The price hike of a 62-year-old drug from $13.50 to $750 per dose recently drew attention to increasing instances of pharmaceutical companies buying out rights to old medications, only to drastically increase prices for them.

The drug, Daraprim, is used to treat parasitic infections, mainly toxoplasmosis, which can cause serious, sometimes  life-threatening, problems for babies born to women who are infected during pregnancy, and for people whose immunity is compromised, such as patients with AIDS or some kinds of cancer, according to a story in the New York Times on Monday.

The drug was acquired by Turing Pharmaceuticals, whose founder and CEO, 32-year-old Martin Shkreli, is a former hedge fund manager. Shkreli was ousted last year by the board of another pharmaceutical company, Retrophin, which he founded in 2011. He left the company amid accusations of illegal stock trading, the Times story said.

Following a public outcry on Tuesday, Shkreli said he had decided not to increase the price of Daraprim to $750 per tablet — but he didn’t say how much the new cost would be, as of press time.

The Times story cites several examples of similar price increases after new companies take over the rights to existing medications.

“As a doctor, I understand the importance of patients having access to affordable medications,” said U.S. Sen. John Barrasso, R-Wyo., an orthopedic surgeon. “Prescription drugs cannot help patients if they are unaffordable. The issue raised by the New York Times illustrates one of the root problems in health care.

“There is wide variation in prices for health care products and services not based on any clear or transparent rationale.”

The effects of drastic price hikes for drugs are felt locally as well as nationally.

“That is something we do see from time to time,” said Steven Hultgren, pharmacy department director for Powell Valley Healthcare. 

Hultgren said the pharmacy stocks an expensive medication for two people who live in Powell. The patients, who are related, have a rare genetic condition that occasionally requires immediate treatment with the drug to save their lives.

One vial of the medication used to cost $5,000. Then, about 18 months ago, another company acquired the rights to the drug and raised the price to $45,000, Hultgren said. 

He said the patients have insurance that will pay the full price for the medication if they need it. If they don’t need it — which is good news for them — the medication sits on a shelf in the hospital pharmacy until it expires after two years and must be discarded.

“Then we’re out thousands of dollars,” he said. “It’s a sticky situation for us.”

It’s also costly for the insurance company, and likely will result in higher rates for other policy holders.

“That cost is getting shifted to somewhere else,” Hultgren said.

The rarer the drug, the more costly it is likely to be.

Hultgren said the Orphan Drug Act of 1983 expedites the process and provides a faster way for companies to develop drugs for rare diseases and bring them to market, he said.

Otherwise, “it takes years and years of research, drug trials and whatnot,” he said.

The act was designed to provide an incentive for pharmaceutical companies to spend money, time and resources to develop drugs that will help a small number of patients.

But once those medications are on the market, “there’s nothing at that point to stop those companies from overcharging,” Hultgren said. “Chemotherapy drugs are a good example. They are so expensive.”

Hultgren said he believes pharmaceutical companies are abusing the Orphan Drug Act.

“My gut (feeling) is that it’s just greed,” he said. “I don’t think there’s any law or legislation telling that company that they can or cannot charge any (price) for that drug.”

The Tribune asked Hultgren if pharmaceutical companies have a financial incentive to find drugs to provide ongoing treatment for illnesses and disorders rather than looking for ways to cure those diseases. 

He replied, “I guess the conspiracy theorist side of me would say that, if a drug company was to develop a miracle drug to cure some of these diseases, I’m not sure they would look to put that on the market. If you cure a disease, you will no longer profit from it.

“I’m not saying there are miracle drugs out there,” he added, “but large corporations are all about the dollar.”

Barrasso said the Affordable Care Act did little to address drug pricing problems.

“Remember, during the health care debate, the pharmaceutical industry negotiated behind closed doors directly with the White House,” he said. “The industry then supported the law’s passage.

“This secretive deal cutting is one of the lasting legacies of the law and now patients are paying the price. If we want to fix health care in this country, we need real reforms that put patients and doctors ahead of Washington special interests.”