Pharma Company Forced To Backtrack After Suddenly Raising Drug’s Price 20-Fold


Amid outrage about sudden price hikes of specialty drugs, a company has reneged on its recent acquisition of a tuberculosis medication, a deal that would have increased the cost of the treatment more than 20-fold. Just three weeks after purchasing the rights to the drug, Rodelis Therapeutics has agreed to return the medication to the nonprofit that previously owned it.

The medicine, named Cycloserine, treats a form of tuberculosis that’s resistant to multiple drugs usually used to treat it — in other words, a serious form of the ailment. There are nearly 90 cases of drug-resistant tuberculosis annually in the United States.

Last week, Rodelis Therapeutics, the company at the center of the controversy, defended its decision to increase the price of the tuberculosis drug, saying it needed to invest and ensure the drug maintained its effectiveness. But the Purdue Research Foundation, the Indiana nonprofit that sold the drug to Rodelis, remained unconvinced, taking back Cycloserine on Monday.

“We discovered literally on Thursday the strategy that had been undertaken [by Rodelis],” Dan Hasler, president of the Purdue Research Foundation, told the New York Times. “We said this was not what we had intended.”


The price of the drug, originally $500 for 30 capsules, would have been $10,800 under the new arrangement with Rodelis. That meant patients would shell out more than $500,000 for the full course of treatment, a situation that threatens access to the lifesaving treatment. Public health officers said the price hike would burden Medicaid agencies that would pay more than $780,000 in a two-year span. Under a new deal, Purdue now charges $1,050 for the batch — more than double than the original price, but relatively less than what Rodelis would have demanded.

Rising prescription drug costs have become a topic of heated discussion among lawmakers, patients, and presidential candidates in recent months. In 2014, spending on medicine increased by 13 percent, totaling $374 billion. Experts and patient advocates largely blame pharmaceutical companies, saying they overprice name-brand drugs and place specialty drugs in a special categorization that allow them to bypass requirements in the Affordable Care Act. These strategies have come to light thanks to recent price hikes for generic, HIV, and Hepatitis C medications.

And Rodelis’ recent business dealing — in which a pharmaceutical company purchases an old, neglected drug and turns it into a costly specialty medicine — has particularly caught consumers’ attention. This week, there has been widespread outrage over a similar move from another drug company. After purchasing Daraprim, a drug used to treat serious parasitic infections, Turing Pharmaceuticals raised the price from $13.50 per tablet to $750 per tablet. Martin Shkreli, Turing’s founder and chief executive, defended his decision, saying the profits will be used to educate doctors about the disease, improve delivery, and develop more effective drugs.

That reasoning, however, hasn’t pacified patient advocacy organizations, many of which have criticized the price hike. Judith Aberg, a spokesperson for the HIV Medicine Association, told USA Today that the classification of Daraprim and other specialty medicines leave even people with insurance struggling to pay for the drugs’ out-of-pocket costs. The HIV Medicine Association joined the Infectious Diseases Society of America in writing an open letter to Turing this week about what they describe as unjustifiable pricing for a “medically vulnerable population.”

Soaring prescription drug prices are quickly becoming a campaign issue. Democratic presidential candidates Hillary Clinton and Sen. Bernie Sanders (I-VT) also lambasted Turing’s recent move, pointing to their proposed policy plans that could help address the issue.


Earlier this month, Sanders introduced a bill that would allow patients to import cheaper drugs from Canada. Medicare could also negotiate with companies on drug costs and pharmaceutical companies would also have to reveal research and development costs. On Tuesday, Clinton revealed a plan of her own that would cap monthly out-of-pocket costs at $250 and lower the monopoly marketing period for biologics, a costly new class of drugs, from 12 to seven years. Another portion of Clinton’s plan aligns with part of a proposal the Center for American Progress unveiled last week that would require companies benefitting from federally funded research to cap their research and development costs.

“It is time to deal with skyrocketing out-of-pocket costs and runaway prescription drug prices,” Clinton said earlier this week. “Nobody in America should have to choose between buying their medicine and paying their rent.”