In what is being blasted as one of the worst cases of abject greed seen for sometime, a former hedge fund manager turned pharmaceutical entrepreneur has bought the rights to a drug used to treat life-threatening parasitic infections in HIV/AIDS patients.
He then raised its price 5,500 percent overnight. This saw the price of the drug, Daraprim, go from $13.50 to $750 per tablet.
According to media reports, 32 year old Marin Shkreli, founder and CEO of Turing Pharmaceuticals, purchased the rights to the drug for $55 million on the day that Turing announced that it had raised $90 million in its first round of financing.
Daraprim, which has been in use for 62 years, is used to treat toxoplasmosis which is an opportunistic parasitic infection which affects babies and people with weak immune systems from AIDS and certain types of cancer.
Pharmaceutical experts say the drug sold for $1 a tablet just a few years ago with its price increasing to $13.50 as the rights to the drug went between pharmaceutical companies. They say the previous price increases, although fairly substantial, were nothing compared to the 5,500 percent increase imposed by Shkreli.
The price rise has been questioned by doctors who prescribe it for patients. Infectious diseases division head at the Icahn School of Medicine at Mount Sinai asked, “What is it that they are doing differently that has led to this dramatic increase?”
Shkreli has defended the massive rise saying the money from sales will be used to develop better toxoplasmosis treatments which have less side effects.
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” he said, adding many patients used the drug for less than a year and that the hiked price was similar to what is being charged for other drugs used to treat rare diseases.
“It really doesn’t make sense to get any criticism for this.” said Shkreli.
But Shkreli’s claims of putting profits back into better treatments for toxoplasmosis have been shot down by experts. “I certainly don’t think this is one of those diseases where we have been clamoring for better therapies,” said professor of infectious diseases at Emory University in Atlanta, Dr. Wendy Armstrong.
The Daraprim controversy is not the first flack the fledgling pharmaceutical company owner has received. The experts say that as owner of the hedge fund MSMB Capital he was accused of trying to persuade the Federal Drug Administration (FDA) to not approve some drugs made by companies MSMB capital was shorting.
In 2011, Shkreli co-founded a company called Retrophin, which also acquired the rights to drugs that had been on the market place for many years and then raised their prices. His own board fired him in 2014, filing a Federal District Court complaint which accused him of using Retrophin funds to pay back unhappy investors in his hedge fund.