The featured image is from Hepatitis C Infographic by Chase Perfect on the price hike of the drug.

Scroll to the bottom of the page to listen to the interview-only version.

In my second interview with Gloria Tavera, MD/PhD student at Case Western Reserve University in Cleveland, we dig deep in to drugs. (Click here to listen to my first interview with Gloria on malaria immunology and access to medicines.)

First, Gloria takes us through the research and development process – the timeline and the costs. That brought us to drug pricing and the role of the pharmaceutical industry. You bet we discuss Martin Shkreli and his company’s price hike of the drug Daraprim from $13.50 to $750. Gloria explains what Daraprim is and how this kind of price hike is not only possible, but totally legal. It all has to do with drug patenting, which we discuss a bit, especially in reference to something called “evergreening” (aka “me too” drugs) – a technique used my drug companies to extend their exclusive patent past the 20 year mark.

In the final part of the interview, Gloria walks us through how this structure could be changed to obtain a better, more efficient pharmaceutical system that works for the public rather than the drug company share-holders. She discusses how the incentive structure needs to change, using a “push, pull, pool” mechanism.

In the show I quoted two articles that do an excellent job explaining these topics:

(1) LA Times op-ed on Big Pharma’s pricing drugs.

Big Pharma, while of course contributing to innovation, has increasingly decommitted itself from the high-risk side of research and development, often letting small biotech companies and the NIH do most of the hard work. Indeed, roughly 75% of so-called new molecular entities with priority rating (the most innovative drugs) trace their existence to NIH funding, while companies spend more on “me too” drugs (slight variations of existing ones.)

But if Big Pharma is not committed to research, what is it doing? First, it is well known that Big Pharma spends more on marketing than on R&D. Less well known is how much it also spends on making its shareholders rich. Pharmaceutical companies, which have become increasingly “financialized,” distribute profits to shareholders through dividends and share buybacks designed to boost stock prices and executive pay.

(2) Vox article explaining the news around Martin Shkreli, the pharmaceutical head recently arrested for securities fraud – though that’s not why the public hate the guy. I guess he’s also an a-hole on Twitter and bought some singular copy of a Wu-Tang album, but we have other beef.

But really the hatred for Shkreli comes from how unapologetic he was about the price increase [of Daraprim by 5,500 percent]. Other companies have pursued similar pricing strategies without stoking so much backlash.

…As Forbes’s Matthew Herper wrote, “Questcor Pharmaceuticals raised the price of its drug, Acthar Gel, from $40 to $28,000 a vial. The reward? It was one of the best-performing stocks in America until Mallinckrodt bought it for $5.6 billion last year. Valeant Pharmaceuticals has done big price increases on numerous drugs. The stock’s up 740% over five years and its founder, Michael Pearson, is a billionaire. Only Shkreli has drawn the American public’s rage.”

Additionally, we touched on the history of the drug industry. Below is just a snippet from an excellent infographic that takes you through the key events in the 80’s that created the system we have in place today.

And of course there was music.

Playlist:

Just want to listen to the interview? Don’t have time for the music? Here ya go.