People 65 and older comprise about 13 percent of the U.S. population but account for 34 percent of all prescription medicine use and 30 percent of all over-the-counter (OTC) drug use.
Because the size of our age group increases by the day and Medicare pays for the largest percentage of those drugs, keeping the prices under some sort of reasonable control is serious business for the economic well-being of individual elders and the government.
Last week, the Senate Committee on Aging, chaired by Susan Collins, Republican of Maine, held its first public hearing on the topic: Sudden Price Spikes in Off-Patent Drugs: Perspectives from the Front Lines, it was called.
A member of the Committee, Senator Elizabeth Warren, Democrat of Massachusetts, was among those questioning the experts invited to testify:
Did you catch that part about the price of one drug going overnight from the overall cost of $300 million to $4.5 billion?
Perhaps you recall that event. In a surprise move back in September, Martin Shkreli, the 32-year-old CEO of Turing Pharmaceuticals, jacked up the price of Daraprim from $13.50 per tablet to $750 per tablet.
Daraprim, used to treat certain parasitic infections and AIDS, is a 62-year-old, off-patent, life-saving drug Turing had acquired in August from another pharmaceutical producer. With the unexpected and unspeakably high price increase, Shkreli was being called “the most hated man in America.”
Last week, in an interview, he not only defended this 5,000 percent increase, he said he should have raised the price even higher than he did.
Keep in mind as you watch Mr. Shkreli in this short video clip, that people will die from not being able to afford this drug – if some have not already:
Last Friday, The New York Times reported that having bought controlling interest in another small biotechnology firm named KaloBios, Shkreli announced a coming price hike for a drug that treats Chagas disease:
”Mr. Shkreli said on a conference call with KaloBios investors last week that...the price would be similar to that of hepatitis C drugs, which cost $60,000 to nearly $100,000 for a course of treatment. In Latin America, benznidazole costs $50 to $100 for the typical two-month course of treatment.
“Benznidazole has never been approved for sale in the United States but is provided free to patients by the Centers for Disease Control and Prevention on an experimental basis.
“KaloBios’s price would be 'pretty devastating,' said Dr. Meymandi of U.C.L.A. 'The people with Chagas for the most part are poor' and many lack insurance, she said.
“It is estimated that 300,000 people in the United States have Chagas disease, virtually all of them immigrants from Latin America who were infected before they came.”
This story gets more complicated because of the announced intention of Shkreli to apply for a voucher from the federal government for another drug that would then get to market months earlier than otherwise, creating greater profit. If you really care about the intricacies of that move, you can read more here.
But it comes down to the same result: gigantic prices for life-saving drugs that patients – and federal health programs – cannot possibly afford, if not so in the short term, certainly in the long run.
Here is what further bothers me a great deal: in the same way that Donald Trump's presidential campaign of resentment, racism and xenophobia has pushed other candidates' rhetoric nearly off the far right edge of the charts, aren't Shkreli's astronomical price hikes likely to lead other pharmas to the same sorts of increases?
We live in that kind of outrageous atmosphere these day, and there isn't anything I know of to stop drug price increases of any amount. As Shkreli points out, in our capitalist system, a CEO's first obligation to share holders is to maximize profit.
I don't have the financial knowledge (or even math skills) to know how to figure out if higher profits are generated by a few expensive purchases or many low priced purchases but it's not hard to figure out that, as noted above, on Shkreli's scheme people without the means to pay will die.
Is this how we want healthcare to be in the United States? We already have a whole bunch of politicians who want to kill Medicaid and Obamacare and/or turn Medicare into a voucher system elders wouldn't be able to afford.
Recall in the Elizabeth Warren video above, both men who testified said there are ways government can help keep drug prices in line with what people can afford, and they offered a few ideas. The point of the hearings is to identify the best ways and find a way to apply them. It cheers me that the relentless Senator Warren is on this Committee.
There will be more hearings on this topic at the Senate Committee on Aging. You can follow the progress at the Committee's website starting with the first three press announcements here, here and here.
There are links to pertinent materials, letters and transcripts on those pages.