A former uber-capitalist hedge manager who gouged the price of an AIDS drug because he could is about to have his own business gouged, courtesy of the free market.
Reviled Turing Pharmaceutical CEO Martin Shkreli bought last month only to spike its price from $13.50 to $750 per pill.
Now a drug compounding company called Imprimis announced Thursday that it will sell a much cheaper alternative to the pharmaceutical. The competing drug, which contains the same active ingredients as Turing’s Daraprim, will cost $99 for a 100-capsule bottle — just under $1 per pill.
Daraprim is a prescription drug used to treat a rare parasitic infection in people with weakened immune systems, most notably those who have AIDS.
“The extent to which companies have raised their prices has gotten so out of control that we can do a lot more,” Imprimis CEO Mark Baum told Mashable. “There’s so much we can do to correct what these guys are doing.”
Shkreli incited the wrath of social media last month when news broke that he had spiked the 62-year-old generic drug’s price by more than 5,000%. The next day, he caved to public pressure and agreed to ratchet down the cost — a promise he has yet to fulfill.
But the fracas also drew attention to a more widespread trend in the drug industry: Pharmaceutical giants like Valeant and Pfizer are similarly buying up the rights to once-cheap off-patent drugs and hiking their prices many times over Pharmaceutical giants like Valeant and Pfizer are similarly buying up the rights to once-cheap off-patent drugs and hiking their prices many times over — albeit by less attention-grabbing increments at a time.
The problem is that generic labelling, which once served to make potentially life-saving medications available for just pennies on the dollar, is no longer a guaranteer of a low price.
The designation was intended to allow multiple companies to compete on price to sell the same drug once a developer’s patent had run its course.
But as the pharmaceutical industry has consolidated into a relative few big corporations, the number of manufacturers producing any given drug dwindled — especially for those that treat rarer conditions with less market demand. In turn, prices have crept upwards.
Unlike drugmakers, compounding firms like Imprimis simply repackage FDA-approved active ingredients to fulfill individual patient prescriptions, most often because a needed drug is in short supply or a patient needs a customized dose. That saves the company the trouble of undergoing the Food & Drug Administration’s costly approval process.
The company plans to repeat this same formula for several other generic drugs for which prices have soared, Baum said. He said the decision was fueled by his decades of first-hand experience dealing with patients who are affected by shortages of prescriptions.
But lest you think that the move is some sort of altruistic mission, Baum assures that he expects the company to turn a sizable profit, even at the reduced price.
“All you have to do is let the market work. We’re going to do really, really well and I’m excited about the profit,” Baum said. “We’re just not going to charge what I think are totally absurd prices.”