There’s a lot you can do with your bathtub besides soaking or playing with your duck collection. Edelberg family legend holds that during Prohibition, a granduncle of mine made gin. You yourself, with a little effort, could raise turtles or tilapia. But if you were as clever and mean as Big Pharma CEO Martin Shkreli, you’d opt to buy the exclusive rights to a rarely used drug, make it yourself, and brace yourself for a cash flow beyond your wildest dreams.
Shkreli’s story is fairly simple: he learned that the rights were available to pyrimethamine, a 60-year-old malaria drug long off patent and available generically. Using his hedge fund piggy bank, he founded Turing Pharmaceuticals and bought the exclusive rights to manufacture and sell the stuff, branded Daraprim in the US. Because we have virtually no malaria here, the drug is used mainly to treat toxoplasmosis, an infection with the generally harmless Toxoplasma parasite that becomes dangerous in anyone with a compromised immune system, including those who are HIV-positive or receiving immune-suppressing cancer chemotherapy.
Also, and ominously, if the Toxoplasma parasite is transferred to the fetus during pregnancy it can cause significant brain damage. When you read that pregnant women should avoid kitty litter boxes, it’s because cats not uncommonly carry the parasite in their intestines.
According to the CDC, more than 60 million people in the US carry the Toxoplasma parasite, but few have symptoms of toxoplasmosis because a healthy immune system generally keeps the parasite from causing illness.
Pyrimethamine is quite inexpensive in malaria-prone, economically depressed parts of the world (about five cents a pill), where it’s widely used. With less malaria but some toxoplasmosis in Europe and Canada, generic pyrimethamine sells for $2 a pill. In the US, it was priced higher, about $13.50 a pill.
And that was the case until Martin Shkreli, realizing he was the only kid on the block with pyrimethamine, promptly raised the price to $750 a pill.
5,000% price increase triggers public outrage
You read that correctly. $750 a pill, a 5,000% price increase that triggered nationwide public outrage. Shkreli was labeled scum, a sociopath, the worst person in America, and a slew of uncreative obscenities.
You might already have watched him being interviewed on TV trying to justify the totally unjustifiable price increase. Not surprisingly, Fox Business News defended his right to do so. Finally, a Shkreli lookalike comedian offers his explanation—briefly funny but then just creepy.
What’s amusing is listening to the moral outrage from anyone who happens to gain from being morally outraged, namely all the presidential candidates and the American Pharmaceutical Manufacturers Association.
Shkreli caught it because he happens to be a really smug jerk who couldn’t keep his mouth shut. You watch him and you want to strangle him. Had he been smarter and simply hired a more mature, sensitive-looking actor to convey compassion and a good PR company to promote some sort of Shkreli Foundation whose goal was a worldwide cancer cure, this all would have passed without a fuss, none of our knickers in a twist.
There’s nothing new about generic price gouging
In 2012, Questcor Pharmaceuticals raised the price of an injectable hormone, ACTH, from $9 a vial to $28,000 a vial, but because they kept a low profile the main thrust of a New York Times article on the subject covered the stock price increase the company enjoyed.
Much more widely used than pyrimethamine, the gout drug colchicine and the IBS med Donnatol both went from less than a penny apiece to $4 a tablet.
We’ve got to face the fact that Shkreli is small potatoes when compared to the seemingly outraged pharmaceutical industry itself. He may make some good money on a couple of thousand people with toxoplasmosis, but there are hundreds of thousands of people using colchicine and Donnatol who are paying through the nose.
Pyrimethamine will remain its five cents in India and $2 in Canada because their governments step in and say no to these egregious price increases. Our government allows us to be throttled by Big Pharma, which justifies price increases by citing the cost of new drug research and testing. Unfortunately, all this “research” is utterly unverified. Drug companies simply refuse to disclose their research and development costs to the public. We’re supposed to take as gospel that they plow their 40% profits back into developing new drugs. There is absolutely no evidence that this is true.
There are three immediate solutions
- In most countries, the government negotiates prices with drug manufacturers. Although the sentence “We’ll pay this amount and not one penny more” will chill the heart of a Big Pharma CEO, it can protect us.
- Shorten the patent exclusivity of brand-name drugs—currently a generic drug comes available much sooner in the EU and Canada than in the US. What the conservative financial newspapers call “poor patent protection” in Canada is actually good for Canadians themselves.
- Give Americans open access to buying their prescriptions from Canadian pharmacies. Although many people already buy their meds by mail from Canada, the US Postal Service is allowed to block shipment and send the packages back. Fortunately, this almost never occurs and your savings can be considerable. For example, the antibiotic rifaximin (Xifaxan) is $25 a tablet in the US and $1.10 a tablet in Canada. To buy meds from a reliable Canadian pharmacy, open an account here and fax them your prescription.
So how can you make $112,500,000 in your bathtub?
Pyrimethamine is actually very cheap to make, and like all pills is first mixed in large vats and then molded into tablets.
Here’s my seat-of-the-pants calculation: Two pyrimethamine tablets are about the same size as one jellybean. A quick Google search tells us that approximately 1,500 jellybeans will fill a one gallon container. The average bathtub has 50 gallons, and thus could contain 1,500 x 50, or 75,000, jellybeans. But if one jellybean is the same size as two pyrimethamine pills, your bathtub can actually hold 150,000 tablets of pyrimethamine.
Were Shkreli to keep the pyrimethamine price as-is (he’s saying he’ll lower it, but gives no figures), a bathtub filled with pyrimethamine tablets is worth 150,000 x $750 or $112,500,000.
Of course you’ll need a tablet press machine, but you can get one on eBay for about 500 bucks. Call it the cost of doing business in your bathtub.
David Edelberg, MD
PS: Click here for cartoonist Brian McFadden’s take on all this.