Drug Price Exponentially Increases from $13.50 to $750
September 27, 2015
Hospitals and pharmacies are having riots due to the price inflation of a 62 year-old drug, Daraprim, that is used in HIV, cancer, and parasitic infection treatment.
This ancient drug, also known as phyrimethamine, is used to treat toxoplasmosis, which is a parasitic infection that can cause threatening problems for babies born to women infected during pregnancy. The drug is also known to treat immune system aberrations, such as HIV and AIDs, and certain cancer types.
The drug’s price rose from $13.50 per tablet to $750 overnight, after being purchased by Turing Pharmaceuticals. Turing Pharmaceuticals acquired the medicine in August 2015 from Impax Laboratories. Turing purchased it for $55 million and, in a same day, the price went up to $90 million.
Several years ago, Daraprim only cost about $1 per tablet, but the price went up significantly upon the purchase by CorePharma in 2010. According to IMS Health, the price leaped from $667,000 in 2010, to $6.3 million. In 2014, the sales went up to about $9.9 million. With the Turing acquisition, the price increase the sales have the potential to increase up to tens or even hundreds million dollars a year.
So, what’s the consumer’s response? Hospitals usually get drugs inexpensively under federal law for discounts and rebates. However, pharmacies, Medicare, and hospitalized patients now have to pay closer to the advertised price. Some public treatment centers were having problems getting the drug due to their low-income patients. Hospitals also find Daraprim extremely expensive and difficult to collect. However, Dr. Rima McLeod of the University of Chicago said that Turing’s price is perfectly manageable. She claims that Daraprim’s price jump from time-to-time, and called it “workable” despite the price increase.
Would this impact the hospitals like Stony Brook and St. Charles? Some hospitals argue that Daraprim’s cost is unreasonably expensive, while others see no sudden difference. Repercussions of the price increase are still unraveling throughout the healthcare industry.