Martin Shkreli Came So Very Close to Becoming a Drug-Pricing Hero (Plus the Ten Best Stories of the Week)

I’m still stuck on how close we came to an bizarro alternative universe where Martin Shkreli became a drug-pricing hero.?

In 2013 -- according to an American Prospect story out this week -- Shkreli had a wild idea. He thought that Acthar Gel, a decades-old medicine that was used for epilepsy in infants and multiple sclerosis, was massively overpriced. So he decided to buy a competing product.?

The plan was to introduce that other medicine at a gigantic discount, thereby taking over the market. Shkreli’s motives weren’t noble. He had bet big that the share price of Acthar’s then-manufacturer, Questcor, would tank, and destroying the market for Acthar would kneecap Questcor and make Shkreli millions. (The legality of the move was discussed this week in my favorite newsletter, Matt Levine’s Money Stuff.)

Becoming the champion of patients and a pricing pioneer would have been a happy side effect.?

The effect of that scheme would have been fascinating. If he had pulled it off, Shkreli might have provided an answer to a critical what-if question: can a competitive, branded medicine, developed on the cheap and sold far below the price of the market leader, succeed??

As it turns out, Shkreli was foiled when he was outbid for the competitor by Questcor, which promptly shelved that product. (Yes, that’s an antitrust problem, but that is another story.)

Still, asking “what if Shkreli had pulled it off?” is thought experiment for the ages, made all the more intriguing by the fact that another much-heralded endeavor designed to test the disruptive pricing idea -- EQRx -- officially met an ignoble end this week.?

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The Ten Best Pricing and Policy Stories of the Week, in Rank Order:?

1. The Kaiser Family Foundation poll on drug prices got heaps of attention because of some questions about weight-loss drugs, but the real news was that a huge majority of Americans haven’t heard of the Inflation Reduction Act’s drug-pricing reforms, which may explain why the poll found that 73% of Americans want more drug-price regulation, up 10 percentage points since 2021.
2. Hospitals are marking up drug prices by 500% over the acquisition costs, and insurers are paying 180% of those acquisition costs, according to updated data from Moran and PhRMA. You didn’t hear about it because there wasn’t any coverage, which kind of blows my mind.?
3. This Reuters story has a worthwhile list of the medicines that might be included in the first round of price controls, sourced from Wall Street analysts. It’s worthy of note that the CMS standards are unclear enough that there is a lot of variation here.?
4. While we’re talking IRA price controls, this Journal of Managed Care and Specialty Pharmacy article is a reminder that CMS could, under the law, simply accept the current net prices for most of the medicines that will be price controlled.?
5. STAT has a damn good piece about the growing realization that there isn’t an economic or regulatory structure in place that will allow researchers to realize the scientific promise of gene therapy for ultra-rare diseases. The chart of promising therapies that have been shelved for financial reasons is pretty dispiriting.?
6. Payers have knives out for obesity meds, underscored by this STAT story on the way that insurers are pushing physicians and pharmacies not to prescribe the diabetes drugs off-label for weight loss.?
7. PhRMA CEO Steve Ubl has a compelling description of the Sophie’s choice that drug manufacturers will soon face: bring a medicine to a small patient population quickly, or delay introduction to ensure the largest possible group is helped. In the past, companies could do both without penalty. Under the IRA, they’ll have to choose.?
8. Another compelling op-ed: Global Blood Therapeutics CEO Ted Love wrote in defense of big-pharma acquisitions, noting that Pfizer’s buyout of GBT makes it much more likely that the sickle-cell treatment his company developed will make it to countries where the burden is high.
9. The calendar for the legal challenges to the IRA is getting more clear, and I pulled together the briefing schedule for five of the six lawsuits here (there isn’t a schedule yet for the Astellas case).??
10. This Washington Post wrapup of all of the must-do health legislation that will be in front of Congress when they return from recess next month is illuminating. My read is that checking all of those boxes doesn’t leave a lot of room for action on PBMs or insulin or whatnot, so those expecting quick access and consensus may be forced to be patient.??