Darlene Costner, Mending Well at Home
LAGNIAPPE: Drug Company CEO Shkreli Arrested on Fraud Charges

Being Priced Out of Drug Treatment?

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.

Comments

I am not an expert on the manufacture of drugs or how a corporation maximizes profit, but I do know a capitalist pig when I see one and Mr. Shkreli fills the bill.

Bruce, " capitalist pig" does not even begin to describe the moral bankruptcy of this sorry excuse of a human being.

To continue Bruce's analogy--all the capitalist pigs eat at the same trough. And that is what you alluded to, Ronni.

I was recently told a Drs. office would contact my insurance for prior authorization for $25.00. And, this was not a primary care dr. but a specialists practice. Is this a back-handed way of getting more from medicare patients?

The medications that drs. prescribe for me are for the most part are no longer covered by insurance without a prior authorization and the cost is usually prohibitive because the medications are not generic.

Generic medicines do not always work for me--I am not generic, nor is anyone else.

I have had two Drs. within the last 3 years prescribe generics that have been quite negative at the taking. One of the medications was mistakenly prescribed because the name was so close to the one the Dr. meant to prescribe. The other 2 prescriptions were deemed not for the ailment the Dr. diagnosed (which diagnosis was also wrong.)

It is most likely (difficult to say this with certainty) that when the time comes for me to need treatment for the chronic blood cancer I have lived with for 15 years, that I will not elect treatment.

The most effective way to combat this is for Congress to remove the legal requirement that makes it happen. Modify corporate law to make 'shareholder profit' only a CEO's second duty, not the first (and pretty much only) one.

If you're going to say that a corporation is legally a person (which is stupid, but probably can't be fixed at this point because too much legal superstructure has been built on it), and if there are jail terms and death penalties for persons who deliberately or through negligence cause the deaths of other people, then there are two choices:

• devise the equivalent of a jail term and a death penalty for a corporation. This will mean that the obligation to shareholders first and foremost requires not doing things that would cause the corporation to be shut down, temporarily or permanently...

or else:

• say that being a CEO does not shield you from criminal responsibility for your actions. If you do something that you know will kill people, you can personally be put in jail or executed.

Congress has the power to control drug prices and profiteering, but spineless politicians would rather take money from Big Pharma than regulate it. There have been many penalties levied against drug companies for a variety of reasons, but they never amount to more than a fine, a financial slap on the wrist that is expected and considered just part of the cost of doing business. As Sylvia notes, if the penalties amounted to actual jail time for the CEO and other individuals, they might carry some weight. Meantime, Shkreli? Pure scum. I don't know how he can face himself in the mirror each morning.

To be clear: I do not support the death penalty for any crime. No country's criminal justice system can be 100% right; when it's wrong, it shouldn't be allowed to make such an irreversible mistake.

However -- given that there IS a death penalty in most American states, I believe it is only fair that CEOs should also be at the same risk if they make a decision to commit mass murder for profit.

It is very sad (and ridiculous) that America - the richest nation in the world - allows its old, sick & poor people to be treated like this.... and for me too in England it is very, very scary as we are heading head first into the same. Every now and then I dream that we all 'up and stop' this crap. But, alas, it's only a dream: they seem to be getting away with murder (on both sides of the pond.

Here! Here! Mary.

It was hard to believe what he was saying as to his motives. I especially was struck when he said the main goal is to maximize profits going to 100% of the profit curve as taught in MBA class (not a verbatim quote, but close). It made me wonder if all those in business schools have any courses that counteract that philosophy of maximizing profits regardless of the consequences to consumers.

@Marge: Some business schools do have "ethics" courses, but even if they all did, and even if they were always required courses, that wouldn't fix the perverse rules built into today's laws, that essentially make 'maximizing profits regardless of consequences' mandatory.

Only law-makers can do that.

Just looking at the picture of Mr Shkreli, before I read the post about what he was doing I thought..well theres a smug looking young man with a lot of snark in his life.

He and his corporate profits don't care about individuals-and many of them don't believe they will ever get old.

I have a surprise for them...some day you too will need some form of life saving drug to treatment-I only hope that it is out of your ability to pay so you can go thru the same type of fears that the current populace does.

He's scum and will most likely vote for Trump, the Republican capitalist leader.

I'm appalled.

Elle in Oregon

Shkreli is a pathetic excuse for a human being. I'd like to be around when he gets sick and needs life-saving drugs or treatment. At his age - he doesn't believe he will get old or sick for that matter, however. Oh the smugness and arrogance is beyond the beyonds.

I read that most of these types of people are sociopaths and thus have no understanding of empathy or guilt

so it is easy for them and you can't touch them with "feelings"

Victoria, I think you're right. I watched a documentary on the men who caused the crash of 2008. The reporter repeatedly tried to ask one of them a question which said essentially: Did you think about how this would hurt people?

Not only could the Wall Street man not answer the question; he couldn't even process it. He kept saying, as if puzzled: Everyone was doing it. Or: We didn't break any laws.

I'm moving closer and closer to giving money to no one except to Elizabeth Warren.

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