#PoliticalSpeak: pharma in the naughty corner

Pharma vampires will finally have to stop gouging. #PoliticalSpeak 

Legislation to stop pharmaceutical companies price gouging has been on the cards for years and it has finally happened in the US. Gouging occurs because companies selling certain off-patent generics find themselves in a position were there is no competition. This tends to happen with low volume speciality drugs. Although gouging is not illegal it is considered unethical by most people. Imagine being poor and you need a medication, that is life saving, and you find you can't afford it because the price has been increase by over 600%? 

Let's hope the anti-gouging legislation will allow the pharma industry as a whole to regain some credibility. The issue of high-cost drugs and the emergence of cartel-like market behaviour still needs to be addressed. I also suspect there will be tweaks to the patent legislation, in relation to pharmaceuticals, to rebalance the risks and rewards associated with drug development. The patent system has been designed by society to reward Pharma for innovation, but not to reward them for too long so as to incentivise them to spend on R&D. The abuse of this system by some Pharma companies, particularly in relation to differential pricing between countries has created a global imbalance. Why should the US market subsidise drug development costs and drugs costs in other countries? I suspect the latter issue may trigger US legislation to try and rebalance the global system. This means European countries, in particular the UK, will have to be prepared to pay more for innovative pharmaceuticals. It will be interesting to see how British politicians deal with this issue when they have to start negotiating trade deals with the US post-Brexit? Pharmaceutical pricing will be high on the agenda. 


Greene & Padula. Targeting Unconscionable Prescription-Drug Prices — Maryland’s Anti–Price-Gouging Law.  N Engl J Med 2017; 377:101-103

Excerpts:

..... Why, in the early 21st century, are so many drugs that were cheaply available in the 20th century becoming prohibitively expensive? The past few years have seen a series of dramatic price hikes on essential off-patent medications, from albendazole to albuterol, digoxin to naloxone, Daraprim to EpiPen. In the storm of allegations and indignation that has followed each of these revelations, one explanation has remained consistent. 

...... To paraphrase Senators Susan Collins (R-ME) and Claire McCaskill (D-MO), who were the chair and the ranking member of the Senate Special Committee on Aging, firms that corner the market on off-patent medications and raise prices wildly often do so simply because they can. When the committee issued a 130-page report last December documenting the parallel strategies used by firms to engage in monopolistic price gouging on older essential drugs, the senators pointed out that these actions, though arguably unethical, have so far not been found to be illegal.

..... Until now. In April, the Maryland General Assembly voted by substantial, bipartisan majorities to pass legislation prohibiting price gouging on essential off-patent or generic drugs; by the end of May, this bill had passed into law. The law authorizes Maryland’s attorney general to prosecute firms that engage in price increases in noncompetitive off-patent–drug markets that are dramatic enough to “shock the conscience” of any reasonable consumer. 

...... Manufacturers of innovative drugs will not be affected, nor will the majority of generic drug manufacturers, who collectively generated $1.7 trillion in cost savings over the past decade by participating in competitive markets to bring drug prices down. Rather, the law specifically targets companies that intentionally pursue a strategy of hiking prices on noncompetitive off-patent drugs.

...... Rather than inhibiting competition, it will deter manufacturers who would take a page from the playbook of Amedra (which raised prices on albendazole), Turing (pyrimethamine), or Valeant (penicillamine and isoproterenol) by exploiting noncompetitive drug markets for short-term profit through unconscionable behavior that imperils public health and individual welfare.

CoI: multiple

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