Drug prices: we need to talk about Nirmal
Outliers weaken big pharma’s efforts to fend off attacks over high cost of medicines
Mavericks revel in controversy. After an unruly bikers rally in 1947, the American Motorcyclist Association insisted 99 per cent of riders were upright citizens. Some gangs claimed the term “one percenter” as a badge of pride. A few drugs industry bosses seem to relish disapproval just as much. This complicates the task of big pharma groups in fending off political attacks over the high costs of medicines.
Nostrum Laboratories of the US is the latest outlier. It has raised the price of a prescription cold medicine by more than 300 per cent to about $170. Last year, it upped the price of an antibiotic mixture to more than $2,000. Boss Nirmal Mulye claimed a “moral requirement to sell the product at the highest price”.
The drug can be bought more cheaply elsewhere. Even so, the case is bad publicity for an industry under pressure on pricing from US president Donald Trump. While not exactly cowed — prices of thousands of drugs have been raised recently — there are signs of restraint. By one measure, drug prices experienced their single largest decline in 46 years in 2018.
The introduction of new drugs pushes up prices. Patent expiries typically push them down. But some of the highest-profile rows concern old, off-patent drugs. The Aids and cancer drug Daraprim is the best-known example. Even though it had been on the market for more than 60 years, “Pharma Bro” Martin Shkreli raised the price 5,000 per cent in 2015.
The chorus of disapproval that followed cut no ice. As boss of Turing Pharmaceuticals, the only maker of Daraprim, Shkreli — later imprisoned for securities fraud — could raise the price as much as he thought the market could bear.
But the real challenge to healthcare budgets comes from rising prices for new treatments, especially for rare conditions. A gene therapy drug that Novartis thinks is worth as much as $5m per treatment is a case in point. The cost of bringing a drug to market has risen to more than $2bn. Companies need to make a return on research.
Weighing the value of cures against their cost would be easier without the antics of “one percenter” drugs bosses. Marginalising them is the job of regulators as well the industry. They should speed up approvals for me-too drugs and close loopholes used to block competition. This would clear the air for a debate over the costs of genuinely novel drugs.