Jonas Salk Was No Hedge Fund Manager
Sometimes it is difficult to determine what is wrong with our healthcare system. Sometimes it is very easy. This is one of those cases.
Andrew Pollack, writing in The New York Times, tells the story of how a former hedge fund manager purchased a drug, Daraprim, from its manufacturer. Daraprim is a 62-year-old drug that is the standard of care for treating certain life-threatening diseases. The drug has been selling for $13.50 per tablet. Its new owner, Turing Pharmaceuticals, in one fell swoop, has increased its price to $750 per tablet. (Jonas Salk gave his polio vaccine to the public for free!) This means annual treatment for some patients will now be several hundred thousand dollars per year. And this transaction is not the only one of its kind.
A number of “old” drugs that have become standards in treating a variety of diseases have been purchased by new owners who immediately raised the price. For example, Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price from $16 per tablet to $360 after its acquisition by Rodelis Therapeutics. Doxycycline, an antibiotic, went from $20 a bottle in October 2013, to $1,849 by April 2014.
These take my breath away. Pharmaceutical pricing is a black hole in the healthcare system. The good news is some of these companies give these drugs to the needy for free. The bad news is it only takes you a couple of months to become needy. These schemes will permeate Medicare and private insurers. But you can be sure insurance carriers will attempt to keep them off their formularies.
So if you must have one of these to survive, know that you’re making a great contribution to the wretched hedge fund manager who just bought the rights to what has become your lifeline. Your prognosis is not good. Neither is that of our healthcare system if we can’t figure out a way to contain this abuse.
Call us. Surely we can do better than this.