Turing Pharamceuticals CEO Martin Shkreli created an instant backlash when he announced his company's plans to raise the price of a vital AIDs drug over 5,000 percent. Shkreli initially defended the move from a business perspective, but he has now bowed to public pressure and agreed to back off on the price increase.
At the heart of the controversy is Daraprim, an anti-infection drug that was developed roughly 30 years before the 32-year-old CEO of Turing Pharmaceuticals was born. Daraprim also has a use as an antimalarial drug, but it is primarily used in the treatment of toxoplasmosis in HIV-infected patients.
Since Daraprim has been around since the 1950s, the patent on the drug has long since expired. However, nobody in the United States manufactures a generic version due to the extremely small market for the drug.
Turing Pharmaceuticals, under the guidance of CEO Martin Shkreli, bought the rights to Daraprim in August 2015, and immediately announced a price hike.
Us Today reports that the drug was available for $13 per pill when Turing Pharmaceuticals bought the rights, and that Shkreli then announced a price hike to $753 a pill.
When Shkreli announced the price hike, the CEO and his company were inundated with outraged comments on social media. Even presidential candidates Bernie Sanders and Hillary Clinton weighed in.
Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6hShkreli initially defended the price increase, citing the fact that Turing Pharmaceuticals needed to turn a profit on the drug after paying $55 million for the marketing rights.
— Hillary Clinton (@HillaryClinton) September 21, 2015
At one point, Shkreli told Bloomberg News that profits from the price increase would allow Turing Pharmaceuticals to develop a modern replacement for Daraprim.
"We know there's a better way to treat this disease," Shkreli told Bloomberg News. "We're developing a drug that is better for them. They don't deserve a drug that's 70 years old. They deserve a modern drug."
Shkreli also vowed that Turing Pharmaceuticals would provide free Daraprim to needy patients in the meantime, but some experts didn't bite.
In an interview with Vanity Fair, Dr. Wendy Armstrong, a professor of infectious diseases at Emory University, called the Turing Pharmaceuticals CEO's claims "frustrating and false."
While Daraprim is a 62-year-old drug, Dr. Armstrong dismissed the idea that it needs to be replaced.
"We've taken a very good drug that was cheap, that had been effective for years and years, and completely turned things on its head to make it expensive completely for a profit motive."Shkreli defended Turing Pharmaceuticals decision to increase the price of Daraprim for several days, but he eventually went on ABC's World News Tonight to roll back the decision.
According to Shkreli, Turing will still increase the price, but it won't be a 5,000 percent increase. The CEO promised a nebulous "more affordable" price point that will still allow Turing Pharmaceuticals to turn "a very small profit."
Nobody knows what the new price of Daraprim will end up being, since anything less than $750 per pill would technically satisfy Shkreli's promise that Turing Pharmaceuticals will roll back the price hike.
Do you think it's appropriate for companies like Turing Pharmaceuticals to buy the rights to old drugs like Daraprim and then jack up the prices?