What's Overlooked in the Daraprim Controversy

Sep 23, 2015
Manufacturer consolidation and egregious pricing demonstrate why plan sponsors need Express Scripts.

It was revealed earlier this week that Daraprim® (pyrimethamine), a 62-year-old drug that treats toxoplasmosis, recently had an overnight price increase of 5,000%, from $13.50 per tablet to $750 per tablet. The news rightfully stirred public outcry against the drugmaker, Turing Pharmaceuticals, who was maximizing profits at the expense of a vulnerable patient population. Yesterday afternoon, Turing responded to the backlash by saying it would lower the price eventually, but the company did not specify what the new price would be.

Unfortunately, this isn’t the first price hike we’ve seen. Daraprim is one of several older generic medications for which a manufacturer has cornered the market and raised the price to egregious levels. For example, Horizon Pharma PLC recently purchased the rights to Vimovo® (naproxen and esomeprazole magnesium) and Duexis® (ibuprofen and famotidine), and soon increased the prices on these older products more than tenfold.

This isn’t innovation. Akin to a spike in gas and plywood prices just ahead of a hurricane, this is profiteering.

Who Pays for U.S. Medications?

What’s typically lost in these discussions is who really pays for these drugs. While U.S. patients who use Daraprim or Vimovo typically only pay a small portion of the medication’s total price, the American taxpayers and employers bear the lion’s share of the burden for these sorts of price hikes.

Irrational drug pricing is an issue that affects far more people than the handful of patients who use one of these medicines. In many ways, these actions are a sort of “Turing Tax” on us all.

Tempting the Regulators

The U.S. subsidizes international drug development. While representing about 5% of the world’s population, the U.S. makes up approximately a third of global drug spend. Even more alarming, the U.S. represents approximately 70% of drug manufacturers’ profits. There is an unspoken social contract in our country where we permit reasonable profits for pharmaceutical companies as long as those profits spur additional innovation and maintain drug affordability and access – especially for a medicine like Daraprim, which is on the World Health Organization’s List of Essential Medicines.

But when certain manufacturers act as Turing and Horizon have, they have broken this social contract with both patients and the country. And in doing so, they essentially are begging the federal government to step in and implement price controls, an act that would surely erode pharmaceutical innovation in the U.S. and around the globe.

There’s another way: Express Scripts has demonstrated how the American system can leverage market competition to keep drug prices within check. After helping initiate a national debate about fair drug pricing last year, we took decisive action that lowered the cost to cure hepatitis C in our country below what was being paid in Western Europe, and in doing so saved the U.S. more than $4 billion this year alone.

How to Sustain the U.S. Pharmacy Benefit

Express Scripts’ utilization management solutions like we delivered in the hepatitis C market help protect plan sponsors and members from unfair drug pricing. We closely track manufacturer price increases and work to ensure that our clients are not paying more for prescription drugs that provide no additional health benefit.

Express Scripts is a leader in stopping these excessive price hikes:

  • For example, Vimovo and Duexis were part of our Step Therapy Program for several years, and this action lowered our commercial clients’ spend on these two products by $7.5 million. And in 98% of these instances, patients switched to a less-expensive, clinically equivalent over-the-counter medication. This year, we have taken the additional step to exclude Vimovo and Duexis from our National Preferred Formulary. Clinically appropriate exclusions such as these will save our clients more than $3 billion from 2014-2016. 
  • We have protected our clients even further by negotiating for future inflation predictability within our contracts with other brand-drug manufacturers. Currently, we have inflation caps for more than 150 of the most critical medications – those that represent more than half of our clients’ brand drug spend. Last year, the clients on our National Preferred Formulary saved more than $100 million because of the inflation predictability we were able to achieve on their behalf.
  • As biosimilars enter the market, Express Scripts is uniquely positioned to leverage this additional competition among specialty medications to drive down those costs and create the financial headroom needed for our country to afford the next generation of innovative pharmaceuticals.

Manufacturer consolidation and egregious pricing demonstrate why plan sponsors need Express Scripts. We are completely aligned with our clients’ interests and always take the necessary actions to make the pharmacy benefit more affordable and sustainable. Working together, we are putting medicine within reach of the 85 million Americans we serve.

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