When did you become aware of the obscene prices the pharmaceutical industry is charging for drugs? For many it was when a smirking Martin Shkreli, founder of Turing Pharmaceuticals, testified on the Hill in February about his price hike of the antiparasitic drug Daraprim from $13.50 to $750, after which he called lawmakers "imbeciles" in a tweeted goodbye.
For others it was the roll-out of Gilead Sciences hepatitis C drug Sovaldi in 2014 at $84,000 for a 12-week course of treatment.
"Let's hold our position whatever competitors do or whatever the headlines," a Gilead executive said in an internal email, an impressive commitment to price-gouging in the face of public opprobrium. The Senate Finance Committee, in an understatement, said the price did not reflect research and development but a "revenue" push. Forbes writer Avik Roy noted the same hepatitis C treatment costs $900 a year in Egypt and that US taxpayers are picking up the tab since most US hepatitis C patients are uninsured, underinsured or imprisoned.
Other shocking drug prices include:
- Kalydeco a drug that treats a rare form of cystic fibrosis in patients ages 6 years and older priced at a $300,000 a year.
- Acthar, a drug that treats treat seizures in infants under 2-years-old priced at a $300,000 a year.
- Kadcyla, a breast cancer drug that costs $94,000 for a year.
- Zydelig, a leukemia drug, made by Gilead the (Hep C drug maker) that costs $57,755 a year.
- Hetlioz, a drug that treats non-24 sleep disorder -- a problem affecting blind people whose circadian rhythm is off -- that costs $60,000 per year.
- Xyrem, a drug that treats narcolepsy for $35,000 per year
- Abilify, a psychiatric drug usually added on to another expensive psychiatric drug, that costs $17, 316 year.
- Praluent, a biologic to lower cholesterol expected to cost over $14,600 a year.
There are efforts to stop the apparent pharmaceutical industry profiteering and opportunism like pending state bills to force drug makers to reveal their true costs and allow insurers to refuse payment. The White House is also launching a new Medicare payment system to stop the incentives for a doctor to use a $2,000 drug when a $50 drug would do. Currently, if doctors buy drugs themselves and administer them in the office, Medicare pays them back with a six percent bonus to cover administrative costs. Under the new program, "Doctors who prescribe a lot of newer, more expensive drugs will earn less than they used to," notes The New York Times, as will Pharma. The move was immediately termed "another troubling example of unelected bureaucrats making decisions behind closed doors," by Pharma-friendly lawmakers. How dare the government protect our tax dollars?
Now Pharma is fighting back. Its lobbying groups, PhRMA, the Pharmaceutical Research and Manufacturers of America and the Biotechnology Innovation Organization, or BIO. have launched a Washington, DC-focused campaign to keep lawmakers from legislating away its profit party.
We Save Lives -- Don't Cut Us Off, Says New Campaign
Does anyone need to be told medicine saves lives? Does anyone need to be told "life is precious"? Apparently so, because the PhRMA/ BIO campaigns depict about 25 patients whose lives were all saved or lengthened by Pharma medicines. "We're fighting back," says PhRMA's new "Hope to Cures: The Value of Biopharmaceutical Innovation and New Drug Discovery" campaign. "You are not average!"
Like "Ask Your Doctor" ads created by the same high budget PR agencies, the videos are full of puppies, sunsets and People Just Like You. We get to meet "Theresa," diagnosed with thyroid cancer at 57, "Hydeia" suffering from HIV/AIDS at 31, "Charis" suffering from ankylosing spondylitis at 29 and "Henry" suffering from glutaric acidemia Type 1 at the young age of three. In a BIO video, a voice over asks, "how do we place value" on "Another decade with a spouse. A few more years with your best friend. A rich, full life rather than one cut short."
No one wishes the patients depicted anything but well, but the campaign's meta-message is that if you question Big Pharma's high prices, you do. The stories deceptively imply that drug regulation -- price controls -- would threaten the patients' lives by jeopardizing "research" which is manipulative and untrue. According to Public Citizen, Pharma's actual research is one-fifth of what it claims and taxpayers kick in a big portion of it. Most reports say Pharma spends a lot more on marketing than research.
Nor are most of Pharma's drugs even life-saving -- a lot more thyroid, cholesterol, ADHD and acid reflux drugs are sold than cancer drugs, their demand whipped up by direct-to-consumer drug ads. (Some widely marketed drugs like statins and acid reflux meds have life-threatening side effects of their own.) PhRMA's "Hope to Cures" campaign even claims high-priced meds help the economy by creating jobs, like for "sheet metal workers." Right.
Parading sick patients in front of the FDA and state officials who decide drug reimbursements is how Pharma has gotten drugs that cost four, five and six digits approved, usually paid for by taxpayers. Co-opted patients (sometimes called Astroturf because they are not really grassroots) "appear before public and consumer panels, contact lawmakers, and provide media outlets a human face to attach to a cause," writes Melissa Healy of the Los Angeles Times, "when insurers balk at reimbursing patients for new prescription medications."
Nowhere in the PhRMA PR campaign are actual costs mentioned like the 12 cancer drugs that cost above $100,000 a year though many do not clearly even extend life. A year on a cocktail of psychiatric drugs can easily cost $60,000. Instead we hear about rare diseases and rare cancers that presumably would not be cured if lawmakers curtail Big Pharma profits.
But the logic fails. Certainly everyone's heart goes out to "Amy" who says her "lungs collapsed and stomach burst during a surgical procedure" a week before her senior prom and she "slipped into a coma and didn't wake until months later." Everyone is happy that Amy is "soon starring in a local musical." But how many of us are at risk of such extreme bad medical luck before our prom? And more importantly, is such a rare medical occurrence a justification for six digit drug prices?
It's no mystery why Pharma began introducing high-priced drugs. It began when the blockbuster pill party which included Lipitor, Seroquel, Zyprexa, Singular, Concerta and Cymbalta ended because the pills went off patent.
It was then that Pharma began pushing injected drugs, called biologics, which can cost as much as $20,000 or more per patient per year. And, not content to just sell drugs that are often as dangerous as they are expensive -- patients receiving the injected drug Xolair must remain in the doctor's office for two hours to make such they don't develop life-threatening anaphylaxis -- Pharma companies are also trying to re-incorporate outside of the US to dodge taxes.
When the blockbuster pill era ended, the new business model of Martin Shkreli emerged of buying up old drugs and gouging their prices. Meanwhile Pharma refuses to develop a drug class that really is life-saving -- antibiotics -- since they provide a poor return on investment because they are not sold in volume. Pharma companies literally receive government money to do what they should be doing anyway -- develop lifesaving antibiotics. Why do they end up "owning" the drugs and not the government and the public?
Cronyism and Conflicts of Interest Abound
PhRMA, which spent $18.4 million lobbying lawmakers last year and BIO which spent $8.4 million, are among the top lobby groups on the Hill. Until 2010, PhRMA was headed by former Louisiana Rep. Billy Tauzin who resigned from Congress where he chaired the committee which oversees the drug industry only to immediately reappear as the leader of PhRMA where he drew a $2 million salary. Who can say revolving door?
Tauzin had played a key role in shepherding the Medicare Prescription Drug Bill through Congress which prohibited government negotiation of lower drug prices and Canadian imports. "It's a sad commentary on politics in Washington that a member of Congress who pushed through a major piece of legislation benefiting the drug industry, gets the job leading that industry," Public Citizen's President Joan Claybrook said at the time.
Since then, conflicts of interest have only worsened. The new FDA commissioner, Robert Califf, was confirmed despite 23 financial links to drug makers.
The former chairman and CEO of Genentech, Art Levinson, is now the CEO of a new Google life sciences venture with Big Pharma which lured away Thomas Insel, director of the National Institute of Mental Health last year. Levinson, who is also chairman of Apple Inc., served as a member of the Roche and Genentech board of directors until 2014. Yes, there is a lot of money in such Pharma partnerships -- especially thanks to high drug prices.