PHARMACEUTICAL companies often produce a common defense for the high price of their medicines. It is that the cost of developing, testing and gaining regulatory approval for a single new drug frequently runs into hundreds of millions of dollars. This outlay has to be recouped. Patent protection can last for just seven years, meaning that the company that developed a medicine must try and earn back that investment as quickly as possible before “me-too” generic producers start to make the same drug and can afford to undercut them on price.
There is, however, no such excuse for the generic producers themselves. There have been frequent examples of what is called “price gouging”. The most notorious was that of Martin Shkreli’s 2015 hiking of the price of a generic anti-parasitic drug from $13.50 a tablet to an eye-watering $750 each. Shkreli, a hedge fund manager, had only recently bought the company before he made this outrageous increase to the fury of clinicians as well as politicians. He was later prosecuted for fraud, not because of this indefensible price rise but for dishonesty when he was still in the hedge fund business.
The latest incident of this deeply objectionable practice has again come in the US where the American arm of a British firm, Hikma, has upped the cost of a generic common diarrhea treatment by no less than 430 percent. Shareholders are pleased but health insurers, doctors and patients are incensed. There happen to be alternatives whose makers have not yet followed Hikma, so it is likely the firm will suffer a serious drop in sales.
But the activities of the whole pharma industry now breed widespread distrust. Sales teams still have huge budgets to wine and dine clinicians in a blatant attempt to get them to prescribe their often more expensive drugs, which are not necessarily as effective as those made by rivals. This deplorable behavior has only been moderated by the transformation of these junkets into “clinical conferences”, generally lasting just part of a day at locations close to golf courses or ski slopes. One UK surgeon recently boasted he had enjoyed two days golf in Portugal at the expense of a well-known pharma company in return for which he had spent half an hour reading a surgical paper, which had in fact been written by his registrar who was still working back at his hospital.
Given the unmasking of widespread dishonesty among international corporations such as Volkswagen, rate-fixing and miss-selling by many of the world’s leading banks and expenses-fiddling by politicians, the public are in no mood to trust Big Pharma either. And there can be little doubt that the pharmaceutical industry is shot through with a high degree of cynicism. It works on the basis that it is in a seller’s market. Victims of serious disease are desperate to try anything that might cure them. This is particularly true of those with terminal conditions who regularly besiege drugs companies begging to be used as guinea pigs for drugs which are still at the early stage of testing.
It is hard to know how to react to naked profiteering by the pharmaceutical industry. For some at least, there seems no possibility of shaming them, because they hide behind the dubious mantra that they are “protecting shareholder value”.
