Monday, November 02, 2015

225.3 - Footnote: Shkreli is far from the first to price-gouge on medicine

Footnote: Shkreli is far from the first to price-gouge on medicine

As a footnote to the update, we should all bear in mind the important fact that this is not the first case of pharmaceutical price-gouging and Shkreli is hardly alone.

For one example, in 2011, a company called K-V Pharmaceuticals acquired a seven-year license to be the sole provider of Makena, a synthetic form of the hormone progesterone, which has been successful in preventing premature births in women who had a history of them. At the time, the drug cost $10-$20 per dose; with a course of treatment typically being about 20 doses, the total cost was $200-400. After buying the license, K-V increased the price to $1500 a dose, making the cost of the average treatment go from maybe $400 to $30,000.

For another, around the same time that Turing Pharmaceuticals bought the rights to pyrimethamine, Rodelis Therapeutics purchased the rights to cycloserine, used to treat multidrug-resistant tuberculosis - and immediately raised the price from $500 for 30 capsules to $10,800.

Pyrimethamine itself had been on the price escalator before Shkreli came along. GlaxoSmithKline, the original makers, sold the US marketing rights to CorePharma in 2010. At that time, the medication cost about a dollar a pill. In one year, sales of pyrimethamine jumped from $667,000 in 2010 to $6.3 million in 2011, even as the number of prescriptions remained about the same. By 2014, sales were up to $9.9 million even as the number of prescriptions dropped by nearly 30%.

Remember, that was before Shkreli entered the picture.

Indeed, the drug industry as a whole is a good example of what's wrong with trusting The Market (pbui) to deal with human needs. If you need a medicine, you need a medicine, and if there is only one or only a handful of sources of that medicine, then you can be told in essence, "your money or your life." That's why the profit margins of the world's 10 largest drug companies ranged from a low of 10% - still more than the average in most industrial sectors - to a jaw-dropping 43%.

And while those companies would insist that this was all just for the sake of developing even newer, better and better in every way drugs, the fact is that those companies spent more - in some cases far more, even double the amount - on sales and marketing as they did on research.

It's just another example - yet another example - of how the pursuit of profit is incompatable with justice.

Sources cited in links:

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