On Drugs: Emerging Business Models (an update)

Remember the pharmaceutical company(s) that started an avalanche of public outcry for snowballing costs (hundreds of fold increase in months) of certain generic drugs? Well, Imprisis Pharmaceuticals has come up with a solution to get reasonably priced versions of said drugs to patients.

Brilliant,” I thought, on reading how they are going to do it.

Then I chewed my lower lip for a while trying to poke a hole in the concept.

But couldn’t.

Finally, in awe of the simplistic genius, I did a classic face-palm and wondered, Why Didn’t anyone Think of this Before?

Before I get into the logistics of it all, let me say that I’m glad the people who need the drugs, such as the generic pyrimethamine of the branded Daraprim, have better access to them. This report indicates the price will be about $1 per pill, compared to $750 that Turing was reported to be considering at one time (but pulled back from).

The trick, not to imply that Imprisis is doing anything that involves slight of hand or fooling anyone, the clever bit, is that Imprisis will provide generic versions of pyrimethamine by using a method that is, and has been for centuries, a generally accepted practice in pharmacies – called compounding.

Compounding is ancient. Used to be, medicines were all individually made by someone with a mortar and pestle and an apothecary of ingredients. As the pharmaceutical industry became more sophisticated, the creation of medicines was standardized (generally a good thing for safety and cost-effectiveness) and pills were produced under strict manufacturing conditions for the masses. Mass-produced pills contain not only the active ingredient but other things to increase its shelf-life, make it easier to swallow, delay release so once a day dosing is possible, decrease stomach upset and some other side effects, and have become the norm.

Occasionally, a physician will prescribe a specialized formulation, which eliminates an allergen, or allows the drug to be administered in different form, such as flavoured liquid or rub-on gel. Compounding is a wonderful throw-back to physician discretion, allowing the doctor to make a professional decision about what’s best for his or her patient, rather than selecting from a menu of pharmaceutical company offerings. Compounding is also popular with veterinarians, who will suggest using a drug that’s been proven effective in humans but needs to be modified for use in animals.

I’ve used compounded drugs. For my cat – a specially formulated gel that I rubbed on his ear to ease long-term administration. For me – combination drugs for topical administration, antibiotics and anti-inflammatories all in one. What the Doctor ordered for the specific situation.

The differences between branded, mass-produced drugs and compounded ones often includes more extensive testing for the preformed pills because the pharmaceutical giant behind them has funded the studies. Also, the pharmaceutical company has the liability if their medicines do damage. With compounding, the prescribing physician takes on this risk, generally with significant knowledge of the properties of the ingredients in the compounded formulation. Somewhat like buying off the shelf versus DIY. Compounding isn’t practical for all the pills prescribed today – we’d need half the population working as pharmacists to provide the millions of drug doses Canadians take every year.

However, clever Imprisis Pharmaceuticals has come up with a practical approach to providing off-patent, rarely used but badly needed drugs, such as the active ingredient in Daraprim. This is the drug Turing jacked the price on and elicited an impassioned response from the public, often focused on the evils of capitalism, pharmaceutical companies and perhaps hedge funds for good measure.

I’d never heard of Imprisis before this and promptly looked them up. They are a very young company,

whose core business is in compounding of existing drugs for better patient outcomes. Although this year looks like their break-even year for sales, prior to 2015, they’ve lost substantial sums. A not unusual scenario for a biomedical startup.

Am I implying the Imprisis has deduced a brilliant solution, hidden in plain sight before everyones eyes and the company deserves the support to do more good, or am I suggesting that being a pharmaceutical Robin Hood is a brilliant marketing tactic by a small company wavering between financial hard times and glory?

I’m not. I’m just sayin’ there’s many perspectives to every good story.

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