By: Louise Kennedy These days, more of us than ever are realizing how events can take a sudden turn and present us with a financialread More
News, Commercial Litigation
Trouble Looms for Drug Manufacturers after Sinister Price Hikes
Pharmaceutical companies like Turing and Valeant are in for some potentially huge penalties after hiking the prices of life-saving drugs earlier this year.
Both companies made the news when executives drastically increased the prices of previously affordable drugs. The public outcry by media outlets and high-ranking officials—including presidential candidate Hillary Clinton—is not the end of trouble for these companies, however. Democrats in congress are calling for a subpoena of Valeant Pharmaceuticals International. Citing the instances when the company obtained heart drugs Nitropress and Isuprel and subsequently increased the drugs’ prices by 212 percent and 525 percent respectively, the congress members are pushing to compel CEO Michael Pearson to testify and to furnish documents connected to the price surge.
Writing in a letter to the chair of the House’s committee on oversight and government reform, representatives said—referencing Valeant Pharmaceuticals and Turing Pharmaceuticals, “Both appear to be engaging in the same business model of acquiring potentially life-saving drugs to maximize their own corporate profits.” In this letter the Democrats wrote that they are also seeking the testimony of Turing Pharmaceutical’s CEO Martin Shkreli and that “Valeant is using precisely the same business model” as Turing.
Turing Takes Aim at AIDs Drug
Martin Shkreli is responsible for increasing the price of an invaluable AIDs drug called Daraprim from $13.50 per tablet to $750. He attempted to defend this on Bloomberg TV by saying that Turing “needed to turn a profit on the drug,” despite the pill costing less than a dollar to manufacture.
Accusations Against Valeant
This summer, nearly overnight, Valeant quadrupled its prices. This horrendous tactic left the average American at a loss with how they would possibly pay for life-saving drugs. It has been alleged that Valeant has manipulated the market and are accused of fraudulent accounting. New York’s attorney general has begun an inquiryinto whether Turing violated anti-trust rules.
Harmful Pharmaceutical Tactics
Even if a company does not take extreme measure of increasing drug prices exponentially overnight, many will still raise the price yearly at a rate far faster than inflation. This all spells disaster, not only for patients who rely on the drugs to survive, but taxpayers who bear the cost through higher premiums and co-payments.