A former hedge fund manager and now boss of a start-up pharmaceutical company has defended the staggering rise in cost of a drug used to treat life-threatening infections.
The drug, Daraprim, is part of the standard first treatment for toxoplasmosis, a parasite infection that can cause serious problems for babies born to women who become infected during pregnancy, and for people with weakened immune systems such as AIDS and cancer patients.
Daraprim was acquired in August by Turing Pharmaceuticals, which immediately raised the price from $13.50 a tablet to $750 a tablet.
The defense
Defending the rise, Martin Shkreli, the former financier and now chief executive of Turing, claimed the drug is so rarely used that the impact on the health system would be small. He also said 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, quoted in The New York Times’ report on the story. He added that many patients use the drug for much less than a year and that the price was now more in line with those of other drugs for rare diseases.
“This is still one of the smallest pharmaceutical products in the world,” he continued. “It really doesn’t make sense to get any criticism for this.”
Dr. Rima McLeod, medical director of the toxoplasmosis center at the University of Chicago, also said that Turing had delivered drugs quickly to patients, sometimes without charge.
“They have jumped every time I’ve called,” she explained, and suggested that despite the price increase the situation seemed workable.
Outcry from specialists
However, plenty of other health care professionals have been quick to protest the increase. Dr. Judith Aberg of Mount Sinai said the major hospital was continuing to use the drug, but each use now required a special review.
“This seems to be all profit-driven for somebody,” she said, “and I just think it’s a very dangerous process. What is it that they are doing differently that has led to this dramatic increase?”
Meanwhile, the Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase for Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.”
Despite his protest against complaints, this is not the first time Shkreli has been accused of putting profit before propriety. His former company Retrophin also acquired old, neglected drugs and then sharply raised their prices. Retrophin’s board recently fired him, claiming he had been using Retrophin as a way to pay back angry investors in his hedge fund. (He denied the accusations and has filed for arbitration against his old company).
Shkreli also started the hedge fund company MSMB Capital, and was accused of urging the Food and Drug Administration (FDA) not to approve certain drugs made by companies whose stock he was shorting.
Can the drug still be obtained reasonably?
The New York Times explained that federal rules will still allow Medicaid and certain hospitals to get Daraprim inexpensively. But private insurers, Medicare, and hospitalized patients will have to pay an amount closer to the list price.
The drug was approved by the FDA way back in 1953, and the patent is long expired. There is therefore the possibility that other companies could make their own, generic versions, but they are limited by distribution restrictions which make it difficult for them to get the samples they need for the required testing.
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Feature Image: Thinkstock
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