posted by Alicia Caramenico
on November 9, 2016
Buy a house or condominium at one price, sell it quickly at a higher price, make tons of money. Just as real estate investors can make fast profits by flipping houses, drug companies are raking in billions in profits by flipping aging pharmaceuticals, according to Bloomberg.
Bloomberg reports that the practice follows a familiar flipping formula: “Buy the rights, hike the price, resell them.” The article spotlighted immune-disorder treatment Actimmune, which investors purchased in June 2012 and hiked up the price 434 percent. It was later sold to Horizon in September 2014, which jacked up the price 81 percent to $538,000 a year. Since 2012, the list price has soared 866 percent.
The post-flip prices of cold-sore cream Denavir, cancer drug Nilandron, beta blocker Dutoprol, and osteoporosis treatment Miacalcin jumped 372 percent, 989 percent, 1,057 percent, and 3,259 percent, respectively:
What makes pharma flipping more harmful is that “we all pay,” explains Capital District Physicians’ Health Plan CEO John Bennett. These skyrocketing prices have a ripple effect throughout the system, raising premiums and increasing health care costs for individuals, families, and employers.