Activism over prescription drug pricing has reached a fever pitch. The recent House subcommittee hearings featuring testimony (or non-testimony in the case of bad-boy Martin Shkreli) from Turing Pharmaceuticals and Valeant executives provided an outlet for public outrage over those companies’ price gouging on life-saving drugs. Meanwhile, presidential candidates Hillary Clinton and Bernie Sanders have both talked up plans to rein in spending on prescription drugs, and even Donald Trump announced that as president he would allow Medicare and Medicaid to bargain with drug companies.
The sordid tale of Shkreli and his company’s 5,000 percent price increase for a 60-year-old off-patent drug used mainly to treat toxoplasmosis in AIDS patients has been well-documented. Valeant is the other poster child for blatant greed in the pharmaceutical industry with CEO Howard Schiller testifying to the House committee that price increases (most notably for cardiac drugs Isuprel and Nitropress by 536.7 percent and 236.6 percent, respectively) accounted for 80 percent of the company’s growth in 2015. Schiller also told the committee that only 3 percent of profits were put back into research. Rep. Carolyn Maloney (NY) summed up Valeant’s business strategy as buy a drug, set revenue goals and “then jack up prices.”
The hearing made for good theater but was ultimately disappointing for those of us hoping to actually hear about legislative or other remedies for curbing rising prescription drug costs. Because as Rep. Elijah Cummings pointed out, this problem is “not limited to two companies, it pervades the industry.”
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