The free market at work: Imprimis to sell drug going for $750/pill for $1.

[Axulus]

When a generic drug formulation goes from $13.50 per pill to $750 each, the company making it is essentially putting a “Kick Me” sign on their back.

But unless you’ve been offline or away from the news for the last month, you’ll know that’s exactly what happened when Turing Pharmaceuticals’ CEO Martin Shkreli announced a price increase for Daraprim, a patented formulation of the antiprotozoal drug, pyrimethamine.

The off-patent drug is used to treat toxoplasmosis, a disease caused by a protozoan that can infect pregnant women and the fetus, as well as immunocompromised patients such as those with HIV/AIDS or cancer.

Turing purchased the rights to the Daraprim formulation of pyrimethamine from Impax Pharmaceuticals in August for $55 million.

As Shkreli made the rounds of cable news, financial channels, and social media, he drew the ire of patients, politicians, and even pharmaceutical societies for the price increase. He has since said that the price will be revisited and lowered. But as of this morning, a one-month supply of Daraprim (30 tablets of 25 mg pyrimethamine) retails between $22,000 and $24,000 across large pharmacies chains such as CVS, Kroger KR -2.70%, Target TGT -5.17%, Walmart, Walgreens, and Rite-Aid, among others. Mr. Shkreli has not responded to a request for a telephone interview.


In response, and as an extension of their ongoing compounding pharmacy services, Imiprimis Pharmaceuticals announced yesterday that it would be offering patient-specific, custom formulations of pyrimethamine together with leucovorin, a folic acid relative often given separately to offset some of pyrimethamine’s side effects.

The price? As low as 100 capsules for $99.

http://www.forbes.com/sites/davidkr...native-to-turings-daraprim-for-toxoplasmosis/

 

[arkirk]

When a generic drug formulation goes from $13.50 per pill to $750 each, the company making it is essentially putting a “Kick Me” sign on their back.

But unless you’ve been offline or away from the news for the last month, you’ll know that’s exactly what happened when Turing Pharmaceuticals’ CEO Martin Shkreli announced a price increase for Daraprim, a patented formulation of the antiprotozoal drug, pyrimethamine.

The off-patent drug is used to treat toxoplasmosis, a disease caused by a protozoan that can infect pregnant women and the fetus, as well as immunocompromised patients such as those with HIV/AIDS or cancer.

Turing purchased the rights to the Daraprim formulation of pyrimethamine from Impax Pharmaceuticals in August for $55 million.

As Shkreli made the rounds of cable news, financial channels, and social media, he drew the ire of patients, politicians, and even pharmaceutical societies for the price increase. He has since said that the price will be revisited and lowered. But as of this morning, a one-month supply of Daraprim (30 tablets of 25 mg pyrimethamine) retails between $22,000 and $24,000 across large pharmacies chains such as CVS, Kroger KR -2.70%, Target TGT -5.17%, Walmart, Walgreens, and Rite-Aid, among others. Mr. Shkreli has not responded to a request for a telephone interview.


In response, and as an extension of their ongoing compounding pharmacy services, Imiprimis Pharmaceuticals announced yesterday that it would be offering patient-specific, custom formulations of pyrimethamine together with leucovorin, a folic acid relative often given separately to offset some of pyrimethamine’s side effects.

The price? As low as 100 capsules for $99.

http://www.forbes.com/sites/davidkr...native-to-turings-daraprim-for-toxoplasmosis/

Ever heard of lawyers? You say it is off patent. Then why did they have to purchase the rights? There probably will be a legal challenge to this dollar a pill idea. I am all for the dollar pill but that is not in keeping with YOUR PHILOSOPHY of rule by the owners.

 

[Trausti]

http://www.forbes.com/sites/davidkr...native-to-turings-daraprim-for-toxoplasmosis/

Ever heard of lawyers? You say it is off patent. Then why did they have to purchase the rights? There probably will be a legal challenge to this dollar a pill idea. I am all for the dollar pill but that is not in keeping with YOUR PHILOSOPHY of rule by the owners.

No, no. Turing bought the "Daraprim formulation," i.e., they bought the brand name rather than make a generic.

 

[dismal]

Seems like a good CEO would have competed with a $749 pill. Not sure this Imiprimis CEO is sufficiently greedy. May have to pull his CEO card.

 

[Elixir]

Seems like a good CEO would have competed with a $749 pill. Not sure this Imiprimis CEO is sufficiently greedy. May have to pull his CEO card.

You're overlooking the inestimable value of being publicly anointed a White Knight, in the midst of a matter that already has more exposure than most companies can buy.

 

[dismal]

Seems like a good CEO would have competed with a $749 pill. Not sure this Imiprimis CEO is sufficiently greedy. May have to pull his CEO card.

You're overlooking the inestimable value of being publicly anointed a White Knight, in the midst of a matter that already has more exposure than most companies can buy.

Also, someone else probably would have come along and sold the pill for $748.

 

[fromderinside]

The problem with all this is that the companies will charge any price they can get with little consideration for why the drug exists. Inventive people do things for various reasons including a want to provide help for those who have the problem requiring such drug. The prices, on the other hand, is set by those who calculate how much they can get for the drug above all else.

Pills required to live are in that spot where price should be secondary even to the point where the producer loses money on the drug. Its a life giving/extending service in a civic minded society. The profit guys need to step back before their lines of price poisoned pills get taxed to the point they can't make money at any price. At that point everybody loses.

Economic white nights aren't the answer here. If there is an argument for government sponsored production here is one. Everybody needs to contribute for the general welfare and everybody needs to promote those who want to provide help for those who have a specific drug life saving solution.

 

[Don2 (Don1 Revised)]

So even with a huge FDA and Obamacare, it only costs $1.00. Good job, regulated market.

 

[Axulus]

So even with a huge FDA and Obamacare, it only costs $1.00. Good job, regulated market.

They are attempting to bypass the FDA through use of compounding pharmacy laws.

You might want to try again.

The drug that Imprimis Pharmaceuticals is selling is not FDA-approved. A bit of background is in order. Even today some drugs need to be tailor-made. A patient, for example, might not be able to swallow a pill so a licensed pharmacist may create for a specific, individual patient a small batch of the drug in liquid form. A pharmacy that does this kind of work is called a compounding pharmacy.

Compounding pharmacies have a long and tendentious history with the FDA. The FDA has always claimed that a new drug is a new drug, even one created only for a specific individual. Thus, the FDA has always said that it has the right to regulate compounding pharmacies just like manufacturers of new drugs. In practice, however, the FDA allowed the industry to proceed with little regulation.

In the 1990s some compounding pharmacies began to create large batches, especially of drugs in short supply, as a way of avoiding the FDA process. The FDA worried about quality control, however, and it re-evaluated its traditional hands off approach. A political battle then ensued in which Congress and the Supreme Court also had their say. In 2012, fungal meningitis outbreaks caused by poor quality control at the New England Compounding Center brought these issue to public attention and resulted in greater regulation of compounding pharmacies, albeit with clearer regulations on when a compounding pharmacy may sell large quantities.

Imprimis Pharmaceuticals did not apply for approval to sell a generic version of Daraprim. As I argued earlier, that would take years and cost millions of dollars. Instead, it is doing an old-style end-run of the FDA process by offering its alternative under the compounding pharmacy laws. That means that it can only sell to order, on a patient by patient, prescription by prescription basis. Since Daraprim is not widely used this may work. Indeed, I hope this end run works but my reading of the act is that compounders can only supply drugs in large quantities if they are on the FDA’s shortage list. Perhaps the FDA will look the other way, however, in order to send Turing and similar firms a message.

http://marginalrevolution.com/marginalrevolution/2015/10/competition-compounded.html

 

[Don2 (Don1 Revised)]

So essentially the FDA is beholden to Big Pharma. Figures.

 

[Axulus]

The problem with all this is that the companies will charge any price they can get with little consideration for why the drug exists. Inventive people do things for various reasons including a want to provide help for those who have the problem requiring such drug. The prices, on the other hand, is set by those who calculate how much they can get for the drug above all else.

Inventive people such as this should work for a university instead of as well paid (2x-3x the salary) for-profit pharma researcher.

Pills required to live are in that spot where price should be secondary even to the point where the producer loses money on the drug.

Who should be required to do this? If no one produces the drug, how does that help anyone?

Its a life giving/extending service in a civic minded society.

There are civic minded organizations that can better fill that role, not for-profit companies.

The profit guys need to step back before their lines of price poisoned pills get taxed to the point they can't make money at any price. At that point everybody loses.

I don't understand what you are getting at here.

Economic white nights aren't the answer here.

I don't think they are being a white night. They are most likely making a tiny profit but also hoping to strengthen their ability to to an FDA regulation run-around due to the positive press this move brings and the huge backlash it would cause if the FDA forbids them, plus gaining some good press in the mean time.

If there is an argument for government sponsored production here is one.

Why? It seems like the $1 pills are able to satisfy the patient/societal need here just fine, and no government told anyone that they had to do it.

Everybody needs to contribute for the general welfare and everybody needs to promote those who want to provide help for those who have a specific drug life saving solution.

We already do through Medicare, Medicaid, Obamacare, etc.

- - - Updated - - -

So essentially the FDA is beholden to Big Pharma. Figures.

Not at all. They can certainly attempt to make the argument that Imprimis is producing too high of a quantity with their $1/pill offer and try to get them to stop and go through the millions of dollar and multi-year long approval process. If anything, they are beholden to the public and the patients that such a dick move would bring about.

Additionally, they are tiny as far as pharma is concerned. They are a microcap company worth $67 million and lost $10 million last year.

 

[Loren Pechtel]

http://www.forbes.com/sites/davidkr...native-to-turings-daraprim-for-toxoplasmosis/

Ever heard of lawyers? You say it is off patent. Then why did they have to purchase the rights? There probably will be a legal challenge to this dollar a pill idea. I am all for the dollar pill but that is not in keeping with YOUR PHILOSOPHY of rule by the owners.

You still need FDA approval to make a drug regardless of patents. They're interested in quality control and that it works the same as the original. If you're going to start from scratch you have to prove both of these things--which is why it takes time to dethrone assholes like this guy.

 

[Will Wiley]

Seems like a good CEO would have competed with a $749 pill. Not sure this Imiprimis CEO is sufficiently greedy. May have to pull his CEO card.

Clearly not acting in the interest of shareholders

 

[untermensche]

What exactly has the free market done?

The gouging is the free market.

The gougers wish the market was a little freer so they could gouge even more.

One compounding pharmacy can supply some of this drug on a per-patient basis.

But the widespread gouging, especially of Americans, by the drug companies goes on and on.

What is so great about the free market?

 

[Axulus]

Seems like a good CEO would have competed with a $749 pill. Not sure this Imiprimis CEO is sufficiently greedy. May have to pull his CEO card.

Clearly not acting in the interest of shareholders

Raising the stock price 17% in a single day isn't in the interests of the shareholders? How do you figure?

 

[Axulus]

What exactly has the free market done?

The gouging is the free market.

The gougers wish the market was a little freer so they could gouge even more.

One compounding pharmacy can supply some of this drug on a per-patient basis.

But the widespread gouging, especially of Americans, by the drug companies goes on and on.

What is so great about the free market?

With robust competition, the price of things doesn't land much above the cost to produce them. We just have to hope that the FDA allows them to compete here and doesn't try to step in and stop it.

 

[untermensche]

What exactly has the free market done?

The gouging is the free market.

The gougers wish the market was a little freer so they could gouge even more.

One compounding pharmacy can supply some of this drug on a per-patient basis.

But the widespread gouging, especially of Americans, by the drug companies goes on and on.

What is so great about the free market?

With robust competition, the price of things doesn't land much above the cost to produce them. We just have to hope that the FDA allows them to compete here and doesn't try to step in and stop it.

There is no market concept that explains why the drug manufacturers charge patients in the US so much more than they charge in other places.

Especially since they get so much US government aid in the process.

 

[Axulus]

With robust competition, the price of things doesn't land much above the cost to produce them. We just have to hope that the FDA allows them to compete here and doesn't try to step in and stop it.

There is no market concept that explains why the drug manufacturers charge patients in the US so much more than they charge in other places.

Especially since they get so much US government aid in the process.

Patents. They are effectively a government created monopoly, meaning no competition is allowed. Furthermore, strict and expensive FDA regulations reduce competition further and only the few who can afford to pass them can supply the drug (and the cost of passing them must be recouped from the patients who use the drug). Finally, there is a general ban on imports unless they have passed said strict FDA regulations and approval process, reducing competition even further. Note that this is all contrary to the statement I made: With robust competition

 

[Axulus]

http://www.forbes.com/sites/davidkr...native-to-turings-daraprim-for-toxoplasmosis/

Ever heard of lawyers? You say it is off patent. Then why did they have to purchase the rights? There probably will be a legal challenge to this dollar a pill idea. I am all for the dollar pill but that is not in keeping with YOUR PHILOSOPHY of rule by the owners.

Rights to the brand name and distribution network that has FDA approval. It would be like purchasing the rights to Advil. You are the only one allowed to sell ibuprofen under the Advil name, but anyone is allowed to sell ibuprofen under other names, only in this case Advil is the only FDA approved brand and distribution network for ibuprofen. Imprimis found a way around that FDA approval by being a compounding pharmacy, which allows it to create specific drugs for specific patients with a specific prescription without itself obtaining normal FDA approval. It is still subject to some FDA oversight, however.

 

[Will Wiley]

Clearly not acting in the interest of shareholders

Raising the stock price 17% in a single day isn't in the interests of the shareholders? How do you figure?

It was a joke that went over your head