Activists Furious at Miami Company Accused of Price-Gouging Brain Cancer Patients

For nearly 40 years, a maximum dose of lomustine, a cancer drug that treats brain tumors, cost no more than $50. But after Miami-based startup NextSource bought the rights to the drug from Bristol-Myers Squibb in 2013, the Wall Street Journal says, the drug's price spiked to $768 per pill. That's a 1,400 percent increase, and the nation is now furious, comparing NextSource CEO Robert DiCrisci to former Turing Pharmaceutical CEO and human worm Martin Shkreli, as well as the jackasses who raised EpiPen prices to ridiculous levels for no stated reason.

Poliical activists are now getting involved: Last week, the People's Progressive Caucus of Miami-Dade, the farthest-left-leaning contingent of activists in the Miami-Dade County Democratic Party, released an open letter demanding local congressional candidates take a stand against pharmaceutical price-gouging. The group is also asking Miami-Dade State Attorney Katherine Fernandez Rundle to launch an investigation into NextSource.

"The Board of the People’s Progressive Caucus calls on all Democratic candidates for Congress in Miami-Dade to oppose this predatory pharmaceutical pricing and to join us in asking the State Attorney to investigate whether NextSource has engaged in gouging and anti-competitive practices," the letter reads. "We further invite all candidates to present a plan for Federal reform that would curtail these out-of-control drug prices and exploitative pricing practices."
The letter was addressed to the eight Democrats running to replace retiring GOP Rep. Ileana Ros-Lehtinen. At least one candidate, progressive Michael Hepburn, one of the original candidates endorsed by the pro-Sanders initiative, Brand New Congress, has already committed to fighting predatory pharmaceutical companies if he's elected. Hepburn, who supports transitioning the nation to a single-payer health-care system, says his health-care plan would allow Medicare to negotiate prices directly with drug companies and bargain charges down.

"The pharmaceutical industry, or 'Big Pharma,' gouges the American people because the government forbids Medicare from negotiating drug prices with pharmaceutical companies," Hepburn wrote in response to the open letter. "Under our plan, this regulation will be eliminated and Medicare will be allowed to negotiate the best possible prices for the American people."
NextSource is a fairly unknown Miami startup. According to the company's website, its central offices are located on SW 73rd Avenue. It has explained why it hiked lomustine prices so much in such a short period of time: A statement posted to the company website says the price reflects the cost of "raw materials, including a key manufacturing component, which has increased substantially."

DiCrisci’s lawyer, Joseph DeMaria, steadfastly denies that his client or NextSource ever “price-gouged” anyone. Instead, he says the company has raised lomustine prices to cover increased manufacturing costs and regulatory burdens imposed by the U.S. Food and Drug Administration. DeMaria said that glioblastoma patients are able to choose from four treatment drugs, and that the three drugs other than lomustine actually cost more than NextSource’s pill. (NextSource remains the only supplier of lomustine, specifically.) DeCrisci also said that the Wall Street Journal’s contention that the company raised prices “1,400 percent” is incorrect. He says the cost of lomustine prior to 2013 was actually “much, much higher” than $50 per pill.

With all the added price increases, DeMaria said most of the revenue NextSource generated from lomustine goes back to paying company costs, and that NextSource’s profit margins for the drug so far have been just 10 percent. “If the allegation is price-gouging, how are we price-gouging when we have a 10 percent profit margin?” DeMaria asks.

But other pharmaceutical experts say that because the drug's price remained so stable for so many decades, NextSource is simply gouging customers whose only choices are to either pay exorbitant fees for cancer drugs or die. NextSource's drug treats glioblastoma, the deadliest and most aggressive form of brain cancer. Only 3 to 5 percent of glioblastoma patients live more than five years. Experts told the Journal that it seems NextSource is also helping push the families of dying cancer patients into debt or bankruptcy.

Here's the open letter in full:

December 29, 2017

An Open Letter to Democratic Candidates for Congress in Miami-Dade

To: Senator Jose Javier Rodriguez, Representative David Richardson, Commissioner Kristen Rosen Gonzalez, Commissioner Ken Russell, Mary Barzee Flores, Matt Haggman, Michael Hepburn, Steven Machat, Debbie Mucarsel-Powell, Mark Anthony Person, Steve Smith

Since 2013, Miami-based pharmaceutical company NextSource Biotechnology has driven up the price of lomustine, a forty-year-old drug used in the treatment of brain cancer and Hodgkin lymphoma, by 1400%. Robert DiCrisci, NextSource’s CEO, has disingenuously claimed that this is related to drug development costs, but the reality is that the drug in question was developed in 1976 by Bristol-Meyers Squibb: NextSource bore zero development costs for this drug.

This is not the first time in recent memory that a pharmaceutical company has engaged in extortion-based price gouging. The EpiPen has notoriously risen in price more than 500% in the past decade, and Martin Shkreli’s Turing Pharmaceuticals raised the price of a critical HIV medication by more than 5000%.

Congress must act to control price gouging drug manufacturers. Right now these costs are being passed on to consumers both directly and in the form of skyrocketing insurance premiums: when insurance companies are forced to pay hundreds of thousands of dollars for a life-saving drug regimen, the entire insurance pool bears the costs. Earlier this year, Senator Bernie Sanders sponsored legislation that would have allowed the reimportation of drugs from Canada, where a 100 mg of lomustine can be purchased for $54. This and other comprehensive reforms are needed to protect American families from predatory companies that would exploit suffering. As long as these companies are permitted to engage in limitless price hikes for life-saving drugs, they will.

The Board of the People’s Progressive Caucus calls on all Democratic candidates for Congress in Miami-Dade to oppose this predatory pharmaceutical pricing and to join us in asking the State Attorney to investigate whether NextSource has engaged in gouging and anti-competitive practices. We further invite all candidates to present a plan for Federal reform that would curtail these out-of-control drug prices and exploitative pricing practices.

We must end the corporate exploitation of suffering for profit, and it begins now.

Signed,
The Board of the People’s Progressive Caucus of Miami-Dade

Correction: This article previously misstated Michael Hepburn's relationship with Brand New Congress. He was one of the original candidates endorsed by the group.