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This week, news broke that a 62-year-old drug went from $13.50 to $750 a pill, inciting outrage. But it's hardly the only one.

Anne Harding
September 25, 2015

When news broke that his company bought the rights to a 62-year-old drug and jacked the price up from $13.50 to $750 a pill, the CEO of Turing Pharmaceuticals Martin Shkreli became “the most hated man in America.”

Shock and outrage over the 5,000% price increase for Daraprim, a drug long used to treat parasitic infections in HIV patients and pregnant women, was swift and widespread. But Shkreli's attempt to turn a hefty profit on an old pharmaceutical product is far from the first or only example of this practice. Other companies have been snapping up the rights to inexpensive, off-patent drugs and reselling them at a much higher cost—often with no added value in sight.

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“It's a trend,” Scott Knoer, the chief pharmacy officer at the Cleveland Clinic explained to Health. Annual drug costs at his institution went up by $11.2 million thanks to sharp increases in the prices of nine different drugs. “If you multiply that by hundreds of hospitals across the country, it's kind of mind-boggling.”

And these increases are largely hidden from everyday consumers, because many of the drugs involved are medications hospitals give to inpatients, for example the heart drugs Nitropress and Isuprel. In February, the very same day Valeant Pharmaceuticals International bought the rights to both medications, the company hiked the list price of Isuprel by 500%, and Nitropress by 200%. “It's the exact same drug off the exact same production line with the exact same people making it,” Knoer said.

Other big price bumps in recent years include a nearly 2.5-fold price increase for Ofirmev, an acetaminophen injection used for relieving pain and fever, back in 2014 after the original maker was bought by Mallinckrodt Pharmaceuticals. Then there's Vimovo, a drug for arthritis pain, which increased in price nearly six-fold in 2014, after the rights were purchased from AstraZeneca the year before.

As recently as this August, Rodelis Therapeutics purchased the rights to the tuberculosis drug cycloserine, promptly bumping its price up from $500 to $10,800 for 30 capsules. Under pressure, the company backed down and turned the rights over to the Purdue Research Foundation, which will sell 30 capsules for $1,050, still twice what it was sold for before.

All of these costs are inevitably passed onto consumers in the form of co-pays and premiums.

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Price facelifts for old drugs aren't the only thing driving up your pharmaceutical costs. When drug shortages occur, “gray market” middlemen may offer these medications at a premium to desperate hospitals. Drug companies may also refuse to sell their products to generic manufacturers, which makes it impossible for them to develop a generic version of the drug. And of course, super-expensive new medications—like drugs for treating hepatitis C—are busting budgets while saving lives.

“We expect that new products are gonna be expensive and brand new products are going to be higher priced, but what's really hard to plan for is when older drugs that you're used to not costing very much, when those products start acting like brand-name, brand-new drugs,” Erin Fox, director of the Drug Information Service at University of Utah Health Care told Health. “It is very frustrating when there are opportunistic businesses that are just basically doing it for the money, especially with older products.”

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One issue that the government should address, Fox says, is the fact that drug makers don't need to disclose who manufactured the product they're selling. “When we're being charged these exorbitant prices, we should be able to have transparency into who's actually manufacturing these products.”

In the end, the news-making Daraprim story might end up being a good thing: Knoer and Fox agree that it's shining a light on the problem of price gouging. As Knoer put it, “The attention is good because this is a horrible issue for health care costs.”

Presidential hopeful Hillary Clinton recently announced a plan to reduce prescription drug costs in response to the news, and Donald Trump, who's vying for the Republican nomination for president, even went as far as calling Shkreli "a spoiled brat," suggesting the issue could become a focal point in the upcoming election.

Shkreli, for his part, has since bowed to the pressuresort of. At the height of the Internet's outrage, he said Tuesday that he would lower Daraprim's cost, but he has yet to share the new number.

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