Bi-Partisan Disgust with Pharma’s Price-Gouging
Everyday Stories from Everyday Californians
Yes on Proposition 61
Bi-Partisan Support for Drug Price Reform
Hillary Clinton, Democratic Candidate for President, former Secretary of State and U.S. Senator
“We’re going to have to re-do the way the prescription drug industry does business. American consumers pay the highest drug prices in the world for drugs that we helped to develop. We have to go after price-gouging and monopolistic prices and give Medicare the authority to negotiate.” — Remarks during Nov. 14, 2015, Democratic Presidential Primary Debate
Donald Trump, GOP Candidate for President
Trump told 1,000 supporters in Farmington, New Hampshire, that he would support allowing Medicare to negotiate drug prices. “We don’t do it. Why? Because of the drug companies.” — U.S. News & World Report, Jan. 26, 2016
U.S. Sen. Bernie Sanders (I-VT), Democratic Candidate for President
“The pharmaceutical industry has become a health hazard for the American people.”
“We now pay, by far, the highest prices in the world for prescription drugs and 1 in 5 Americans – including patients suffering with cancer – cannot afford to fill the prescriptions their doctors write.” — BernieSanders.com, Sept. 22, 2015
“The time is long overdue for Congress to listen to the needs of the American people and not the enormously profitable pharmaceutical industry.” — BernieSanders.com, Sept. 22, 2015
U.S. Sen. Chuck Grassley (R-IA), Chairman, Senate Judiciary Committee
“Given the priority that voters place on addressing the high cost of prescription drugs, we believe that it is time Congress and the Administration work together to take concrete steps to address pricing abuses.” —The Hill, Nov. 27, 2015
Assemblymember David Chiu (D-AD-17)
“I am still hopeful that the Legislature will have the courage to take meaningful action against skyrocketing drug price hikes that deny life-saving drugs to sick people and threaten to bankrupt our healthcare system,” said Chiu, a member of the Assembly Committee on Health. “But in the absence of that, the Drug Price Relief Act is the only practical vehicle available for Californians to take collective action in 2016, a year that has seen new drugs cost $100,000 per treatment, Democratic and Republican congressional leaders and presidential candidates denounce the actions of Pharma CEOs, and surveys finding high drug costs the No. 1 health priority for Americans. I enthusiastically support the ballot measure, and look forward to assisting the efforts to educate the public on the facts about exploding drug prices.”
Congressman Mike Honda (D-CA-17)
“We cannot allow price-gouging to damage the lives of everyday Californians,” said Honda. “The people of our state must be able to afford the medicines that are providing them quality of life or, in some cases, keeping them alive. To gouge consumers on the prices of such medicine is immoral, unconscionable and must be stopped.”
California Nurses Association
“As nurses on the front lines of care, we see too many patients unable to afford life-saving medications. We endorse the Drug Price Relief Act because it will make life-saving medication more affordable to all Californians by forcing drug companies to reign in their price-gouging. This initiative is the best chance we have to halt the consumer rip-offs and excessive greed embodied by the drug industry and the lobbyists it has on payroll. To date, all efforts to reduce the costs of prescription drugs in the state legislatures and in Congress have failed because of the iron-clad grip that drug companies have on the legislative process. The people and patients deserve better. California’s nurses urge a yes vote on the Drug Price Relief Act and we will do all we can pass this important initiative.”
U.S. Sen. Susan Collins (R-ME), Co-Chair, Senate Select Committee on Aging
“These companies are to ethical pharmaceutical companies as a loan shark is to a bank.” – The New York Times, Dec. 10, 2015
“The companies we’re investigating look more like hedge funds than they do traditional pharmaceutical companies. We never anticipated companies acquiring off-patent drugs and then jacking up their prices to enormous heights, and do so, as one executive essentially put it, ‘because I can.’ But that is exactly what we have seen in recent months.” – Reuters, Dec. 9, 2015
Rep. Elijah Cummings (D-MD)
I think companies that are doing the right thing they ought to be joining me in looking for the Shkrelis of the world. They ought to be screaming at the top of their lungs because what it does is it gives the entire industry a bad image.
The other thing that concerns me is when other drug companies like Pfizer, the ones that you may have in mind, are about to raise prices. They say, well you know it would be reasonable for us to raise our prices 5%. After all, we have more R&D, we deserve a little bit more profit because of certain improvements we’re making to our manufacturing plants and things of that nature. They see a Shkreli going up 5,000%, and they have to scratch their head and think, why go up 5 to 10% when you’ve got a guy going up 5,000%?
No matter how you look at it, the public ends up paying. Source: Business Insider
Former U.S. Assistant Deputy Secretary of Commerce Ro Khanna
“The price-gouging of everyday Californians is both immoral, and symbolic of bad stewardship by our elected leaders,” Khanna said. “When the government fails to maintain competitiveness and fairness to consumers it is necessary for our leaders to demand action—no one should choose between life-saving medicines and groceries.”
U.S. Sen. Marco Rubio (R-FL), GOP Candidate for President
“These companies decide, ‘We can get away with charging it, and so we do.’” — Fortune, Oct. 19, 2015
“You ask yourself, how is this possible? There are less prescriptions being written for that drug and yet you’re making more money on it than you ever have. The answer is they’re raising the prices dramatically, and the reason they’re raising the price dramatically is because they can.” — Wall Street Journal, Oct. 19, 2015
U.S. Sen. John McCain (R-AZ), 2008 Republican Nominee for President
“No American should have to worry about having to fill a prescription because they can’t afford to pay for it.” — Press release, Sen. John McCain website, Jan. 8, 2015
“How could pharmaceutical companies be able to cover up the cost to the point where nobody knows? Why shouldn’t we be able to reimport drugs from Canada? It’s because of the power of the pharmaceutical companies. We should have pharmaceutical companies competing to take care of our Medicare and Medicaid patients.” — Republican Presidential Primary Debate, Jan. 5, 2008
Editorials Agree: Pharma Greed Has Gone Too Far
Pfizer’s Tax-Avoidance Scheme Assailed as a “Disgrace”
John Cassidy, The New Yorker, Nov. 23, 2015.
“The Pfizer–Allergan deal will be the biggest inversion yet, and it is nothing short of a disgrace. Drug companies like Pfizer have long benefitted from taxpayer-funded research carried out under the auspices of organizations like the National Institutes of Health and the National Science Foundation. Now, Pfizer is seeking to avoid paying the taxes that are due on its profits, particularly profits generated by its overseas subsidiaries.”
“… being based in the United States enables Pfizer to exploit the vast reservoirs of technical expertise that reside here, and to access federal support for scientific research. For example, according to the company’s Web site, it has dozens of collaborative projects with the National Institutes for Health. And being headquartered in the United States certainly hasn’t prevented Pfizer from making a lot of money. Over the past two years, the company has generated almost nineteen billion dollars in net profits.”
Los Angeles Times editorial board, Nov. 25, 2015
“You’ve got to hand it to pharmaceutical giant Pfizer Inc.: It’s managing to make Americans resent drug companies even more than they already did.”
Sacramento Bee editorial board, Dec. 1, 2015
“Big Pharma is far from altruistic. The prices of generic and brand-name drugs have climbed steadily, with a nearly 5 percent increase this year alone, according to the Altarum Institute Center for Sustainable Health Spending. This is also an industry in which one of its leaders, Pfizer, announced a merger with a foreign rival so it could move its headquarters outside the United States and avoid paying taxes. It should come as no surprise that drugmakers can deduct the cost of direct-to-consumer ads from their taxes.”
Froma Harrop, San Francisco Chronicle, Dec. 3, 2015
“It’s one thing for Pfizer to renounce its U.S. citizenship, moving its official residence to Dublin, Ireland, as a tax dodge — all the while continuing to run the business in the United States. That disgusting tactic happens to be disgustingly legal, thanks to our indolent Congress and its failure to fix the corporate tax laws.
“It’s quite another to insult the public with blatant phoniness that avoiding billions in U.S. taxes gives the company ‘the strength to research, discover and deliver more medicines and therapies to more people around the world.’”
USA Today editorial board, Dec. 1, 2015
“U.S. drugmakers benefit enormously from policies that force Americans to pay far more for prescription drugs than do people abroad. The companies benefit, to the tune of $12 billion a year, from the fact that Medicare isn’t allowed to bargain over drug prices. They benefit from American laws governing securities and intellectual property. They benefit from a highly educated workforce. And they benefit from a highly respected federal system for testing and approving new drugs.
“But when these same companies are asked to pay their U.S. taxes, they complain bitterly about high rates. Some go so far as to merge with a smaller foreign company so they can ‘move’ their headquarters to a country with a lower corporate tax rate.”
St. Louis Post Dispatch editorial board, reprinted in Sacramento Bee Dec. 1, 2015
“In fact, few U.S. companies pay anywhere near 35 percent in federal taxes… This is part of what makes corporate inversions so despicable. These companies were built with the help of the same U.S. taxpayers whom companies like Pfizer now propose to stiff. University researchers, paid or subsidized by tax dollars, contribute to the cause. Patent laws protect their corporate intellectual property, and the civil side of the federal court system does little but arbitrate corporate disputes. And then there’s subsidized public and private education, transportation and other infrastructure and countless other forms of citizen obligations that taxes pay for.
“And now Pfizer wants to pretend to be Irish?”
Mark Buchanan, Bloomberg View, Dec. 2, 2015
“The planned merger of pharmaceutical giant Pfizer with competitor Allergan, aimed in large part at cutting the combined company’s tax bill, illustrates a troubling trend in the industry: Firms are focused more on pursuing near-term profits than on the difficult, longer-term research needed to develop truly groundbreaking new drugs. This is unfortunate, because disease may be making a comeback.”
Turing Pharmaceuticals CEO Martin Shkreli – A Poster Child for Pharma Greed
Sacramento Bee editorial Board, Sept. 22, 2015
“The Food and Drug Administration must reevaluate its rules for bringing old drugs into the modern marketplace, and determine whether loopholes are being unfairly exploited by these startups.
“Exhibit A in this travesty is Martin Shkreli, a 32-year-old former hedge fund manager whose business model was to urge the FDA to reject drugs made by companies whose stock price he was betting would drop.”
Janell Ross, Washington Post, Sept. 23, 2015
“BBC News has suggested that Martin Shkreli might be the ‘most hated man in America.’ Bloomberg Business opted for the adjective ‘notorious’ when describing Shkreli’s business history. The Daily Beast said Shkreli is ‘Big Pharma’s Biggest A**hole.’”
Boston Globe Editorial Board, Dec. 2, 2015
INSTEAD OF the public drubbing he’s received, maybe Martin Shkreli deserves a thank you…In making himself a soft target for drug industry skeptics, Shkreli also fueled public ire over the high cost of prescription medications. So much so, a new poll suggests, that many Americans are now willing to consider some form of government intervention as a way to moderate the upward slope of drug prices.
Negotiated, Transparent Prices Offer a Better Deal for Taxpayers
Los Angeles Times editorial board, April 26, 2015
“Just because it’s hard to shine a light on every aspect of drug pricing, however, doesn’t mean pharmaceutical companies should keep the state completely in the dark. The lack of transparency about pricing is a problem throughout the healthcare industry, and Congress is doing little about it. That leaves it to state lawmakers to pry open the healthcare black box, which they’re trying to do in various ways across the country.”
USA Today editorial board, Oct. 1, 2015
“Allowing Medicare to negotiate directly with drug companies is an eminently sensible idea. In government, the first principles of spending taxpayer money ought to be: Don’t buy what isn’t necessary, and get the best deal possible.”
New York Times editorial board, Dec. 19, 2015
“There is ample evidence that drug prices have been pushed to astronomical heights for no reason other than the desire of drug makers to maximize profits.”
“Experts have proposed several ways to reduce drug prices, like fostering greater competition among drug companies or allowing the government to negotiate lower prices. Encouraging the development of innovative drugs and setting prices in ways that make lifesaving medicines affordable to all are not mutuallsy exclusive ideas.”
The Sacramento Bee editorial board, September 22, 2015
There’s a terrible new trend in the pharmaceutical industry: Buy an old drug that is the standard treatment for rare but life-threatening diseases, then jack up the price on the captive market.
We don’t criticize sharp business people for trying to make a buck, but these are vulture capitalists, not venture capitalists.
Their immediate victims are the patients who rely on these drugs to stay healthy. But we’ll all end up paying as insurers, hospitals and government health plans get hit with this price gouging. (A Medi-Cal spokesman says it will be keeping an eye on the potential impact.)
As , officials and industry watchers are getting increasingly concerned about this rapacious practice. Some members of Congress launched investigations, which is good and necessary.
But clearly, federal regulators need to take a hard look as well. The Food and Drug Administration must reevaluate its rules for bringing old drugs into the modern marketplace, and determine whether loopholes are being unfairly exploited by these startups.
Exhibit A in this travesty is Martin Shkreli, a 32-year-old former hedge fund manager whose business model was to urge the FDA to reject drugs made by companies whose stock price he was betting would drop.
His new venture is Turing Pharmaceuticals, which in August paid $55 million for a drug called Daraprim. Approved by the FDA in 1953, it has been used to treat malaria, but is also the drug of choice against parasitic infections that attack patients with weakened immune systems, including those with HIV.
The drug’s price increased during a series of deals – from about $1 a tablet several years ago to $13.50. The companies increased their revenue even as the number of prescriptions held steady or declined. Turing immediately jacked up the cost again – to an astounding $750 per pill.
Medical groups quickly objected, calling the price spike “unjustifiable for the medically vulnerable patient population.”
New York Times editorial board, December 20, 2015
“There is ample evidence that drug prices have been pushed to astronomical heights for no reason other than the desire of drug makers to maximize profits. Prices in many cases far exceed what’s needed to cover the costs of research and clinical trials, and some companies have found ways to rake in profits even without shouldering the cost of drug development.
The two worst offenders are bottom feeders that simply buy companies they believe have underpriced their drugs and then quickly raise prices to astronomical levels.
In August, Turing Pharmaceuticals acquired the American marketing rights to a 62-year-old drug to treat a devastating parasitic infection and raised the cost of one pill to $750 from $13.50. That brought the cost of a course of treatment for some patients to hundreds of thousands of dollars. (Turing’s founder, Martin Shkreli, was indicted on Thursday on charges of securities fraud involving a hedge fund and another biotechnology firm he started.)
Valeant Pharmaceuticals greatly increased the prices of several drugs it acquired, including two used by hospitals to treat heart conditions. It also protected its high-priced dermatology drugs by urging doctors to send prescriptions to a mail-order pharmacy that would make sure no cheaper alternative was substituted.
The Pharmaceutical Research and Manufacturers of America, a trade group, described Turing and Valeant as essentially investment vehicles ”masquerading as pharmaceutical companies.”
Yet even some mainstream companies have set high prices that seem hard to justify. Eli Lilly said its new lung cancer drug, Portrazza, would cost about $11,430 a month in the United States, six times the $1,870 price that leading oncologists said in a recent journal article would be a fair reflection of the benefit the drug offers compared with older therapies.
Similarly, Pfizer set the list price for Ibrance, a drug to treat a form of advanced breast cancer, at $9,850 a month, a price that remains high even after the 20 percent discount demanded by insurers. The price was not based on manufacturing costs or research costs, according to an analysis by The Wall Street Journal. Rather, Pfizer set the price as high as it could without causing doctors and insurers to favor an alternative drug.
The pharmaceutical industry often defends its prices by noting that drugs account for only 10 percent of nationwide health spending. But in employer-based health insurance plans, drug benefits account for 19 percent of spending, not much less than spending on inpatient hospital care, according to a recent analysis by the Kaiser Family Foundation. And surveys have shown that many Americans have difficulty paying for the drugs they need. Major drug companies often increase prices 10 percent or more a year, far faster than inflation, straining the health care system.”
The Boston Globe editorial board, February 6, 2016
“There also were signs that members of Congress from both parties might be able to work together on achieving a tricky balance — making medicine affordable while still rewarding those who, against scary odds, seek to develop disease-beating treatments.
The House committee’s session attracted more notice than normal because of a brief appearance by its star witness, Martin Shkreli, aka “Pharma Bro.” Shkreli is the now-infamous former chief executive of Turing Pharmaceuticals, which bought an obscure drug that treats a parasitic infection and jacked up the price from $13.50 to $750 a pill. Shkreli, who was arrested on unrelated securities fraud charges, smirked and fidgeted in his seat before invoking the Fifth Amendment. “I don’t think I’ve ever seen the committee treated with such contempt,” said Representative John Mica, a Florida Republican.”
Star Tribune editorial board, January 23, 2016
“Klobuchar, Iowa Republican Sen. Chuck Grassley, Arizona Republican Sen. John McCain, Democratic Sen. Al Franken and other congressional stalwarts have backed a variety of drug cost reforms for years, yet these common- sense solutions remain mired in Congress. Klobuchar in particular has waged a dogged fight to ban shady “pay to delay” deals in which the makers of brand-name drugs pay generic manufacturers to hold off selling less-expensive versions of the same medication.
Unfortunately, these congressional consumer advocates are battling hurricane-force political headwinds, courtesy of the wealthy pharmaceutical industry and its legions of lobbyists. Drugmakers understandably like the profitable status quo in which American taxpayers fund much of the basic research for drug development – particularly cancer treatments – through research grants, yet also pay some of the highest prices in the world for medications once they come on the market. Even with the Affordable Care Act’s coverage expansion and Medicare Part D for seniors, copays and deductibles can still leave many consumers scrambling to pay or going without.”
“It’s worth noting that 100 of the nation’s leading cancer doctors support the three initiatives pushed by Klobuchar. In August, they authored an alarming article in the Mayo Clinic Proceedings medical journal. The doctors noted that the “average price of new cancer drugs increased 5- to 10-fold over 15 years, to more than $100,000 per year in 2012.” Their solutions include ending pay-for-delay deals, allowing imports from Canada and permitting Medicare to negotiate drug prices. In a statement this week, the Federal Trade Commission said its chairwoman, Edith Ramirez, also supports pay-for-delay legislation.
Klobuchar and others have waged a long battle to rein in drug prices. She is to be commended not only for embracing respected solutions but also for her readiness to seize the opportunity at hand to go further. “At some point people in Washington have to start listening to their constituents about drug prices and stand up to the drug companies,” she said this week. “This simply can’t continue.””
San Jose Mercury News editorial board, January 14, 2016
“Americans spent a mind-boggling $370 billion on prescription drugs in 2014. The cost of medicines rose by more than 10 percent in 2015 for the third year in a row, far exceeding the inflation rate.
Pharmaceutical companies deserve a reasonable return for their substantial investment in researching and developing new drugs, but this is just greed. Congress needs to act, beginning with giving Medicare the ability to negotiate with pharmaceutical companies on prescription drug prices.
Republicans in Congress have blocked this for close to a decade, despite polls showing two-thirds of Republicans nationwide want Medicare officials to have this power. It could cut prescription drug bills by more than $30 billion, and negotiated prices will not put companies out of business or stop research.
It may be impossible to achieve blanket approval for Medicare to negotiate every drug price, but Congress should allow the federal government the power to rein in the most costly examples of Big Pharma’s price gouging for drugs treating routine chronic diseases.”
The Salt Lake Tribune, January 9, 2016
“Evil in medicine is often linked with the past practices of blood-letting, lobotomies and arsenic treatments. Now we can add to these atrocities another evil, that of killing people by preventing their needed, life-sustaining treatments.
There is an area of government that is currently under-utilized ccc protecting citizens from intentional predators. Not wild or rabid animals, zealous terrorists, gun nuts or Wall Street, but you’re getting closer. It’s one that lurks within our society, moving about undetected, like “the thing” in John Carpenter’s movie of the same name. They just look “human” and are becoming an increasingly bad part of Big and Little Pharma that can’t seem to see the patient for the money.”
Jeff Clawson, M.D., is an emergency physician and medical director of the International Academies of Emergency Dispatch in Salt Lake City.
Contra Costa Times editorial board, December 18, 2015
“If karma has a name in 2015, it must surely be Martin Shkreli.
Shkreli, the 32-year-old poster boy for corporate excess who flashed to prominence this year by outrageously raising prices on generic, lifesaving prescription drugs, was arrested by the FBI on Thursday on charges of securities fraud.
The English proverb puts it another way: What goes around comes around.
Shkreli has lived his life as if he wants to make real the fictional character Gordon Gekko, who was played brilliantly by Michael Douglas in the 1987 classic film “Wall Street.” Gekko’s now-famous movie quote — “Greed, for lack of a better word, is good” — seems to have been adopted as Shkreli’s personal credo.
Shkreli — who was manager of the hedge fund MSMB Capital Management and was CEO of Retrophin, a biopharmaceutical company — seemed hellbent on becoming a symbol of Wall Street greed.
He got his wish in September when it was announced that his latest company had paid $55 million for Daraprim — a 62-year-old drug primarily used for newborns and HIV patients — and was raising the price so that the average cost of treatment jumped from $1,130 to $63,000.
Most anyone with a conscience — and even some members of Congress — were understandably outraged by the action. There was much vitriol and Shkreli was called many unpleasant and unflattering names. Presidential candidates even joined the chorus.
Through it all, Shkreli was arrogantly unapologetic. He defended the price increase as a “great business decision.”
“Our shareholders expect us to make as much money as possible,” he said during a health-industry summit earlier this month. “That’s the ugly, dirty truth.”
Shkreli eventually agreed to lower the price of the drug but showed no remorse in doing so and has remained defiant in his extensive use of social media where he even said he would ” … never, ever price a drug beyond a sick person’s reach.”
He is now chief executive officer of Turing Pharmaceuticals, the firm that raised the drug prices, and KaloBios Pharmaceuticals, but the federal indictments stem from his activities while he was at Retrophin and MSMB.
The U.S. attorney’s office in Brooklyn brought seven counts, including securities fraud conspiracy and wire fraud conspiracy, against Shkreli.
“As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company,” said U.S. Attorney Robert Capers.
Of course, Shkreli deserves his day in court. He could actually have a wonderful defense. But should he be convicted of these charges, Shkreli can do some serious prison time. And that’s the dirty, ugly truth. Like we said, what goes around comes around.”
Pharma Execs in Their Own Incriminating Words
Martin Shkreli, CEO, Turing Pharmaceuticals
“Every time a drug goes generic, I grieve. Let us not mourn the dearly departed, instead celebrate the profits and new assets it brought us.”
@MartinShkreli Twitter feed
“And it seems like the media immediately points a finger at me. So I point one back at em, but not the index or pinkie.”
@MartinShkreli Twitter feed (quoting Eminem lyrics)
“The companies before us were actually just giving it away almost. The price they were pricing it at – $13.50 for a course of less than 100 pills – meant the price of a course of treatment to save your life was $1,000.”
“Watch a sickeningly smug CEO justify raising the price for an AIDS pill by 5,500%,” Brad Reed, BGR, Sept. 22, 2015.
“I think they have a fundamental misunderstanding with how pharmaceutical companies operate.”
“CEO says drug price will be lowered after hike from $13.50 to $750 a tablet,” Fox News Health, Sept. 22, 2015.
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business…This is still one of the smallest pharmaceutical products in the world. It really doesn’t make sense to get any criticism for this.”
“Douchebag Pharma CEO Raises Drug Price 5000% Because Screw Your Sick Baby” Wonkette, Sept. 22, 2015
Pfizer CEO Ian Read on merger with Allergan that will allow the Pharma giant to avoid billions in U.S. taxes
“We’ve assessed the legal, regulatory and political landscape and are moving forward with our strategy to combine these two great companies for the benefit of the patients and to bring value to shareholders. That is our obligation.”
“Pfizer Chief Defends Merger with Allergan as Good for U.S.,” New York Times, Nov. 23, 2015
“This just enables us to invest more in the U.S.”
“Pfizer Weighs Splitting Up New Drug Behemoth,” Jonathan Rockoff, Wall Street Journal, Nov. 23, 2015
Gilead Exec Kevin Young Defends $84,000 Hepatitis C Drug
“Let’s not fold to advocacy pressure in 2014. Let’s hold our position whatever competitors do or whatever the headlines.”
–Kevin Young, Gilead executive vice president for commercial operations, in a company email about the outrage over the company charging $84,000 for a round of treatment with Sovaldi, a drug for hepatitis C.
“How an $84,000 drug got its price,” Carolyn Johnson, Washington Post, Dec. 1, 2015