Has the startup culture lost it’s way? American startups have adopted big pharma’s outrageous price markup’s
What happened to the startup culture? Don’t we specialise in taking on top-heavy, over-priced, inefficient industries? I thought we believed in listening to customers and solving their ‘pain points’? Aren’t we meant to be tackling the dinosaurs of top-heavy corporations and red-tape bound bureaucracies? Isn’t the startup culture meant to bring lower costs and more flexible services?
According to Fairfax Media, a startup run by the former hedge fund manager Martin Shkreli called Turing Pharmaceuticals recently acquired the patent to a drug called Daraprim. According to Wikipedia, Daraprim (generic name Pyrimethamine) is used for protozoal infections like malaria. This drug is apparently so important that it is currently listed on the World Health Organization’s List of Essential Medicines. Daraprim was being sold for $1 a tablet only several years ago.
‘Turing immediately raised the price to $US750 a tablet from $US13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.’ Andrew Pollack, The Age, 21st September 2015.
Medical specialists have protested the outrageous price increase of a 62-year-old drug, which is the standard of care for treating life-threatening infections. After reviewing a string of similar cases, a pattern is emerging. Aggressive companies sometimes called ‘startups’ are buying up older, off-patent, generic drugs, then charging price markups of over 1,000% or more.
~ Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price from $500, to $10,800 for 30 pills after its acquisition by Rodelis Therapeutics.
~ Valeant Pharmaceuticals recently acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 per cent and 212 per cent, respectively.
~ Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1849 by April 2014.
~ Digoxin is one of the oldest drugs on the market; it was originally prescribed in 1785. Until recently it cost pennies a pill. A cardiologist in the USA was recently asked to fill out a three-page insurance form demanding he get pre-approval before prescribing it for his patients with heart failure.
“I wrote on the form: ‘ARE YOU KIDDING ME?’ ” said Dr. Lindenberg, a cardiologist who practices in New York state, USA. Rapid Price Increases for Some Generic Drugs Catch Users by Surprise. Elisabeth Rosenthal. 8th July 2014. The New York Times.
A month’s supply of Digoxin now costs some American patients $1,000.
Pharmaceutical companies have a long history of manipulating vulnerable markets into paying huge markups.
The Australian health analyst Stephen Duckett has repeatedly pointed out that Australian could save several billion dollars a year if we adopted a more efficient drug purchasing system. Reports have shown that Australians currently pay at least 14 times more for prescription drugs than people in the UK, New Zealand, and Canada.
One of the reasons for Australia balking at signing the highly secretive Trans-Pacific Partnership, are leaked documents showing that we may be forced to pay the same outrageous price for pharmaceutical drugs that Americans are currently paying.
America is now spending 17% of it’s entire GDP on health care. A large proportion of this money is being wasted on scandalous markups of health-related products, including $100 for an aspirin and $1,000 for a hospital toothbrush. Despite paying a yearly health bill equal to the entire GDP of France, the USA currently ranks 34 on a World Health Organization list of estimated life expectancy rates, out of 194 countries. Higher up on the list despite spending a fraction of the USA health budget are Lebanon, Greece and Ireland.
Health startups normally focus on getting patients out of over-priced, error prone hospitals, and bringing them practical health services using newer technology like teleconferencing, smart devices and cloud-based medical records. Health startups are a billion dollar industry in the USA, fueled by a consensus that the current USA health funding model is an unsustainable disaster. Incubators like Rock Health are helping support and fund this rapidly growing echo system.
So what are startups doing in an unhealthy relationship with big pharma?
It’s time to review the startup culture; what our values are and what sort of a world we want to help create.
It’s worth noting that the millions of refugees currently sweeping across Europe, and the families they left behind in the Middle East are desperately in need of healthcare. There’s more than enough of the health dollar to go around for every man, woman and child on this planet.
We need to stop the health dollar being wasted on sickening greed. And any company claiming profit markups of 1,000% and depriving sick patients of essential treatments should be thrown out of the startup movement.
Wikihospitals September 2015
Shkreli’s Turing Pharma banks $90M in a murky funding round. Damian Garde, 10th of August, 2015. Fierce Biotech
Doctors Not Happy After Drug Goes From $13.50/Tablet To $750 Overnight. September 21, 2015. Consumerist.
Pharma firm hikes life-saving drug price by 5,500%. Ali Jarekji. 21 Sep, 2015. RT.
Premium policy? Getting better value from the PBS. Stephen Duckett and Peter Breadon. 21st June 2015. Grattan Institute.
Pharmacist Survey Raises Concerns for Patient Access to Generic Drugs. National Community Pharmacists Association. April 7, 2015. PR Newswire.
Rapid Price Increases for Some Generic Drugs Catch Users by Surprise. Elisabeth Rosenthal. 8th July 2014. The New York Times.
Australians paying 14 times more for prescription drugs than other Commonwealth nations. 2nd December 2013. ABC News.