Turing price controversy fuels drug-pricing debate

Photo credit: Bill Brooks/Creative Commons

A decision made by Turing Pharmaceuticals, which markets two little-known therapies, to hike the price of one drug by 5,000% fueled a long, simmering debate about rising drug prices and what should be done to address common pharmaceutical pricing practices.

The backlash to Turing's decision was swift. Turing CEO Martin Shkreli promised to lower the price increase although as of mid-October he had not yet provided the new price for Daraprim, which is used to treat toxoplasmosis.

“For toxoplasmosis and other critical, under-treated diseases, the status quo is not an option,” the company said in a Sept. 24 statement. “Turing hopes to change that by targeting investments that both improve on the current formulation and seek to develop new therapeutics with better clinical profiles that we hope will help eradicate the disease.”

But that wasn't enough to stem the criticism facing the company.

Craig Rothenberg, the company's chief communications officer, a longtime executive at Johnson & Johnson, resigned. PhRMA and BIO rescinded the company's memberships. The New York attorney general launched an investigation into the company's drug-distribution practices and whether they violate antitrust laws. In addition, lawmakers, including Sen. Bernie Sanders (I-VT), a Democratic presidential candidate, requested that the company turn over information about its drug-pricing practices.

And even as Shkreli's responses became more unexpected—on Monday he tweeted at Sanders and Hillary Clinton, asking them whether they wanted a lower price for Daraprim or if they wanted Turing to use its resources to develop a new drug—the debate about drug pricing continues, and it now targets some of the world's largest drugmakers.

Valeant, a serial acquirer that also hikes the prices of approved drugs once it acquires them, said this week that it had received subpoenas from two attorneys general who are seeking information about the company's patient-assistance programs as well as its drug-pricing and drug-distribution practices. Lawmakers had also requested information about the price increases for Nitropress, a high blood pressure drug, and Isuprel, a heart drug.

The stakes for Valeant and other Big Pharma companies are much higher than they are for Turing.

A recent poll conducted by the Kaiser Family Foundation found that 83% of Americans believe that the government should be allowed to negotiate drug prices on behalf of Medicare enrollees. Both Sanders and Clinton have proposed new regulations that would allow the government to negotiate drug prices.

Despite growing public awareness and criticism of the issue, changes to government spending on drugs and how they are priced would require legislation. A Jefferies analyst noted in October that "'any significant changes to the current payment structure would require Congressional support stemming out of the Republican-led House's Ways and Means committee,' which the expert believes is highly unlikely."