Hedge Fund Manager Buys Rights To Critical Drug, Hikes Price By 5000%
The hedge fund manager responsible for the price increase is named Martin Shkreli.
By Dartagnan / Daily Kos
September 21, 2015
Print
219 COMMENTS
This is enough to make anyone sick.
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.The hedge fund manager responsible for the price increase is named Martin Shkreli. Shkreli has a reputation as some type of wunderkind, having started his own hedge fund company while still in his 20's. Shkreli has already drawn attention for urging the FDA not to approve drugs made by companies whose stocks Shkreli was shorting. In July 20012, Citizens for Responsibility and Ethics in Washington called for an investigation of Shkreli and others whom it charged were manipulating the prices of drug company stocks through blog posts intended to spread negative and purportedly misleading information about certain drugs. According to CREW, Mr. Shkreli has acknowledged he has no medical expertise whatsoever. His company stands to increase sales in the magnitude of tens or even hundreds of millions of dollars from the price increase, according to the article.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase on Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.” An organization representing the directors of state AIDS programs has also been looking into the price increase, according to doctors and patient advocates.
Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy, and also for those with compromised immune systems, like AIDS patients and certain cancer patients.
The history of Daraprim provides an interesting case study into everything that is wrong with the U.S. health care system.
Daraprim, which is also used to treat malaria, was approved by the F.D.A. in 1953 and has long been made by GlaxoSmithKline. Glaxo sold United States marketing rights in 2010 to CorePharma. Last year, Impax Laboratories agreed to buy Core and affiliated companies for $700 million. In August, Impax sold Daraprim to Turing for $55 million, a deal announced the same day Turing said it had raised $90 million from Mr. Shkreli and other investors in its first round of financing.Shkreli may also be able to prevent generic duplication of the drug by controlling its distribution, a tactic which prevents other companies from getting enough of the drug to test.
Ultimately, the problem really isn't Mr. Shkreli. He's just a shark doing what sharks do. The problem is that when vital drug treatments and health care are consigned to the whims of the "free market," people like Shkreli are equally free to charge whatever they want to vulnerable patients by claiming, as here, that the distribution is small enough to warrant "specialty status" for such drugs:
The hedge fund manager responsible for the price increase is named Martin Shkreli.
By Dartagnan / Daily Kos
September 21, 2015
219 COMMENTS
This is enough to make anyone sick.
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.The hedge fund manager responsible for the price increase is named Martin Shkreli. Shkreli has a reputation as some type of wunderkind, having started his own hedge fund company while still in his 20's. Shkreli has already drawn attention for urging the FDA not to approve drugs made by companies whose stocks Shkreli was shorting. In July 20012, Citizens for Responsibility and Ethics in Washington called for an investigation of Shkreli and others whom it charged were manipulating the prices of drug company stocks through blog posts intended to spread negative and purportedly misleading information about certain drugs. According to CREW, Mr. Shkreli has acknowledged he has no medical expertise whatsoever. His company stands to increase sales in the magnitude of tens or even hundreds of millions of dollars from the price increase, according to the article.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase on Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.” An organization representing the directors of state AIDS programs has also been looking into the price increase, according to doctors and patient advocates.
Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy, and also for those with compromised immune systems, like AIDS patients and certain cancer patients.
The history of Daraprim provides an interesting case study into everything that is wrong with the U.S. health care system.
Daraprim, which is also used to treat malaria, was approved by the F.D.A. in 1953 and has long been made by GlaxoSmithKline. Glaxo sold United States marketing rights in 2010 to CorePharma. Last year, Impax Laboratories agreed to buy Core and affiliated companies for $700 million. In August, Impax sold Daraprim to Turing for $55 million, a deal announced the same day Turing said it had raised $90 million from Mr. Shkreli and other investors in its first round of financing.Shkreli may also be able to prevent generic duplication of the drug by controlling its distribution, a tactic which prevents other companies from getting enough of the drug to test.
Ultimately, the problem really isn't Mr. Shkreli. He's just a shark doing what sharks do. The problem is that when vital drug treatments and health care are consigned to the whims of the "free market," people like Shkreli are equally free to charge whatever they want to vulnerable patients by claiming, as here, that the distribution is small enough to warrant "specialty status" for such drugs:
