When a drug costs 30 times what it once did
An Orange County woman paid $4.30 for a generic antibiotic and was asked… (Gary Friedman, Los Angeles…)
Diane Shattuck filled a prescription in December for a generic antibiotic called doxycycline. With insurance, she paid $4.30 for 60 pills at a CVS store in Orange.
She returned at the end of February to refill her prescription. This time, she was told her cost for the drug would be about $165.
“It was bizarre,” Shattuck, 73, told me. “And no one at CVS could explain why the price was so high.”
Unfortunately, I won’t be able to offer a clear-cut answer, either. But my effort to untangle Shattuck’s situation cast a harsh light on the shadowy world of drug pricing.
It revealed that different manufacturers can charge wildly different prices for what is essentially the same generic medicine, and that drugstores can rake in unconscionable profits by passing along marked-up meds to customers without the slightest explanation.
“It’s a very murky world,” said Jeffrey McCombs, a professor of pharmaceutical economics and policy at USC. “All you can say for sure is that the price being charged has nothing to do with the actual cost of producing the generic.”
There’s been a lot of buzz lately about insane healthcare charges. Time magazine carried an extraordinary article by Steven Brill recently highlighting the arbitrariness of many hospital prices. My own columns on being hospitalized after a cat bite touched on some of the same issues.
But crazy hospital charges often can be negotiated lower by patients or patient advocates. Prescription drugs are offered by pharmacies to customers on a take-it-or-leave-it basis. And many people might not think to even question the price being charged.
Shattuck was prescribed doxycycline for a skin rash. The first batch of pills she received was manufactured by Watson Pharmaceuticals, which was acquired by Switzerland’s Actavis Group last year. Watson specializes in generic drugs.
According to the U.S. National Library of Medicine, “doxycycline is in a class of medications called tetracycline antibiotics.” It’s used to treat inflections, “including pneumonia and other respiratory tract infections; Lyme disease; acne; infections of skin, genital and urinary systems.”
When Shattuck tried to refill her prescription last month, she was informed that the only doxycycline available was manufactured by Mylan Pharmaceuticals, which, like Watson, specializes in generic drugs. Mylan’s doxycycline, however, came with a price tag absurdly higher than Watson’s.
Shattuck’s doctor said she could skip the refill and stop taking the med, so she never had to fork over the extra cash. But the experience left her wondering how the insured price of the drug could have gone from just a few bucks one month to $165 two months later.
Mike DeAngelis, a CVS spokesman, blamed the problem on “a supplier shortage” involving Watson’s doxycycline.
He also said that, “recognizing the significant price difference between the generic drug our patient was previously dispensed and one that was available from a different generic supplier,” Shattuck was offered “a bridge supply of her prescription until the original supplier’s product became available.”
CVS reordered the Watson-made doxycycline within a week’s time, DeAngelis said, and “refilled her prescription Feb. 22 and left her a message that her order was ready.”
First of all, Shattuck told me that CVS’ “bridge supply” consisted of just three pills, which weren’t enough to last until the new refill was ready. Moreover, she said, there was no message from the pharmacy that a refill was ready.
“That’s because they don’t have our phone number,” Shattuck explained. “We don’t want them calling all the time to say our prescriptions are ready.”
As for that supplier shortage, Charlie Mayr, a spokesman for Watson’s parent, Actavis, said that “we are shipping to all customers, including CVS. There is no shortage of inventory from the Actavis perspective that we are aware of.”
He declined to comment on the pricing of his company’s doxycycline, as did Nina Devlin, a spokeswoman for Mylan.
But Devlin said that Mylan’s doxycycline and Watson’s doxycycline are not perfectly identical, “and therefore cannot be compared by price.”
William Comanor, head of pharmaceutical economics and policy studies at UCLA, said this was a ridiculous distinction.
“Doxycycline is always going to be the same in terms of active ingredients,” he said. “The inert compounds may be different, but not the active ingredients. They have to be consistent.”
A CVS pharmacist in Los Angeles, who asked that his name by withheld because of fear of retaliation by the company, shared with me the average wholesale price of different makers’ doxycycline, as made available to pharmacists by the McKesson Connect online ordering system.
The system shows that the average wholesale price of 100 doxycycline pills made by Watson with a strength of 100 milligrams is $328.20. The same number of doxycycline pills at the same strength made by Mylan cost $1,314.83.
Sudden increase in cost of common drug concerns many – WSMV Channel 4
NASHVILLE, TN (WSMV) –
Many people may not recognize the name, but they have probably used it for a health problem at one point.
Doctors use doxycycline to treat a wide range of issues, including everything from acne to Lyme disease, anthrax exposure and even heartworm in our pets.
However, the once cheap and effective drug has now dramatically gone up in price, and that has health professionals concerned.
Hospitals like Vanderbilt University Medical Center keep doxycycline in stock, but some folks worry the cure for their ailment could now be financially out of reach.
“It's a change that occurred overnight,” said Vanderbilt pharmacy manager Michael O'Neil.
Not long ago, the pharmacy at Vanderbilt's hospital could purchase a 50-count bottle of 100 mg doxycycline tablets for $10, but now the same bottle costs a staggering $250.
“That's concerning to us, both as citizens and practitioners, when you see a huge increase like this in a price of a drug,” O'Neil said.
Vanderbilt keeps thousands of doxycycline pills on hand in the event of a bioterrorist attack, like anthrax, and O'Neil said replacing expired pills is prohibitive.
“This one is just hurting us when we need to replace the medication,” he said.
But it's the most vulnerable who are in the most jeopardy. For a pet, a heartworm diagnosis can be a death sentence without doxycycline.
Veterinarian Dr. Joshua Vaughn of the Columbia Hospital for Animals is already seeing the tragic results.
“We had one patient who we diagnosed with heartworm. We recommended heartworm treatment, but when they saw the total dollar amount, they elected not to treat the dog at all,” Vaughn said.
While manufacturers say they are having problems with raw supply, many in the medical community see greed as an overriding factor.
Vaughn said he wrote a recent prescription for doxycycline that cost $77. This week, the price increased to nearly $3,000.
Copyright 2013 WSMV (Meredith Corporation). All rights reserved.
Drug Goes From $13.50 a Tablet to $750, Overnight
Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”
Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.
In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively. Marathon had acquired the drugs from another company in 2013 and had quintupled their prices, according to the lawmakers. Senator Bernie Sanders. the Vermont independent who is seeking the Democratic nomination for president, and Representative Elijah E. Cummings, Democrat of Maryland.
Doxycycline, an antibiotic. went from $20 a bottle in October 2013 to $1,849 by April 2014. according to the two lawmakers.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase for Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.” An organization representing the directors of state AIDS programs has also been looking into the price increase, according to doctors and patient advocates.
Martin Shkreli is the founder and chief executive of Turing Pharmaceuticals, which raised the price of the drug Daraprim to $750 a tablet from $13.50. Credit Paul Taggart/Bloomberg, via Getty Images
Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis. a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy. and also for people with compromised immune systems, like AIDS patients and certain cancer patients.
Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.
“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”
This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy. He started MSMB Capital, a hedge fund company, in his 20s and drew attention for urging the Food and Drug Administration not to approve certain drugs made by companies whose stock he was shorting.
In 2011, Mr. Shkreli started Retrophin, which also acquired old neglected drugs and sharply raised their prices. Retrophin’s board fired Mr. Shkreli a year ago. Last month, it filed a complaint in Federal District Court in Manhattan, accusing him of using Retrophin as a personal piggy bank to pay back angry investors in his hedge fund.
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Mr. Shkreli has denied the accusations. He has filed for arbitration against his old company, which he says owes him at least $25 million in severance. “They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money,” he said.
Daraprim, which is also used to treat malaria. was approved by the F.D.A. in 1953 and has long been made by GlaxoSmithKline. Glaxo sold United States marketing rights to CorePharma in 2010. Last year, Impax Laboratories agreed to buy Core and affiliated companies for $700 million. In August, Impax sold Daraprim to Turing for $55 million, a deal announced the same day Turing said it had raised $90 million from Mr. Shkreli and other investors in its first round of financing.
Daraprim cost only about $1 a tablet several years ago, but the drug’s price rose sharply after CorePharma acquired it. According to IMS Health, which tracks prescriptions, sales of the drug jumped to $6.3 million in 2011 from $667,000 in 2010, even as prescriptions held steady at about 12,700. In 2014, after further price increases, sales were $9.9 million, as the number of prescriptions shrank to 8,821. The figures do not include inpatient use in hospitals.
Turing’s price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.
Turing Chief Explains Drug Price Rise
Martin Shkreli, the chief executive of Turing Pharmaceuticals, explains the increase in drug prices in a CNBC interview.
By CNBC on Publish Date September 21, 2015. Photo by CNBC. Watch in Times Video »
Some doctors questioned Turing’s claim that there was a need for better drugs, saying the side effects, while potentially serious, could be managed.
“I certainly don’t think this is one of those diseases where we have been clamoring for better therapies,” said Dr. Wendy Armstrong, professor of infectious diseases at Emory University in Atlanta.
With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
The switch from drugstores to controlled distribution was made in June by Impax, not by Turing. Still, controlled distribution was a strategy Mr. Shkreli talked about at his previous company as a way to thwart generics.
Some hospitals say they now have trouble getting the drug. “We’ve not had access to the drug for a few months,” said Dr. Armstrong, who also works at Grady Memorial Hospital, a huge public treatment center in Atlanta that serves many low-income patients.
But Dr. Rima McLeod, medical director of the toxoplasmosis center at the University of Chicago, said that Turing had been good about delivering drugs quickly to patients, sometimes without charge.
“They have jumped every time I’ve called,” she said. The situation, she added, “seems workable” despite the price increase.
Daraprim is the standard first treatment for toxoplasmosis, in combination with an antibiotic called sulfadiazine. There are alternative treatments, but there is less data supporting their efficacy.
Dr. Aberg of Mount Sinai said some hospitals will now find Daraprim too expensive to keep in stock, possibly resulting in treatment delays. She said that Mount Sinai was continuing to use the drug, but each use now required a special review.
“This seems to be all profit-driven for somebody,” Dr. Aberg said, “and I just think it’s a very dangerous process.”
A version of this article appears in print on September 21, 2015, on page B1 of the New York edition with the headline: Once a Neglected Treatment, Now an Expensive Specialty Drug. Order Reprints | Today’s Paper | Subscribe
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