Avondale, a secretive Alabama-based drugmaker, has gained unwanted national attention after the company increased the price of a bottle of vitamins to almost $300 that can be bought on the internet for $5.
In the latest example of price-gouging in America’s lightly regulated pharmaceutical industry, records show Avondale inflated the price of Niacor, a prescription-only version of niacin, by “809 percent last month, taking a bottle of 100 tablets from $32.46 to $295”, according to the Financial Times.
Niacor is the prescription form of niacin, a type of vitamin B3 that is used to treat high cholesterol and the increased risk of a heart attack. With one easy search on Google, a generic version of Niacor can be bought for $5.75 on Jet.com - meanwhile, if the consumer wants the prescription brand, well, they might have to sell their Apple Watch.
Avondale’s development of price-gouging is certainly bad timing on management’s behalf when considering Martin Shkreli, who in the past year has become the most hated man in America after he bought the rights to a drug, then raised prices by 5,500 percent. In the world of Big Pharma, buy-and-raise schemes are not limited to just Shkreli, but it’s rampant across the industry, such as Valeant Pharmaceuticals who has been accused of raising drug prices by more than 5,000 percent.
The Financial Times said Avondale acquired the rights to Niacor from Upsher Smith, a division of Japan’s Sawai Pharmaceutical, earlier this year. The buy-and-raise scheme was immediately applied to Niacor, as management faced little or no competition among other drugmakers, along with limited government regulation.
Niacor isn’t the first time the company inflated drug prices, management “increased the price of SSKI by 2,469 percent, taking a 30ml bottle from $11.48 to $295,” according to the Financial Times.
According to the data provider Iqvia, there were almost 19,000 prescriptions written for Niacor in 2016. Niacor has been described as a drug with a fast absorption rate, making it popular with the medical community. Most people are oblivious to the sharp increase of Niacor, because of the secrecy surrounding drug prices are not usually disclosed to the public.
Michael Rea, chief executive of Rx Savings said, “this is the latest example of an inefficient US market where the consumer, payer and doctor don’t have all of the information available to make a financially sound choice, which makes software to help cut what people spend on medicine.”
He warned: “They are caught in a web of inefficiency and are being taken advantage of.”
FT could not get in contact with anyone associated with Avondale, which was started in 2016 by Mark Pugh, an executive behind several pharmaceutical companies. A spokesman from Upsher confirmed the sale of products to Avondale, but could not provide further information on the price increase.
Mr Pugh has held several executive roles in the drugmaking industry, sometimes at companies that have implemented very sharp price increases. A 2014 biography says he has “more than 20 years of industry experience” and a “documented record of success in identifying and capturing new business opportunities to build high-profit, high-growth corporations”.
Acrogen did not return a request for comment made through its website. Emails to the company were returned undelivered. Mr Pugh did not respond to a request for comment through LinkedIn.
A spokesperson for Upsher confirmed it had sold the two products to Avondale, but declined to make the terms of the deal public and did not explain why it did not announce the transaction at the time.
It declined to say whether it continues to manufacture the product on behalf of Avondale, or whether it was aware the new owner planned to raise the price sharply.
It has been one week since Hurricane Maria devastated the island of Puerto Rico. And inside hospitals and clinics, doctors have limited supplies and will soon run out of diesel to power the buildings.
The looming medical crisis is set to explode at any time. Dr. María Rodríguez is the medical director of Concilio de Salud Integral de Loíza, a community health center in a small town in the northeastern portion of Puerto Rico. She told CNN that she only has six hours of diesel left. Fuel distribution has been inconsistent and there just isn’t enough. Once Dr. Rodríguez is out of fuel, she will have no choice but to close her doors.
With the fuel and power shortages, she expects the top health concern in the days ahead will be infectious diseases. As people who need medications do not get them, she predicts mental health issues will become a problem as well. “The desperation that all these people have, they’ve lost everything — on the whole island,” she says.
“What else we can do?” she asks. “I haven’t seen anything like this.” For 24 years, she’s worked at the center, which serves about 15,000 underprivileged patients each year. Despite the possibility of a power outage, she and her co-workers are still trying to provide services to the best of their ability. In normal conditions, the center provides everything from primary care and pharmacy services to X-rays. “We can do some things. I have a stethoscope and the antiseptics and I can prescribe. But the pharmacy can’t work with that, they need the system — they need labs to provide medications to these patients,” Rodríguez says.
“It will get worse before it gets better,” she says. Her feelings are shared by other health care providers on the island as well, who believe a medical crisis is about to unfold. Dr. Robert Fuller, an emergency medicine physician at the University of Connecticut and International Medical Corp. arrived in Puerto Rico to help those whose lives are on the line.
“I didn’t realize it was gonna be corner-to-corner everybody affected by the storm,” says Fuller, squinting into the sunlight. “Every family’s been touched and disturbed in some way or another. And the degree of destruction — the power the storm had — took me by surprise.” Communities are disabled by the storm, he says, yet it’s fuel and electricity that are driving this disruption.
“If we had good logistics and good communications, things could probably settle out a little faster,” Fuller says. However, the lack of those things could lead to a medical problem, since medications might not be delivered where needed. Puerto Rico is a “complicated mess” right now, he says. –CNN
It’s not a matter of human resources, says Dr. Fuller. “It’s a matter of getting the medications and treatments to the people.” It’s also a matter of being able to move around and get services to people, which cannot happen without fuel. Unless medical supplies and fuel to run clinics and hospitals can get to the devastated island, and soon, the looming medical crisis will explode, and it could cost some their lives.
Remember the terrorist bombing at the 1996 Olympics in Atlanta, Georgia? If you"ll recall (or follow the link and read), Richard Jewell, the security guard who discovered the backpack containing the bomb, heroically warned people away and prevented it from creating a larger tragedy than the two lives it claimed. His hero status was short-lived, however, as he became the prime suspect. With only an accusation, his name was gleefully dragged through the mud by every mainstream news outlet at the time until he was eventually cleared by the FBI. Though ultimately vindicated, Jewell"s life was just about ruined.
The US media is always casting heroes and villains in their contrived narratives, packaged and delivered for the consumption of the common American nitwit, many of whom swallow it whole and then follow the lead by piling on in social media forums, twittering and facebooking and generally being the good hapless dupes that they are. The latest Bad Guy of the week is Martin Shkreli, former CEO of Turing Pharmaceuticals. As anyone reading this probably already knows, Shkreli has been demonized for buying the rights to an outdated drug, Daraprim, that treats a rare condition called Toxoplasmosis and jacking the price up 5000%. On the face of it, it sounds absolutely awful. Martin was excoriated in the public sphere as the worst kind of greedy exploitative capitalist scumbag, accused of holding a captive audience virtually hostage and making them pay a hefty ransom if they wanted to live (Toxoplasmosis is fatal if left untreated). And Martin did his image no favors, happily donning the costume of the evil caricature that was custom-tailored for him by the American press, a nice bespoke suit of fine villainy.
However, as with every story, there"s much more nuance here than is fathomed by the short-attention-spanned and feeble-minded MSM lapdogs reporting it. Thanks to the internet--and in this case, Martin"s proclivity to make himself accessible to anyone in the world by way of a series of YouTube livestreams--we can actually get his side of the story. Let"s investigate.
Martin claims his company, Turing Pharmaceuticals, purchased Daraprim and jacked up its price in order to finance the development of a much more effective modern drug to treat Toxoplasmosis. The problems with Daraprim, as Martin explains, is that it"s very old (invented in the 1940s), it doesn"t work that well, and it"s toxic to bone marrow and can be as deadly to the patient as to the disease itself. There was no incentive to create a better drug because the disease was so rare, and there was already a cheap (if problematic) drug on the market to treat it, so it has mostly gone unnoticed in the pharmaceutical industry. Martin wants to replace Daraprim with a new drug that targets the enzyme that causes the disease without the bone marrow toxicity. To accomplish this, his plan is to raise the drug"s price from $13.50 to $750 per pill. At $750 per pill for an 84 pill course, the total cost is now $63,000 to cure the disease, which as Martin points is both rare and fatal. There are similar drugs on the marketplace (i.e. for other fatal ailments) that cost anywhere from $80,000-$130,000 per course, so Daraprim is still relatively cheap for a what is a life-saving medication. Martin explains that, while the price hike is indeed extreme, his company has made it easier for patients to get the drug by lowering the co-payment to "almost nothing", with the insurance companies picking up the tab and, furthermore, that Turing gives away 60% of their Daraprim to patients who can"t afford it, leaving the company with a 40% gross margin. He says that nets out overall to $25,000 in profits for Turing per treatment course, virtually all of which goes back into R&D for a Daraprim replacement.
So, as the plan goes, by buying Daraprim and ramping up the price, Turing Pharmaceuticals will be able to use the profits to invent a new, more effective drug, while in the meantime being compassionate to Toxoplasmosis sufferers by making sure they can still get Daraprim affordably. He claims no one is dying as a result of the price hike and emphasized those who need it can still get it. Martin"s full explanation is nicely encapsulated in the following video:
