Valeant Pharmaceuticals International is one of a new breed of drug companies, which have been accused of cutting real research and development in favour of buying old, off-patent generic drugs and then upping the price by several hundred per cent. This can be done because, as a result of their age and relatively low demand, many older generics have no competition.
R and D, trials and regulations cost a lot of money and drug companies have always argued that patents and the fixed-term monopolies they create are the reward. However, buying the rights to a generic drug on which someone else did the legwork years ago, and then jacking up the price, is not the same thing. Increasing prices takes advantage of patients who may have no other choice, unless they consider death a viable alternative.
Turing Pharmaceuticals, earlier this year bought the rights to a drug called Daraprim, used to treat a common parasite that can be fatal in patients with compromised immune systems (most notably those being treated for HIV and cancer). The price of the drug rose from $13.50 (£8.75) per pill to $750 overnight. CEO Shkreli said this week in an interview with the website Business Insider. “Until we figure out demand,” he said, “we won’t lower the price.” This is a drug that has been around for more than 60 years and is used in very specific patients over a very long period. It is absurd to think that the company is only now “figuring out” demand.
Valeant has substantially raised the price on numerous drugs it has acquired: Glumetza, a diabetes treatment, went up by 1,020 per cent; Cuprimine, used to treat Wilson’s disease, increased in price by 2,850 per cent; and the heart-rate drug Isuprel went up by 720 per cent. The surface at a company that has bought at least 100 drugs since the former management consultant and now Valeant’s chief executive, J Michael Pearson took the helm in 2008. This is a Canadian company, the largest on the Toronto Stock Exchange, and Valeant can’t engage in such practices in Canada, where there are federal and provincial controls on what drug groups can charge Canadians.
Neither, Valeant or Turing have actually broken US laws. The drugs rights were sold on the open market to the highest bidders; depressing though it is, what they then do with the pricing is up to them.