NCPA - National Center for Policy Analysis

Legislating Drug Price Transparency

June 23, 2017

NCPA Senior Fellow Thomas Hemphill writes in Regulation magazine:Essential Medicines. 

The U.S. pharmaceutical industry has once again become a target of consumers' and politicians' ire. In the past few years, public outcry ensued after a new, blockbuster drug was marketed at a seemingly exorbitant price and an older, off-patent generic drug underwent a progression of price hikes.

The former controversy was over the drug Harvoni, first released by Gilead Sciencesin 2014. Harvoni can completely cure many people of the most common type of hepatitis C (and with few side effects), resulting in its being hailed by the medical community as a major breakthrough. However, the patient cost of this "miracle drug"-- $94,500 for a 12-week treatment -- elicited a firestorm of condemnation.  By late 2014, both Democrats and Republicans on the U.S. Senate Finance Committee were demanding detailed cost data on Harvoni from Gilead Sciences because the new drug was already placing an additional strain on the budgets of state and federal health care assistance programs.

The latter controversy was over Turing Pharmaceutical's marketing of Daraprim, a medication used to treat protozoal infections in AIDS and cancer patients. Daraprim is on the World Health Organization's List of Essential Medicines. In the summer of 2015, Turing announced that the drug's price would rise from $13.50 to $750 per tablet -- a 5,500% increase.

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