The decision brought a storm of outrage from user groups and almost the entire medical community. Shkreli added nothing of value to the drug, he simply upped its price 鈥� 4,500 per cent.
He got away with it because daraprim, invented in 1953, was no longer under patent protection. Told patients and hospitals could no longer afford the medication, he replied, it 鈥渁in鈥檛 my fault.鈥�
Eventually, facing universal condemnation, Shkreli agreed to reduce the price somewhat, though he wouldn鈥檛 say by how much. But this disgraceful episode casts light on a much larger problem. Just how should the price of pharmaceuticals be set?
Market competition is the normal mechanism that keeps things balanced. But in some cases, as Shkreli proved, that mechanism doesn鈥檛 work.
If a medication is the only one in its field, there is no competition. Or, as could be the case with daraprim, the market might be too small to attract multiple manufacturers. In effect, Shkreli might have a monopoly.
sa国际传媒 has a world-leading system for dealing with challenges like these. A federal agency called the Patent Medicine Prices Review Board was set up in 1987 to oversee any new drug licensed in sa国际传媒.
An expert panel evaluates new medications based on how much benefit they offer. The panel also calculates the average price in seven comparable countries. On these two factors, the board determines how much the manufacturer is allowed to charge in sa国际传媒.
Two significant obstacles, however, have emerged. First, the board鈥檚 authority to set prices is being challenged in court.
The company bringing the lawsuit manufactures Soliris, a drug taken by patients with a rare blood disorder. Soliris is the only medication that treats this disease, and it can be life-saving.
But Soliris must be taken throughout a patient鈥檚 life, and the manufacturer wants $700,000 for a year鈥檚 supply. This is exactly the kind of situation the board was created to deal with. But if the lawsuit is successful, what happens then?
The second problem is more immediate. The board has no means of determining the actual price paid by national drug plans for any particular medication. All it has to go on are published price lists, and these are unreliable.
Pharmaceutical firms offer different countries different deals. Give us sole rights, promise not to tell and we鈥檒l charge you less than the country next door. Or pay our asking price for this drug, and we鈥檒l give you a break on that one. There is no bottom line.
There are several bills before the U.S. Congress that would force drug companies to open their books and reveal their true costs and price lists. Whether these statutes will ever be enacted is a good question. They face ferocious opposition from the industry.
But failing that solution, it might seem another approach would be worth pursuing. Provincial health ministries cover most of the medications in question. Ask them what they鈥檙e paying.
Unfortunately, the answer might be: Sorry, we can鈥檛 tell you. We signed a confidentiality agreement to get a better deal. Unbelievably, the provinces are also playing beggar thy neighbour with each other.
There has been some movement toward a national strategy. The premiers have agreed to purchase some commonly used drugs in bulk.
But secret deals are still being made. It鈥檚 time our health ministries stopped playing a loser鈥檚 game and brought an end to this foolishness.
