Big Pharma has been in the news lately for particularly despicable behavior: Turing Pharmaceuticals, bought Daraprim, a 62-year-old infectious disease drug, and immediately raised its price from $13.50 a pill to….$750! The company’s response (in essence): Well, we’re not the only ones. Earlier this year, Valeant Pharmaceuticals International bought the rights to sell two heart medications, Nitropress and Isuprel, and promptly raised their prices 212% and 525% respectively.
The usual explanation from Big Pharma is that outlandish drug prices are funding research and development. However, a New York Times column analyzing these two companies’ behavior concludes that a relatively token amount was spent on R&D: Valeant spent 3% of sales on R&D — contrasted with paying its five highest-paid executives 1.5 % of sales. To add insult to injury, Valeant has a rock bottom tax rate of 3.3% and has laid off nearly all the employees (the American ones, anyway) from three major acquisitions since 2012 — 4170 employees laid off out of 5,870.
This nasty behavior makes me wonder about the drug company manufacturing the drug I rely on to manage Parkinson’s symptoms, Ropinirole HCL ER,. I’ve notice the funny name on the bottle: Dr. Reddy’s Laboratory — sounds like a patent medicine from the 19th century, doesn’t it? Turns out Dr. Reddy is based in….Hyderabad, India. (More jobs that used to be in America.) Discovering that your drugs are manufactured in a country not known for its hygiene or efficiency does not give me a warm fuzzy.
Some factoids from the inevitable Wikipedia article: Dr. Reddy’s Laboratories was established in 1984, and yes, there really was a Dr. Reddy, Anji Reddy . The company has expanded internationally both in facilities and markets, and in 2000, rolled out its first commercial launch of a generic product in the USA. Shortly after, the company started to be traded on NYSE. You may see Dr. Reddy’s brand name on generic ibuprofen or sodium naproxen (Alleve) in your local drugstore.
Unlike the bad pharmas cited at the beginning of this post, Dr. Reddy’s has invested heavily in R&D; it is even the only Indian company to have significant R&D being undertaken overseas. Among other international locations, an American laboratory in Atlanta was set up in 2000. Reddy’s research thrust focused on large niche areas in western markets – anti-cancer, anti-diabetes, cardiovascular and anti-infection drugs. However, by 2009, the “drug discovery” activities were spun off to a separate subsidiary. And in my limited searching on the web, I did not see any drug breakthroughs as a result of Reddy research.
I poked around on the Reddy website. There is something called a CPSIA Certificate for each product. This stands for Consumer Product Safety Improvement Act, which does not seem to have much to do with drug manufacturing — more with lead paint and children’s toys. I again do not get a warm fuzzy to find that testing for compliance is performed by something called “Bird Dog Marketing Group” in Lancaster, PA. (Shouldn’t this be a lab?) The mystery of CPSIA Certificates is solved upon going to Bird Dog’s website — they are “the leader in Child Resistant Package Testing” — oh — not really a big concern for me.
My big concerns are quality — well, I guess I need to rely on USFDA for that — and price. So far, so good on the latter: Under my insurance plan, the $320 annual deductible for drugs mysteriously goes away next year (yippee!), although I still pay $20 a month for the Ropinirole drug. Thank goodness for insurance. However, pricing could change overnight, as demonstrated by Valeant and Turing’s behaviors.