Daraprim: A Brief Summary

Prescription drug prices rose three times faster than inflation in the decade between 1981 and 1991, making the pharmaceutical industry the nation's most profitable business. Prescription drugs even exceeded the rapidly rising inflation rate for all other medical services. They now represent at least 10% of all the medical

Because pharmaceutical companies have so much power over pricing, they have started to raise prices with no motive other than more profit. In recent years, the industry has seen a steep price increase in drugs. These increases, in some cases, seem inexplicable. Regarding this is the recent example of the EpiPen, a common emergency drug used for patients with severe allergies. In the past, the EpiPen was available to patients for as low as 40 dollars. Now the price is “almost 600 dollars.” (Woodward, Layton) The problem with this is the device has had no fundamentally different changes to it. This means the pharmaceutical company responsible for the EpiPen raised the price for no reason other than more money in the company’s pocket. A

One man named Martin Shkreli started this absurd trend. Martin increased the price of Daraprim by approximately 300%. This price increase has raised outrage to those that need Daraprim in order to survive. Alexandra Sifferlin states that “New York–based Turing Pharmaceuticals recently caught flak for buying an old medication (the drug Daraprim, used to treat a dangerous parasite) and dramatically raising its price to make a profit—from $13.50 to $750 per pill. Although Turing reversed course, a health care industry group cites other examples to show such hikes are becoming common”. (pg.12) This price increase is absurd, but what is more absurd is that these companies let people suffer. Daraprim is used to treat HIV, and most patients need

The pharmaceutical industry consists of intensive marketing, production, and research meant to develop drugs that provide the entire world with the capabilities to cure infectious diseases and support daily needs. An aging world population and greater work loads has given an incentive for pharmaceutical firms to rigorously produce and sell numerous variations of drugs to treat cancer, allergies, diabetes, and pain. Some trends to be considered include: greater technological improvements, cheaper drugs, and increased investment/R&D spending. Technological improvements have guaranteed higher purities and cheaper drugs. However, increased research has dramatically driven patented drug prices to an all high premium; Byetta, a type 2 diabetes pen

As time passed, prices of the drug increased while supply diminished. Because of the characteristics that promote stability, “relevant markets are characterized by highly inelastic demand, increasing the firms’ incentives to coordinate because even a small change in supply can have a large effect on price.” (Commission, 2011)

Unit price growth is a factor that is very important in the pharmacy it’s what drives spending on the products needed, but utilization growth helps because it performs roles in certain therapies. One of the main drug trends taking over at the time is specialty drugs but the cost is known to start at a high end cost of $30,000 with the highest being $100,000 for this line of treatment. Specialty drugs already take up more than a quarter of drug spending in the United States although the growth rate for traditional pharmaceuticals have slowed. But there’s been works on solution’s such as modernizing payment policies and also adopting new modes of clinical studies, also working on improvement of analytical

First of all, the author points out that the drugs prices and the drug manufacturers are just concerned about high profits. It is mentioned that drug prices should be cheaper for the poor countries facing the pandemic problem. This point is challenged by the lecturer. He says that the drug companies cannot reduce the price of the drugs. Furthermore, he argues that companies need high profits, as every business, to keep making more drugs and without this profits the companies would not exist.

Demand for generic drugs in the United States is unquestionably high. Designed to help offer lower cost options for medications, this market provides financial relief for individuals who need medication to help with a common virus or a life-threatening illness. The disparity of medication costs can be significant for generics, with estimates that costs can be around 80 percent lower than brand name drugs (McGee, 2015). This drastic reduction in prices when changing medications to generic form is the cost effective measure consumers are attracted to. As demand levels are safe since consumers need drugs for a variety of reasons, prices have risen to test the threshold of acceptance. Drug manufacturers will change prices to reflect their perception of what a market can bear. Medications have been the topic of much debate recently, with increases rising as high as 5000 percent this year (Velshi, 2015).

As indicated by Pharmaceutical Research and Manufacturers of America (PhRMA), the pharmaceutical exchange bunch, high costs are an impression of the innovative work costs it takes to put up a medication for sale to the public. PhRMA refers to that all things

As a consultant to pharmaceutical companies for three years, I talked to people afflicted with disease – like Donna – about affordability of their treatments. For some of the newest treatments on the market, drug prices, and subsequently patient costs, have reached unsustainably high levels.

While the actual medicine is very cheap and has been used for many years, the design of an EpiPen, which injects the medicine into the body has allowed the company to get the patent and increase its price. Price hike was very dramatic, reaching $600 for two pens which expire after a year. It has been observed that the level of allergies has been rising, which only benefits the company. So, what allows these companies to price drugs as they want? Obviously a lack of regulation. American government believes that allowing companies to have a patent and prize the food as they want encourages them to put a lot of money in R&D because they know that once they have a product, they can enjoy monopoly power and get huge profits. So, the idea is that if government intervenes, companies will be discouraged from inventing new remedies (Rosenthal 2).

In the United States, consumers are now spending upwards of 200 billion dollars a year on pharmaceutical drugs, and this number is slated to increase by 12-15% each year in the coming decade (Hoey 1). Many life-saving and essential drugs for consumers tend to get quite expensive depending upon the type of treatment prescribed to that patient. Depending upon market variables, including mergers, and buyouts, drug prices will have a greater chance of going up in price due to less competition in these cases. Most generic drugs that are manufactured have to delay release of these live-saving drugs until the much larger drug companies are able to make a substantial profit first. The real issue for many consumers is that the ones paying for premium health insurance plans will feel the effects of these price increases first as prices rise. Most elderly folk, or anyone covered under Medicare and Medicaid have some semblance of price protection from several federal acts of law to help maintain reasonable price points. However, even with regulations in place, some companies and drug entities are able to delay drug approvals with the FDA shorting stocks and betting on the loss of other smaller companies. These practices endanger the consumers at all levels as drug companies increase the cost of life-saving pharmaceutical drugs causing extreme hardships for patients, the delay of drug releases affecting consumer care, the potential for paying

The price of healthcare in America is extremely high. Healthcare spending in America is so high because of drug spending. Studies have also shown that America spends more on healthcare than any country in the world but produces inferior results. Any drug that is sold in America, must be approved by the FDA. The concept behind drugs is to save or extend life of persons in need. Over the last decade, we have seen a large increase in drugs pricing. Prices hiked from 2.4% growth in 2013 to 12.2% growth. Some factors could be blamed for this increase of drug prices. This factors include the fact that USA does not regulate drug prices, length of drug patents, limited competition and small markets.

Turing Pharmaceutical has been sued for 5,000% price increase of Daraprim drug. The company that was headed by Martin Shkreli faces breach of contract charges. Mr. Martin is claimed to have hiked the prices and also faces charges of defrauding. Later on, he had invoked the fifth amendment during the grill by the concerned congress he has been condemning the politicians and the members of the congress. The company, Turing, also facing charges of breaching the contract (Kevin, 2016). The entrepreneur refused to testify the charges of his unethical acts of raising the prices of the drugs in all his associated drug companies last year. The drug, Daraprim, is essential for many people suffering from AIDS. The patients will have to cater for the higher prices hiked by the entrepreneur. He was arrested in December 2015 after his reassignment. Hiking the price have been referred as “blood money” (Joanna. 2016). The hiking of the prices has been unaffordable. The hiking is said to be 5 000% for Daraprim, that is from $13.50 to $750 a pill (Joanna, 2016). Surprisingly, the hiked prices were done after the company acquired the drugs from another company. The company was expected to provide accurate data on prices which they failed to provide. Martin is said to have been purchasing the medicine from other companies and selling them at abnormal prices. He had promised to lower the cost of the drugs but it

Competition within the U.S. pharmaceutical industry is very high. With less elastic demand than for other industries, profit potential is enormous. Demand is more inelastic as prescription drugs are necessary for many individuals with illnesses such as diabetes and high blood pressure. Within the industry, there are two types of manufacturers: brand name and generic. These groups compete not only among one another, but with each other as well. Brand name pharmaceutical companies often try to, and succeed in preventing or delaying approval and circulation of generic equivalents. The most common tactic used is a reverse payment settlement agreement, otherwise known as “pay-for-delay”. Generic firms promise to delay the circulation of their