A Penny a Pill?

Editor’s Note: This article previously appeared in a different format as part of The Atlantic’s Notes section, retired in 2021.

One reason why lawmakers are concerned about expensive prescription drugs—the kind that cost hundreds or even thousands per pill—is that state Medicaid programs can’t afford them. Medicaid is jointly funded by states and the federal government, so it’s constrained by state budgets.

At yesterday’s “Pharma Bro” hearing, Nancy Retzlaff, Turing Pharmaceuticals’ chief commercial officer, said the company now makes Daraprim available on Medicaid for “a penny a pill.” But several of the Congress members present wondered, just how much is the actual cost to Medicaid? (That is, not the price patients pay, but the one Medicaid plans do.)

I asked Matt Salo, the director of the National Association of Medicaid Directors. He didn’t have time to get back to me before yesterday’s story ran, but this is what he says now: “The actual price is not pennies per pill—it's hundreds of dollars per pill.”

Sounds better than the $750 list price, but definitely more than the $13.50 Daraprim cost when Martin Shkreli acquired it.