Some people just don’t get it. Multimillionaire biotech entrepreneur Martin Shrekli seems to be one of those people. Shrekli has been at the center of controversy for his willingness to push up to and possibly beyond the bounds of morality since he founded MSMB Capital almost six years ago. Shkreli is an acknowledged hothead, and was fired as the CEO of Retrophin last year (which he founded) for poor judgement relating to the use of Twitter among other malfeasances. (Retrophin recently filed a complaint in federal court against Shkreli for self-dealing and fraud in a $60 million dollar lawsuit.)
Shkreli is at is again this fall, having acquired the rights to a drug to treat the toxoplasmosis often associated with cancer and AIDS (Daraprim) and immediately increasing the price 50 fold overnight. That’s right, Shrekli’s Turing Pharmaceuticals jacked the price of Daraprim from $13.50 per tablet to $750 as soon as it was legally possible, saying it needed the extra money to pay for “research” into improved treatments for toxoplasmosis.
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Turing Pharma under fire for obscene price gouging
A couple of weeks ago, the Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing saying the price increase for Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.” Moreover, according to the New York Times, an organization of the directors of state AIDS programs is also investigating the massive price increase.
Daraprim (generic pyrimethamine) is used almost exclusively to treat toxoplasmosis, a serious parasite infection that afflicts babies born to women who become infected during pregnancy, and people with compromised immune systems such as AIDS patients and many advanced cancer patients.
Statement from Martin Shkreli
Martin Shkreli, the founder and CEO of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Shkreli said, pretending to be unaware that gouging desperate patients to “stay in business” is clearly greedy and not acceptable. He went on to try and justify this ridiculous, greedy and antisocial behavior by saying that patients only typically use the drug for a period of months and that the new 5000% higher price was now “more in line” with other drugs for rare diseases.
“This is still one of the smallest pharmaceutical products in the world,” the apparently completely tone-deaf Shkreli claimed. “It really doesn’t make sense to get any criticism for this.”
Daraprim is part of disturbing trend
In fairness, it should be noted that Turing is not the only firm ripping off the public by charging outrageous prices for older treatments for rare diseases that are inexpensive to produce and have a near “captive audience.” Analysts point out there is a growing concern in the health care industry about 5- to 50-fold price increases on older drugs (many generic) that have become long-standing mainstays of treatment for many diseases.
Although some of the recent massive drug price increases are related to shortages, the large majority are due to a new (and clearly morally bankrupt in this author’s opinion) business strategy of acquiring older drugs and then converting them into high-priced “specialty drugs.” You can call this repricing strategy whatever you want, but where I come from, we call it a scam.
For example, Cycloserine, a antibiotic almost exclusively used for multidrug-resistant tuberculosis, recently saw the price move up over 20-fold to $10,800 for 30 pills from only $500 after it was acquired by Rodelis Therapeutics. Rodelis GM Scott Spencer offered another flimsy excuse, arguing the firm had to make large investments to make sure the supply of the drug remained reliable. Spencer also noted that Rodelis has provided the drug free to some needy patients, and heath care industry sources note that Turing has a similar policy of providing the drug at no charge in certain cases.
My message to Martin Shkreli would be to stop being such a greedy pig. If you really desperately need money for research, go ahead and increase the price on Draprim 500% or maybe even 1000%, and use those additional funds to support more research on toxoplasmosis, but you can’t jack it up by 5000% because that’s clear and obvious gouging, and that’s morally wrong.
Finally, given Shkreli’s history, we definitely need to see regular documentation that every last cent of the extra revenue from Daraprim is actually spent on research, and is not used to pump up admin staff, line Shkreli’s pockets or diverted to another one of his pet projects.