Price hikes for pharmaceutical drugs are running rampant these days. There is seemingly no end to the situation where giant pharmaceutical companies hold patients and health insurers hostage with ever increasing payment for their drugs, premium or off-patent.

Patients, customers or cash cows?

Progressive increase in drug prices can be normal, as it reflects the natural economic activity known as inflation. However, many infuriating incidents of price hike do not represent such economic activity – rather, the alleged greed of the pharmaceutical industry, all under the pretext of increasing costs.

The most infamous person, perhaps, who had come to represent the face of pharmaceutical greed, is Martin Shkreli the “pharma bro”. Shkreli became public enemy number one when Turing Pharmaceuticals, a company he founded, raised the price of Daraprim from USD13.50 to USD750 overnight. He justified his action by saying “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business”. Similarly, the public has also witnessed a price increase in EpiPen – a life-saving epinephrine injection for anaphylactic shock – from USD100 to more than USD600.

Many such instances cast the overbearing impression that the patients who need these medications dearly are mere cash cows to the executives of pharmaceutical companies. When these companies face little competition in the market, economic dogma dictates that the major players will have the final say on how much they want to charge. Unless the market pushes back.

Movements for cheaper drugs

Public uproar in the United States over irresponsible price gouging hits the climax in recent years. However, there is evidence that various parties are putting significant efforts into solving the crisis. The US Food and Drug Administration (FDA) was reported to have approved a record number of abbreviated new drug application (ANDA) this year.

Source data from FDA Activities Report of the Generic Drug Program, FY 2016 and FY 2017 (through July). Photo credit: Equities.com
Source data from FDA Activities Report of the Generic Drug Program, FY 2016 and FY 2017 (through July). Photo credit: Equities.com

The steady rise in generic drug approval is seen as a welcoming sign that the agency is serious in its attempt to drive down drug prices by directly increasing competition in the market. As mentioned by the agency’s Commissioner Dr Scott Gottlieb, that “no patient should be priced out of the medicine they need, and as an agency dedicated to promoting public health, we must do our part to help patients to get access to the treatment they require…

The agency had also taken the initiative to release a list of off-patent pharmaceuticals with limited or no competition, and pledged to prioritise the review of ANDA application for the reference listed drugs. In the related draft guidance which was released by FDA, the agency agreed to shorten the review of generic drug application by two months if the sponsors could fulfil certain criteria.

Fight for transparency in drug pricing

The mechanism of drug pricing has always been blurry. Despite continuous clarification made by the pharmaceutical industry – where the burden of price hikes was attributed to increasing R&D and regulatory costs – very little was known on how these companies derive the final price, much less on knowing the proportion of premium being levied on patients.

A recently published study in JAMA Internal Medicine criticised that certain companies reaped more than 10-fold higher revenue than the amount spent on R&D, and disputed the widely cited USD2.7 billion cost of drug development. They said the actual figure should be a much lower USD648 million.

A meaningful progress has been achieved on this battlefront in early October this year, as the Governor of California, Jerry Brown signed a bill that, as reported by Los Angeles Times, required insurers to “start disclosing how much of their premium revenue is spent on prescription drugs, the increase in drug spending year over year, and which drugs are consuming the largest amount of that money. They’ll also report the drugs with the biggest price increases.”

On the other hand, pharmaceutical companies are also mandated to notify insurers and other bulk buyers in advance if they plan to increase prices more than 16% over a two-year period, and to provide the rationale behind the proposed hike to the state.

The bill was described as a modest, but necessary step towards more transparency in the industry.

“DIY” drug manufacturing

"EpiPencil", the brainchild of Michael Laufer, of DIY medicine collective Four Thieves Vinegar. Photo credit: STAT News

On the more extreme end of the collective effort to fight back skyrocketing drug prices enters anarchist and biohacker, Michael Laufer. The 38-year-old math teacher advocates for the do-it-yourself EpiPen as part of his larger goal of pushing for a DIY movement.

Speaking to STAT news, Laufer said "I feel an ethical responsibility when someone doesn't have access [to drugs] … and they die. If I have the knowledge on how to produce a lifesaving medication [and don't tell the world] … I feel complicit in their death by my inaction."

Thus far, there has been no report on whether anyone has the courage to manufacture and use the DIY EpiPen – known as EpiPencil – published by Laufer. The man had been perceptive towards the legal consequences of selling the device itself, and had only limited to providing free advice and encouragement, to empower those patients who had no alternatives.

Whether it is morally and legally acceptable to encourage patients to manufacture EpiPen alternative at homes warrants detail discussion. However, Laufer's home-made EpiPencil does trigger a series of interesting questions: if EpiPen can be manufactured cheaply at home, how much premium does the actual EpiPen charge? Does the world really need such desperate measures to overcome the drug price challenge? Such are the questions worthy of our time. MIMS

Read more:
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What is the US doing to bring drug prices down?
Reducing Malaysian healthcare costs via generic drugs

Sources:
https://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html
https://www.nytimes.com/2016/09/22/opinion/the-epipen-outrage-continues.html
http://raps.org/Regulatory-Focus/News/2017/08/08/28204/Generic-Drugs-in-2017-FDA-on-Track-for-Most-Approvals-Ever/
https://www.equities.com/news/fda-on-pace-for-record-number-of-generic-drug-approvals
http://www.raps.org/Regulatory-Focus/News/2017/06/19/27936/Priority-Generic-Drug-Reviews-New-FDA-Draft-Guidance/
http://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2653012
http://www.latimes.com/opinion/la-ol-drug-price-transparency-20171009-story.html
https://www.statnews.com/2017/10/12/michael-laufer-drug-prices/