Who’s to blame for the price Daraprim? It’s not who you think.

Daraprim is a drug that no one ever heard of unless they are taking it. It is used to treat toxoplasmosis, a parasitic infection, has been around for decades, and is prescribed typically in patients with weakened immune systems, such as those with AIDS. Daraprim has been newsworthy because a small company, Turing Pharmaceuticals, recently purchased the drug from Impax Laboratories for $55 million, and promptly raised the price of Daraprim.

Originally $13.50 per pill, Turing raised the price to $750, sparking outrage over price gouging and taking advantage of sick patients. After the outcry, Turing will lower the price, but they have not disclosed by how much.

Is the Turing CEO a greedy businessman or an investor trying to recoup his investment and earn a profit? Should the free market determine drug prices or is there a role for government price controls?

Go back to 2003, the year Medicare Part D was created. Buried in the 1000+ page bill, which undoubtedly every member of Congress read and understood, was this dirty little secret: According to the law, Medicare itself is not allowed to negotiate drug prices with pharmaceutical companies. Was this known or debated at the time? The bill was rushed through Congress with a final vote at 3 a.m. How’s that for transparency?

Medicaid and Veterans Affairs are able to negotiate lower drug prices. As do foreign countries, which pay 50 percent less than we do for the same drugs. How could a bill like this pass through Congress? Easy. Lobbyists.

Credit former Congressman Billy Tauzin, R-La., for steering the bill through the House of Representatives, via arm twisting and a 3 a.m. vote. Rep. Tauzin was a long time Democrat, but he switched parties to maintain his seniority and power in Congress when Republicans took control in 1994. Eventually, he retired and became CEO of big pharma lobbying group PhRMA, earning a $2 million salary lobbying for the pharmaceutical industry. How’s that for a revolving door?

Passage of Medicare Part D more than paid for Mr. Tauzin’s salary. If Medicare had the same negotiating power as Medicaid, the Congressional Budget Office estimates, “It could save $116 billion over ten years,” money otherwise in the coffers of big pharma.

The argument is that pharmaceutical companies need profit for future research and development. That’s true. Bringing a new drug to market costs $2.5 billion. And takes 12 years on average with the odds of the new drug traveling from laboratory to pharmacy about 1 in 5,000. The counter argument is that most of the largest pharmaceutical companies spend more on marketing than on R&D. Meaning high drug prices are supporting TV commercials.

The result is that Medicare, and ultimately the taxpayers, pay whatever big pharma asks. That’s why medications used to treat macular degeneration cost $2,000 per month, consuming one-sixth of the Medicare Part B budget. For the patient with macular degeneration in both eyes, costs could reach $48,000 per year. Medicare happily pays the price set by big pharma. Other countries, on the other hand, negotiate prices down and pay approximately half of the U.S. cost.

Credit where credit is due. The Obama administration has asked Congress to authorize Medicare to directly negotiate with drug companies for some high-cost prescriptions. That will be a tough fight against the big pharma lobby.

Rather than focusing on a businessman buying a company and trying to make a profit, the attention should shift to the larger problem of Medicare’s non-negotiable prices, which everyone pays for through taxes and copays.

Brian C. Joondeph is an ophthalmologist and can be reached on Twitter @retinaldoctor. This article originally appeared in the Independent Journal.

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