When Turing Pharmaceuticals recently skyrocketed the cost of Daraprim from $13.50 to $750 per capsule without warning — a staggering increase of more than 5,000 percent — the public response was immediate and angry. In the firestorm that followed, a story of unmitigated greed emerged.
For 62 years, the FDA-approved drug has been the recommended treatment for toxoplasmosis, a parasitic infection that is actually quite common, as it can be caused by changing kitty litter. But it only creates health problems for people with compromised immune systems, including those living with HIV or cancer and pregnant women.
In August 2015, Turing Pharmaceuticals acquired Daraprim and immediately jacked up the price to such a degree that it seemed obvious Turing’s 32-year-old CEO, Martin Shkreli, had purchased the medication with this lucrative end game in mind. Even in a country accustomed to Wall Street greed, the level of Shkreli’s voracity was stunning.
Responding to the increase, The New York Times reported that the exorbitant price hike would raise annual costs of Daraprim into the tens of thousands of dollars, essentially making it unaffordable for the majority of the estimated 2,000 Americans currently taking it for toxoplasmosis.
The Infectious Disease Society of America and the HIV Medicine Association both responded quickly, sending a joint, tersely worded letter to Turing Pharmaceuticals urging the company to lower the price, and arguing there was simply “no justification for an increase of this magnitude for a medication approved by the U.S. Food and Drug Administration in 1953.”
Despite Daraprim having been out of patent protection for years, the New York attorney general informed Turing Pharmaceuticals the company was being investigated for illegally restricting access to a drug and making it difficult for competitors to create their own versions.
In the midst of the controversy, Shkreli donated $2,700 to Vermont Senator Bernie Sanders’s presidential campaign. Sanders publicly rejected the donation, redirecting the gift to an HIV health clinic. The slight prompted an outraged Shkreli to tweet that he was so angry he could “punch a wall.”
When a small pharmaceutical company in San Diego, Imprimis Pharmaceuticals, announced its plans to produce a drug with Daraprim’s active ingredients and sell it for less than $1 a capsule, it seemed to finally quiet the noise.
But for some, Daraprim is just the latest example in an ongoing trend of pharmaceutical price jacking. Kelsey Louie, executive director of New York’s GMHC, told Plus, “Shkreli’s company... bases its entire business plan precisely on the price-spike strategy…this is neither new nor illegal — but it is getting worse.”
The Washington Post shared data from an AARP Public Policy Institute study showing that generic and name-brand drug costs have been steadily climbing for years. But, because these prices have increased in small increments, often from one year to the next, they haven’t garnered much attention.
“Pharmaceutical companies widely appear to feel comfortable raising the price of their drugs,” Carolyn Johnson wrote in an article for The Washington Post. “But are the justifications for those increases really any different [from Turing’s] at their core?”
The curative hepatitis C drug Sovaldi from Gilead Sciences costs $1,000 per pill, or $84,000 per person for the course of treatment; Kalydeco, a cystic fibrosis drug from Vertex, costs more than $300,000 per year; and Celgene’s cancer drug Revlimid runs $150,000 annually.
A government-monitored drug pricing system could address this problem. Such a system, Louie argues, could make it so “the Martin Shkrelis of the world don’t have the legal ability to prioritize profits over people’s lives.”