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Americans Started to Really Pay Attention to Drug Price Hikes in 2015

Martin Skhreli's infamous 5,000 percent price increase for an anti-parasitic drug had one positive effect: it outraged Americans enough for them to pay attention to the practices of an otherwise opaque pharmaceutical industry.
Photo by Andrew Gombert/EPA

This story is part of a partnership between MedPage Today and VICE News.

Martin Shkreli, aka the "pharma bro" everyone loved to hate, wasn't the first person to jack up drug prices, but his actions this year resonated with Americans and people across the world while shining a spotlight on an otherwise opaque industry.

Experts say drug prices have risen every year for more than a decade, and 2015 was no exception. But now, people are sitting up and taking note — and for most Americans, it couldn't come sooner.

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"I would say it's getting worse," Leigh Purvis, the AARP Public Policy Institute's director of health services research, said of drug prices overall. "The trend lines are really just diagonal lines up."

She helped compile an annual report on prescription drug prices for AARP, an association advocating for people 55 and older, and found that the average annual drug price hike was seven times higher than inflation.

If you think this doesn't concern you because you don't take prescription drugs, you're wrong.

"If you have health insurance, you're paying for prescription drugs that other people are taking," Purvis said. "Prices are spread out among everyone who has insurance. Even if you aren't taking one right now, you're helping to pay for other people's prescription drugs."

Here's a look back at some of the biggest drug price news of the year:

Feb. 10 - Valeant Pharmaceuticals International buys heart drugs Nitropress and Isuprel from Marathon Pharmaceuticals and raises prices the same day. Nitropress reportedly went from $257.80 to $805.61 per vial, an increase of 212 percent. Isuprel went from $215.46 to $1,346.62, an increase of 525 percent.

Aug. 10 - Headed by 32-year-old former hedge fund manager Martin Shkreli, Turing Pharmaceuticals acquires the rights to the antiparasitic drug Daraprim from Impax Laboratories. The drug was approved by the Food and Drug Administration in 1953 and treats malaria and toxoplasmosis, a life-threatening disease that strikes those with compromised immune systems, including HIV/AIDS patients.

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Aug. 14 - Senator Bernie Sanders (I-Vt.) and Representative Elijah Cummings (D-Md.) write to Valeant Pharmaceuticals for information about why it raised its heart drug prices.

Sept. 1 - Rodelis Therapeutics acquires a tuberculosis drug called Cycloserine from Purdue Research Foundation's Chao Center. The price of the price of 30 Cycloserine pills go from $480 to $10,800.

Sept. 10 - Sanders introduces the Prescription Drug Affordability Act of 2015.

Sept. 16 – Prescription Drug Affordability Act of 2015 is referred to the House Committee on Energy and Commerce's Subcommittee on Health. (It hasn't reached the House floor yet.)

Sept. 18 - USA Today reports on 5,000 percent Daraprim price increase, from $13.50 to $750 per pill.

Sept. 20 - The New York Times calls attention to the Daraprim price increase and the story goes viral. The world is introduced to Martin Shkreli, who tweeted Eminem lyrics, among other things, in response to the negative publicity.

Sept. 22 - Rodelis backtracks, returns Cycloserine to Purdue Research Foundation.

Sept. 23 - Presidential candidate Hillary Clinton, who is running against Sanders, announces her own plan to reduce drug costs.

Related: This Is How Drug Companies Jack Up Their Prices and Hurt Patients

Oct. 31 - Shkreli tells HIV positive activist Josh Robbins that he will lower the price of Daraprim. He does not say how much or give an exact date.

Nov. 20 - AARP Policy Institute's Rx Price Watch Report notes that retail prices for 115 specialty prescription drugs increased by 10.6 percent on average in 2013, compared with a 1.5 percent inflation rate over the same period.

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Nov. 24 - Shkreli's Turing Pharmaceuticals doesn't lower the price of Daraprim, but announces plan that would give hospitals discounts instead.

  • The same day, the Los Angeles Times reports that the secret one-of-a kind Wu-Tang Clan album has sold for "millions."

Dec. 9 - Word gets out that Shkreli was the one who bought the Wu-Tang album for $2 million.

Dec. 17 - Shkreli is arrested on charges unrelated to the Daraprim price hike and is charged with securities fraud. The internet goes nuts with schadenfreude.

Dec. 18 - Shkreli resigns as CEO of Turing Pharmaceuticals.

Dec. 21 - Shkreli tells the Wall Street Journal that the charges against him are bogus and punishment for his Daraprim price hike.

We couldn't include everything in this timeline, which is limited to price increases when drugs were bought by other companies and became the sole suppliers of those drugs.

The rest is somewhat more mysterious. That's because when companies raise their own prices over time — as Mylan has done to Epi-Pen by a reported 400 percent since acquiring it in 2007 — we don't always hear about it until months later.

"They don't send out a press release," said Dr. Peter Bach, who studies drug pricing and works at Memorial Sloan Kettering Cancer Center in New York City.

He explained that pharmaceutical companies are able to set prices unlike in any other industry because the demand is infinite, there's basically no competition, and people don't stockpile drugs because they expire. In his opinion, there was an unwritten rule among these companies not to overcharge if they were getting reasonable returns on their investments. But that's all changed within the last five years, explaining that once a few companies started doing it, Wall Street expected "outrageous" returns.

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"Shkreli and Turning epitomized that, but it's actually industry-wide," he said.

Related: Clinton and Social Media Wrath Prompts Pharma CEO to Roll Back Drug Price

But perhaps because of a Daraprim price hike's effect on a vulnerable population (and perhaps because he bought that Wu-Tang album), drug price hikes have struck a chord this year.

"I think the political headwinds for doing anything about prescription drug pricing are pretty strong," Purvis said. "Those of us who work in the field are thrilled there's so much attention. But the drug industry is very powerful."

The pharmaceutical and health products industry has spent almost $179 million this year, according to the Center for Responsive Politics. Although this is the lowest dollar amount the pharma industry has spent lobbying in nearly a decade, it's still the top spending lobbying industry in the nation, followed by the insurance industry, which has spent nearly $119 million this year.

But there's one more thing to put on on our timeline:

Dec. 21 - In response to growing interest in drug prices, CMS, the Centers for Medicare and Medicaid Services, publishes a drug price comparison tool, using data from 2014. Below are the top 10 drug price per unit increases of the year.

Brand NameGeneric NameTotal SpendingTotal Annual Spending Per UserClaim CountAvg Cost Per UnitChange In Average Cost Per UnitManufacturerUseVimovoNaproxen/Esomeprazole Mag$38,879,753.75$1,826.1148,972$12.46543.00%Horizon PharmaArthritis pain relieverCaptoprilCaptopril$37,263,265.91$449.89458,345$0.83329.10%Multiple ManufacturersTreats high blood pressure, heart failureDigoxin; DigoxDigoxin$217,958,706.40$237.825,024,757$0.94298.00%Multiple ManufacturersTreats heart rythmn problems, including atrial fibrillationPrednisolone AcetatePrednisolone Acetate$159,572,405.97$108.632,538,652$8.08166.00%Multiple ManufacturersEye drops for inflammation, injuryClobetasol PropionateClobetasol Propionate$167,415,145.68$167.731,954,141$1.51134.50%Multiple ManufacturersTreats eczema and psoriasisTargretinBexarotene$73,523,400.47$88,689.264,548$145.65122.50%ValeantTreats skin problemsClomipramine HclClomipramine HCL$79,334,397.90$4,409.67135,792$8.02103.90%Multiple ManufacturersAntidepressantUrsodiolUrsodiol$79,888,946.03$1,111.17370,376$2.0296.10%Multiple ManufacturersDissolves GalstonesDoxazosin MesylateDoxazosin Mesylate$102,415,256.03$170.873,125,479$0.5689.60%Multiple ManufacturersTreats high blood pressure and enlarged prostateCyanocobalamin InjectionCyanocobalamin (Vitamin B-12)$4,822,427.48$8.272,322,568$2.0778.20%Multiple ManufacturersTreats lack of vitamin B-12