Primary Care Corner with Geoffrey Modest MD: Drug shenanigans come home to roost (finally, at least a beginning)
19 Dec, 16 | by EBM
By Dr. Geoffrey Modest
There was a timely article in STATnews (in particular their Pharmalot series by Ed Silverman which regularly exposes drug company malfeasance) about price-fixing among generic drug makers. And, 2 generic pharmaceutical executives have finally been accused by the feds (see https://www.statnews.com/pharmalot/2016/12/14/heritage-generics-antitrust-price-fixing/?s_campaign=trendmd ). Hopefully more to come…
Jeffrey Glazer and Jason Malek of Heritage Pharmaceuticals, the former chief executive officer and president respectively, were accused by federal authorities of conspiring with rivals to fix prices for doxycycline hyclate and glyburide. This is the first criminal charges of a two-year federal investigation into such price-fixing among generic pharmaceuticals. At this point no other companies have been named, though Mylan Pharmaceuticals, Teva Pharmaceuticals, Actavis, Lannett Co, Impax Laboratories, Sun Pharmaceuticals, Endo International’s Par subsidiary, and Taro Pharmaceuticals have disclosed receding subpoenas in this investigation. These two executives had been fired from Heritage in August 2016 for a seven-year long “running criminal conspiracy that severely damaged Heritage”, noting that they had “looted tens of millions of dollars from Heritage by misappropriating its business opportunities, fraudulently obtaining compensation for themselves, and embezzling its intellectual property”, per the court documents. Heritage Pharmaceuticals claimed that these two had redirected more than $9 million to a dummy company between 2012 and 2015.
Prior findings have found that half of all generics had become more expensive during the prior 12 months, with 11 at least doubling the price, and one medication increasing 17,000%. This led to an investigation by Sen. Bernie Sanders of Vermont and Representative Elijah Cummings from Maryland, but the manufacturers have refused to testify (including Heritage), stifling the investigation. At that point Sanders had his formidable quote: “pharmaceutical executives must be held accountable for ripping off the American people by charging them the highest prices in the world for prescription drugs… At a time when one out of five Americans cannot afford the medication they need, we must do everything we can to end the greed and illegal behavior of the drugmakers. Fraud can no longer be an acceptable business model for the pharmaceutical industry.”
Also as reported by a prior issue of STAT and on a PBS news-hour blog on November 4, 2016 (http://www.pbs.org/newshour/rundown/bernie-sanders-requests-federal-investigation-insulin-makers-price-collusion/ ) Sanders and Cummings want an FTC investigation into Eli Lilly, Sanofi, and Novo Nordisk, since their price for insulin has been going up in tandem over several years. The cost of insulin more than tripled from 2000 to 2013, from $231 to $736 a year per patient, despite the fact that the original insulin patent had expired 75 years ago.
There have been many blogs in the past on drug company shenanigans (see http://blogs.bmj.com/ebm/category/pharmacy/ ). One (http://blogs.bmj.com/ebm/2015/09/30/primary-care-corner-with-geoffrey-modest-md-and-the-drug-company-shenanigans-continue/ ) commented on pyrimethamine but also mentioned the above Heritage increase in price of doxycycline from $20 for 50 tablets in October 2013 to $1849 in April 2014, an increase of >8000%, leading many of us (including myself) scouring around for substitutes….