Every three months, Oxford Dictionaries releases its new entries, and modern language mavens everywhere have a field day.
A few of my favorites from the summer update: weak sauce, microaggression, cupcakery, and at the risk of perpetuating wholly unfair stereotypes about journalists, beer o’clock.
With that, I kick off my final column of 2015, a year-end smorgasbord—originally Swedish, entered the English language in the late 19th or early 20th century—of looks back and peeks ahead.
I’ll start with my nominee for the next update: pharmabro.
The term, of course, refers to Martin Shkreli, the perpetually attention-seeking now-former CEO of several companies who spent 2015 pissing off practically everyone, and vice versa, and ended the year out on a $5 million bond after his arrest on fraud charges.
He even got into it with the Wu-Tang Clan, whose one-of-a-kind album Once Upon A Time in Shaolin Shkreli bought at auction for $2 million. (When the rap supergroup learned he was the buyer, they donated “a significant portion” of the loot to charity, according to Bloomberg. Shkreli said they were just covering their, well, booties, as those hip-hop folks like to say.)
Shkreli the pharmabro—others around the Internet assigned him far less charitable neologisms—managed to give anger about drug prices a white-hot focal point: his own 32-year-old face, which, by live streaming himself on the Internet and keeping up constant Twitter patter, he helped project everywhere.
Going into 2015, I pinpointed drug pricing as one of five potential flashpoints for biopharma. This was far from rocket science; everyone following the business knew more public outrage was coming. Exactly one year ago, powerful drug purchasing agent Express Scripts (NYSE: ESRX) said that the newly launched Viekira Pak combination from AbbVie (NYSE: ABBV) and Enanta Pharmaceuticals (NASDAQ: ENTA) would be the only hepatitis C treatment it would buy for its customers. It was a slap-down of Gilead Sciences (NASDAQ: GILD), which once upon a time was the Shkreli of biopharma, thanks to the price tags for hepatitis C treatments sofusbuvir (Sovaldi) and its follow-on Harvoni: $84,000 and $94,500 per course, respectively.
Gilead CEO John Martin and his colleagues have never galvanized the haters quite like Shkreli, but one could argue they did no better than Shkreli winning over hearts and minds with two standard pro-pharma arguments: Drugs are expensive to make, so high prices help support more innovative R&D. (Shkreli tried to use that one about Daraprim, the anti-parasitic drug that helps saves the lives of people with HIV, after he jacked up the price from $13.50 to $750 a tablet.)
Also, the costs of caring for patients with chronic diseases are massive, therefore an exorbitant price for a relatively short course of a curative drug like sofosbuvir in fact saves money in the long run. (In the short run, however, what does it do to strained state budgets?)
As we pivot into 2016, will some of the outrage over drug prices be siphoned off, as Shkreli enters the pop-culture swamp where quasi-celebrity meets personal and legal train wreck? Will news coverage of his fraud trial—if and when he gets there—and the political circus of the presidential race detract from the real issue of unsustainable healthcare costs in the U.S., or will it amplify them?
I’ll do my small part here to stump for the real issues. First, keep in mind through the months to follow that drug prices account for less than 10 percent of total U.S. healthcare spending, according to 2013 data from the U.S. government. They’re a part of the healthcare cost problem, but only one small part.
Still, one way to bring down our drug costs is to let Medicare—the largest drug buyer in the world—negotiate prices. By law, it cannot do so. As I noted earlier this year when Shkreli first made himself a target with his Daraprim price-gouging, let’s not forget that our own lawmakers have allowed drug makers to gouge Medicare for a lot of old warhorse drugs, led by heartburn treatment omeprazole (Nexium). The top ten drugs Medicare bought in 2013 added up to $18 billion, or 17 percent of the program’s total spending that year.
Now we head into an election year. Democratic front-runner Hillary Clinton has vowed to fight price gouging and give Medicare negotiation rights. Some Republican candidates have at least paid lip service to alarmingly high drug costs.
Egregious tax dodges epitomized by Pfizer’s “inversion” acquisition of Irish-domiciled Allergan don’t seem to anger the public quite the same way, even though the executives involved are pulling a Shkreli: Exploiting what’s legal to do what’s unethical, then trotting out bromides of doing what’s best for shareholders and boosting innovation.
So it looks like industry critics need Pharmabro Numero Uno to do his thing, keep up the mugging and tweeting and primping (despite comments to the Wall Street Journal this week that he wants to lower his profile). For people who want big changes in the way the drug business … Next Page »