Nonprofit hopes to lower pharmaceutical prices

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Health care is an expensive industry for patients, doctors, pharmaceutical and insurance companies.

It becomes even more expensive when the price of generic drugs, which are drugs with expired patents, rise. Part of the problem is the monopolization of the pharmaceutical industry, which is why former Idaho Falls resident Dan Liljenquist is teaming up with other organizations to form a nonprofit pharmaceutical company.

Intermountain Healthcare, Trinity Health, SSM Health, Ascension, the Department of Veterans Affairs and philanthropists are partnering to form the company nicknamed “Project Rx,” Dan Liljenquist wrote in The New England Journal of Medicine.

Dan Liljenquist is an attorney who also holds a bachelor’s degree in economics from Brigham Young University. He is vice president of Intermountain Healthcare’s Enterprise Initiative Office in Utah.

By being a nonprofit, Project Rx would provide affordable generic prescriptions to patients. Its aim is to “establish a nonprofit generic-drug manufacturer with the explicit mission of producing affordable versions of essential drugs and ensuring a stable supply of such products,” the article said.

Due to the sensitive nature of starting a company, Dan Liljenquist was unable to speak to the Post Register. However, his father, Idaho Falls doctor John Liljenquist, was able to.

John Liljenquist said part of the problem is that pharmaceutical companies are getting bought up and prices are being raised due to limited suppliers. Traditionally, most generic drugs are cheaper than brand-name drugs.

“Generic companies have figured out a way to manipulate those prices, so they go way back up,” Liljenquist said.

Robert Butikofer experienced this phenomenon firsthand. He was going to the doctor for a colonoscopy and is currently on the generic medication Warfarin due to an increased risk for blood clots.

Warfarin is inexpensive compared to the cost of other blood thinners under patent, but due to the risk of bleeding during the colonoscopy, Butikofer had to switch to a different blood thinner, Lovenox.

Lovenox is also a generic drug, but it was more expensive than Warfarin. It cost Butikofer $1,250 out-of-pocket for 20 doses of Lovenox, or $62.50 per dose. Warfarin costs around $10 for a monthly supply, according to GoodRx.

Butikofer had to pay for the generic Lovenox without insurance help because his Medicare plan wouldn’t cover the cost. Butikofer fell into the “doughnut hole” of the Medicare plan, where the insurance only covers costs to a certain amount before the patient has to pay full-cost for medication.

Butikofer had to switch prior to the surgery because Lovenox only stays in the system for a few hours and acted as a bridge medication so he could have the colonoscopy without risk of bleeding or a clot. Warfarin stays in the system for a few days.

“It’s a rip-off, to be nice,” Butikofer said.

He said he doesn’t mind people making a reasonable profit, but those profit margins in pharmaceutical companies are too high. Pharmaceutical companies on average make about a 20 percent profit margin, the U.S. Government Accountability Office reports.

In some cases, pharmaceutical companies will stop making generic drugs because the prices are too low for them to make the profit they want.

In 2010, pharmaceutical company Valeant obtained the medication rights to Syprine, a generic medication to treat Wilson’s disease, and raised the price more than 3,000 percent from $652 for a month supply to $21,267, according to The New England Journal of Medicine article “Addressing Generic-Drug Market Failures - The Case for Establishing a Nonprofit Manufacturer.”

Left untreated, Wilson’s disease can be fatal.

This isn’t an isolated instance. In 2015 Turing bought the rights to the medication Daraprim and raised the price from $13.50 to $750 per pill, the article said. There also was the well-known case of the EpiPen price increase that caused a Congressional hearing into the price increase.

Mylan obtained the rights to the EpiPen in 2007 and raised the price from $94 to $609. The company had to settle a lawsuit and allow a generic drug to enter the market in 2015.

The EpiPen is a life-saving drug that counteracts an allergic reaction.

Butikofer said these companies aren’t acting responsibly toward patients or the public. They are just pursuing maximum profit.

“You almost hate to go to the doctor or (have) a prescription because what’s the surprise going to be when I get to the pharmacy,” Butikofer said.

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