CEO Raises Cancer Drug Price Tag 5,000% Because Drug Was ‘Unprofitable’
In August, Turing Pharmaceutical bought the 62-year-old patent on a drug called Daraprim. Almost overnight, the company raised the price of the drug from $13.50 to $750. The medical community is up in arms over the drastic price, but according to Turing CEO Martin Shkreli, a former hedge fund manager, that’s how the medical business should be.
CBS News correspondent Don Dahler caught up with Shkreli and asked, “Why was it necessary to raise the price of Daraprim so drastically?
“Well, it depends on how you define ‘so drastically.’ Because the drug was unprofitable at the former price, so any company selling it would be losing money. And at this price it’s a reasonable profit. Not excessive at all,” Shkreli answered.
Daraprim was developed in 1953 as a treatment for toxoplasmosis, an infection caused by a parasite. It’s contracted from eating under-cooked meat or drinking contaminated water. It affects most seriously those with compromised immune systems, like AIDS and cancer patients.
The average cost for patients used to be about $1,130, but when Turing raised the price to $750 per tablet, the cost skyrocketed to $63,000, and for certain patients, the cost would be an astronomical $634,000.
Shkreli told CBS that while the price increase looks “greedy,” the former hedge fund manager believes there are “a lot of altruistic properties to it.”
“This is a disease where there hasn’t been one pharmaceutical company focused on it for 70 years,” he continued. “We’re now a company that is dedicated to the treatment and cure of toxoplasmosis. And with these new profits we can spend all of that upside on these patients who sorely need a new drug, in my opinion.”
But CBS medical contributor and oncologist Dr. David Agus disagreed.
“Patients shouldn’t be taxed and charged for future research and development. Patients should pay for the drug they’re getting and what they need in the situation that they are [in],” said Agus.
“It’s predatory pricing and it’s inappropriate.”
The story reached Washington by Monday evening, where Democratic presidential front-runners Hillary Clinton and Bernie Sanders both weighed in on the controversy.
Vermont Sen. Bernie Sanders said that this price hike was just “…the latest in a long list of skyrocketing price increases for certain critical conditions.”
Sanders and House member Elijah Cummings have been investigating these kinds of drastic drug price increases for years.
As Dr. Agus, said, “Right now, it’s out of control, and so we as a country, as a government, as individuals, as doctors all have to get together and say, we need to make pricing appropriate.”
Shkreli believes the new price is appropriate.
“There’s no doubt, I’m a capitalist. I’m trying to create a big drug company, a successful drug company, a profitable drug company,” he said. “We’re trying to flourish, but we’re also — our first and primary stakeholders are patients, there’s no doubt about that.”
Well, he won’t have any patients left soon since they can’t afford the drug.