Another Pharma Company Recaptures a Generic Medication

Applehu Akbar writes: Daraprim, currently used as a niche AIDS medication, was developed and patented by Glaxo (now GlaxoSmithKlein) decades ago. Though Glaxo's patent has long since expired, a startup called Turing Pharmaceuticals has been the latest pharma company to 'recapture' a generic by using legal trickery to gain exclusive rights to sell it in the US. Though Turing has just marketing rights, not a patent, on Daraprim, it takes advantage of pharma-pushed laws that forbid Americans from shopping around on the world market for prescriptions. Not long ago, Google was fined half a billion dollars by the FDA for allowing perfectly legal Canadian pharmacies to advertise on its site. So now that Turing has a lock on Daraprim, it has raised the price from $13.50 a pill to $750. In 2009 another small pharma company inveigled an exclusive on the longstanding generic gout medication colchicine from the FDA, effectively rebranding the unmodified generic so they could raise its price by a similar percentage.

Comments

Shop elsewhere if you need this drug

[Calibax]

Daraprim (generic name Pyrimethamine) is also used a alternative treatment for maleria where quinine cannot be used, although resistance is now prevalent worldwide. The manufacturing cost is roughly $1 per 25 mg tablet, so even the old price of $13.50 per tablet is a very substantial markup. A typical course of treatment requires around 90 to 120 tablets.

Anyone in the USA needing this drug should fly to the UK where it is still manufactured by GKN and sold for the equivalent of $70 for 90 tablets. Those same 90 tablets would cost $67,500 at the new price in the USA, so the saving would be substantial even allowing for air fare, hotel, etc.

Some enterprising company willing to spend the money to get approval to import the drug from the UK would put this startup out of business. Hopefully.

Re:Shop elsewhere if you need this drug

[Jiro]

Some enterprising company willing to spend the money to get approval to import the drug from the UK would put this startup out of business. Hopefully.

They can't, because of the loophole (which is not explained in this article, but is in other articles like http://blogs.sciencemag.org/pi... ): You are not allowed to sell a generic equivalent unless you can prove it is as effective as the nongeneric version. In order to prove it is as effective as the nongeneric version, you need to do trials that compare it to the nongeneric version. The company that owns the nongeneric version refuses to sell you any, so you can't do trials, so you can't prove it's effective, so you can't sell it.

Re:Shop elsewhere if you need this drug

[ColdWetDog]

Or go to Mexico. Or any other civilized country.

Or perhaps, hammer your hapless elected representative to allow for 'free trade' in pharmaceuticals. Remember that concept? The world is your oyster. It's time that gobalization benefited the majority of the population for a change.

Re:Shop elsewhere if you need this drug

[gstoddart]

Corporate profits.

In case you haven't noticed, American politicians are more than willing to entrench corporate profits into law.

When pharma buys a law, you can make damned sure it's only pharma who benefits. Likewise, when the copyright cartel buys a law, it's only a good thing for them.

Basically when corporations buy laws, they write it, give themselves exemptions and loopholes so they control the outcomes ... it's a stacked deck, by a corrupt process which says the more money you have the more access to "democracy" you have.

Me, I think shit like this is pretty much demonstrating how the US has sold the farm for a couple of magic beans in the form of "intellectual property". Free markets? Who wants one of those when you can guarantee corporate profits and not have to work for it?

I hope this CEO gets mauled by bears.

Re:Shop elsewhere if you need this drug

[Spy Handler]

Corporate profits.

In case you haven't noticed, American politicians are more than willing to entrench corporate profits into law.

This is why we should all vote for Donald Trump. Bush and Clinton will do whatever Big Pharma tells them to do, but Trump won't.

Re:Shop elsewhere if you need this drug

[Cyberax]

The problem is, you CAN NOT get an approval for an alternative generic. This shitty fucktard invoked an FDA clause allowing this company to use "closed distribution". I.e. this company can pick and choose to which customers it sells the drug in exchange for discounted pricing.

Why does it matter? - To market a generic drug you need to show that it's equivalent to an existing drug. And Turing can block any such clinical study - a classic Catch-22. This loophole should be fixed, but given the dysfunctional state of the Congress any bill fixing this will probably be encumbered with a prohibition on abortions and more NSA spying.

Re:Shop elsewhere if you need this drug

[Calibax]

There are no generic manufacturers for Daraprim because of the low volumes sold. This startup bought the exclusive right to sell the drug in the USA, which is why they can jack up the price.

Other countries still sell it for low prices. The cost of the drug in Canada, or the UK, or Mexico (if you trust their pharmacies) make a trip out of the country worthwhile.

Re:Shop elsewhere if you need this drug

[PopeRatzo]

Free markets? Who wants one of those when you can guarantee corporate profits and not have to work for it?

Or, it just may be that "free markets" don't exist, have never existed and cannot exist, and this is just a snapshot of what late-stage capitalism looks like.

When it's dog eat dog, the big dog eats and sick dogs die.

LISTEN CAREFULLY: There is no "free market" solution to health care costs. Not drugs, not hospitals, not doctors. How would you feel if you lived in a small town and the doctor came out to your house to see to your sick child and you were told, "You're child won't live the night without this drug. I've got exclusive rights to the drug and even though it costs me $0.25 to make, I'm going to charge you $100,000 because it's a matter of supply and demand and your dying daughter has just increased your demand."

There is no "free market" solution to health care costs because sick people are vulnerable. Their families are vulnerable. And people with the last name, "Inc" will gladly throw a baby off a bridge for a dollar.

Re:Shop elsewhere if you need this drug

[PopeRatzo]

This is why we should all vote for Donald Trump.

Clearly, you have some expertise with pharmaceuticals.

Re:Shop elsewhere if you need this drug

[quantaman]

Your comment is the real meat of this story. All outlets are being lazy and stupid by making the story all about this one unethical businesskid.

I'm not sure if I'd call them lazy and stupid.

If you want to rally people to a cause there's nothing better than an unrepentant entitled asshole nominating himself as the villain.

Re:Shop elsewhere if you need this drug

[the gnat]

This loophole should be fixed, but given the dysfunctional state of the Congress any bill fixing this will probably be encumbered with a prohibition on abortions and more NSA spying.

Eh, I think this case may be outrageous enough to get them to close this particular loophole, and here's why: it's an indefensible perverse incentive, Big Pharma doesn't need it, and the last thing the lobby wants is for politicians to be talking about drug prices in general. Right now their stock prices are falling because of Clinton's comment, and most people working in biotech or pharma think Shkreli is an asshole* and would happily feed him to the wolves anyway. What they need is a very targeted bill that prevents this particular abuse but doesn't touch any other part of the wider industry's business model. I think they could get broad bipartisan support for this - it's the kind of no-brainer that allows politicians to take credit for something without having to address real-world problems.

(* Most of us have scientific backgrounds, and Shkreli is exactly the kind of humanities-major business-weasel we've despised since college. Actually, worse, because most econ majors don't eventually stalk the families of former employees. No one else will cry when his BMW is repossessed.)

Re:Shop elsewhere if you need this drug

[Darinbob]

Now a good trick is to convince doctors to not prescribe this drug if needed, but prescribe other drugs that may be effective, or even recommend a summer vacation to Canada. Part of the problem is that doctors are too far removed from costs, and they'll prescribe a drug without realizing the economic impact; even if patients can afford it because of insurance, it raises costs of drugs overall thus health costs continue to rise.

Re:Shop elsewhere if you need this drug

[Pluvius]

Incorrect. If brand-name manufacturers had this sort of power over generic drug approval, then there would be no generic drugs. The people who are saying that they can withhold consent to having their drugs used in bioequivalency trials are doing so based on a court case that never went to trial, about a company (mis)using REMS (a restriction placed by the FDA on certain dangerous drugs) to keep other companies from having their product. Daraprim is not a REMS drug AFAICT.

The real reason why there are no generic versions of Daraprim is because creating one and getting one approved costs a lot of money. When Glaxo was still selling the drug at a relatively low price, there was no incentive to make a generic because said generic couldn't be competitive. Now that Turing has marked the price up, a generic is far more feasible, but it will still take a considerable amount of time before one gets on the market. And even then, it might not be worth the risk that Turing will just lower the price and undercut any would-be competitors.

Rob

Re:Shop elsewhere if you need this drug

[Darinbob]

The villain who upset the apple cart though. I can imagine a lot of pharmaceutical CEOs highly annoyed that after years of slowly raising prices, one new asshole raises them suddenly so that the whole world now takes notice.

Re:Shop elsewhere if you need this drug

[gstoddart]

Or, it just may be that "free markets" don't exist, have never existed and cannot exist, and this is just a snapshot of what late-stage capitalism looks like.

I live in a country with socialized medicine ... I agree with you completely.

I think any system which allows some douchebag corporation to buy the rights to a drug and jack the price up by that much is inherently flawed.

And I believe a government in which industry can buy themselves laws which suit their own purposes is doomed to fail, and is likely in the middle of failing.

America has been coopted by corporate interests. And there are way too many politicians telling us this is the way forward.

Buying a drug so you can make it artificially scarce and jack up the prices by that much? That's not a "free market" ... that's a system which is so utterly broken as to be scary.

The modern form of "capitalism" is pretty much a cancer on the world. It's nothing but greedy douchbags with politicians in their back pocket giving them laws which allow them to manipulate the system as they see fit.

Re:Shop elsewhere if you need this drug

[cascadingstylesheet]

Or, it just may be that "free markets" don't exist, have never existed and cannot exist, and this is just a snapshot of what late-stage capitalism looks like.

In 2009 another small pharma company inveigled an exclusive on the longstanding generic gout medication colchicine from the FDA, effectively rebranding the unmodified generic so they could raise its price by a similar percentage.

Oh dear. It's too bad that no "progressives" have had any power since 2009.

Re:Shop elsewhere if you need this drug

[Zaiff Urgulbunger]

Turing Pharmaceuticals CEO Martin Shkreli defends HIV drugs price hike
What a sack of shit he is.

Re:Shop elsewhere if you need this drug

[slew]

AFAIK, the situation is like this. As part of the 2007 update to the Food and Drug Administration Act added the authority for the FDA to require drug manufacturers to implement a Risk Evaluation and Mitigation Strategy (REMS) to ensure that the benefits of a drug or biological product outweigh its risks. The theory was that some drugs might have serious enough side effects or complicated treatment plans that the FDA should require drug manufactures to make sure patients weren't harmed needlessly by taking these drugs in a way not supported by safety trials (aka elements to assure safe use or ETASU).

As an example, they could restrict wholesalers to sell the drug only to physicians or patients who attended training seminars, or only allow use for certain purposes and time-limit quantities to prevent certain side effects, make sure medicine is stored correctly and destroyed when expired, and they could require patients to be monitored for certain specific serious side effects, not allow the drug to be administer to otherwise healthy people etc... Seemed like a good idea at the time....

The unintended side effect of this is that Pharma companies have been crafting REMS to make it nearly impossible for generic manufacturers to obtain sufficient quantities of approved drugs for the required safety and equivalence trials. For example, a part of the ETASU might be that all patients must attend a company training seminar, or not allow the drug to be used on healthy people, but if you are doing a blind trial, that won't work.

To make the situation worse, even if the FDA didn't require REMS for a particular drug, the Pharma companies decided to "voluntarily" implement similar restrictions for their drugs on the wholesalers.

Wholesalers that don't comply with the Pharma's ETASUs would be violating both FDA rules and probably licensing restrictions and subject them to direct liability and thus will generally not sell product directly to these generic manufacturers. The only option remaining for generic manufacturers would be to purchase the product directly from the brand-name manufacturer. Under current law they are not required to sell drugs directly to their competitors and under strict interpretation of the FDA act, if a drug has a specific REMS, it is likely not technically legal.

Also even if the generic manufacturer decided to buy some of the drug on the "grey-market", they won't satisfy the requirements of the ANDA (abbreviated new drug application) which would require the same version available in the US market for demonstrating bio-equivalence.

FWIW, in 2012 there was an effort to amend the FDA act to allow the medical trials to bulk purchase of brand-name drugs at market prices and exempt REMS requirements, but it failed due to heavy lobbying...

Re:Shop elsewhere if you need this drug

[TsuruchiBrian]

This particular evil was perpetrated by a small startup and a corrupt politicians who are bribed to pass laws written by big pharma, and exploited by pharma of all sizes.

Re:Shop elsewhere if you need this drug

[TsuruchiBrian]

He started rich. He would have more money now if he had simply invested it in an index fund. Even by taking advantage of federal bankruptcy laws, his ROI is slightly worse than someone blindly putting money into their 401K.

He's just a regular fucking idiot who has managed not to blow the fortune he inherited.

It turns out having a shit ton of money gives you such a huge advantage that even a fuckface like Trump can't screw up.

Re:Shop elsewhere if you need this drug

[arglebargle_xiv]

or even recommend a summer vacation to Canada

That would be preferable to buying from online "Canadian" pharmacies, which aren't that at all but mostly fronts for Russian organised crime. You'll be shipped generics from India, not Canada. It's not as bad as it sounds because they depend on repeat customers so they work pretty hard to keep customers happy (you generally get the real deal, your credit card won't get ripped off, etc), but it's still taking a bit of a gamble.

Re:Shop elsewhere if you need this drug

[Tony Isaac]

You are not allowed to sell a generic equivalent unless you can prove it is as effective as the nongeneric version. In order to prove it is as effective as the nongeneric version, you need to do trials that compare it to the nongeneric version.

This is not correct. From the FDA:

The ANDA process does not require the drug sponsor to repeat costly animal and clinical research on ingredients or dosage forms already approved for safety and effectiveness.

The generic drug manufacturer needs only to prove that their version is equivalent to the original (details also spelled out at the above link.)

Re:Shop elsewhere if you need this drug

[Zontar The Mindless]

I agree with everything with the exception of your conclusion, which is erroneous because you're trying to spin the facts to suit your ideology.

The correct conclusion is that less corporate control over government is the solution.

Re:Shop elsewhere if you need this drug

[arglebargle_xiv]

It's a complicated situation. Outside the US, critlcal/life-saving drugs are generally covered by government regulations that keep them affordable. Inside the US, pharma companies get to set whatever price they want. Since this drives buyers to non-US sources, they've got their friends in the US congress to pass laws making it illegal to buy (or at least bring in) drugs from alternative sources. Sure, some people will die because they can't afford the medication they need, but by and large profit margins will be maintained. It's an acceptable loss.

Scum of the Earth

[JustAnotherOldGuy]

People and companies that do this sort of predatory business are truly Scum of the Earth.

I don't care how legal it is, this is just pure scumbaggery at its absolute worst.

"I don't care if you die, I need to make a profit!"

Re:Or just use homeopathy?

[JustAnotherOldGuy]

What about just using homeopathic treatments instead?

Yeah, but if you forgot to take your homeopathic meds, you'd overdose.

Re:Not an exclusive lock

[Qzukk]

Sure, and after you spend hundreds of thousands of dollars buying the equipment and the chemicals and hiring people to do it, Turing Pharmaceuticals "sees the light" and drops the price to 50 cents using the profit they've collected up to that point to stay afloat. Then they buy you out of bankruptcy with the rest of their profit and burn your facility to the ground as a message to any other investors who think they can stand up to them.

Then they raise the price to $751/pill, just to make a point.

Re:Or just use homeopathy?

[TsuruchiBrian]

Or praying. Has anyone tried praying? Or Magic?

If I received a terminal diagnosis...

[hyades1]

...I know how I'd spend my last time on Earth.

Evidently, the CEO is a sociopath?

[AdamThor]

I guess their CEO (Turing Pharmaceuticals CEO Martin Shkreli) harasses people on the internet as well.

See:
http://gawker.com/lawsuit-scum...

Mod Parent Up

[rsilvergun]

There's another good reason why there's no free market in health care: It's too hard to comparison shop.

Ever get a bad Twinkie? You know, one of the Generic brands that just isn't very good? Maybe you tried two or three brands before you found one you like better than Twinkies. Me, I like the Safeway brand better than the Hostess one.

Now, try doing that for a heart transplant. See, you don't have enough information. It takes one taste to know a bad Twinkie and you're out $3 bucks for a pack of 'em. It takes 8 years to know what goes into a heart transplant and you're probably only gonna ever have the one.