the common decency act…

Posted on Thursday 8 October 2015


Pharmalot
by Ed Silverman
October 8, 2015

Martin ShkreliA US Senator has asked the Federal Trade Commission to investigate whether drug makers are hiking prices and then restricting distribution to prevent generic drug makers from making lower-cost versions of their medicines. In a letter to the agency, Minnesota Senator Amy Klobuchar cited Martin Shkreli and his Turing Pharmaceuticals, which created a nationwide sensation after recently buying a life-saving medicine and then raising the price from $13.50 a pill to $750. This 5,000 percent price hike triggered a new round of scrutiny of prescription drug costs that is now spilling over into the presidential election campaign.

In her letter, Klobuchar noted that Turing uses a controlled distribution system to prevent generic drug makers from purchasing its pill. Without sufficient supplies, a generic drug maker is unlikely to have enough medicine to run clinical tests needed for FDA approval. And a generic medicine must be bioequivalent with a brand-name drug, meaning it must produce the same sort of effect in a patient.

As we explained earlier this week, Turing maintains a select list of qualified buyers, including a specialty pharmacy to fill individual prescriptions, as well as certain hospitals and clinics. But all shipments come from a division of a major wholesaler that must clear any other purchase requests with Turing. And a Turing executive acknowledged that he would reject any orders from a generic drug maker. Klobuchar complains that this system, which is sometimes employed by other pharmaceutical companies, deserves investigation because it may preclude competition and, ultimately, force consumers to pay higher prices for medicines.

“As a public policy matter, this practice is disturbing, but as you know, the antitrust laws do not apply to unilateral price increases, no matter how unfair,” Klobuchar wrote in her letter to FTC chairwoman Edith Ramirez. “If a company were to employ this strategy to deny competitors supply for use in a generic application, it would be doing more than simply raising prices,” she continued. “It could be excluding competition from the market to the detriment of consumers and violating the Federal Trade Commission Act.”
Wouldn’t that be nice. We might throw in Gilead’s Sovaldi for good measure. Neither company did the discovery, yet they essentially hold sanctioned monopolies through different mechanisms. Worse, both are exploiting patients who have no other real choices. If Martin Shkreli isn’t breaking a law, maybe we need some new laws – the Common Decency Act of 2016…
  1.  
    Melody
    October 9, 2015 | 8:17 AM
     

    It’s been awhile since I’ve chimed in with my diabetes perspective, but . . . when Eli Lilly “partnered” (Stole) with UCSF and Genentech to produce/market rDNA insulin, they systematically withdrew natural animal insulins from the marketplace BECAUSE THEY COULD. U.S. diabetics have no choice now unless they import the few natural varieties remaining in production from other countries. While Lilly promised the new rDNA stuff was “better . . . just like the human body makes . . . purer . . . and would be cheaper”, they lied as well as monopolized the marketplace. Forty years ago, hubby could walk into any drugstore–without a prescription–and obtain a month’s supply of life-saving insulin for under $10 a vial. Now, after jumping through regulatory hoops (4 doctor’s visits/year; collection of data substantiating blood glucose monitoring; securing appropriate prescription, etc.), he can secure a vial for $273.49 (retail). [Thank dog for Medicare and insurance.]

    When we contacted the FTC all those years ago, and because Novo Nordisk was a market participants (though imitating Lilly’s marketing strategy), they informed us that they saw “no problem” with marketplace monopoly, price manipuation, deceptive advertising, whatever. . . a regulatory shoulder shrug and “Meh.”

    Melody

  2.  
    James O'Brien, M.D.
    October 9, 2015 | 11:18 AM
     

    Short interest in Gilead is up:

    http://cnafinance.com/gilead-sciences-gild-stock-short-interest-is-up/5857

    The author here doesn’t think it is merited but he didn’t mention anything about patent politics.

    It would seem that in an election year, Gilead would be a ripe political target because no one except shareholders like what they are getting away with.

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