CEO to roll back pill’s 5,000% price hike
Ex-hedge fund manager hiked price of infection fighter Daraprim after getting rights
What do you get when you cross a former hedge fund manager, a decades-old drug and a potentially fatal disease?
When it comes to the drug Daraprim, the answer is a whopping overnight price increase of more than 5,000 per cent — and an explosive controversy that ultimately forced a cocky drug company CEO to back down.
Daraprim, the brand name for the drug pyrimethamine, is the gold standard treatment for toxoplasmosis, a parasitic disease that can be fatal for people with weakened immune systems, such as those with HIV/AIDS.
Daraprim has been around for 62 years, but in August a company called Turing Pharmaceuticals acquired the marketing rights to the drug — and jacked up the price from $13.50 (U.S.) per pill to $750.
As word of the price hike got out, outrage exploded in the infectious disease community and online, where a deluge of tweets accused Turing chief executive Martin Shkreli of being the “personification of evil” and “the most punchable man in America.”
Salon magazine dubbed him “the Donald Trump of drug development,” and Democratic presidential candidates Bernie Sanders and Hillary Clinton both weighed in, with the latter pledging to cap prescription prices. By Tuesday night, NBC News was reporting that Shkreli had bowed to pressure and would cut the price for Daraprim to either break even or reduce his profit.
Shkreli, a former hedge fund manager with a history of controversy, had spent much of the past 48 hours vigorously defending himself, taking to Twitter to call one biotech journal- ist a “moron” and linking to an Eminem song (“I am whatever you say I am . . . in the paper, the news every day I am.”)
In several television interviews, Shkreli painted his original price hike as altruistic, claiming that $750 per pill is still a steal given the $100,000 price tag for many cancer treatments.
While acknowledging each pill costs less than $1 to manufacture, he asserted to Bloomberg that the markup was necessary for the company to turn a profit.
“This drug is earning $5 million in revenue and I don’t think you can find a drug company on this planet that can make money on $5 million in revenue,” he said.
The Toxoplasma gondii parasite, which is spread by cat feces or by eating undercooked meat, is widespread, infecting an estimated 30 to 50 per cent of the global population.
While most infected people do not exhibit symptoms, the disease can be fatal for people with weakened immune systems. It is also dangerous for pregnant women, who can pass the infection to their babies, potentially causing blindness or mental disability.
A Daraprim price increase doesn’t directly affect Canadians — according to Health Canada, the drug was discontinued in this country in 2013.
But in the United States — where a liberal regulatory system allows companies to dictate sticker prices and generic companies have shied away from challenging Daraprim’s reign — the annual cost of treating toxoplasmosis with Daraprim at $750 a pill would be $634,500 for patients weighing more than 60 kilograms, according to a joint letter written by the Infectious Diseases Society of America and HIV Medicine Association. “This cost is unjustifiable for the medically vulnerable patient population in need of this medication and unsustainable for the health care system,” said the letter.