The duo are connected to at least four companies that have hiked prices on life-saving and other drugs
A headline from a recent Bloomberg report referred to Novum Pharma executives Todd Smith and Benjamin Bove as “the New Pharma Bros.” The moniker is an unflattering callback to the recently convicted Martin Shkreli, who notoriously and unapologetically increased prices on the drug Daraprim by more than 5,000%.
“The Chicago-based duo has played important roles at no fewer than four companies that have raised prices on life-saving and other drugs by as much as 4,116%,” Bloomberg said.
According to the report, the duo offers struggling pharmaceutical companies a sure-fire fix: thwarting efforts by health plans to block access to drugs and pushing copays that are often zero, even for pricey drugs. They also offer the use of specialty pharmacies — one of which they used to own — to make drug prescriptions hassle-free for doctors and less costly for patients.
But critics say the scheme could still result in higher premiums in the long run. “It’s totally a wrong way to frame the issue to say it’s free to the patient,” said Stephen Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota. “It’s ripping people off.”
One Novum Pharma representative called the scheme a “patient-access-centered model.” A former colleague familiar with the strategy told Bloomberg it involves the use of data analytics to find insurance-system vulnerabilities that might allow coverage of high-price drugs — generous health plans, insurers that tend to overlook price hikes on lesser-known drugs, or doctors that are likely to prescribe the drugs.
For at least the past three years, Smith and Bove have reportedly gone around the US to either work or consult at drug companies. And according to Bloomberg, huge price increases would often follow their arrival.
“At Novum Pharma, the wholesale price of a tube of the skin gel Alcortin A jumped to US$7,968 in 2016, from US$189 in 2015,” the Bloomberg report said. The arthritis drug Indocin, manufactured by Iroko Pharmaceuticals LLC, nearly tripled in January, reaching US$2,550 for 30 suppositories. Kaleo, a company that makes auto-injectors, reportedly set the price of a naloxone auto-injector two-pack to US$4,100 in 2016; that was from US$575 when it was launched two years earlier at a lower dose.
The two were also connected to Horizon Pharma Plc, which recently has come under scrutiny in Canada for introducing Procysbi at an extremely steep price. Smith arrived at the company in 2010 as a senior vice president; Bove came on board the next year.
The company fell into dire financial straits in 2011 due to a disappointing public offering; two years later, it more than doubled the price of arthritis treatment Duexis, its first product, to US$502 for a 90-pill bottle. By the time Smith left the company in 2014, one bottle cost US$1,030.
“A bottle of Duexis now costs US$2,482,” Bloomberg said.