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Martin Shkreli, the 32-year-old head of Turing Pharmaceuticals, stoked Internet outrage this week when it was reported that he raised the price of the 62-year-old anti-parasite drug Daraprim to $750 per tablet, from $13.50. Then he defended himself, Gekko-style, by saying, “I am a capitalist who plays to win.”
On Wednesday, he said he’ll lower the price to an undisclosed amount, but not before the parasite-free-organs-are-for-closers attitude drew widespread attention to the rising cost of prescription drugs. The prices of existing medications for everything from tuberculosis to blood pressure have rocketed up in recent years after the drugs were acquired by pharmaceutical companies.
“[Daraprim] is such a perfect, crystalline example of everything that can be done, given the lack of rationality in the system, and the total bankruptcy of the justifications for high drug prices in the first place,” Peter B. Bach, director of the center for health policy and outcomes at Memorial Sloan Kettering Cancer Center in New York, told the Washington Post.
But price hikes on existing drugs represent just a small part of America’s overall prescription-cost woes. Drug companies are regularly churning out new medications to treat everything from cholesterol to cancer. The $84,000 Sovaldi is practically nothing, for example, compared to Solirism, a $700,000-per-year drug that treats a rare blood disease, or Naglazyme, a $500,000 treatment for a rare skeletal disorder. The difference is that unlike drugs that only a few hundred Americans will ever need, Sovaldi could completely change the lives of the roughly three million Hep C sufferers in the U.S.
If, that is, their insurers would pay for it.
Drug makers have long justified their high prices by saying it’s the only way they can recoup their investment into research and development. Then again, pharmaceutical companies have some of the largest profit margins in the health-care industry.
In an emailed statement, a Gilead spokeswoman responded to questions about Sovaldi’s price by saying, “unlike treatment for other chronic diseases, Sovaldi offers a cure … at a price that significantly reduces Hepatitis C treatment costs and delivers significant savings to the healthcare system over the long-term.”
Together, Sovaldi and Harvoni generated $12.4 billion in sales for Gilead last year. The company’s CEO, John C. Martin, is a billionaire. Gilead’s revenues doubled last year, and as the New York Times wrote, the company “now is faced with figuring out what to do with all the cash it is generating.”
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Last year, New Mexico’s Human Services Department issued a rule that required patients to show that they have Stage 3 or Stage 4 liver fibrosis before Medicaid will cover them for drugs like Sovaldi.
In Stage 4, the liver is “hard as a rock,” Sanjeev Arora, a University of New Mexico physician, told the Albuquerque Journal. “Treating someone for Hepatitis C after they have developed cirrhosis is a little bit like closing the barn door after the horse has left.” While they wait to develop cirrhosis, Hep C patients face a higher risk of developing depression, nerve pain, and lymphoma.