There have been a few developments in the Turing Pharmaceuticals affair. Martin Shkreli, after given several fantastically annoying interviews, finally reversed course and said that the company will lower the price of Daraprim (pyrimethamine). He is not, at the moment, saying what the price will be lowered to: perhaps to merely ten times the previous price, instead of fifty times? A philanthropist indeed – more on this below.
And the trade group PhRMA, after a nice long conspicuous silence, issued a statement that Turing “does not represent the values of PhRMA member companies”. That’s pretty weak, but it’s definitely better than the silence-gives-consent strategy it replaced. The group went on to say that “we do not embrace either their recent actions or the conduct of their CEO”. Good! But those aren’t exactly ringing words of condemnation, either – think about it, who exactly would embrace either one, given any other options?
John Carroll of FierceBiotech (who Shkreli called a “moron” on Twitter a couple of days back, prompting me to note in return that he is, after all, an indisputable world-renowned expert on morons), has an editorial that gets to the point that many of us have been trying to make about this affair. The problem is that Shkreli and Turing are acting like evil parodies of an actual drug company, rapaciously jacking up prices while all the while justifying everything as needed for R&D expenses. The fact that Turing has been doing zero R&D gets lost in all this noise, because (to a first approximation) they sound just like every other drug company when they claim that.
It’s time for the industry to come up with a better reason for why we get up in the morning, and a more credible approach for dealing with controversies. Real innovation costs a lot of money and deserves to be well compensated. That model has created an industry which is seeing tens of billions of dollars being pumped into new product development. It has provided the world with a painless cure for hep C and huge advances in oncology in just the last few years. And much, much more.
It’s OK to do good work for money. You also don’t have to play the Good Samaritan defense in the wake of a blunder. And it shouldn’t be allowed for execs like Shkreli, who is using the country’s no-holds-barred policy on drug prices to generate some fast cash.
Exactly. PhRMA still needs to make the case for why Turing is not just some bad little company that went a little too far. As it stands, people will look at them, look at the rest of the drug industry, and then decide that the difference is one of degree, not of kind. That, though, is why I think that PhRMA (and individual companies) have been so quiet during this fiasco. They don’t like the questions that would come up. Think about it – you come out and say that a fifty-fold price increase is completely out of line, and the follow-up question is (naturally) what sorts of price increases you think are in line. And nobody wants to talk about that. You come out and say that a company that buys into an old drug that it had not the slightest part in developing shouldn’t suddenly inherit the ability to ram its price through the roof, and the follow-up question is which drugs in your own portfolio were acquired from someone else, and how you’re pricing them. Finally, you come out and say that Turing’s rationale (R&D spending) is ridiculous, and the follow-up is how much you’re spending on your own R&D and how your prices relate to that.
And no one wants to talk about that, either, except in hand-waving generalities. But we should (here are three attempts I’ve made on the topic). We really do spend a lot on it – well, those of us who are trying to discover drugs do, as opposed to the Valeants and Turings of the world. I regard Valeant and Turing as a difference of degree only, by the way. Valeant’s CEO has more sense than to try to stomp down on a fifty-fold price increase (I hope), but their attitude towards discovering their own drugs seems to be “That’s for fools”.
By wrapping ourselves in statements of purpose and noble intentions, we in the R&D-driven part of the drug industry are doing ourselves a disservice. It leaves us unable to distinguish ourselves from obnoxious parasites, outfits like Turing that can, with a straight face, recite the same rationales. We’re going to have to be more forthcoming about how much money we spend, where it goes, and display our expensive failures to make the point that a lot of money has to come in, because a lot of money is also going out. If only one out of every ten cars that Ford developed – assembly lines and all – ever made it to the showrooms, cars would be more expensive. If only one out of every ten movies – after shooting, production, and editing – ever made it to theaters, ticket prices would go up. We get one of out of every ten drugs in the clinic to market, and we’ve got to pay for it somehow. We’re in the position of Adam Smith’s butcher, brewer, and baker: people don’t expect us to provide useful drugs sheerly out of the goodness of our hearts, good though some of them may be. But they shouldn’t be expecting us to skin them alive just because we might be able to get away with it, either.
And we’ve also got to explain to people why outfits like Turing Pharmaceuticals are not the same as the rest of us. Saying that we don’t like them (which is basically all that PhRMA has said) is a tiny first step. Now we have to prove that we aren’t them.
Update: more on this problem from FiercePharma.
Second update: Turing has been kicked out of the BIO trade group, in a welcome development.