California lawmakers are putting another fight against biopharmaceutical companies as they raised the issue of drug overpricing. This is in lined with the controversy of Martin Shkreli, a former Turing Pharmaceutical CEO who was charged with security fraud last December. Shkreli raised the price of an anti-infection drug to almost 5,455 percent!
The proposal to start a transparency bill was initiated because of the rhetorical fights regarding overpriced drugs that were raised by the patient advocacy groups, legislators, labor unions, consumers, organizations, and insurers against biopharmaceutical companies. The debate often features Shkreli’s controversy.
Drug pricing will be one of the main key issues that will be discussed in the Biotech Convention that will be held in California. There are around 15,000 participants including biotech executives that are expected to attend the annual convention of the Biotechnology Innovation Organization.
The last BIO convention was held last 2004 at the Bay Area. The said event was also controversial when the protesters throw tomatoes on the convention-goers to highlight their opposing views to genetically modified foods.
Now the biotech industry is facing another controversy as it battles with legislators and consumers because of the recent price increases including the $1000 per pill hepatitis C drug of Gilead Sciences.
There is a petition to put the pricing initiative on the November ballot. The state legislation would require the biopharmaceutical companies to report their respective state government purchasers any 10% increase on the prices or any drug that will costs over $10,000 a year.
The legislation would also oblige insurance companies to report any information concerning drug price increases.
Ed Hernandez, state Senator and a Los Angeles area Democrat said that the transparency bill is for the overall good of the public.
But Sara Radcliffe, CEO of California Life Sciences Association, a biotech trade group based in South San Francisco, mentioned an opposing view. The company is having a campaign against the transparency bill. Radcliff noted that the bill will just bring the money for research to paperwork’s. Radcliffe reiterated that these require lot of paperwork for accountants and lawyers instead of spending the money for research.
She also pointed out that 60 days before a drug maker can report a price hike; the secondary distributor may corner the market by getting the drug at lower price then sell it at a higher price few months later. She said that this may lead to shortages in the long run.
Putting an End to Overpricing: Will this be Possible?
Legislators are trying to regulate the price hike of the biopharmaceutical companies to protect the welfare of the consumers. Martin Shkreli controversy clearly shows how cunning a biotech company can be, if their price hike is not properly regulated. At the end, it is the consumers who will suffer most if the price of the drugs is too much to handle.
It is understandable if Biotech companies will put a higher price considering that they invested millions of dollars to fund a clinical trial that would take years to finish. Plus the fact that they also lost millions of dollars for a failed experimental drug treatment. But it doesn’t give them the right, to put an over price tag on a certain drug.
Regulators should continuously remind them that there is always a social and moral responsibility in every business venture. The service for the common good should still be included in their priority.