A drug company once led by Martin Shkreli, the so-called pharma bro who gained notoriety last year after jacking up overnight the price of a medication by 5,456 percent, promised Monday to price its products in a “transparent and responsible” way. KaloBios Pharmaceuticals, a Brisbane, California-based firm focusing on treatments for neglected conditions such as Chagas disease, also swore it would “not engage in aggressive pricing or ‘price-gouging.’”
“Our new pricing model is a commitment to define and develop transparent, responsible pricing for the products we hope to bring to patients in the future,” KaloBios Chairman and CEO Cameron Durrant said in a statement. “Drug pricing is a big concern for all stakeholders in healthcare. We believe that our approach balances the needs of key stakeholders, including patients, clinicians, payers, [nongovernmental organizations], investors, policymakers and advocacy groups.”
The announcement came amid increased scrutiny of drug pricing methods and an overall lack of transparency throughout the process. Pharmaceutical companies have been criticized by politicians in general and U.S. presidential candidates in particular who have painted drugmakers as greedily exploiting and ruining the lives of middle-class Americans. Last month, Democratic White House hopeful Hillary Clinton ran an PhRMA aimed at the embattled Valeant Pharmaceuticals International, slamming its “predatory pricing” practices, and last fall, Democrats in the House of Representatives launched a task force designed to “combat the skyrocketing costs of pharmaceuticals” and demand transparency in pricing.
Companies and industry groups are beginning to push back as a result, airing television commercials and engaging in other forms of damage control to salvage the industry’s reputation. The Pharmaceutical Research and Manufacturers of America has run ads touting the industry’s contributions to human health, and the group has said it would increase its spending on such advertising by roughly 10 percent, to spend a total of several million dollars in 2016.
KaloBios — likely best known for the benznidazole employed to treat Chagas disease, estimated to affect some 300,000 people in the U.S. — said its new framework would apply to all its products at present and in the future. The model would be “affordable for patients and players” and “transparent for stakeholders,” the company said in its statement. At the same time, it would deliver “a reasonable return for the company taking the risk of bringing products to patients.” It would seek “a reasonable and transparent profit margin” for these drugs, vowing, “We will not take arbritrary price increases on our products.”