Turing Daraprim Price Hike Follows a Precedent

SEPTEMBER 22, 2015
Allison Gilchrist, Associate Editor, and Katie Eder, Senior Editor
Old drugs with new price hikes add another dimension to the national drug pricing debate.
Sometimes, drug price increases can be attributed to raw material shortages, but other times, the hikes are just a business strategy executed under claims that the drugs were undervalued to begin with.
Whatever the reason, the public has taken notice of the trend, especially in the wake of Turing Pharmaceuticals increasing the price of the 62-year-old drug Daraprim 5000% overnight under the latter motive.
At 10:56 a.m. yesterday, Democratic presidential hopeful Hillary Clinton tweeted, “Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”
Clinton’s proposal aims to lower drug costs by reducing pharmaceutical industry tax breaks and mandating certain levels of research spending, Bloomberg reported today.
Specific provisions of her plan include:
  • Enacting a $250 per month ($3000 per year) cap on patients’ out-of-pocket spending for prescription drugs.
  • Reducing the sales exclusivity period for biotech drugs to 7 years from the current 12 years.
  • Banning pharmaceutical companies from writing off drug advertising spending as a business expense.
  • Allowing Medicare to negotiate drug prices with manufacturers—a right already afforded to both Medicaid and the US Department of Veterans Affairs.
In the meantime, Daraprim joins the following list of steep price hikes seen after drug acquisitions:
1. Pyrimethamine (Daraprim)
In August, Turing Pharma purchased the rights to Daraprim, the decades-old standard of care drug for life-threatening toxoplasmosis that is also a co-treatment for HIV and malaria.
Following the drug acquisition, the price per tablet of Daraprim promptly leaped from $13.50 one day to $750 the next.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing calling this price increase “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.”
Turing CEO Martin Shkreli told CBS News that the Daraprim price hike was “not excessive at all.”
“…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,” Shkreli claimed.