Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.
The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.
This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy. He started MSMB Capital, a hedge fund company, in his 20s and drew attention for urging the Food and Drug Administration not to approve certain drugs made by companies whose stock he was shorting.
In 2011, Mr. Shkreli started Retrophin, which also acquired old neglected drugs and sharply raised their prices. Retrophin’s board fired Mr. Shkreli a year ago. Last month, it filed a complaint in Federal District Court in Manhattan, accusing him of using Retrophin as a personal piggy bank to pay back angry investors in his hedge fund.
Mr. Shkreli has denied the accusations. He has filed for arbitration against his old company, which he says owes him at least $25 million in severance. “They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money,” he said.
Noting that the pill sold for $13.50 and the course of treatment “to save your life was only a $1,000,” Shrkeli said he had to make a change.
“We know, these days, in modern pharmaceuticals, cancer drugs can cost $100,000 or more, whereas these drugs can cost a half of a million dollars,” he explained. “Daraprim is still under-priced relative to its peers.”
Asked if the pill really only costs $1 to manufacture, Shkreli agreed and said, “It costs very little to make Daraprim.”
Shkreli then listed off manufacturing, distribution, and FDA costs as well as paying the people “who make it to specifications.”
Pressed even further on the $750 cost per pill, the CEO defended the price by noting how much it brought into the pharmaceutical company annually.
“This drug was making $5 million in revenue,” he said with a smile. “And I don’t think you can find a drug company on this planet that can make money on $5 million in revenue.”
Shkreli stated that the drug is made for a “very very tough disease.”
“It requires a lot of attention and focus. The drug company needs to partner with the patients and make sure that it’s a very cared for community. And that costs a lot of money too,” pointing out that the company also “gives away” the drug for $1 for those who can’t afford it.
In other words, Shkreli is simply doing what any capitalist would do if they are following the ideological precepts of their system. It’s up to us to reject capitalism and demand that these drugs be free or very inexpensive if we want to defeat people like this. But so long as we believe in the profit motive, it’s hard to really see the logical alternative here. Otherwise, the people marketing these drugs are simply being bad at their jobs. If people die or go bankrupt to stay alive, well, what is that to the capitalist? I mean sure Shkreli is an utterly loathsome human who adds nothing positive to the world by staying alive. But he just represents an economic system that Americans love and adore.