Another Example Of A “Shkrelian” Drug Price Increase

The story of Martin Shkreli and the drug, Daraprim, has been used as an example of drug company greed. Daraprim is used to treat a parasitic disease known as toxoplasmosis, which can be life-threatening in people with compromised immune systems. In 2015, Turing Pharmaceuticals, where Shkreli was CEO, acquired the rights to Daraprim from CorePharma, and promptly raised the price from $12.50 a tablet to $750. The rationale for such an outrageous price hike was that this was a life-saving drug and should be priced accordingly. However, Daraprim is a generic drug, one that has been the market for 70 years! There are numerous other life-saving drugs that are generic and have also been on the market for decades. Yet, these drugs are very modestly priced. Shkreli was vilified for this. Fortunately, Shkreli’s behaviors have not been mimicked – until now.

Fludarabine is a chemotherapeutic drug that was discovered by John Montgomery and Kathleen Hewson in 1968 at the Southern Research Institute. This drug is used in treating various forms of leukemia and has grown in importance recently in its use in readying patients undergoing CAR-T cell therapy. As reported by STAT, fludarabine is sold by Fresenius Kabi for $272/vial and by Teva Pharmaceuticals for $109/vial. However, due to supply chain issues, supplies of this drug are in short supply. There is another supplier, Areva Pharmaceuticals, and it has just raised its list price to $2,736/vial. It justifies this action by saying that access to the active pharmaceutical ingredient is limited and that the drug must be manufactured in small quantities to maintain quality. That may be true. But can this really justify a tenfold increase in price? Presumably, the cost of ingredients have only increased by 20 – 30% – not 10X.

Even at this tenfold increase, healthcare budgets aren’t going to be broken as this is really a niche drug. However, that’s not the point. This is an egregious action, one not justified by the manufacturer making improvements to the drug. It is the same drug that has been used for almost half a century. But this action reflects terribly on all drug makers and this example will be used to further justify putting price controls on the biopharmaceutical industry.

On its website, Areva Pharmaceuticals claims that: “Every aspect of our business is operated in accordance with the highest ethical and moral standards.” Its pricing of fludarabine challenges that assertion.