Bloated prices on AIDS drug scrutinized
Pharma firm records point to executives’ motivations, tactics
Former Turing Pharmaceuticals CEO Martin Shkreli projected more than $200 million in annual sales of Daraprim, the prescription drug for which the firm imposed a 5,000% price hike last year, a congressional memo released Tuesday shows.
“$1bn here we come,” Shkreli wrote in a May 27, 2015, email when his firm moved to acquire the medication used to treat a parasitic disease that affects AIDS sufferers and others with weakened immune systems, the memo shows.
In a subsequent August email, the memo shows Shkreli forecast an even brighter financial future: “We raised the price from $1,700 per bottle to $75,000 ... so 5,000 paying bottles at the new price is $375,000,000 — almost all of it is profit and I think we will get 3 years of that or more.”
“Should be a very handsome investment for all of us. Let’s all cross our fingers that the estimates are accurate,” the email concluded, according to the memo prepared for Democratic members of the House Committee on Oversight and Government Reform.
The Shkreli emails are among more than 250,000 pages of documents the committee obtained from Turing for a scheduled Thursday hearing on corporate methods and reasoning behind soaring prescription drug costs. The panel similarly obtained more than 75,000 pages of documents from Valeant Pharmaceuticals International, a Canadabased company criticized for price hikes of 525% and 212% on two heart medications.
Shkreli, a pharmaceutical industry businessman who gained public attention and criticism over the Daraprim price hike, is among the hearing ’s scheduled witnesses. Under indictment on unrelated securities fraud charges, Shkreli signaled in a January court filing that he would assert his constitutional protection against self-incrimination rather than testify before Congress.
Rep. Elijah Cummings, D-Md., the House panel’s ranking minor- ity member, said the Turing and Valeant records “provide a rare, inside look at the motivations and tactics of drug company executives.”
“They confirm what Americans across the country have experienced firsthand for years — that many drug companies are lining their pockets at the expense of some of the most vulnerable families in our nation,” Cummings said.
Turing representatives did not immediately respond to a message seeking comment on the memo and records. Shkreli, who recently retained high-profile New York defense attorney Benjamin Brafman, used a Fox Busi- ness interview Tuesday to criticize the House hearing and say he would only testify if granted legal immunity.
“I’m not going to say anything other than the Fifth Amendment,” he said. “They just want this to be a circus.”
Valeant, whose interim CEO Howard Schiller is scheduled to testify at the hearing, said the company tries “to set our prices at the appropriate levels, but we also listen to the market.” After receiving complaints about costs for the heart drugs, Valeant said, “we’ve responded by offering volume-based discounts of up to 30% for each of them.”
Turing similarly pledged in December “that no patient needing Daraprim will be denied access.”
Turing documents obtained by the House panel, however, show company officials were concerned that advocates of patients infected with the HIV virus that causes AIDS were “sensitive, and actionoriented” and could organize a “backlash from patient advocacy groups” over the price hike.
An Oct. 12 internal Turing presentation suggested seeking a meeting with Chad Griffin, president of the Human Rights Campaign, “in an attempt to slow their aggressive stance and work with them to better understand the company.”
“Turing ’s internal memos prove the company put profits over the well-being of patients with life-threatening health conditions and treated the entire controversy as a public relations problem,” Griffin said in a statement issued Tuesday.
Company records also showed the Daraprim price hike impact on patients, hospitals and other health care providers.
“There are patients waiting now for product who have a $6,000 (health insurance) copay,” Turing executive Tina Ghorban wrote about the medication in an Aug. 18 email released by the House committee.
The records show Turing received an Oct. 8 complaint from Massachusetts General Hospital seeking the firm’s help to get Daraprim for an uninsured patient who needed medical treatment.
Sharing the plea internally with other officials, the head of Turing ’s investor relations wrote: “I think we are acting a little like a deer in the headlights, and need to take some action steps now. If a hospital like Mass General is having issues, we are in trouble.”