Hefty drug price increases have been an outrage-provoking subject for politicians, the public and pharmacy benefits managers all year long. But another group besides drugmakers has been benefiting from them: dealmakers.
Private companies have been taking advantage of climbing prices by buying older drugs on the cheap, hiking their stickers, and reselling them, Bloomberg reports, citing data from software company Connecture.
Take Actimmune, which a private equity outfit bought from Genentech in 2012 for $55 million, for example. Its price climbed by 434% in two years before Horizon Pharma grabbed it for $660 million.
Then there’s Novartis’ cold-sore cream Denavir, whose price leapt 372% over two transactions aided by private equity. And the list goes on and on.
Of course, drug flippers aren’t the only price-hike offenders. Plenty of drugmakers have notched sizable increases on meds that haven’t changed hands at all, and one need only look at key Mylan blockbuster EpiPen, one of Congress’ most recent price-hike scapegoats, to see it.
Instead, they’re “taking advantage of a dysfunctional market,” Stephen Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota, told Bloomberg.
One reason? There’s “very little risk” in picking up drugs, ZS Associates’ managing principal Pratap Khedkar told the news service. Other private-equity firms see a relatively quick payout on the horizon.
Of course, as pharma’s drug-pricing scandal rages on, there’s more and more possibility of winding up in an unwelcome spotlight, as Concordia Pharmaceuticals knows. The company–one of several in the specialty pharma space that’s been hit especially hard by the crackdown–recently raised prices on two meds purchased from a PE outfit that had already made its own increases.
That price lift didn’t go unnoticed by CVS Health, which kicked the drugs–Nilandron and Dutoprol, up 989% and 1,057% respectively since 2013, off its formulary.
A lot of jacked-up drugs still do fly under the radar, though, John Bennett, CEO of nonprofit insurer Capital District Physicians’ Health Plan, told Bloomberg. So, while drug flippers may not be the only group contributing to skyrocketing drug costs, “the bottom line is it all adds up,” he said.
By Carly Helfand
Source: Fierce Pharma
The United Arab Emirates (UAE) Ministry of Health and Prevention (MoHAP) has established a partnership with Novo Nordisk Pharma Gulf focusing on the creation of a national scientific guide for obesity management and weight control. The collaboration also aims to enhance public awareness of cardiovascular diseases and their complications.
Pharma giant Eli Lilly is teaming up with Haya Therapeutics in a $1bn deal to find multiple regulatory-genome-derived RNA-based drug targets, as it eyes up new targets in obesity. Under the deal, the companies will use Haya’s proprietary regulatory genome discovery platform to identify and validate long non-coding RNA (lncRNA) targets for developing potential treatments for obesity and related metabolic disorders.
The sale includes custom formulation and contract manufacturing capabilities for the nutrition market from the production facilities in New Jersey and Utah in the United States, and Tamaulipas, Mexico. Financial terms of the transaction were not disclosed.
