When Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) recently launched its generic version of Syprine for the treatment of Wilson's disease, which sees copper build up in the liver, brain and other tissues, the Israeli company seemed like a knight in shining armor riding to the rescue of patients with this rare condition. Valeant Pharmaceuticals was charging an astronomical $21,267 for a bottle of 100 branded Syprine tablets.
In the press release promoting its generic version, described as a "lower-cost alternative," a senior Teva executive boasted about the new drug: "It shows Teva's commitment to serving needy groups of patients." The press release, however, did not specify what this "lower cost" was - $18,275 for 100 pills, according to the Elsevier drug prices database.
Valeant, which holds the patent for Syprine, increased the price of the original drug to over $21,000 in 2015. Five years before that, 100 pills of the original drug cost $652.
This put Valeant on the hate list of pharma companies raising prices for some of their products into the stratosphere with no apparent reason other than greed. This list already includes Turing Pharmaceuticals under the management of CEO Martin Shkreli, which raised the price of Daraprim, its anti-parasitic drug, and Mylan Pharmaceuticals under the management of CEO Heather Bresch, which raised the price of its EpiPen, an injectable drug for treatment of allergic stings, consumption of certain foods, etc. by 461% between 2007 and 2016 - from $100 to $600. These prices aroused anger in the US and resulted in Congressional investigations.
The initial price set by Teva for its generic version of Syprine has also aroused astonishment and anger. Senator Bernie Sanders, who ran in the Democratic Party primaries for president in 2016, wrote on his Facebook page, "Teva Pharmaceutical's new generic version of the drug Syprine… will cost $18,375 for a bottle of 100 pills. That’s 28 times what Syprine cost in 2010. We have a crisis in drug prices in this country, where pharmaceutical companies are able to charge whatever they want. We need a Congress and a president that is willing to stand up to the power of the pharmaceutical industry. The future of drug prices in America comes down to this: Do we have the guts to stand up to drug companies who are ripping us off?"
"The New York Times" yesterday drew attention to Teva's pricing policy, writing, "Nearly three years after Valeant’s egregious price increases ignited public outrage, the story of Syprine highlights just how hard it can be to bring down drug prices once they’ve been set at stratospheric levels.
"Despite efforts by the Food and Drug Administration to encourage more competition for drugs that have no generic alternatives, companies like Teva will still charge as much as the market will bear as long as there is no significant competition."
Writing last week about Teva's pricing policy for its new generic drug, Wells Fargo analyst David Maris wrote, "By and large, generics work when there are multiple players. When there’s not, you get this."
When there are not many competitors, and the drug in question serves a relatively small group of patients, as in the case of Syprine, the pharmaceutical companies will try to make the biggest profit that the market will bear. Wilson's Disease, the accumulation of copper in the body, is extremely rare - 8,000-10,000 patients in the US. Only 5,226 of them gave prescriptions for Syprine to pharmacies. Up until now, Teva's only competition has been the original version of Syprine, made by Valeant.
Valeant has now decided to answer Teva's challenge by issuing what it calls an "authorized version" of Syprine as $19,119 per 100 pills.
Teva spokesperson Kaelan Hollon told the "New York Times" “If there is more competition and ample supply, pricing will continue to fall.” However, she declined to comment on how Teva set its prices only saying that the company considers a number of factors.
"The New York Times" mentions what is liable to happen to a company that raises its prices sky-high with no justification: "Valeant was once a Wall Street favorite that kept investors happy by buying up old, off-patent drugs like Syprine, sharply raising their prices, and investing little in research and development. That changed in 2015, when questions were raised about the impact this strategy was having on patients… Congressional and federal investigations into the company’s practices followed, leading to a plummeting stock and the departure of the chief executive and major investors."
Published by Globes [online], Israel Business News - www.globes-online.com - on February 25, 2018
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