by Gaius Publius
Another tale of price-gouging by the out-of-control andn predatory pharmaceutical industry. This time, the perp is a company called Valeant (get it? brave, strong, noble; princely) and the drug is the leading treatment (because almost no competition) for lead poisoning, a drug called Calcium EDTA.
The amount of gouging is huge. Valeant bought the drug though an acquisition (which means none of their money went into its development), then raised the price … 2700 percent, from under $1,000 to over $27,000.
Here's the story, from STATnews, an industry publication (my emphasis):
Huge Valeant price hike on lead poisoning drug sparks anger
A drug used to treat lead poisoning is causing a toxic reaction among hospitals and poison control centers after Valeant Pharmaceuticals jacked up the price more than 2,700 percent in a single year.
At issue is a decades-old, intravenous treatment for severe and life-threatening cases of lead poisoning, which occur infrequently, but generally require supplies to be on hand. Known as Calcium EDTA, Valeant acquired the drug in 2013 as part of a $2.6 billion deal to buy another company called Medicis.
After resolving manufacturing problems that caused shortages, Valeant pursued the hallmark strategy that made it infamous — taking sky-high price hikes. Before Valeant took control, the list price for a package of vials had been stable at $950. But in January 2014, Valeant boosted the price to $7,116. By December 2014, several more increases took the price to $26,927, according to Truven Health Analytics.
Ever since, poison control specialists have been angry, especially since there are few viable options and a French company sells its version for less. Their reaction is a case study in the exasperation doctors and hospitals feel at the multitude of price hikes of all sizes that they see month after month, the vast majority of which never make headlines but create frustration and squeeze budgets behind the scenes.
“This is a drug that has long been a standard of care, and until recently it was widely accessible at an affordable price,” said Dr. Michael Kosnett, an associate clinical professor in the division of clinical pharmacology and toxicology at the University of Colorado’s School of Medicine and a consultant to the California Poison Control System, who has contacted Congress. “There’s no justification for the astronomical price increases by Valeant, which limit availability of the drug to children with life-threatening lead poisoning.”
The article goes on to note: “For nearly two years, Valeant has been a poster child for pharmaceutical greed. … [It] regularly bought companies and then boosted prices on some medicines to new heights. The plan, which largely eschewed investment in R&D, made the company a Wall Street darling.”
That's not me saying that; it's the industry.
Banking on Profit from Flint and Other Lead-Struck Cities
Valeant has argued that the number of cases per year is small and the ingredients have a short shelf life. About that “purchase volume”:
A Valeant spokesman maintains the current pricing is justified. “The list price increases over the past several years have enabled us to provide to the market consistent availability of a product with high carrying costs and very limited purchase volume of 200 to 300 units per year,” he wrote us.
But Valeant can read the news as well as you or I. In particular, the news in lead-poisoned Flint, Michigan, and other cities with similar problems. That story is widely reported. This is the Washington Post:
Untold cities across America have higher rates of lead poisoning than Flint
[Lead poisoning] has occurred not just in Flint but all over the country, for decades — and not from water, but (primarily) from the paint that colors old homes.
Data collected by the Center for Disease Control and Prevention shows that over 40 percent of the states that reported lead test results in 2014 have higher rates of lead poisoning among children than Flint.
To humans, that spells tragedy. To a pharmaceutical company, though, that spells profit. A commenter at the STATnews site notes (my emphasis):
Valeant doesn’t really care about its income from 50 cases of acute lead poisoning a year. What they really want to go after IMO is the huge market for kids and adults with subacute and chronic lead toxicity, for which chelating agents are also used depending on blood levels. Best example is lead contamination of the Flint, Michigan water supply with thousands of people exposed, some pretty sick. Moreover elevated lead levels have been found in the water supply of over 350 municipalities. Bottom line is that when you add all of these contamination sources together Valeant stands to make a killing, so to speak on EDTA.
Bernie Sanders is getting into the act:
While kids in Flint are poisoned by lead, Valeant charges $27,000 for the leading treatment. https://t.co/aHekRjp5A7
— Bernie Sanders (@SenSanders) October 11, 2016
Sanders, of course, is the source of my headline.
Don't Play Whack-a-Mole with Companies; Whack Drug Prices Industry-Wide
A final note from me. Mitigating this behavior — getting them to soften the assault a little, or telling them to “cut it out” — is not the solution. So long as they have the power to do this, they will do this, because that's what they do, that's what they hire their CEOs to do. Using power, especially the power of the Executive Branch to force a cap on drug prices, and enforce that cap relentlessly as an industry-wide standard, is the only answer that won't leave the public constantly vulnerable to the next predator.
Any other solution is playing whack-a-mole with one drug company after the next, and then only if the press catches them at it.
It's not the government's job to protect any company's profit. That's the company's job. It's the government's job to protect its citizens in cases like this. Period. No one in office should triangulate between these goals.
“When fascism comes to America, it will be wrapped in the flag and carrying the cross.” — Sinclair Lewis