Six Pharmaceutical Industry Practices That Will Make Your Blood Boil

I recently posted the cost of a one-month supply of my daughter's oral chemotherapy drug to Facebook. The drug, Everolimus, retails at about $12,000 per month according to GoodRx, a site that allows people to "comparison shop" for medications and provides coupons for deep discounts on certain medications.

Everolimus is manufactured by Novartis and goes by the brand name of Afinitor. It's indicated for the treatment of various advanced stage cancers. It's also used to prevent organ rejection for transplant patients. In my daughter's case, she's taking the drug for metastatic inflammatory myofibroblastic tumor - a rare cancer that started in her liver and spread to her abdomen and lungs. She's also taking it to prevent organ rejection because she had a liver transplant a few years ago when her initial tumor was discovered.

Thankfully, our insurance covers the drug. Even so, I think it's important to be aware of how much it costs (some hoop-jumping was necessary for us to get this drug approved). So I looked it up. Even though I knew it was an expensive drug, it was still shocking to see the total amount in black and white.

After staring at it for a while, I posted the price to Facebook. It seemed like important information. Most of the time we have no idea how much prescription drugs cost and this is hurting us - our economy, our healthcare system, and the very people who these drugs are meant to help.

Someone in my circle of Facebook friends works for Biogen, a biotech company whose flagship products treat multiple sclerosis. She responded to my sticker shock by posting two maddening pharmaceutical industry talking points:

  • It costs a billion dollars to bring a new drug to market, and that doesn't include all the "failed" drugs. So, high drug prices are necessary to fund innovation.
  • Predators like Martin Shkreli, the guy who hiked up the price of a drug that treats toxoplasmosis from $13.50 to $750 per pill, are the exception rather than the rule. (she offered this gem up when someone used him as an example of bad pharmaceutical ethics).
  • Here's some advice to those of you who work in pharma and happen to be connected to someone on Facebook who has a child with cancer: don't try to justify the shockingly high cost of some specialty drugs. Just don't do it. Tell your lies to the media. Tell them to yourself. Spray paint them on the side of your yacht, but keep them far away from me.

    This experience motivated me to create a letter from a fake company to its clients, announcing some new policy changes inspired by Big Pharma (and Biogen specifically). Although Biogen is the example here, most of the top pharmaceutical and biotech companies employ these practices regularly.


    Dear Client,

    Thank you for continuing to be a patron of You Need Me to Survive, Inc, (NASDAQ: YNMS) although we both understand the unspoken truth that you have no choice in the matter. I won't dwell on this since I know it's an issue that causes you no small amount of distress.

    In the interest of good faith and transparency, I am submitting a list of key policy changes which may impact you in the coming months. All of these policies are routinely employed by the pharmaceutical and biotech industries who I am endlessly inspired to emulate. My biggest inspiration, by far, is BioGen, a company who has raised the price of its blockbuster product Avonex twenty-one times in the last decade (an average of 16% per year). This is astounding when you consider that Avonex, a drug that treats multiple sclerosis, was approved in 1996 and demand has declined every year for the past ten years. I know what you're thinking. Isn't it inspiring? Isn't this so great for Biogen's shareholders?

    Here's what you can expect from me in the coming months:

    1. At least one significant, arbitrary and life changing (for you) price increase to my existing suite of products in the next year. For some of you, this may pose a barrier to obtaining my products. While this may usher in your demise, please take comfort in the fact that a price increases are essential for innovation. They provide an ongoing pipeline of critical life-saving products to the endless supply of clients who can afford to pay anything I feel like charging.
    2. Each new successful product I roll out will cost 20% to 40% more than anything you're paying for at the moment, regardless of whether it offers any benefits to what you're already using. I'm sure you can appreciate the business aspect of charging a premium for the products you depend on to keep you or a loved one alive. (even if, technically, they don't).
    3. In an effort to provide some financial relief for customers who may not be able to afford the direct purchase of my products, I'm partnering with several insurance companies who can obtain my products at a wholesale price and will cover the cost - in full - for clients who enroll in this program. An insurance company underwriter will assess every request you make for a product and approve or deny access based on their discretion. Monthly insurance premiums will range from zero dollars (for those who qualify for government assistance), to $1400 per month. Before you balk at the sticker price, remember this is only a fraction of what it would cost you to buy my products directly and, anyway, who can put a price on your life? Oh that's right, I can!
    4. I'm going to drastically increase the prices of my most coveted and effective products (even if they've been around for decades) capitalizing on the fact that there's no regulatory system in place to control all. But don't worry, I plan to offer rebates and discounts to the insurance companies I'm partnered with. You can only benefit from these rebates and discounts if you buy insurance (see item #3, above).
    5. I'm going to give myself a pay package that includes a two million dollar salary, four million dollar bonus and stock awards of over ten million dollars, just like my idol, George Scangos, the Chief Executive of Biogen, did in 2015. Making lifesaving products while keeping stockholders (myself included) happy, is hard work and I'm sure you'll agree that I'm worth it.
    6. I'm going to dedicate over 25% of my revenue to marketing my products to people who have no choice but to use them. You can rest assured that the giant rate hikes I'm foisting on you will help me expand my market earning me even more money. Once again, I'm taking a page from Big Pharma who spent over 27 billion dollars on drug promotion in 2012. What do you expect? Lifesaving medications aren't going to sell themselves!
    7. I realize it may take you some time to adjust to these policy changes and it saddens me to think that I may lose some of you as clients. But, I have an obligation to my shareholders and a commitment to free market capitalism. Please feel free to direct any questions to my secretary.


      It all sounds absurd - most businesses would lose its clients if it tried to pull this. So why are we letting the companies that make our drugs get away with it?

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