Here are links to a few interesting news articles I came across recently. They are about the underlying issues that allow parasitic douchebags like Martin Shkreli to increase the price of 60-year old drugs by 5000%. Also read the comment sections for linked articles.
Link 1: Shkreli, Turing, and PhRMA
PhRMA still needs to make the case for why Turing is not just some bad little company that went a little too far. As it stands, people will look at them, look at the rest of the drug industry, and then decide that the difference is one of degree, not of kind. That, though, is why I think that PhRMA (and individual companies) have been so quiet during this fiasco. They don’t like the questions that would come up. Think about it – you come out and say that a fifty-fold price increase is completely out of line, and the follow-up question is (naturally) what sorts of price increases you think are in line. And nobody wants to talk about that. You come out and say that a company that buys into an old drug that it had not the slightest part in developing shouldn’t suddenly inherit the ability to ram its price through the roof, and the follow-up question is which drugs in your own portfolio were acquired from someone else, and how you’re pricing them. Finally, you come out and say that Turing’s rationale (R&D spending) is ridiculous, and the follow-up is how much you’re spending on your own R&D and how your prices relate to that.
By wrapping ourselves in statements of purpose and noble intentions, we in the R&D-driven part of the drug industry are doing ourselves a disservice. It leaves us unable to distinguish ourselves from obnoxious parasites, outfits like Turing that can, with a straight face, recite the same rationales. We’re going to have to be more forthcoming about how much money we spend, where it goes, and display our expensive failures to make the point that a lot of money has to come in, because a lot of money is also going out. If only one out of every ten cars that Ford developed – assembly lines and all – ever made it to the showrooms, cars would be more expensive. If only one out of every ten movies – after shooting, production, and editing – ever made it to theaters, ticket prices would go up. We get one of out of every ten drugs in the clinic to market, and we’ve got to pay for it somehow. We’re in the position of Adam Smith’s butcher, brewer, and baker: people don’t expect us to provide useful drugs sheerly out of the goodness of our hearts, good though some of them may be. But they shouldn’t be expecting us to skin them alive just because we might be able to get away with it, either.
Link 2: Should Martin Shkreli be allowed to play the Good Samaritan defense?
In a moment of candor no doubt brought on by some personal animosity, Martin Shkreli let down his guard on Sunday and told me exactly why he hiked the price of a 62-year-old drug by more than 5000%. “It’s a great business decision that also benefits all of our stakeholders,” Shkreli told me on Twitter. “I don’t expect the likes of you to process that.” He then called me a moron, and later bragged about flipping off the media. So there you have it. The unvarnished truth. It was a business decision. It was about money. And screw you.
It’s time for the industry to come up with a better reason for why we get up in the morning, and a more credible approach for dealing with controversies. Real innovation costs a lot of money and deserves to be well compensated. That model has created an industry which is seeing tens of billions of dollars being pumped into new product development. It has provided the world with a painless cure for hep C and huge advances in oncology in just the last few years. And much, much more. It’s OK to do good work for money. You also don’t have to play the Good Samaritan defense in the wake of a blunder. And it shouldn’t be allowed for execs like Shkreli, who is using the country’s no-holds-barred policy on drug prices to generate some fast cash. If you make a mistake, don’t play the same weak card. Not unless you want to find Martin Shkreli standing right beside you, shoulder to shoulder. That’s the kind of public relations disaster that this industry can no longer afford.
Link 3: Turing Pharma price hike debacle tars entire pharma industry’s reputation
Unfortunately for pharma and its already bottom-of-the-industry-polls reputation, the damage was already done. If Shkreli is, as the Daily Beast called him, “pharma’s biggest a**hole,” the problem is still bigger than one greedy and egocentric profiteer. The ongoing collateral tarnish of pricing issues on the entire industry’s reputation is one it can’t afford if it expects to maintain trusting relationships with physicians and consumers. “The problem is that Martin Shkreli is not the drug industry, but it would be easy for someone on the outside to mistake him for the drug industry. Particularly if you’re not overly fond of the drug industry to start with, as many people aren’t,” said Derek Lowe, a medicinal chemist and author of the blog In the Pipeline, in an interview. Frank David, founder and managing partner at Pharmagellan, blogging on Forbes, agreed. “The risk to all pharma companies is that this could become a story not about a single biotech, but about the industry as a whole and its insensitive, unethical pricing practices,” he said.
And that was about it–executives from the rest of the industry stayed publicly mum. TheStreet’s reporter Adam Feuerstein noted he couldn’t get any pharma CEOs to comment on the record. Execs commented privately to FierceBiotech as well, but didn’t take their arguments public. “The problem is that silence gives consent. People will say ‘well, they’re not saying anything against him, so they must be with him,'” Lowe said. “Staying silent looks like you’re OK with it.” And as David wrote, “We’ve seen this movie before – and we’re about to see it again, this time in drug pricing. Although Turing’s hefty hike may fail the red-faced test, no bright line divides it from what has become standard industry practice: annual double-digit percentage price increases on marketed drugs, year after year. Yes, 15% is less than 5,000% – but they both lie on a spectrum, and if pharma’s dismal approval rating continues to lie just below that of insurance companies, it’s hard to imagine much public sympathy materializing when companies try to explain the difference.
What do you think? Comments?