Hikma risks a stratospheric 430% price increase on product
pharmafile | August 22, 2017 | News story | Manufacturing and Production, Sales and Marketing | Hikma, biotech, drugs, generics, pharma, pharmaceutical
It wasn’t so long ago that pharmaceutical companies could change the prices of its products with little scrutiny. A series of price gauging stories has put an end to that era and now companies are under much more pressure to be both transparent over their price increases, with more now committing to ensuring they keep annual price increase within 10%.
Hikma, a generic drugmaker, has not taken such cautious measures, after the Financial Times revealed it planned an increase of 430% on its medicine for diarrhoea. Raising the price by such an extent on a generic product, 35-year-old medicine is now a dangerous move but that is not the only drug Hikma, a generic drugmaker, is prepared to ramp up the cost on.
Alongside the 430% increase on Lomotil, the brand name of the diarrhoea drug, it also raised prices by eye-watering amounts on five other products. On Propanthelin, a drug for excessive sweating, the price increased by 203% and Prednisone, a medicine for inflammatory conditions, the increase was by 190%. The rest of price increases were between 76% and 173%.
How is the company able to get away with the increases? With many of the drugs, they face little or no competition in the generics market. Most of the market in Lomotil is taken up by cheap, generic tablets but there is still a need for liquid formulations in those that are unable to swallow tablets.
This effectively allows generic manufacturers to make up for the downward trend in generic prices and margins by artificially inflating the prices of niche drugs. This tactic has become infamous now as price gauging, whatever the justification, and public anger at such cases is rising all the time.
The Martin Skhreli case recently tried showed the genuine public antipathy towards a public figure of such tactics, as the court struggled to find a jury that would be unbiased such was the distaste at his behaviour.
The justification on the part of generics manufacturers is often that such a low-selling drug, as a liquid formulation, needs to be made commercially viable by raising the price.
The FDA has taken action on such cases of generics with little competition, by promising generics developers that any application in such a market would be reviewed as a priority.
Hikma released recently that it continues to be recognised on the FTSE4Good Index Series for positive environmental, social and governance practices – there might be a few eyebrows raised at such an award if the public gets wind of its most recent business practices.
Ben Hargreaves
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