Marriage of Inconvenience(Knitting in the City Book #7)(147)
Janie and the baby sounded further away when Quinn spoke next. “It’s about Caravel, and where the profits are coming from.”
“Oh.” I had to mentally crowbar myself into switching gears. “Janie figured it out?”
“She wants to talk to Kat about it in person tomorrow, just in case she has questions.”
That’s right. Tomorrow our friends were coming for a visit. Which meant I needed to fix things between Kat and me before tomorrow.
“Can you give me the short story?”
“Yes.” He paused, likely because Desmond’s cries abruptly stopped; then he said, like he was distracted, “It’s complicated. I didn’t know this, but some drugs can’t have generics. Meaning the company that develops the original name-brand drug has exclusive rights to make, market, and sell the drug for a long time.”
“That makes sense, though. I mean, if I discover a drug, why would I want someone else selling a drug I discovered?” Movement in my rearview mirror snagged my attention, a black SUV pulling into a parking space behind me. I told myself not to look at it, I was just being paranoid. “What’s in it for a pharmaceutical company if they can’t make money off their discovery? They got to make money somehow.”
“Yes, I agree. That makes sense. So most drugs have an exclusive period, which is called being ‘under patent’ I think, where they can recoup their investment and make money. But once the patent runs out, other companies, laboratories, etcetera, can make generic forms of the drugs. But first, the other companies have to go through the FDA and get approval for the generic version. There’s a lot of hoops to jump through, and it’s expensive for companies to obtain approval for the generic version.”
“So what’s the problem? That seems fair.” My eyes, moving of their own accord, flickered to the SUV. The engine was still running and the lights were on.
“The problem is, there’s not always a big demand for out-of-patent drugs. And that means, some drugs only have one version available and only one company makes it.”
“Let me get this straight.” I paused, moving my attention back to the benign sight of the cement wall, collecting all the pieces of the info Quinn had dropped on me. “Some drugs—even though they’re out-of-patent and anyone can make them if they jump through the hoops of the FDA and spend a bunch of money up front—can only be bought from one company?”
“Exactly.” I could almost see Quinn nodding.
“So, what does this have to do with Kat’s financial reports?”
“Kat was concerned—Janie said Kat was concerned—about the reduction of funding to research and development at Caravel. She’s worried that Caravel hasn’t brought any new drugs to market since Caleb took over as CEO.”
“That’s right. So how is Caravel making money?”
“First, they’re selling their name-brand drugs and devices as normal and expected.”
I waited for him to continue; when he didn’t, I prompted. “Okay. And?”
He made a sound of exasperation. “Caleb has been directing Caravel to acquire the rights to market and sell generics from small companies and laboratories. These are drugs that have been out-of-patent for twenty or thirty years. In a few cases, these drugs have never had a name-brand version, they’ve never been under a patent, they’ve been around for forty or fifty years, sometimes longer. He doesn’t need to go through the expensive hoops from the FDA, that process has already been done by these smaller companies. These aren’t drugs with a high demand, there is no name-brand version. So there’s only one source who makes these drugs. Once he’s acquired the rights, he’s jacking up the prices by five hundred percent or more.”
Five hundred percent? “No shit.”
“Yes. And patients who need these drugs—most are for rare diseases—have no choice but to pay the cost.”
My eyes bugged out. “But if it’s for a rare disease, how can he make so much money from them?”
“Do the math. A rare disease affects less than two hundred and fifty thousand people. Thirty different drugs times two hundred thousand people, each needing one dose daily. One pill that used to be a dollar a dose is now sixteen hundred dollars a dose.”
“Fuck me.” My mouth dropped open. This fucking guy . . . This guy was the devil. “How is someone supposed to pay for that?”
Quinn’s tone was frustrated. “I don’t know. I was too pissed off after Janie explained the reports. I took Desmond for a run in the stroller rather than flying out to Boston and getting arrested for assault.”