The Feds Make a Move on Soaring Drug Prices

Republicans will hate that the government is interfering in private business.

Fiscal Times

By Eric Pianin
October 16, 2015

Federal and state prosecutors delivered an unmistakable shot across the bow of the U.S. pharmaceutical industry this week amid mounting concern that soaring drug prices are posing risks to the health of many Americans and blowing a hole in the budgets of federal and state health care programs.

Two of the worst offenders, Valeant Pharmaceuticals International and Turing Pharmaceuticals, were presented with subpoenas or letters by prosecutors investigating their pricing practices and other aspects of how they do business

During a Senate hearing last summer, Sen. Claire McCaskill (D-MO) questioned former Valeant CFO Howard Schiller about the company’s February 2015 decision to increase the price per vial of Isuprel, a drug used to treat cardiac arrest, from $215 to $1,346. That same month, Valeant boosted the price of the Nitropress, a blood pressure medicine, from $257 to $805 per vial.

Last month, Hillary Clinton called out Turing for boosting the cost of Daraprim, an older drug used to treat infections, from $13.50 to $750 a pill. Donald Trump called the company’s 32-year-old CEO, Martin Shkreli, a “spoiled brat.”

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Few have done more to arouse public and government hostility to the pharmaceutical industry than Shkreli, a cocky former Wall Street hedge fund manager who purchased Turing and then jacked up the price of Daraprim by more than 5,000 percent after acquiring the rights from Impax Laboratory. Shkreli, who once worked as an intern for TV personality Jim Cramer, exuded arrogance and a healthy disregard for the well-being of sick Americans in numerous tweets on social media and appearances on television.

Shkreli ultimately announced that his firm would reduce the price of Daraprim, but without saying by how much. Roughly three weeks after making the promise under pressure from Clinton, Shkreli told Business Insider this week that it wasn’t clear when he would lower the drug and that he wasn’t paying attention to requests by government officials for more information about the drug’s price.

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tags: price gouging, price fixing, monopoly, unfettered capitalism,