Well, that didn't take very long.
One month and one day after the New York Times article about a price increase to $750 a tablet from $13.50 for the drug Daraprim after it was bought by Martin Shkreli's Turing Pharmaceuticals, a competitor has announced it has made available an alternative that sells for "as low as $99.00 for a 100 count bottle, or at a cost of under a dollar per capsule."
From the press release from San Diego, Calif.-based Imprimis Pharmaceuticals:
Mark L. Baum, CEO of Imprimis stated, "It is indisputable that generic drug prices have soared recently. While we have seen an increase in costs associated with regulatory compliance, recent generic drug price increases have made us concerned and caused us to take positive action to address an opportunity to help a needy patient population. While we respect Turing's right to charge patients and insurance companies whatever it believes is appropriate, there may be more cost-effective compounded options for medications, such as Daraprim, for patients, physicians, insurance companies and pharmacy benefit managers to consider."
Hillary Clinton and Bernie Sanders have both tried to make political hay out of this issue. Mrs. Clinton wrote to the chairwoman of the Federal Trade Commission denouncing the "egregious actions of Turing Pharmaceuticals." In her letter, she said, "Normally, we might expect such a dramatic price increase to encourage other companies to enter the market, seek approval for a generic version, and lower the price, but Turing has restricted distribution of Daraprim—making this sort of market response extremely difficult." Senator Sanders is fundraising off the issue, claiming to have "started a congressional investigation" into Mr. Shkreli's "price gouging."
The nice thing about the Imprimis action is that it is the natural working of the market. If someone with a monopoly tries to extract monopoly prices, he's not going to keep a monopoly for long in a market that allows free competition. It's one thing with a patented drug that has a defined period of exclusivity to reward discovery and industry. But this is a generic drug. Any other generic drug company trying to charge unreasonably high prices will find itself facing competition, too, as soon as word gets out, so long as the market is large enough to make it worth the trouble.
Sometimes problems that may appear to require political or regulatory intervention wind up solving themselves through market competition. The story here isn't over, but this may be one of those cases.
