Stranger than Fiction

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology-11-02-2016, Volume 40, Issue 11
Pages: 20

Recent astronomical price increases have driven accusations that some pharma companies are price-gouging.

Recent astronomical price increases have driven accusations that some pharma companies are price-gouging, and galvanized public opinion against an industry whose popularity has been slipping for the past 10 years. Beyond any ethical or business questions, have the actions of a few senior managers at some companies prevented an honest dialogue with the public, and a clearer understanding of the cost issues affecting most drug developers?

Recapping recent events:

October 2016. United States Senator Bernie Sanders and Representative Elijah Cummings write to Ariad Pharma’s CEO asking him to explain the “repeated and staggering price increases” that raised the price of its leukemia treatment Iclusig by 40% to $200,000/yr, in less than a year (1).

October 2016. US Representative Dan Kildee of Flint, Michigan, which has been declared a state of national emergency since its municipal water supply was found to be contaminated with lead in June 2016, asks Congress to investigate Valeant Pharma for raising the price of a lead poisoning treatment from $900 to $2700 per month (2). In February and April 2016, senior executives from the company testified before the US House of Representatives Committee on Oversight and Government Reform, and before a senate committee, after increasing prices for two heart treatments.

August and September 2016. Hillary Clinton accuses Mylan NV of “price gouging” when it increased the price of its EpiPen treatment, which had gone from $57 per single injector when Mylan bought the technology from Merck in 2007, to over $600 per pack of two (3). The company’s CEO testifies to Congress in September, and Mylan settles an overpricing case with the Department of Justice for $465 million (4). By October 2016, at least one consumer class action lawsuit has been filed against the company (5).


September 2015. Turing Pharma writes the precedent-setting script for these scenarios when it raises the price for Daraprim, a 60-year-old drug used to treat toxiplasmosis that it had recently acquired, increasing its price from $13.50 to $750 per tablet (6). Its former CEO testified before the US House of Representatives in February 2016. Various media outlets report him referring to Mylan’s senior management as “vultures” (3) after the EpiPen price increase was announced, and then suggesting that Mylan should have increased prices even more (6).


1. D. Bloomfield, “Bernie Sanders Follows ‘Greed’ Tweet on Ariad with Letter,”, October 20, 2016.
2. M. McIntire, “Flint Lawmaker Urges Probe into Lead Poisoning Drug Price Hike,” October 20, 2016,
3. E. Willingham, “Why did Mylan Hike Epipen Prices by 400%?  Because They Could,”
4. K. Thomas, “Mylan to Settle Overpricing Case,”, October 19, 2016.
5. M. Mitchell, “Mylan Faces Federal Class Action Over EpiPen Pricing, The
6. R. McClean, “As Turing Took Steps to Acquire a Life-Saving Drug, CEO Shrekli Saw Dollar Signs,” CNN, Feb. 3, 2016.

Article Details

Pharmaceutical Technology
Vol. 40, No. 11
Pages: 20


When referring to this article, please cite it as A. Shanley, "Stranger than Fiction" sidebar to "What Price Healing?” Pharmaceutical Technology 40 (11) 2016.