Martin Shkreli is a 32-year-old former hedge fund manager who is now the founder and CEO of a company called Turing Pharmaceuticals. Turing recently acquired a drug called Daraprim, which helps prevent malaria and treats toxoplasmosis. It’s also used to treat complications from cancer and AIDS.
Until recently, patients needing Daraprim could get it for $13.50 per pill. Then the ex-hedge fund manager acted exactly as you’d expect an ex-hedge fund manager to act: his company raised the price to $750 a pill. Yes, you read that correctly: seven hundred and fifty dollars for a single pill.
What suddenly made Daraprim so valuable that the price increased over 5,000%? That’s a fair question. When asked for an explanation for the drastic jump, Shkreli replied, “Well, it depends on how you define so drastically. Because the drug was unprofitable at the former price, so any company selling it would be losing money. And at this price it’s a reasonable profit. Not excessive at all.”
Plus, Shkreli said that Daraprim isn’t used all that often and so the price increase won’t have that much of an impact. He also added that the company would use the extra profit to develop a better toxoplasmosis drug.
CBS News medical contributor Dr. David Agus, an oncologist, commented, ”Patients shouldn’t be taxed and charged for future research and development. Patients should pay for the drug they’re getting and what they need in the situation that they are… It’s predatory practice and it’s inappropriate.”
Shkreli, predictably, insisted the hike had nothing to do with greed. “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Shkreli said. “This is still one of the smallest pharmaceutical products in the world. It really doesn’t make sense to get any criticism for this.”
He noted that patients often use it for less than one year. Plus, he said, the new price is more closely aligned with other drugs used for rare diseases.
He did make a small admission about the hike being related to money, but of course justified it: “There’s no doubt, I’m a capitalist. I’m trying to create a big drug company, a successful drug company, a profitable drug company,” he said. “We’re trying to flourish, but we’re also — our first and primary stakeholders are patients, there’s no doubt about that.”
Americans, however, aren’t all that fond of ex-hedge fund managers these days, nor are they convinced that an overnight 5,000% drug price hike is justified. Plus, the media picked up the story and in turn, political figures like Hillary Clinton and Bernie Sanders weighed in. Shkreli quickly become the most hated man in America this week.
And just like that, the price of Daraprim came down quicker than it went up. “We’ve agreed to lower the price of Daraprim to a price that is more affordable,” Shkreli said on ABC World News Tonight. He didn’t offer the new price, but given the public outcry, it’s probably going to be notably less than $750 a pill.
Shkreli isn’t a stranger to controversy. In fact, he’s being sued by Retrophin — a biotech company that he founded in 2011 and ran until he was ousted last year. The lawsuit, which seeks more than $65 million in damages, claims that he created the company and took it public only to provide stock to investors when his hedge fund, MSMB Capital Management, became insolvent. To say that he’s a douchebag doesn’t seem inappropriate.
Shkreli isn’t the only pharmaceutical executive to drastically raise the price of a drug. He just caught lot of heat for it. Some companies raise the prices when they claim there are shortages. Others do so by purchasing old drugs and renaming them “specialty drugs,” according to The New York Times.
Take the tuberculosis treatment drug, Cycloserine, for example. Rodelis Therapeutics acquired it and raised the price from $500 for 30 pills to $10,800 for the same amount. General Manager Scott Spencer explained the increase as necessary because “the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients,” reported The New York Times.
And you’ve probably heard of doxycycline. That’s because it’s been around since 1967 and is a commonly used generic antibiotic. And yet a bottle of it increased from $20 to $1,849 between October 2013 and April 2014.
Then there’s Plaquenil (known generically as hydroxychloroquine), an anti-malaria drug that many lupus and rheumatoid arthritis patients rely on. While it’s difficult to track down any solid info, patients across the country have recently been reporting that they either can’t get the drug (that used to be extremely inexpensive) or that the price has gone up so much that they can’t afford it. The American Society of Health-System Pharmacists (ASHP) cites an “increased demand” and “regulatory issue” for the shortage. But it bears noting that “Concordia acquired Plaquenil tablets from Covis in April 2015,” so take from that what you will.
Pharmaceutical companies are long known for pricing drugs as high as they possibly can. Often, it can be explained away by the high cost of R&D for a new drug. But in cases like that of Daraprim, it’s not so easy to justify. And Americans are getting tired of it.