AUGUSTA — Why did infamous “Pharma Bro” Martin Shkreli hike the cost of a decades-old drug by 5,000 percent? Because he could. His attitude was like that of Willie Sutton, who, when asked why he robbed banks, quipped: “Because that’s where the money is.”

Shkreli’s outrageous price hike earned him headlines and widespread public condemnation, but it wasn’t the first time he had exploited the absence of pricing regulation in the pharmaceutical industry. In 2014, he was CEO of a pharmaceutical company that bought the rights to a little-known and cheaply manufactured drug used to treat a rare kidney disease, for the sole purpose of jacking up the cost to consumers from $1.50 per pill to $30 per pill. He found a way to charge whatever the unregulated market would bear.

Intense public shaming didn’t cause him to back down, and consumers had no legal recourse. Shkreli does face a mountain of civil litigation and criminal charges, but not for his egregious price-gouging; instead, he is accused of securities fraud. (Jury selection is currently underway in his trial in federal court.)

Shkreli is not alone in his exploitation of the drug market. Last year, generic drug manufacturer Mylan jumped the price of a two-pack of EpiPens, used for emergency treatment of severe allergic reactions, from about $100 in 2007 to over $600 last year.

Last winter, the Maine Attorney General’s Office and attorneys general in 19 other states sued Mylan and six other generic pharmaceutical companies for conspiring to artificially inflate prices and reduce competition for an antibiotic drug and an oral diabetes drug. Generics have a reputation for being cheap alternatives to name brands, but that reputation comes with asterisks. Just because a drug is cheap for them to manufacture does not mean any savings will be passed on to consumers.

The Maine Attorney General’s Office has successfully taken on pharmaceutical companies for such unfair trade practices as off-label marketing practices, price-fixing schemes and antitrust actions. Providing a fair playing field for consumers is a critical part of our mission. However, chasing bad actors in federal and state courts is a slow and cumbersome process, while consumers continue to pay outrageous prices for life-saving prescriptions.

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The Journal of the American Medical Association reported last August that prescription medications comprise about 17 percent of total health care costs nationally and 19 percent of employer-based health care benefits. In December, the Senate Special Committee on Aging, co-chaired by Maine Sen. Susan Collins, released a detailed report exposing price gouging by generic drug companies. The report observed that Americans will spend more than $328 billion on prescription drugs this year and the federal government will spend another $126 billion through Medicaid, Medicare and the Department of Veterans Affairs.

Yet as the JAMA report points out, “Drug prices are higher in the United States than in the rest of the industrialized world because, unlike that in nearly every other advanced nation, the U.S. health care system allows manufacturers to set their own price for a given product.”

Identifying price gouging is very difficult with the information publicly available. There are many middlemen between the research laboratory and the retail pharmacy who increase the costs of drugs. We know manufacturers sometimes boost prices solely to increase profits, but because of the secrecy maintained by drug companies, there really is no way to know exactly what drives the price increases of any particular drugs. Piercing the veil of these schemes often depends on whistleblowers coming forward to spill the beans.

This legislative session, I worked with state Sen. Eloise Vitelli of Arrowsic on legislation modeled on a new Maryland law to give the attorney general the authority to sue generic-drug manufacturers who engage in price gouging. The legislation would also protect consumers by increasing transparency in pharmaceutical costs, giving the attorney general access to the factors that lead to sudden increases in drug prices. The Legislature’s Judiciary Committee will continue deliberations on this proposal over the summer and fall.

In his post-prison life, Willie Sutton found work using his experience as a bank robber to consult with bank security firms in order to protect banks and prevent robberies. He gave them an inside look at how bank robbers operate. If we can get clearer information from drug companies, we too can get an inside look at the industry and better protect the many Mainers who depend on their life-saving pharmaceuticals.

Sunshine will prove to be the best medicine.


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