Martin Shkreli: How a hedge fund trader became the most controversial man in America

The 32-year-old hiked the price of a life-saving drug by 5,000 per cent

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The Independent Online

And so where exactly was Martin Shkreli, the young hedge funder who has found himself at the centre of global outcry after the pharmaceutical company he bought raised overnight the cost of a life-saving treatment for people with HIV and weakened immune systems from $13.50 per pill to $750?

His spokesman failed to respond to enquiries, and at the New York building where the 32-year-old entrepreneur has his office on the 39th floor, the message relayed to The Independent via the security staff was that Turing Pharmaceuticals would not be “seeing any more journalists”.

Mr Shkreli has been seeking to push back against both scorn, and allegations that he could be threatening the health of people with potentially deadly diseases by increasing the cost of treatment by up to 5,000 per cent.

 

The price hike was carried out last month for Daraprim, known generically as pyrimethamine, by Mr Shkreli and his firm, shortly after it bought the rights to the drug.

Daraprim fights toxoplasmosis, the second most common food-borne disease, which can easily infect people whose immune systems have been weakened by HIV, chemotherapy or pregnancy, according to the Centres for Disease Control. In the US, it is believed around 60m people may carry the toxoplasma parasite.

Mr Shkreli’s firm is far from being the first to take an old drug and increase its price. But he found himself the recipient of a joint letter from the Infectious Diseases Society of America (IDSA) and the HIV Medicine Association.

They wrote to to Turing calling the price increase for Daraprim “unjustifiable for the medically vulnerable patient population”.

“Please help us improve public health by immediately implementing a rational and fair pricing strategy for pyrimethamine that keeps treatment for a potentially fatal condition accessible to our patients,” the letter said.

 

The move also took a political twist after Hillary Clinton tweeted her disapproval of the increase while fellow Democrat Bernie Sanders moved to add Daraprim to an ongoing probe on Capitol Hill

 

 

Daraprim, which is also used to treat malaria, was first approved by the Federal Drug Administration 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 $700m. In August, Impax sold Daraprim to Turing for $55m, a deal announced the same day Turing said it had raised $90m from Mr Shkreli and other investors. Only a few years ago, Daraprim cost only about $1 a tablet, but the drug’s price rose sharply after CorePharma acquired it.

Turing is not the first firm to be accused of exploit a glaring loophole within a generic pharmaceutical, but the decision to hike the price so sharply has raised many questions about the pharmaceutical industry and pricing.

American consumers have long been the industry’s piggy bank, willing to pay far more for far more than the rest of the developed world, all in the name of free market capitalism, many campaigners say.

 

 

The question many people are asking is: how can a company just buy rights to a generic drug, in other words one that can be produced by any manufacturer because its patent has expired, and spike the price without fear of anyone else coming along and producing it much cheaper?

Analysts say the answer is in the issue of supply and pharmaceutical economics. Producing a generic version of an off-patent drug is not simply a matter of looking up the ingredients and copying them and the process of producing generic versions of off-patent drugs is far from straightforward.

And they point out that generic drug makers need a large supply of the drug that they are copying in order to formulate and produce an alternative version.

Before it can get to the market and to patients they must also prove to drug regulators that it does exactly what the original version did, without any material change in known side-effects. All of that costs money.

 

Indeed, Mr Shkreli has made a strident financial defence of his decision and told one journalist who asked him about it on Twitter that he was a “moron”.

He told Bloomberg News that firms that had previously owned the rights to the drug had been “virtually giving it away” and that “we need to turn a profit” on the drug. He added: “It is still under-priced compared to its peers.”

In a statement issued on Tuesday, the company added: "Turing will work with any patient, hospital, clinic and financial institution – on a case-by-case basis – to help secure access to Daraprim.

“We have established a number of financial assistance programmes administered by a specialty pharmacy provider to support patients with financial need. This includes offering the product without charge to qualified, uninsured patients.”

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