Rising drug prices have been making top headlines and continuing to stun the nation over the past few years. Several companies have been doubling the price of medications, with the most publicized and recent example being none other than Martin Shkreli, the former pharmaceutical executive from Turing. Shkreli stirred up a whirlwind of attention after raising the price of Daraprim, a life-saving drug used to treat serious parasite infections.
In response to the jarring 5,000 percent price hike, the House Oversight and Government Reform Committee held a hearing on February 4th to discuss the government’s role in combating rising healthcare prices. In attendance were CEO’s from multiple pharmaceutical companies and two FDA officials.
Chairman Chaffetz started the hearing by stating that the federal government will spend one trillion dollars on Medicare, Medicaid, and other healthcare programs over the course of the next year— a staggering sum that will only increase if necessary measures are not taken in years to come.
Furthermore, pharmacist and congressman Buddy Carter offered valuable insight as an active member of the healthcare industry in Georgia’s first district. Carter continued in detail about how disappointing the increased prices of essential drugs are. He stated that, “these perverse business practices are implemented to exploit patient groups.”
Chairman Carter described the struggle of Americans who can’t afford this life saving medication. He posed this question to Martin Shkreli: “What do you say to that single pregnant woman who might have AIDS, no income, she needs Daraprim in order to survive. What do you say to her when she has to make that choice? What do you say to her?”
Martin Shkreli hid behind a smirk and declined to answer, exercising his Fifth Amendment right to protect himself from self-incrimination. At one point, Representative Cummings scolded Shkreli for openly laughing while millions of Americans are dying.
Rep. Elijah Cummings didn’t even attempt to question Shkreli, and instead pleaded with him, arguing that Shkreli could use his position and his influence over his former company as a force for good. Cummings suggested Shkreli could use his influence to advocate for patients’ rights and could “make a difference in so many people’s lives.” “I know you’re smiling,” Cummings said, “But I’m very serious, sir. The way I see it, you can go down in history as the poster boy for greedy drug company executives, or you could change the system. These examples of price gauging are particularly unfair because many of these drugs have no generic equivalents. With no competing products, those who rely on these medications are forced to either buy them at high prices, most likely far out outside of their economic means, or refrain from buying them at all.
The committee made sure to delve into how pharmaceutical executives benefited from the unfair price increases. It was revealed that Mr. Schiller, the representative of Valeant at the hearing, made about $400,000 a month.
Part of the issue may be the FDA’s process for reviewing generic drug applications. Chairman Chaffetz claimed it is too slow and inefficient.
Unlike Shkreli, Nancy Retzlaff of Turing defended the price hike of Daraprim. She argued that very few patients are prescribed this treatment and the drug is priced far below its market value. She also detailed the rebates available that can be used by patients to lower the cost of the Daraprim. Ultimately, this has resulted in a $750 medication.
Following Turing’s testimonial, Howard Schiller of Valeant attempted to defend the company’s pricing model. He argued that increasing prices are based on the medication’s high value. He also explained that Valeant is one of the leading drug companies dedicated to producing effective drugs. Portions of their profits are allegedly used for research and development. Concluding his argument, Schiller admitted there have been mistakes and promised to try to change for an improved future.
There may be two sides to every story, but it’s clear that increasing the market price of drugs to a certain extent is unethical. Given today’s economic situation for many Americans, patients can’t afford to treat life-threatening illnesses with these unexpected price-hikes continuing to occur. Pharmaceutical companies should be accommodating patients and making necessary medications accessible and affordable. Instead, it seems as though some executives are more concerned with lucrative business methods. It’s important to remember why these drugs were developed in the first place— to help people suffering from medical conditions, not for monetary gains.