Richard Smith: Death and the inescapable logic of greed

richard_smith_2014Martin Shkreli is the man who became infamous through buying the rights to Darapim (pyrethamine) and raising the price by 5000% from $13.50 to $750 per pill. There is, I suggest, an inescapable logic to his move that Hillary Clinton described as “outrageous.”

Pyrethamine has been around since 1959 and used, usually in combination, to treat toxoplasmosis and malaria. But now with the enthusiasm for “repurposing” drugs it is being tested or proposed as a treatment for motor neurone disease, chronic lymphocytic leukaemia, and melanoma. This is where the logic begins—because people will pay a great deal of money for a few more weeks of life or even the possibility of a few more weeks.

Established drug companies know this, which is why, as a paper in the Journal of the National Cancer Institute described in 2009, Bristol-Myers Squibb could charge $80 352 for a course of Cetuximab, an epidermal growth factor receptor inhibitor, to treat non-small lung cancer. In a large European trial overall survival was increased by 1.2 months, meaning that the cost of an extra patient-year of life was $800 000. That, of course, is just the cost of the drug, and as the extra year of life was accompanied by febrile neutropenia, an acne-like reaction, diarrhoea, and infusion-related reactions the cost of care was no doubt substantial.

The paper gives other examples of expensive drugs producing short extensions to life: Avastin cost $90 816 for 1.5 months of life; Sorafenib $34 373 for 2.7 months (a bargain); and Eriotinib $15 752 for 10 days. I remember a ghoulish oncologist telling me “We now need stopwatches for our trials.”

Larry Summers, a leading economist, once president of Harvard, and co-chair of the Lancet Commission on Investing in Health, explained at the launch of the commission, economists have now measured the amount people will pay for an extra year of life and it boosts the return on investment from investing a dollar in health from $9 to $20. This is part of the explanation of why the United States spends 17.5% of its gross domestic product on healthcare and all countries experience continuing pressure to increase their spend.

Most patients in the US will have their drugs paid for by insurers or the government, but I listened this week to the broadcaster Steve Hewlett describe how he has been asked to pay £15 624 for a drug, ramucirumab, to treat his oesophageal cancer that has metastasised to his liver and not responded to first line treatment. The National Institute of Health and Clinical Excellence did not approve the drug for use in the NHS—unsurprisingly since it’s cut off for a quality adjusted life year is around £30 000. Hewlett described how he contacted the manufacturers and found he could get it more cheaply and that the Royal Marsden had miscalculated his dose. It still, however, knocks off only a few thousand pounds. Hewlett described how he felt he had no choice but to try the drug, recognising that it might produce no benefit at all—or, the upside, produce a much better response than the tyrannical average. His consultant advised him to pay for the drug unless he was needing the money for something like a family wedding (a way surely of saying that she didn’t have much confidence in the drug).

The infamous Shkreli, who is facing trial for fraud, re-enters the story here. He told the Financial Times at a lunch that he thought that Daraprim, which may keep people with a fatal disease alive, “was woefully underpriced.” He thinks that he should have charged more than $750 a pill: “It is not a question of ‘Is this fair?’, or ‘What did you pay for it?’, or ‘When was it invented’. It should be more expensive in many ways…“If you have a drug that is $100 for one course of therapy, and you know that you can charge $100,000, what should shareholders think when you say, ‘I’d rather not take the heat’?”

He’s being logical. Drug companies say that they price drugs high to cover research costs. We must pay astronomical prices for toxic and largely ineffective drugs in order to have future drugs that will, we hope, be more effective. But this is bullshit. I learnt at business school that the right price for a product is whatever you can get people to pay. The market decides. Anything else, as Shkreli says, is cheating shareholders, and in the US the law says that companies have a duty to maximise the financial return to shareholders.

Shkreli is not the problem: he’s simply a symptom of our inability to face up to death.

Richard Smith was the editor of The BMJ until 2004.