Turing’s Price Hike A Symptom of Bigger Problem
Hating on Martin Shkreli nearly broke the Internet after he raised the price of a generic but life-saving drug from $13.50 to $750. While it would be easy to pile on, at Gay Men’s Health Crisis we believe this is an opportunity to shine a light on the bigger problem. As one biotech analyst noted, Shkreli’s company, Turing Pharmaceuticals, bases its entire business plan precisely on the price-spike strategy, which is neither new nor illegal – but it is getting worse.
Building on a long history of prescription drug policy activism, GMHC has spoken out about the next generation of drug profiteering – which is to buy cheap generic drugs that are made by one pharmaceutical company and raise the price exorbitantly. Because it takes years and an estimated $1 million to get a new generic drug approved in the US, there is a guaranteed profit at least for several years. And because many of these drugs are a niche market – only a small number of people actually need the drug – there is virtually no incentive for other drug makers to compete for the business and thereby drive the price back down.
A whole host of factors have led to this situation, but safe to say that our regulatory system has not caught up to the worsening circumstances. This is not for a lack of understanding or common sense reform ideas – it’s always a lack of political will. Needless to say, pharmaceutical companies are very powerful but at GMHC, we know how to change the power dynamic through activism, political pressure and organization. Shkreli has backed off from an outrageous price hike for a drug that costs pennies to produce, and we will hold him to that. But we are also determined to see this issue addressed at the federal level.
For that reason we are cautiously optimistic about presidential candidate Hillary Clinton’s response to the Shkreli fiasco. She has put forth a plan that hits at both ends of the issue: better regulation and more competition. The first order of business is to stop the bleeding – and to this end, her proposal would cap the amount of money people pay out of pocket for prescription drugs. But she understands better than anyone that the situation is complicated; indeed, a heavy-handed regulatory fix could actually make matters worse if not coupled with increased competition. To that end, there are other elements to Clinton’s plan, but notably it would allow individuals and resellers to import drugs from places with similar safety standards, such as Canada and Europe, where drugs are often sold at half the cost that Americans pay. GMHC and biotech experts have long supported this regulatory reform.
The bottom line is that too many of our essential, life-saving medicines are at risk of becoming out of reach for patients in the United States and around the world because the greed and opportunism of companies like Turing Pharmaceuticals always outpace our increasingly enfeebled regulatory system. GMHC demands Congress create a better system for regulating prices so that the Martin Shkrelis of the world don’t have the legal ability to prioritize profits over people’s lives.
Kelsey Louie is the CEO of Gay Men’s Health Crisis.