Martin Shkreli, boss of the controversial pharmaceutical company that increased the price of its life-saving drug 50-fold overnight, has claimed slashing the price of the drug may lead him to cut research for “lethal diseases” and force him to fire staff.
After intense pressure, including criticism from presidential hopeful Hillary Clinton, Shkreli confirmed this week he will slash the price of Daraprim, a drug his company, Turing Pharmaceuticals, bought in August and then hiked from $13.50 to $750 a pill.
“We might have to curtail research for several lethal diseases that we are seeking treatments for. We might have to fire people,” he told the Guardian.
Shkreli declined to say how much he would cut the cost of Daraprim, the standard treatment for the dangerous blood infection toxoplasmosis. Daraprim is a daily drug many patients have to take for a year or more.
“We have to do a lot of calculation. When we make the new price, we are going to make it so that Turing is a break-even or only slightly profitable company,” he said.
“There are very few people who care about toxoplasmosis more than me,” he said. “I think I know more about toxoplasmosis than anyone in the world.”
But medical experts cast doubt on the assertions of the former hedge fund manager-turned-pharmaceutical entrepreneur.
“I’m highly skeptical. I don’t trust that we are going to see a return to a price that’s economically feasible or truly justified,” Tim Horn, HIV project director at the Treatment Action Group, a global research and policy advocacy group in the fields of HIV, tuberculosis and hepatitis C, told the Guardian. Another specialist called Turing’s actions “repulsive”.
A storm erupted on Monday after details of the price hike became public. Clinton called Turing’s actions “price gouging” before unveiling a far-reaching proposal to cap the out-of-pocket costs of all medicines to $250 a month if she wins the White House in 2016. Biotechnology stocks on both sides of the Atlantic fell following her comments.
Meanwhile, Shkreli attempted to justify his strategy – saying he would put profits back into research to improve the drug.
Shkreli told ABC that as a result of the outcry, he had agreed to lower the price of Daraprim “to a point that’s more affordable”.
Dr Alan Taege, a toxoplasmosis specialist at the Cleveland Clinic in Ohio, a major academic and medical treatment center, told the Guardian that he found Shkreli and Turing Pharmaceuticals’ approach “repulsive”.
“Our pharmacy department suddenly contacted me to say we have received this huge price increase for Daraprim – it was a total surprise, a complete shock to all of us,” Taege said.
Shkreli has been attacked on social media since the news broke. Another presidential hopeful, Donald Trump, reportedly said he looked like a “spoiled brat”. On Twitter, Shkreli quoted music star Eminem: “And it seems like the media immediately points a finger at me / So I point one back at em, but not the index or pinkie”. He has since taken his Twitter account private.
“I’m not affected by the anger,” he told the Guardian. “I don’t think much about the wider world. I work with my patients.”
Toxoplasmosis is a parasitic disease that is not common in the developed world but is serious when it occurs, hitting people with suppressed immune systems, such as HIV patients who have developed Aids, cancer sufferers on heavy chemotherapy and organ transplant recipients. It can also affect pregnant women, endangering the fetus.
Hundreds of millions of people carry the parasite that causes the illness harmlessly in their bloodstream, but if it erupts into toxoplasmosis and is left untreated it usually kills the victim within one to four weeks.
Daraprim, also known by its generic name pyrimethamine, is a highly effective treatment that has been the primary standard drug used in the US since its invention in the 1940s.
Generic versions are more readily available in other countries. But in the US Daraprim is difficult to copy as a generic because its market, though profitable, is tiny and its government approvals have been “grandfathered” in from the 1940s before the rules were tightened dramatically in the 1960s, making the more modern required drug safety tests hard to replicate by a rival.
When a patient develops toxoplasmosis, the symptoms are “alarming” and the cause not immediately obvious to the sufferers, Taege said.
“They might start showing signs of stroke, or headache, confusion and fever; they may show up at the hospital with convulsions. At that point they are critically ill and if left untreated, they die,” he said.
Daraprim is administered, in combination with plentiful hydration and two other drugs to limit side-effects for at least six weeks to knock out the infection, and then often for a year or even indefinitely to help the immune-compromised patient keep the parasite at bay.
In buying Daraprim, Turing Pharmaceuticals also restricted distribution so that the drug is supplied only through a specialty pharmacy chain, which has brought complaints from individuals and hospitals that it is now harder to get hold of, Horn said.
Health professionals remain skeptical of Shkreli’s claims that a price hike is needed in order to improve the drug. Taege said it functions well as it is. Horn said: “I worry that he is going to come up with a new formulation, then he can patent the new form of the drug and get market exclusivity.”
While Daraprim is short of actual rivals in the US, it does not enjoy the kind of official short-term monopoly that a patent provides, which would block even the potential of price competition in the short term.
“His actions are more like Wall Street than the drug-development industry. It’s speculative, like picking a penny stock and figuring out how to get the price up – but for real people this is about life and death,” said Sean Dickson, manager of healthcare access for the National Alliance of State and Territorial Aids Directors.
Shkreli said he would provide Daraprim free or for as low as a dollar for those who cannot afford it. But Dickson said drug companies were required in such situations to help balance out price hikes.
Turing is not the first speculative company to find an obscure drug, buy its commercial rights and then rack up the price. The trend has been growing in recent years and there have been rows about a selection of drugs to treat tuberculosis and hepatitis C, among other conditions.
“I’m glad Mr Shkreli’s egregious example has served to put the spotlight on this awful trend,” said Horn.
The price increase of Daraprim could translate into crippling costs for those paying for the drug themselves, or dramatically higher insurance deductibles and co-pays, or a potentially unsustainable burden on state and federal systems that pay for those who cannot afford the cost of the drug or insurance such as Medicaid, Taege said. “Many people who end up suffering from toxoplasmosis are in a lower socio-economic bracket. It’s an unfortunate situation,” he said.
Dickson said he hoped Shkreli’s “financial wizardry” would alert the authorities to the loopholes in the law. “The US is one of the few countries where you can do something like this,” he said.
This article was written by Joanna Walters in New York, for theguardian.com on Thursday 24th September 2015 12.02 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010