Pot, Kettle: Industry criticism of parasite drug price hiker Shkreli doesn't ring true

By Gareth Macdonald contact

- Last updated on GMT

Pot, Kettle: Industry criticism of parasite drug price hiker Shkreli doesn't ring true

Related tags: Drug industry, Pharmaceutical industry, Pharmacology

If even the apparently non-joke, potential US presidential candidate Donald Trump criticizes your behaviour, you must know what you are doing is unpopular. 

Martin Shkreli’s decision to charge $750 a pill for daraprim – which is used to treat toxoplasmosis - has seen him called a rapscallion​ in the mainstream press, a moral offender​ by the financial papers and “a nothing​” by Trump​.

Others in the race to run for the highest office in the US have also weighed-in.

Front runner for the Democratic nomination Hillary Clinton accused​ Shkreli of price gouging and called on him to lower the price of daraprim. Democrat rival Bernie Sanders​ rebuffed Shkreli’s attempt to donate to his campaign. 

The US drug industry has also criticised Shkreli.

In September PhRMA tweeted that “.@TuringPharma does not represent the values of @PhRMA member companies.”

‘Discount’

Turing​ has since said it will offer daraprim to hospitals at the discounted price of – ahem - $350 a pill.

Shkreli ​ meanwhile has said he regrets not raising the drug’s price even higher.

Express Scripts – the largest pharmacy benefit management organization in the US – has partnered with Imprimis Pharmaceuticals to produce a $1 per pill alternative version of the drug.

Spokesman David Whitrap told us “our decision to provide access to a $1 alternative was prompted by the Turing price hike on daraprim​” adding that “Express Scripts will not make any profit on this solution. We are doing this because it is the right thing to do.”

He said the current price of daraprim is “unconscionably high​” explaining that the drug is simple to produce, its ingredients are very inexpensive and the condition it treats is very rare.

We believe that manufacturers bringing innovative drugs to market deserve a fair profit, and there are instances where we cover – without complaint – drugs that deliver clinical value at price tags in excess of $100,000.

However, what we’re seeing with Turing isn’t scientific innovation; it’s financial innovation. And Express Scripts will always do everything within our power to ensure that our clients and patients have access to the most appropriate medicine at the lowest possible price.​“ 

Profit before R&D

More recently, Pharma CEOs have sought to distance themselves from Shkreli and Turing citing R&D investment.

GSK CEO Andrew Witty – whose company owns rights to daraprim outside the US – told fellow execs at the Forbes Healthcare Summit that Shkreli  was “sucking up resources that should be used on more innovative, new medications​” according to Business Insider​.

The criticism is in keeping with a November​ blog post by PhRMA in which the industry group said: “Unlike Valeant and Turing, innovative biopharmaceutical companies have R&D at the core — and the numbers prove it​.”

According to PhRMA, the US drug industry invested more than $51.2bn​ in drug R&D last year and member companies spend – on average - 20% of the revenue they generate on development.

In contrast – according to the post – Valeant spends just 3% of its revenue on R&D. PhRMA does not state what Turing spends on R&D.

A response posted by someone purporting to be Eliseo Salinas, Turing’s head of R&D, reiterated the privately-owned company’s claim​ that it currently spends 60% of its profits on drug development.

Pot, Kettle

But should the US drug industry criticise anyone for focusing on profit rather than R&D investment?

Few people dispute PhRMA’s claim about its members R&D spending. However, there are those - like long time drug industry critic Donald Light​ - who argue that companies' investment is more often about profit than innovation.

Light told us 90% of the money drugmakers invest in research is “spent on developing clinically minor variations and more costly clinical trials than are needed for submission to regulators for approval​.”

He claimed, based on his own analysis of NSF data​, “the drug industry spends only 1.3% of sales on basic research to discover new molecules​” adding that “more profits for more research means more development of minor variations in order to get fresh patents so they can monopoly price​.”

A key partner and promoter of this pattern is the FDA and EMA, by not requiring evidence that new drugs are clinically superior and having low, loose standards for trial quality, which are still lower for accelerated reviews for drugs deemed priority or vital.”

This view was echoed by Light’s co-author Joel Lexchin, who told us “I think that what we’re seeing with the PhRMA criticism [of Shkreli​] is just an example of the pot calling the kettle black.

We need only look at the example of cancer drug prices that have been criticized by 100 oncologists​, the price of drugs for multiple sclerosis going from an average of $8,000-$11,000 USD per year in the early to mid-90s to $60,000 now or the price for the new drugs being used to treat Hepatitis C​.”

The only reason that Martin Shkreli is being so roundly criticized is because he doesn’t try to disguise what he’s doing, i.e. he openly admits he’s in it for the money and doesn’t sugar coat it with phrases about wanting to do good for patients​.” 

PhRMA declined to comment when contacted by in-Pharmatechnologist.com.

Capitalism

Don’t get me wrong, I’m certainly not a Shkreli fan or apologist. 

Judging by his twitter feed​ – a forum for stock tips, discussion of incongruous hip-hop acquisitions​ (please Bill Murray​ do it!) and spats with brilliant journalists​ – Martin Shkreli does not seem to be a very nice bloke.

The trouble is that there isn’t a law in the capitalism rule book that says he needs to be nice.

In fact, the real trouble is that there isn’t really a capitalism rule book at all. It’s more of a pamphlet with the word society crossed out and replaced with things like “the market is king​” next to photos of Margaret Thatcher and Ronald Regan.

Shkreli’s argument – which he put forward at the same Forbes conference attended by his non-fellow pharma CEOs – is that the drug industry is “a business, we’re supposed to make as much money as possible​."

Sadly, this is an entirely legitimate position in a market-driven culture where – in most other instances – making money from business is lauded as a positive.

The latest news is that Shkreli plans to hike the price of another anti-infective, a drug called benznidadole this is used to treat Chagas disease​.

Like toxoplasmosis, Chagas - which is described as the new HIV/AIDS of the Americas in a 2012 paper in PLOS​ - is a parasitic disease. Unlike toxoplasmosis, it primarily affects the poor​.

At present benznidadole costs between $50 and $100.

Related topics: Regulatory & Safety, Regulations

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