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Turing Pharmaceuticals CEO Martin Shkreli increases price of AIDS drug overnight

UPDATE: This greedy CEO jacked up the price of a much needed drug. Then Hillary Clinton weighed in. Now he has backflipped.

Emily MoultonEmily Moulton
@em_moulton
3 min read
September 23, 2015 - 4:30PM
Martin Shkreli speaks to CBS News

HIS decision to increase an old drug used by AIDS patients by 4000 per cent overnight sparked outrage across the world wide web.

Now, after days of public backlash, Martin Shkreli, the former hedge fund manager and entrepreneur who, at just 32 years of age, runs Turing Pharmaceuticals has backflipped on the hike.

Shkreli’s company recently bought a 62-year-old drug called Daraprim, which is used by AIDS patients then raised its price by 4000 per cent as part of a “great business decision”.

For the past week Mr Shkreli has been public enemy number one after several HIV/AIDS advocacy groups began questioning the justification for the price hike.

Daraprim is used to treat life-threatening parasitic infections in babies born to women who become infected during pregnancy as well as those with a compromised immune system.

Turing bought the rights to the drug, which is said to cost around $1 to produce, in August for $55 million and immediately raised its price. It was $25.20 (AU) but is now $1051 (AU).

(Initially it was reported the price had increased by 5000 per cent but theThe Washington Post reported the company said the pill is actually $25.20 a tablet not $18.90 and therefore the increase was 4,100 per cent.)

Mr Shkreli said on Tuesday he would lower the cost of the medication, however he would not say by how much.

He told NBC News the decision to cut the price was in response to the outrage. He has also made his Twitter account private in response to the backlash.

Democratic US Presidential candidate Hillary Clinton was among the thousands upset over Turing’s decision to increase the price.

She even tweeted her disgust saying it was “outrageous” and vowed to cap a price on drugs.

“Yes it is absolutely a reaction — there were mistakes made with respect to helping people understand why we took this action, I think that it makes sense to lower the price in response to the anger that was felt by people,” Mr Shkreli said.

In another TV interview Mr Shkreli said the reason for the hike was because the drug was no longer profitable.

He also said money raised could be used for researching a new drug.

“Our first and primary stakeholder is patients. There’s no doubt about that,” The Washington Post reported he said to CBS. “I can see how it looks greedy, but I think there’s a lot of altruistic properties to it,” he said.

But when told by another TV station, CNBC, that a HIV doctor they had spoken to said a new drug wasn’t needed, Shkreli responded: “That’s not true. There’s a recent paper that suggests that two patients died due to auto-immune encephalitis from toxoplasmosis, so there’s a lot of people who die from toxoplasmosis every year and this field desperately needs new ways to treat toxoplasmosis.”

According to the New York Times, this is not the first time Mr Shkreli has created a drug company and raised prices.

Four years ago he started another pharma company, Retrophin, which also bought old drugs then jacked up their prices.

Last year, Retrophin’s board fired Mr Shkreli and last month 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, theNew York Times reported.

Mr Shkreli has denied the accusations and has reportedly filed for arbitration against his old company, which he claimed owes him at least $25 million.

“They are sort of concocting this wild and crazy and unlikely story to swindle me out of the money,” he told the paper.

But when a journalist asked the Turing CEO why he increased the price of Daraprim on Twitter, Shkreli launched into a tirade calling Fierce Biotech editor John Carroll a “moron” and a “bad journalist”.

Shkreli’s disregard to the initial backlash was shown in his response to Twitter users. when asked by one how he slept at the night the former hedge fund manager responded by saying: “you, know, Ambien” in reference to a sleeping pill.

How the Twittersphere reacted to Shkreli’s decision was epic.

According to the New York Times, Turing is not the first pharmaceutical company to raise prices of old drugs to turn them into high-priced specialty drugs.

Last month, two members of the US Congress wrote to Valeant Pharmaceuticals which had recently bought two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals.

Shortly after acquiring the drugs, Valeant raised their prices by 525 per cent and 212 per cent respectively.

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Original URL: https://www.news.com.au/finance/business/other-industries/turing-pharmaceuticals-ceo-martin-shkreli-increases-price-of-aids-drug-overnight/news-story/27bfd142e4a34335d92b5ce65aa3a47e