Think the entire pharma industry has moved past the old strategy of buying drug rights, jacking up prices and reaping the rewards? Think again.
Big Pharma may be limiting hikes to the single digits, but some smaller drugmakers aren't shying away from the buy-and-hike strategy that's triggered public outrage in the past. Consider Egalet, which recently bought several pain meds from Iroko Pharmaceuticals and immediately filed for bankruptcy.
The drug now carries a list price of $650 per bottle containing 90 pills, Axios reports, citing Elsevier data. Last year, the same bottle cost $383, according to the publication. The prices are before rebates and discounts.
An Egalet representative said the drug's price is "now consistent with similarly differentiated branded products in its class."
To get its hands on the Iroko drugs and a phase 2 pipeline candidate, Egalet had issued Iroko $45 million in notes, handed over 49% of its new common stock and promised potential royalty payments. Now, the company projects $80 million to $90 million in annual sales from its entire portfolio.
Small drug companies have frequently turned to big price hikes in an effort to pump up sales, often leading to pushback from patients, payers and Congress. Most notoriously, Martin Shkreli’s Turing Pharma in 2015 boosted the price of toxoplasmosis drug Daraprim by 5,000%, setting off a drug pricing firestorm that’s still playing out years later.