You can settle with the self-appointed superiority of the Twitter mob: Martin Shkreli is an unrepentant, deluded psychopath. Or, you can swallow hard and admit that a few things that Martin Shkreli said are likely right:
- That prices for many drugs, particularly antibiotics and rarely used generics, are too low.
- That PhRMA and BIO are sycophantic.
- That Shkreli may not be such a rogue CEO at all – and that behind closed doors, many more are cut from the same cloth.
- That funding future research with steep upfront prices could, if wielded correctly, help even out new drug prices once they’ve hit the market.
Last Friday, Shkreli spoke on MedCity News’ weekly show MedHeads – and defended his pricing of Daraprim at Turing Pharmaceuticals. You can see the discussion here.
Shkreli said he’s fielded thousands of phone calls and has spoken to countless journalists, but his message has been lambasted across the board. He’s biopharma’s bad boy.
However, here’s the silver lining: People are talking about drug prices. Before it’s inevitably buried in the news cycle, we must grasp onto the lessons we can actually learn from Shkreli. Because in some measure he’s right.
Shkreli’s argument on MedCity News is that Daraprim is a fairly ineffectual drug that’s only prescribed to some 2,000 patients – and costs a mere $13.50 per pill. Bringing that price up to $750 a pop, Shkreli argued, would bring Turing “to the break-even point.” Whether or not there’s legitimacy to that statement is up for hot debate – with most experts and the media convinced he’s just peddling more psychopathy.
However: $13.50 per pill really is quite low, from a company standpoint and an ROI standpoint. There are countless drugs that sit on pharmaceutical company shelves – either paused in the development process or simply too unprofitable to produce. Hiking up the price for an ill-used drug does have its merits, if it does ideally help generate research for a better next-generation product. Whether Shkreli will actually follow through on his claims is dubious, given his track record at Retrophin. But there’s a case to be made for making uncommonly used drugs, even if they’re off-patent, more expensive – and let the insurance companies deal with the bottom line.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Then there’s the example of antibiotics – which in particular are mass-produced and prescribed with abandon. That’s led to increasing rates of bacterial resistance. Reducing the accessibility of over-prescribed drugs like amoxicillin may actually help lessen the spread rate of hardy bugs that cause terrible illnesses. Increasing the costs of these antibiotics might actually help curb overprescription rates, particularly in underdeveloped countries that lack the infrastructure to regulate dosage and administration rates.
PhRMA and BIO ejected Shkreli from their respective trade groups. But they have actually been criticized, in their own right, for barring transparency in issues like drug pricing. As they are advocates more for the biopharmaceutical industry than for, say, patients or providers, the immediate stance for such a trade group tends to be to protect one’s own. It’s one thing to ban Turing Pharmaceuticals from their ranks, but yet another to really crack down and analyze similar practices going on in many other firms. We’re an industry fraught with constant boosting of prices, ostensibly to fuel R&D – but the numbers are hard to reconcile.
Take the drug colchicine, a 3,000-year-old medicine used to treat gout that’s been broadly reported on just this past week. Until Shkreli boldly defended his stance on hiking up his drug’s prices, the controversy around colchicine had been forgotten by the broader public – despite ongoing conversation about how the drug costs are just too damn high. Pharma CEOs make decisions like Shkreli all the time, albeit in a less brash manner. Price hikes slip under the radar frequently. Take the rising cost of commonly prescribed diabetes drugs:
- Costs rose 150 percent for six popular, brand-name diabetes drugs in the past five years. Two of these drugs rose in price more than 250 percent.
- In 2012, the cost of treating diabetes was $245 billion
- The spend on insulin and other diabetes medications is projected to rise 18.3 percent over the next three years – a rate that’s 60 times greater than the income growth rate of 0.3 percent across all households.
Many of the drugs used to treat diabetes are off-patent. The disease’s incidence is rising at an uncontrolled rate. And yet, the prices are increasing. Why? Shouldn’t the greater drug production help curb costs? You’d imagine so – and yet we’re paying more and more for the same drugs. Something’s got to give. There’s a lot more to criticize in hiking the price of ubiquitous drugs than those that are used seldom. Shkreli is the scapegoat here – the face of a confusing and money-hungry pharmaceutical industry.
In any case, here’s another thought: Is Martin Shkreli the kind of CEO life science needs? A brash, tech-heavy dude-bro that breaks the rules. He’s more Uber than AbbVie. The current biopharma industry is stuffed with buttoned-up white men in grey suits, brokering deals behind closed doors and then speaking in code during investor calls and, of course, JP Morgan.
It’s truly incredible: One biopharma CEO that just happened to be unapologetic and asinine managed to move markets – and potentially pop the biotech bubble. This is largely because of his public persona and the internet’s mob-like mentality to crucify anyone that’s perceived, well, as a douche. But others that have behaved accordingly didn’t move the bar, and didn’t get the broader public talking.
Maybe we need a few more Shkrelis in our midst – if only to shake things up and get people thinking.
[youtube http://www.youtube.com/watch?v=Lystfat0Fp0&w=560&h=315]
