The Drug With a 5,000 Percent Markup

The story of Daraprim’s huge price hike is part of a trend of exorbitant pharmaceutical pricing.

The drug company Turing Pharmaceuticals is under fire after a New York Times article published Sunday detailing how it raised the price of a toxoplasmosis drug by more than 5,000 percent after acquiring the drug in August. One tablet of Daraprim used to cost $13.50; now, after its acquisition by Turing, it costs $750 per tablet.

This could have significant effects on patients’ ability to afford treatment, though Turing’s CEO Martin Shkreli has said that Daraprim will be free for anyone who can’t afford it. According to the Times, some hospitals may not be able to afford to keep the drug in stock, which could keep patients from getting treatment in a timely manner.

The Infectious Diseases Society of America (IDSA) and the HIV Medicine Association (HIVMA) wrote a letter to Turing earlier this month, asking them to reconsider the price increase.

“Under the current pricing structure, it is estimated that the annual cost of treatment for toxoplasmosis, for the pyrimethamine component alone, will be $336,000 for patients who weigh less than 60 kilograms and $634,500 for patients who weigh more than 60 kilograms,” the letter reads. “This cost is unjustifiable for the medically vulnerable patient population in need of this medication and unsustainable for the health-care system.”

Daraprim is just one example of skyrocketing prescription-drug costs. Multiple-sclerosis drugs are another—a study published in Neurology examined nine different MS drugs and found that their prices “increased annually at rates 5 to 7 times higher than prescription drug inflation” between 1993 and 2013. And another study by AARP found that, on average, prices for brand-name prescriptions increased by an average of 13 percent in 2013, compared to an inflation rate of 1.5 percent.

“We needed to turn a profit on the drug,” Shkreli said in an interview with Bloomberg Business earlier this week. “The companies before us were actually just giving it away almost.” He claimed the price increase was a response to increased costs, and that Turing would be putting the money back into developing new and better drugs to replace Daraprim, which is 62 years old.

This August, in Mayo Clinic Proceedings, doctors from many different institutions wrote an article questioning the reasoning behind meteoric prices for cancer drugs:

In 2006, the U.S. government made a great effort to improve access to approved cancer drugs by requiring Medicare Part D to cover such drugs. Conversely, the 2003 Medicare Prescription Drug, Improvement, and Modernization Act contains legislation that forbids Medicare from negotiating drug prices. These policies have created an opportunity for drug companies, rendering them the sole decision makers on the price of cancer drugs. There is no relief in sight because drug companies keep challenging the market with even higher prices. This raises the question of whether current pricing of cancer drugs is based on reasonable expectation of return on investment or whether it is based on what prices the market can bear.

Several states have introduced bills pushing for pharmaceutical companies to have to disclose the costs associated with different drugs, in the hopes that more transparency could help control prices. This might also eliminate one defense offered by Shkreli that, despite the price hike, “Daraprim is still underpriced relative to its peers.”

This is likely little comfort, however, to those patients now facing a price that that’s 5,000 percent higher than before.