Rocketing prescription drug costs garner daily attention lately...
A Kaiser Health Tracking Poll released in August revealed that 72% of Americans feel that drug costs are unreasonable. Seventy-four percent suspect drug companies put profits before people.
These sentiments are understandable given the average cost of a brand-name cancer drug in the United States is around $10,000 a month - double the level from a decade ago, according to data firm IMS Health.
What's behind the dramatic drug price increases in 2015?
There are several factors that go into drug pricing. There's research and development and operating costs. Sometimes actual shortages in medication are to blame, brought on by manufacturing issues and market consolidation.
But more often than not, "pharmaceutical price gouging" is the chief culprit behind high drug prices.
Such was the case with Daraprim, a toxoplasmosis drug manufactured by Turing Pharmaceuticals. On Sept. 20, the price of the 62-year-old drug jumped from $13.50 to $750 per pill overnight thanks to Turing CEO Martin Shkreli, who's since become one of the most hated executives in America.
Daraprim wasn't the first drug to suddenly see its price inflate this year, nor was it the last. You see, there is currently no regulating body that oversees drug prices. That's why a handful of price gouging instances were egregious enough to not only make headlines this year, but also to spur Congressional action.
Here's a look at four of the most outrageous drug price increases this year...
4 Greed-Fueled Drug Price Increases in 2015
No. 4 Most Outrageous Drug Price Increase in 2015: Cycloserine
Formerly known under brand name Seromycin, Cycloserine was developed in 1955 and is considered an "orphan" drug - a special category of medications for treating rare diseases. Cycloserine is used to combat life-threatening multidrug resistant tuberculosis that doesn't respond to the two primary treatment drugs administered first for the illness.
Rodelis Therapeutics purchased the rights to Cycloserine in August from a nonprofit called the Chao Center.
The Centers for Disease Control and Prevention say cases of MDR TB account for less than 1.5% of TB cases - only about 95 people nationwide. The Chao Center had been producing enough of the drug for about 40 to 60 patients per year, prior to the proposed sale. As part of the deal, the Chao Center requested that Rodelis maintain a sustainable supply of the drug to provide to patients who couldn't afford it at low or no cost.
When they learned that Rodelis was planning to increase the price to $10,800 for a prescription of 30 pills from the original price of $480 for the supply, the CDC requested that Rodelis return the rights to Cycloserine, according to The New York Times on Sept. 21. The two companies eventually agreed that the deal would be called off and the rights to Cycloserine were returned.
No. 3 Most Outrageous Drug Price Increase in 2015: Doxycycline
Doxycycline is a broad-spectrum tetracycline antibiotic used for treating severe acne, rosacea, and other infections. It is also used to prevent malaria and after possible exposure to anthrax.
The price of 100 milligram capsules of doxycycline more than doubled in two years' time - from $20 a bottle in October 2013 to its current price of $1,849.
That's a 9,000% increase.
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On Dec. 4, the antitrust division of the U.S. Department of Justice subpoenaed Mylan NV (Nasdaq: MYL) for information related to the pricing and marketing of its generic doxycycline antibiotic products. In February, Vermont Sen. Bernie Sanders asked the U.S. Department of Health and Human Services' enforcement arm to investigate generic drug price increases.
No. 2 and No. 1 of the Most Outrageous Drug Price Increases in 2015: Isuprel and Nitropress
Currently embattled Valeant Pharmaceuticals Inc. (NYSE: VRX) bought the rights to both these medications in February. Isuprel is given to people with a slow heart rate, and Nitropress is a vasodilator that helps lower blood pressure.
After acquiring them, VRX raised the price of both therapies by 525% and 212%, respectively. However, it did not, according to an April 25 report in The Wall Street Journal, shift production of the drugs to an expensive manufacturing plant. Nor did it make changes to improve either medication in the lab. It simply purchased these two therapies and raised their prices dramatically to make major cash.
For more information on the most outrageous drug price increases in 2015, including the latest on "Pharma Bro" Martin Shkreli, you can follow us on Twitter @moneymorning or like us on Facebook.
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