Recently there have been stories of outrage because a venture capitalist was able to secure an exclusive license for an old off-patent drug that is an essential treatment for a small patient population. Turing Pharmaceuticals proposed to raise the price of Daraprim, a 62 year-old drug, by 5000%.
This is not the first time that a generic drug manufacturer has tried to take advantage of a cornered market for old medicines.
In 1998 generic drug manufacturer Mylan, raised the price of generic Lorazepam by 2600% and generic Clorazepate by 3200% after allegedly obtaining exclusive licensing agreements for certain active ingredients. In 2000 Mylan agreed to pay $147 million to settle claims made by the FTC without admitting any wrongdoing.
Low cost generic drugs are the ultimate legacy of lengthy and costly pharmaceutical innovations. In 2015 an estimated 80 percent of all prescriptions written in the United States will be for generic drugs. Generic drugs are cheaper than originator products because generic manufacturers do not absorb the costs that innovators have to bear for discovery and research including clinical trials for safety and efficacy.
Since the Turing controversy erupted there have been a number of knee-jerk reactions but none that address the circumstances that lead to the issues highlighted above. In fact, some of the proposals to cap drug prices put at risk orphan drug policies that are essential for the millions of American patients who suffer from rare diseases.
The example of Daraprim and other older generic medicines with limited markets requires a thoughtful approach to generic drug policies and regulations.