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.
“What
is it that they are doing differently that has led to this dramatic
increase?” said Dr. Judith Aberg, the chief of the division of infectious diseases
at the Icahn School of Medicine at Mount Sinai. She said the price
increase could force hospitals to use “alternative therapies that may
not have the same efficacy.”
Turing’s price increase is not an isolated example. While most of the attention on pharmaceutical prices has been on new drugs for diseases like cancer, hepatitis C and high cholesterol, there is also growing concern about huge price increases on older drugs, some of them generic, that have long been mainstays of treatment.
Although
some price increases have been caused by shortages, others have
resulted from a business strategy of buying old neglected drugs and
turning them into high-priced “specialty drugs.”
Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price
to $10,800 for 30 pills from $500 after its acquisition by Rodelis
Therapeutics. Scott Spencer, general manager of Rodelis, said the
company needed to invest to make sure the supply of the drug remained
reliable. He said the company provided the drug free to certain needy
patients.
In
August, two members of Congress investigating generic drug price
increases wrote to Valeant Pharmaceuticals after that company acquired
two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals
and promptly raised their prices by 525 percent and 212 percent
respectively. Marathon had acquired the drugs from another company in
2013 and had quintupled their prices, according to the lawmakers, Senator Bernie Sanders,
the Vermont independent who is seeking the Democratic nomination for
president, and Representative Elijah E. Cummings, Democrat of Maryland.
Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014, according to the two lawmakers.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter
to Turing earlier this month calling the price increase for 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 people with compromised immune systems, like AIDS patients and certain cancer patients.
Martin
Shkreli, the founder and chief executive of Turing, said that the drug
is so rarely used that the impact on the health system would be
minuscule and that Turing would use the money it earns to develop better
treatments for toxoplasmosis, with fewer side effects.
“This
isn’t the greedy drug company trying to gouge patients, it is us trying
to stay in business,” Mr. Shkreli said. He said that many patients use
the drug for far less than a year and that the price was now more in
line with those of other drugs for rare diseases.
“This
is still one of the smallest pharmaceutical products in the world,” he
said. “It really doesn’t make sense to get any criticism for this.”
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.
Turing Chief Explains Drug Price Rise
Martin Shkreli, the chief executive of Turing Pharmaceuticals, explains the increase in drug prices in a CNBC interview.
By CNBC on Publish Date September 21, 2015.
Photo by CNBC.
Watch in Times Video »
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 to CorePharma
in 2010. 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.
Daraprim
cost only about $1 a tablet several years ago, but the drug’s price
rose sharply after CorePharma acquired it. According to IMS Health,
which tracks prescriptions, sales of the drug jumped to $6.3 million in
2011 from $667,000 in 2010, even as prescriptions held steady at about
12,700. In 2014, after further price increases, sales were $9.9 million,
as the number of prescriptions shrank to 8,821. The figures do not
include inpatient use in hospitals.
Turing’s price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid
and certain hospitals will be able to get the drug inexpensively under
federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.
Some
doctors questioned Turing’s claim that there was a need for better
drugs, saying the side effects, while potentially serious, could be
managed.
“I
certainly don’t think this is one of those diseases where we have been
clamoring for better therapies,” said Dr. Wendy Armstrong, professor of
infectious diseases at Emory University in Atlanta.
With
the price now high, other companies could conceivably make generic
copies, since patents have long expired. One factor that could
discourage that option is that Daraprim’s distribution is now tightly
controlled, making it harder for generic companies to get the samples
they need for the required testing.
The
switch from drugstores to controlled distribution was made in June by
Impax, not by Turing. Still, controlled distribution was a strategy Mr.
Shkreli talked about at his previous company as a way to thwart
generics.
Some
hospitals say they now have trouble getting the drug. “We’ve not had
access to the drug for a few months,” said Dr. Armstrong, who also works
at Grady Memorial Hospital, a huge public treatment center in Atlanta
that serves many low-income patients.
But
Dr. Rima McLeod, medical director of the toxoplasmosis center at the
University of Chicago, said that Turing had been good about delivering
drugs quickly to patients, sometimes without charge.
“They have jumped every time I’ve called,” she said. The situation, she added, “seems workable” despite the price increase.
Daraprim
is the standard first treatment for toxoplasmosis, in combination with
an antibiotic called sulfadiazine. There are alternative treatments, but
there is less data supporting their efficacy.
Dr.
Aberg of Mount Sinai said some hospitals will now find Daraprim too
expensive to keep in stock, possibly resulting in treatment delays. She
said that Mount Sinai was continuing to use the drug, but each use now
required a special review.
“This seems to be all profit-driven for somebody,” Dr. Aberg said, “and I just think it’s a very dangerous process.”
