A drugs firm defends raising the price of life-saving HIV medication by a mere 5,000%

Are the price hikes justified?
Are the price hikes justified?
Image: Reuters/Regis Duvignau
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A small pharmaceuticals company, Turing, bought the exclusive rights to market the HIV drug Daraprim and then proceeded to increase the price of the live-saving drug by 5,000% almost immediately. Turing raised the price of Daraprim from $13.50 per pill to $750.

As the New York Times points out, Turing isn’t the first company to quickly increase the prices for an older drug after acquiring it from another company. But that hasn’t stopped some from describing the CEO, Martin Shkreli, as “big pharmas biggest asshole.”

Not that Shkreli is sheepish about the decision, quoting Eminem in response to his critics.

Shkreli has defended himself on multiple outlets. “We needed to turn a profit on this drug,” he told Bloomberg. “The companies before us were just giving it away, almost. Daraprim is still underpriced, relative to its peers.” He added that he would never deny someone treatment over their ability to pay.

Daraprim has been the standard medication for the food-borne illness, toxoplasmosis, since 1953. The disease predominately affects those with weakened immune systems, including patients with HIV and AIDS.  In a statement on its website, Turing claims to want to increase awareness of toxoplasmosis and fund research for “next-generation treatments.”

New drug companies that start off small often raise funds from venture capitalists looking to invest in biotechnology early on in hopes of getting a huge payoff several years later. The returns for these investments are high risk, so developers invest a range of different drugs to get the best possible return. While the vast majority of VC funding goes towards developing novel drugs, there has been a notable shift in companies developing specialty drugs for rare diseases and buying older drugs, then hiking up the price.

The Tufts Center for the Study of Drug Development estimates it costs pharmaceutical companies $2.6 billion to develop a new drug—but critics argue that Daraprim had already undergone several years of research and development by its inventor, so there is no justification for the price hike.

In an open letter, the HIV Medicine Association and the Infectious Diseases Society of America wrote: “This cost is unjustifiable for the medically vulnerable patient population in need of this medication and unsustainable for the health care system.”

The price for prescription drugs has even become a campaign issue for Democratic presidential candidates. Bernie Sanders has introduced a bill to “lower soaring drug prices” and Hillary Clinton has weighed in:

Quartz has reached out to Turing for comment and will update this post with any response.