if true means
Turing is the only game in town for a lot of supply channels. In addition, the
medical market is relatively unable to adapt to these sorts of market
fluctuations due to 1. supply chain being slow to respond (high regulation and
insurance) 2. high need of patients themselves and 3. lack of knowledge about
the drug and alternatives due to the infrequency of its prescription.

What this adds up to is that Turing can buy up the manufacturing of this drug,
jack up the price, and pocket the gains for a year or two while the market
adapts. Make no mistake, the market will adapt and undercut him and he will
destroy his monopoly by doing this, but he will also achieve perhaps many
hundreds of percent ROI on his purchase of the drug. Afterwards he can sell
the drug to another company and move on to another vulnerable natural monopoly
in the drug space.

>“It really doesn’t make sense to get any criticism for this.”

It absolutely does, though. If he's able to exploit a pricing inefficiency as
a producer, then the press can exploit him by hanging him out to dry in the
public eye. Companies can, and should, face public relations campaigns against
them for unethical, if legal, behavior.

~~~
ikeboy
>It absolutely does, though. If he's able to exploit a pricing inefficiency as
a producer, then the press can exploit him by hanging him out to dry in the
public eye. Companies can, and should, face public relations campaigns against
them for unethical, if legal, behavior.

What does bad PR mean for them? Nobody's going to refuse treatment if they
would otherwise afford it.

~~~
pixl97
I don't know much about monopolies, but, didn't Microsoft get in trouble for
creating one? Also, back in the days of trustbusting were there not penalties
for such actions? Is it in anyway against the law to do what they did? I can't
answer these questions... but what the eye of the press can do is look deep
into all of his practices and if there is anything illegal going on it my get
noticed far quicker.

~~~
fnordfnordfnord
>didn't Microsoft get in trouble for creating one?

Sort of. Their competitor-plaintiffs are no longer going concerns, and MS are
still going relatively strong; so one might argue that the "trouble" was of
little consequence. The length of time all of that took to wind its way
through the courts means that patients will die waiting for the market/courts
to sort itself out.

------
pasbesoin
There are people who are evil. I don't care what economic language in which
they couch it. They deserve what they get -- and I hope it is coming to them,
soon. (This is not a threat, just a strongly held sentiment.)

P.S. I hope that micro-laboratories and production diversification will soon
put a final "paid" to such exploitative strategies and tactics. Yeah, the
"risk" of a chemistry and biologics lab in every back yard and basement... I'm
increasingly of the sentiment that it is less than the increasing risk of
autocratic and monopolistic control of centralized production and
distribution.

This is a somewhat surprising development in my own attitude, to me. As I
recall observing all the bone-headed and sometimes downright risky and
uncaring behavior of e.g. chemistry students, including potential majors --
and some of the instructors -- back in college. Part of me is strongly
concerned about keeping them from poisoning others and whatever environment
they find themselves in.

Nonetheless, as I observe an increasing momentum towards artificial scarcity
and profiteering -- often by people with no credit for making or enabling the
original discoveries and creations -- I see decentralization as the only
effective response.

I, and many others, tried "playing by the rules." Turns out, they've been
increasingly rigged, and us, screwed. I'm not the only one deciding, "you have
to take care of yourself." Not just in general, but seemingly in every aspect.

~~~
oconnor663
I think if we depend on people to Be Good when there are big financial
incentives not to, we're already screwed. We have to look at why the
incentives are bad.

> With the price now high, other companies could conceivably make generic
> copies, since patents have long expired. One factor that could discourage
> that option is that Daraprim’s distribution is now tightly controlled,
> making it harder for generic companies to get the samples they need for the
> required testing.

This should've been the second paragraph of the article, not buried near the
bottom. The author seems to be expecting a system to make legal monopolies
behave nicely. Instead we should stop creating legal monopolies.

------
tim333
>Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849
by April 2014, according to the two lawmakers

wft? I'm kind of confused. Wikipedia says "Doxycycline is available as a
generic medicine and is not very expensive. The wholesale cost is between 0.01
and 0.04 USD per pill." Why on earth are they paying $1,849 a bottle? Maybe
they are only allowed to buy of certain suppliers with FDA licences or some
such rather than just buying it from India for a few cents?

edit: I see the " $750 a tablet" "Daraprim, known generically as
pyrimethamine" is avilable on AliBaba for "US $1-10 / Kilogram "
[http://india.alibaba.com/country/products_india-
pyrimethamin...](http://india.alibaba.com/country/products_india-
pyrimethamine.html)

Some weird import restrictions going on I guess?

~~~
acveilleux
The rules for pharmaceutics manufacturing in the western world are very
strict.

Any competent university lab could turn up a few Kg of pyrimethamine. You need
a GMP compliant FDA-approved facility to make it for medical use.

------
antidaily
I'm fairly sure this guy has been discussed here before. A year ago or so:
[https://web.archive.org/web/20150420142850/http://pipeline.c...](https://web.archive.org/web/20150420142850/http://pipeline.corante.com/archives/2014/09/11/the_most_unconscionable_drug_price_hike_i_have_yet_seen.php)

~~~
dang
Discussed at
[https://news.ycombinator.com/item?id=8302451](https://news.ycombinator.com/item?id=8302451).

~~~
larrys
Feature request: Along those lines, I was trying to find an article (using
algolia) which discussed different names for AWS service names confusion and
it was useless for that purpose (given search terms I tried). Since I always
clear my browser history I couldn't see the links that I had visited.

A nice feature would be if there was a way to note which article links I
clicked on or which comment threads I have visited. (If I comment then it's
easy to find but I read more than I comment). That way I could just browse
back that history and could have easily found that article that I was looking
for.

~~~
ikeboy
You can see which ones you've upvoted at
[https://news.ycombinator.com/saved?id=larrys](https://news.ycombinator.com/saved?id=larrys)
(only works for you).

~~~
larrys
Thanks for that. But for some reason both that and the save comments seems
incomplete. Hard to believe those are all of the stories I upvoted I upvote
everything I read typically and upvote (from memory) more comments then "saved
comments" indicates. Also "saved" should be "upvoted".

------
port6667
This is scary. If the TPP passes, drug pricing will suddenly rise in every
country, not just USA.

------
steveeq1
Ok,

I am somewhat ignorant about how the drug system works in america, but
theoretically, can one buy the drug where it's cheaper (say, India) via the
darknet markets like silkroad or whatever and have it shipped to the US?

~~~
mullen
Yes, but there are two problems:

1) You can't guarantee they are real. The upside of buying drugs in the US is
that if you get fake pills, it is a huge deal and people get sued out of
business for this. Rite Aid (A national drugstore chain) got caught shorting
the pill count in prescriptions and they got into big trouble.

2) The Department of Homeland Security will open packages from companies that
they suspect are selling medicines from abroad and shipping to the US and
impound the pills. The odds are good that you won't get caught, but if you do,
it can become a real hassle.

~~~
toomuchtodo
Neither are a problem. Typically, you don't get repeat business if you're
selling fake pills, so online sellers of prescription drugs almost always
provide you with what you're buying. This applies to both prescription drugs
as well as recreational drugs purchased through darknets.

Regarding DHS and CBP, both are overblown concerns. You'll receive a letter in
the mail noting they've confiscated the material in question, which you
usually send to the seller who will replace the shipment at no charge to you.

~~~
computer
(Heavy metal or other) contamination of the drugs you receive could be an
issue. Who's testing the India-/China-produced drug?

You might receive an Official batch that may or may not be checked by their
local governments, but it might also be from a more shady source.

------
ExpiredLink
>> _“This seems to be all profit driven for somebody,” she said, “and I just
think it’s a very dangerous process.”_

Don't worry! It's just capitalism.

------
ikeboy
On this topic, read
[http://www.forbes.com/sites/matthewherper/2012/09/05/how-a-4...](http://www.forbes.com/sites/matthewherper/2012/09/05/how-a-440000-drug-
is-turning-alexion-into-biotechs-new-innovation-powerhouse/).

------
tuna-piano
The thing that I think many people are ignoring is the positive effect that
high drug prices (& profits) leads to in the economy.

Economic resources such as entrepeneurs, capital, equipment and scientists
follow the money. If there's money to be made on Wall street, resources go
there. If there's money to be made in mobile apps, resources go there.

As mentioned elsewhere in this thread, the price being so high now shows that
the people buying it at that price truly value it that much. When it comes
down to it, many people are willing to spend almost anything to stay alive and
healthy.

The extremely high prices (and therefore profits) for specific drugs simply
leads more resources to go into the development of additional similar money-
making and life saving drugs.

It would be a shame if we capped drug prices at some artificially low level,
as that lowers the incentive for additional resources to develop additional
drugs.

~~~
dijit
No offence to you, but you're so capitalist it's to the detriment of human
health and you should be ashamed.

I'm asthmatic, My life can cease in a pretty painful way if I'm denied access
to drugs- my illness is an easily preventable one, so why should I die
gasping? You're right I'll pay anything to keep living.. I'll literally starve
before I stop paying for my medication. But why would you wish that upon me?
Because drug companies can have an extra slice of pie?-- forgive me if I'm
wrong but isn't private healthcare mostly about making shareholders rich and
-not- about significant R&D on preventable diseases (which would then be a tax
on the ill for their life).

I come from a country with social healthcare, I grew up the product of a
bottle of whiskey and a bad decision, thus, poor.. I'm currently putting _more
money_ into my government through taxes than I ever __could have possibly
__taken out- but given the draconian practises you seem to favour, I would
have died as a child because there is no way my mother could have afforded to
buy my medication -and- keep me fed.

~~~
dang
> you should be ashamed

I know this is an internet convention of sorts, but please don't do it here,
even when someone advocates bad policy. HN comments should be free of personal
swipes, especially otherwise decent comments like this one.

~~~
dijit
You're quite right, I apologise.

I was rather dumbfounded when I wrote it and I should have taken the time to
calm down and proof before submitting.

~~~
dang
It happens to all of us!

------
larrys
While shocking people have to keep in mind that pricing relates to more than
cost but more importantly value. The fact that a particular product or service
was priced a certain way for years is not as relevant as it might seem on the
surface. I pay a very low price for a generic drug (copay doesn't even matter)
but the value to me of the drug is much higher. The non generic version is
priced perhaps 10 times as much but still provides value at that price.
Perhaps these prices in the article are super inflated but my point is the
fact that a drug was priced at $5 per tablet and now is $50 per tablet is not
a non-starter in itself. Who cares what the % increase is? The question is
does the drug provide value at $50 per tablet? Also a particular person's
ability to pay doesn't really factor into this. I am sure the drug companies
would love to be able to charge some classes of people more (Larry Ellison)
and some less (jobless). But they are not allowed to do this. I know people's
automatically will think "ripoff" (and maybe it is a "ripoff" whatever that
is) however a price increase in itself does not indicate a ripoff.

"Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis,
was just increased in price to $10,800 for 30 pills from $500 "

Right and I don't take any drugs that even cost $500 for 30 pills (let alone
$10,800). So this article could have just easily compared the pills that I buy
30 for $10 to 30 for $500 and written a similar article.

~~~
powera
No, unless you feel that people who use medicine are nothing more than a
resource to be exploited.

Were it not for a (probably illegal in this case) monopoly, other people would
be able to make that same pill for $5 per tablet. And then nobody would pay
$50 for the pill.

Supply and demand IS NOT the same as "charging everyone as much as they will
pay for everything". It's inherently unfair to everyone who has to buy that
thing, and that's why people think it's a rip-off, because it is.

[edited to remove some hyperbole]

~~~
ikeboy
The question is, if it costs me X to make a product, and the value to you is
100X, who captures the 99X spread? I could charge 99X, you would pay it since
the value is higher, and I'll capture most of it. I could charge 2X, it's
still worth it to me to produce it, and you'll capture most of it. What value
here is most fair? Why is one value fairer than another? The standard economic
answer is "let the market decide", and that works, up to a point. If you
reject that, you need a better way to decide. Let's say you have a government
agency set prices: how do they choose?

You've just pushed the problem around. Saying "get rid of the free market" in
only a solution if you have a concrete alternative.

~~~
pxndx
The thing is, the value for these products is infinite. If people don't have
them, they'll die.

~~~
ikeboy
The value of a human life is not infinite, at least not in health budgets.
Insurance companies set a non-infinite value to decide what procedures to
cover.

In theory, you could calculate the exact value provided by this drug (under
the QALY model).

~~~
learc83
The value of a human life to the individual who's life it belongs cannot be
calculated in economic terms (at least for most people) because it is
unbounded, i.e., there is not a price that most people will accept for their
life. The economic value of a human life to society can be calculated.

Under your theory a fair method to price life saving drugs doesn't exist. The
person getting the drugs will effectively extract infinite value while the
company will only extract a finite value.

~~~
icebraining
_The value of a human life to the individual who 's life it belongs cannot be
calculated in economic terms (at least for most people) because it is
unbounded, i.e., there is not a price that most people will accept for their
life._

Not really true, I'm afraid. People killing themselves (or allowing others to
kill them) to ensure a payout to their families happens with some regularity.

~~~
learc83
1\. My qualifier "most people" covers that situation, because it is very very
rare.

2\. Usually this happens because they place a higher value on their children's
life and well being than their own. So even in the case were someone does
place a value on their own life, it's only in relation to someone else's life.

The case of 2 is interesting because it shows that of the people who would
accept a finite sum for their own life, very few would accept a finite sum for
their chidren's life.

Since paying for the child's healthcare is the responsibility of the parent in
a free market, we are back to my previous point that their is no fair free
market way to price life saving drugs.

