I just read about another case where a pharmaceutical company bought the rights to an old, been-around-forever drug and then drastically increased the price. Argh.
A few months ago I posted about the drug Daraprim, which was bought by Turing Pharmaceuticals. Its CEO, the now infamous Martin Shkreli, raised the price from $13 a pill to over $700.
Last February, Valeant Pharmaceuticals bought the rights to Seconal (secobarbital), an 80-year-old sleeping pill. Ten years ago 90 Seconal tablets cost about 30 dollars. Now it’s closer to $3,000.
It’s believed Valeant did this in response to California’s new End of Life Option Law, their version of Death with Dignity, which is set to go into effect in June.
Seconal is the mostly commonly prescribed drug for assisted dying. The dose needed is 9 grams, and in my state, Washington, which also has a Death With Dignity law, that costs just under $3,000. Health insurance is not required to cover drugs for assisted dying.
|Related post: Death with Dignity – “How to Die in Oregon”|
The other commonly prescribed drug used to be pentobarbital, or Nembutal, but there has been a lot of controversy surrounding this drug for another reason: it’s what the prison system normally used for executions by lethal injection.
Nembutal is only manufactured in Europe now, and the EU basically refuses to export drugs used for executions.
So for a patient wanting to take advantage of assisted-dying laws but who cannot afford $3,000 out of pocket, a more complicated drug cocktail can be manufactured by a compounding pharmacy. (California will join Washington, Oregon, and Vermont in having Death with Dignity laws.)
I get that $3,000 is perhaps not that much when you consider how much health care costs at the end of life. And because Seconal is rarely used, you might agree with Valeant’s reasoning that if they didn’t raise the price enough to make a profit, they would just stop making it altogether.
But pharmaceutical companies in general have been raising the prices on all drugs, old and new, and it doesn’t seem sustainable. Even if you have insurance that covers the price increase, the cost will filter down to you eventually through higher premiums, co-pays, deductibles and taxes.
Turing got a lot of bad press over its Daraprim price hike, but not enough to make them reduce the cost by much. Valeant probably won’t either.
However, Valeant has been taking some hits on the stock market because of some fuzzy accounting practices, as well as spending a lot of money to buy the rights to the apparently worthless drug Addyi, the female version of Viagra.
Their stock price has dropped by 85% over the last year.
As a result, Valeant’s core business model of raising the prices of older drugs by eye-popping amounts may not even be viable going forward — especially in the current politically charged environment. That’s why I think investors may want to let the dust settle before trying to catch this plummeting pharma stock.
I hope this trend by pharmaceutical companies to maximize profits at the expense of their customers’ good will eventually turns around. Until then, however, many people are being hurt by having the drugs they need priced out of their reach.