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Shkreli isn't the only one

http://www.nytimes.com/2015/10/20/business/drug-makers-sidestep-barriers-on-pricing.html

Shkreli would be the man you love to hate, who was arrested yesterday for matters unrelated to the offending price hikes.

Anyway. Turing is not the only company which has taken sort of old skool drugs and hiked the prices on them. The NYT article above is from a couple months ago. I mention it because I'm sitting here drinking tea and listening to a guy from Marathon Asset Management be used as a tool by the Bloomberg team to explain What Just Happened in the High Yield Markets. And then, they segued over to health care costs, and this guy basically pointed his mouth at Horizon Pharma (mentioned in the NYT article above).

What he said is a pretty good match for what the NYT article says. Horizon put Pepcid in a pull with Ibuprofen, did all the relevant testing to get it through the FDA and patent it, and then they sold it for some substantial mark up over Pepcid and Ibuprofen at the drugstore (in turn, typically a markup over what you would pay at, say, Costco -- so if this combo would cost you $50 a month at Costco, they were charging a little more than triple that). They had a competitor which had done the same thing with Naproxen and Nexium, _which they then bought_. And then they apparently added a zero to the monthly price of both.

From the NYT piece: "If prescribed separately, the two drugs together would cost no more than $20 or $40 a month. By contrast, Duexis, which contains both in a single pill, costs about $1,500 a month."

No, there is no magic in putting them in one pill and this isn't time released or anything like that. The only magic is the legal structure and Horizon Pharma's sales team, which convinces doctors to work with Horizon to fill the prescription, that was the doctor's office doesn't have to convince insurance to reimburse -- the doctor's office would cave and quit prescribing the combo drug. But Horizon's team is tougher than that and can get the payment for the drug. But of course that's coming out of a downstream pocket somewhere.

Honestly, the Japanese scheme of governmental price fixing on every goddamn element of the health care system looks more appealing to me every day. I know, I know, command and control is a bad idea. I'm sure it is. But it looks _sooooo_ tempting right now.

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