Pharma Financialized

Matthew Herder argues that recent drug price hikes are only one part of a bigger problem with industry-driven pharmaceutical research and development.


Dramatic overnight increases in the price of a few pharmaceutical products have grabbed a lot of attention this week. For example, the manufacturer (Rodelis Therapeutics) of cycloserine, a critical drug used to treat a rare and dangerous form of multidrug-resistant tuberculosis, raised the drug’s price from $15 US per pill to $360 US – a 2,000% increase. Not to be outdone, the manufacturer (Turing Pharmaceuticals) of pyrimethamine (brand name: Daraprim), a life-saving treatment for a parasitic infection called toxoplasmosis, raised the price from $13.50 US per pill to $750 US – a 5,000% increase.

These are just the latest examples, however. In August, after acquiring two heart drugs from other manufacturers, Valeant Pharmaceuticals jacked up their prices by hundreds of percentage points. Also, in early 2014 Valeant planned to increase the Canadian price of a critical treatment for Wilson’s disease, trientine, roughly 13-fold, from $963 per month to $13,244.

Pyrimethamine (brand name: Daraprim)

Are these and other similarly dramatic examples of price gouging total outliers?

It’s true that cycloserine and Daraprim were exceptionally high price changes. But make no mistake: they are the exception that proves the rule. What rule? The rule that there is, at most, a tenuous relationship between the demonstrated value of a pharmaceutical product, the parties who actually do the work of establishing its safety and effectiveness, and the product’s price point in the marketplace.

The views, opinions and positions expressed by these authors and blogs are theirs and do not necessarily represent that of the Bioethics Research Library and Kennedy Institute of Ethics or Georgetown University.