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What to Do About Turing (And the Others)

In the post just before this one, I’ve outlined the situation with Turing Pharmaceuticals and their strategy of gigantic price increases. As the links there show, however, they’re not alone. Several other companies have the same idea: find a small drug, for a small population, that’s not selling for much, and ram the price up as high as possible immediately. This is a terrible idea.

It’s terrible for several reasons. You have the ethical/humanitarian ones obviously, but I can make a case without even appealing to those arguments – which is good, I’d say, because those sorts of arguments (as correct as they can be at times) rarely seem to make a lot of headway. Here, then, is the more hardheaded case against Martin Shkreli and his ilk.

First off, they are horrendous for the reputation of the entire drug industry. As I’ve said before, critics of “Big Pharma” tend to go on about rapacious, greedy pricing schemes, squeezing patients and insurance companies beyond any human decency, and so on. Well, what do we do when someone comes along who’s actually doing just that? Who’s living the stereotype, exemplifying every cliché about Evil Drug Companies? My fear is that most members of the general public will draw no distinction at all between the likes of Turing Pharmaceuticals and all the other companies with names like “Something-Something Pharmaceuticals” – that is to say, the rest of the industry. Turing’s business model is basically that of a virus, hijacking a lot of existing machinery for its own ends, but no one’s going to see that unless they understand a fair amount about the business, and if there’s one thing I’m sure of, it’s that most people don’t understand much about the drug business at all. A biotech CEO has already sent a note to Adam Feuerstein, pleading with him to make the case the Shkreli and Turing are not representative of the industry. I agree, but how many people are going to listen?

Second, the awful publicity about these pricing strategies runs a serious risk of bringing the entire pricing structure of the industry under much heavier scrutiny and regulation. Martin Shkreli is going around saying that Turing is just a tiny little company, raising prices on a tiny little drug – and although that’s probably true, it doesn’t matter. This sort of thing could be a catalyst for far bigger changes, and many of those would be very unpleasant for the rest of the industry. Do you want to have pricing power for your new drugs? Then you need to police that, because pricing power is not some sort of natural right. It might be one in an ideal free market, but you may have noticed over the years that pharmaceuticals do not trade in any sort of ideal free market. The industry is regulated backwards, forwards, and sideways, and the various governments and government agencies involved (starting, but certainly not ending, with the FDA here in the United States) can do all sorts of things if provoked. And remember, coming down good and hard on the drug companies would, in fact, be politically very popular, and we’re heading into an election year around here.

So what should be done? We need to have more drug companies making loud, prominent public statements about this behavior. (I see others calling for this as well). Where’s PhRMA? Keeping their heads down, as far as I can see, which means (for most people) that “silence gives consent”. I understand being reluctant to talk about drug pricing, for fear of opening up discussions that you don’t want to have, but you know what? Those discussions are already going on, and as they say in politics, if you’re not at the table then you’re on the menu. The industry needs to get out in front of this stuff and make it clear that strategies like Turing’s are regarded as aberrations, misfunctions in the system rather than just sort of larger-than-normal examples of, y’know, business as usual. Is anyone going to do this?

Secondly, there should be calls – not least from industry – for the FDA to re-evaluate how it deals with the loopholes that are being exploited. The regulatory framework for bringing old drugs into modern compliance has had unintended consequences, and it’s time to rethink it. The regulatory framework for taking a drug into closed distribution has had unintended consequences, and it’s time to rethink it. Is anyone going to do this?

Retrophin, Turing, Catalyst, Makena, Valeant and others are warning signs. The way that they’re raising prices with such impunity on drugs that they took no risks on whatsoever is a failure of the system. The rest of us, companies and employees of companies that actually do the work of real drug development, need to step up, loudly and publicly, to distinguish ourselves from these rent-seeking parasites. Otherwise, we shouldn’t be surprised if people treat us as more of the same type. Is anyone going to do this?

Update: it’s not hard, folks. Shkreli practically denounces himself; joining in should be the work of a moment. . .

Update 2: here are some suggestions from John LaMattina.

84 comments on “What to Do About Turing (And the Others)”

  1. Just a guy

    The problem with point 1 is: how much profit is enough? Is a 10% ROI sufficient? 25%, 50%? Who decides that? Pharmaceutical pricing has been an election issue since at least the 90s, and scant progress has been made solving. I’d expect more of the same. Price controls should like a good solution, just be sure to be ready for the blowback when drug companies no longer think that they can profit as much off their R&D, and see what that does to new drug development and pharma employment.

    On #2, what loopholes are being exploited here? Yes, Turing is closing distribution, but a savvy generic company could have had reference standards in storage at a low cost for just such an eventuality. I assume, but don’t know, that there must be a way to still obtain sufficient Daraprim to show bioequivalence. I don’t know that this would so much a loophole as a clever, albeit cynical, exploitation of the rules.

    On #3, Quescor showed the way on this a decade ago, and its founders profited mightily. Until MRK and GILD start selling their drugs at cost, someone will always accuse them of profiteering of the back of the sick.

    1. NAMELESS_HERO in reply to Just a guy

      since government has a ~20% mark for profits on slot machine casino owners I see no reason why the pharmaceutical dep. shouldn’t have the same limit. u don’t want a ~20% mark, go ‘fund-youself’.

  2. Am I Lloyd

    The basic problem with Turing et al. is that they exemplify the very opposite of capitalism – they took little to no risks developing the drugs but they want to reap all the rewards. A win for Turing and others would be a gigantic loss for capitalism itself. Martin Shkreli is turning into the Agent Smith of the capitalist system and his likes need to be silenced. The only question is – where’s (and who’s) our Neo?

  3. Hap

    My question is, why is closed distribution allowed? In most lines of business, you don’t have to sell to anyone, but we have already limited that right in some cases and for some goods (housing discrimination laws, for example). In this case the good is rather heavily regulated (for some reason), and does not bear much resemblance to a free market – you are counting on governments to maintain the market you play in, and to make sure that others who don’t have to play by those rules can’t play here. The bioequivalence rule is imposed from FDA, as a consequence of maintaining that system. There doesn’t seem like a very good reason to keep allowing companies to restrict access to their drugs to avoid complying with these rules. If they don’t wish to sell drugs under such rules (though they sure like making money by those rules), then I’m sure other companies would.

    Lobbying Congress to change the rules governing the FDA to prevent this would likely be a cheaper and politically more palatable to delete people like Shrekeli by the drug business gene pool. You will have to have the price discussion at some point, but this might not be place to have it.

    1. George Xu in reply to Hap

      Shkreli is likely (ab)using the Risk Evaluation and Mitigation Strategy (REMS) program to control distribution (see http://healthaffairs.org/blog/2015/03/24/ensuring-timely-approval-of-generic-drugs/).

      The Retrophin presentation mentioned in this previous post specifically described using this strategy: http://blogs.sciencemag.org/pipeline/archives/2014/09/11/the_most_unconscionable_drug_price_hike_i_have_yet_seen

      US lawmakers have re-introduced a bill (the first version stalled) to stop this loophole by allowing generics co’s to seek damages if HHS-approved requests for the drug are denied: http://blogs.wsj.com/pharmalot/2015/06/23/a-bill-would-prevent-drug-makers-from-frustrating-generic-rivals/

      Maybe the outrage over this incident will help spur legislators to pass some form of this bill.

  4. anon

    Let’s not forget that Turing raised ~ $90 million dollars and reported raising ~$60 M. The difference was never explained by the company.

  5. okemist

    I do get sick to my stomach with stories like this, but you talk about the reputation of pharma being besmirched by this. All pharma big and small has had this issue of greed continuing ad nauseum for years. Its hard to bite the hand that has fed me for so long, and I still believe in the virtues of the business; but some times it is hard to see the ethical difference between pharmaceutical sales and the corner dope dealer who has his hooked clientele showing up daily to replenish their supply. I get the same feeling when I have to pay $400 a month for 15 milligrams of advair, that’s nearly $5,000 a year for almost 2 tenths of a gram? of an off patent medication with a nifty inhaler? Where’s the shock and discuss over the NINE BILLION dollar sales of this formulation?

  6. Dr. Manhattan

    #1 (Just A Guy). Hard to say what is the proper ROI. As you clearly are aware, the sad fact is that 95% of pharmaceutical research leads to no marketable compounds. If we understood more maybe we could bring that number down, but as has been the topic of so many posts on this blog, we are constantly surprised by the failure of compounds to engage with mechanisms we thought we understood well enough. You do want to reward innovation and risk taking, and also need to compensate for the high failure rate inherent at present. One hopes to bring that failure rate down, but it will probably be a very long process. But the fear is real that this could blow up into a political storm of hurricane proportion for the industry, especially with the coming election cycle.

    In the case of Turning, it is pure financial engineering going on with the price setting; no R&D and no risk were involved. The compound is cheap and simple to make. By employing the “closed distribution”, Turing has cut off attempts at fielding a bioequivalent generic. As you point out, one hopes that the compound is in some reference set in a freezer.

  7. anon

    @Dr. Manhattan

    The problem is that even if we all know that research is mostly failure, nobody knows how much money is “lost” in the failed research. I myself would like to know much more about the numbers.

  8. TeddyZ

    How much is too much? http://www.quantumtessera.com/how-much-is-too-much/
    Pharma is EXTRAORDINARILY profitable, and still has decent ROI (as compared to ExxonMobil, for instance).

  9. anon

    My wife was actually in the middle of a high-risk pregnancy when Makena enormously jacked up the price of 17-hydroxyprogestrone. We were fortunate enough to afford the ridiculous cost increase, but many in our clinic couldn’t. Thanks to them, pregnant women at high risk for preterm delivery (like my wife) lost their children at 20-30 weeks (like we did in our first pregnancy, before we knew it could help us) while Makena raked in the cash. Evil somehow doesn’t seem harsh enough to describe these people

    Fortunately, many doctors and pharmacies that we knew of broke the rules and provided this drug cheaply or at no cost. Unfortunately, most of the nurses and doctors we spoke to blamed all of this on Big Evil Pharma, in general, and their desire to make money over helping patients (their probably hiding cures for cancer too!). Thanks Makena! Like we need even more misplaced anger directed at the drug discovery industry.

  10. Not to derail the thread, but linked in my handle is a tweet from one of 2016’s presidential candidates, talking drug prices, using the Shrekli gambit as a hook.

  11. Just a guy

    “Hard to say what is the proper ROI.”

    Therein lies the issue. It’s fine to be against egregious price hikes, and a 5000% increase does seem egregious, but what’s the limit and who decides? I’m sure insurance companies would like to have a say, is it any better letting insurance companies make higher profits? It’s worth recalling Galbraith’s quip about capitalism versus communism.

    There are industries in which the government regulates cost increases, for example taxis: try getting a cab in midtown at 3 pm on a rainy day….

    It’s also not true that Turing took no risk: there’s no guarantee they’ll recoup the money they spent on this drug and they have to worry about genericization. Both of these are substantial risks.

  12. Hap

    However, Turing doesn’t seem to be taking any more risk that any other business in a normal (open) market but wants to make the profit from selling in a more highly regulated market (where the regulations and thus the level of profit are partly determined by the added risk of discovering new products and the high costs of determining their safety and effectiveness in people over other product that do not require such investments).

    If you don’t want play by regulated market rules and expectations, don’t play in a regulated market.

  13. Hap

    I think, ultimately, that it’s Congress’s job to fix this; unfortunately, thanks to Pharma and its sales and (over)marketing departments, it may be better for them politically (particularly my own party) to throw stones and complain about drug pricing than to fix the problem (the ability of companies to close distribution to competitors for bioequivalence studies).

  14. Hap

    Note also that their strategy is specifically to preclude genericization of their drug. The ability of a drug to go generic is one of the key factors in whether people tolerate or don’t the cost of patented/nongeneric drugs. If drugs can be prevented from going generic in this manner, people will be far less tolerant of high drug prices for new and useful drugs, and eventually there won’t be so many. Which will solve the problem, but not helpfully, and not soon.

  15. Brett

    Fixing it seems straightforward – companies should be required to make an out-of-patent-time drug available for bioequivalence and testing. That would put a giant constraint on behavior like this, since jacking up the price drastically would spur generic manufacturers to get involved.

  16. a

    Would be good if Mr. Gates use his deep pocket to make non-profit generic drugs, and fight off Shkreli in court.

  17. David

    What if you said that anyone can do the research and get rights to sell it? Not exactly the same as exclusivity, but incentivises the research, and provides some competition to do said research economically and price reasonably. Seems to me there’s not too much incentive to compete to break an exclusivity under such a plan, unless someone is profiteering excessively.

  18. David

    What if you said that anyone can do the research and get rights to sell it? Not exactly the same as exclusivity, but incentivises the research, and provides some competition to do said research economically and price reasonably. Seems to me there’s not too much incentive to compete to break an exclusivity under such a plan, unless someone is profiteering excessively.

    You also might get some innovation on the production, purity, efficacy end of things too, rather than simply confirming current use in return for profits.

  19. z

    It is not the same as pharma companies at all, but one area in which price increases are infact regulated and held to scrutiny (and thus useful as an example at least) are insurance policies.

    The main issue is that this talk of ROI and such will go back to the commonly discussed topic of: How much does a drug cost to make anyway?

    Insurance companies do have some “R&D” (mostly to improve their models and see what things might help them give better estimates/risk assessment), but it is likely of a very small scale comparatively and could probably just swept up in the basic operating costs.

  20. z

    BTW, I mean every kind of insurance (auto, home, life), not just medical. Some are more regulated than others and differs state to state, but I believe most of them do have “profit margin limits” which from what I recall is often ~5% or under for the standard ones.

    And as it is their business to calculate what their expected costs are, so they can get a pretty accurate ROI for what their premiums are. If nothing unexpected happens at least.

  21. Anoned

    I worked in the pharmaceutical industry for almost 30 years, started in development and moved into research for the last 20 years. Up to about 5-7 years ago I always believed that drug pricing was mostly due to the high failure rate of potential new drugs, development costs and marketing.
    I now think that drug pricing is mostly due to greed and the need to show ever increasing profits. I believe that this pervades the industry today. I don’t know what the solution is, but something needs to be done.

  22. cville townie

    The problem is, basically, it’s turtles all the way down. And the last turtle for generic approval is always going to be the squatter’s FDA authorized product.

    You can order Dara- (nope, I won’t say it) pyrimethamine online from Canada or the UK. If it gets through customs, and many Americans receive drugs every day from legitimate foreign pharmacies, so I assume it well might, then you’re good for $2/tablet. The FDA can also authorize bulk imports if they determine there’s a shortage.

    The problem is proving bioequivalency. The laws authorizing the FDA’s generics program require equivalency to be proven to the original approved drug. Any grey-market imports would just be assumed to be non-equivalent until proven otherwise, and you can’t prove equivalency to something non-equivalent even when at a molecular level it’s the exact same thing. And regardless of if they are possible to import or legal to sell, the bioequivalence studies require the “real thing”, right down to documentation that it was the genuine article and not some knock-off.

    This loophole is big enough to fly a jumbo jet through. Congress needs to either amend the law to make it explicit that the manufacturer is required by law to provide supply for FDA generics trials in all cases (including REMS as well, which I think this is not), at penalty of losing FDA approval to sell entirely, or allow an alternate approach for generics makers to get approval that does not require supply of the original approved drug, or both.

  23. SteveM

    Re: “So what should be done? We need to have more drug companies making loud, prominent public statements about this behavior. (I see others calling for this as well).”

    A couple of comments.

    First of all, Shkreli et al. operate amorally like gangsters. They won’t be shamed into submission by public statements from other drug companies. Shkreli is treating Turing like a classic Mafia bust out. I.e. screw the customers and parasitically milk the company for every cent possible, then just walk away when the con implodes.

    Secondly, other generic manufacturers would be averse from entering a gamed market because they know that the price is artificially inflated. As soon as they entered the market the margins would drop to paper thin levels like most generics. So why bother?

    The simplest solution would be for the federal government to take an inventory of generic demand across all drug classes then bid out to the generic manufacturers to make the drugs at those volumes and contract out a distribution system. Sell them to pharmacies at cost.

    Then no supply or price uncertainty. And the Shkreli parasites would have to find other hapless hosts.

  24. Philip

    Post #26

    @1 (Just a guy): The public is being hurt, even killed (see #11 by anon) by these loopholes. The government created the loopholes, the government should close them, now. For the closed distribution problem, pass a law/rule that says that to be allowed to sell your drug, you must make reasonable quantities available to the FDA, NIH and competitors at the cost to manufacturer. We also need to revisit grandfathered drugs that go through FDA approval. Market exclusivity has turned out to be a great cost, for a small service. I know I will be called a communist or socialist for this, but if it is worth testing a grandfathered drug to insure its safety, let the NIH do it.

    @2 (Lloyd): I just want to point out how correct you are about Turing taking a very small risk. They are not even taking the drug through new testing. They saw a loophole and ran through it. That needs to be stopped.

    @7 (Dr. Manhattan): We do not really have to set a proper ROI. What would be a proper return for Lilly for a drug that stopped the progression of Alzheimer’s? Just get close the loopholes that have produced the trouble and let the market take care of itself.

    @14-16 (Hap) and @17 (Brett): Well said.

    @23 (Anoned): The public and soon the politicians will agree with you that greed is the only thing when it comes to drug pricing. In a free market, margins like some we are seeing should bring on ruinous competition. But as we all know the pharmaceutical industry is not and should not be a free market (Andy may disagree, but what does he know). An unregulated pharmaceutical industry would look too much like snake oil and supplements. I wish I had a solution.

  25. Anon

    Shkreli et al have clearly shown that they have no interest in anything but short-term increases in their own personal bank balance, so why would they care about Pharma’s reputation or sustainability. Let’s not be naive, the only way to stop this is to make and apply laws that make this kind of behaviour illegal. But that’s just never going to happen in the US as extorting money out of desperate patients is considered just normal part of capitalism.

  26. PharmaHeretic

    Have a look at a photo of Martin Shkreli from this article. What do you think?

    http://www.rawstory.com/2015/09/ex-hedge-funder-buys-rights-aids-drug-and-raises-price-from-13-50-to-750-per-pill/

  27. anon

    @PharmaHeretic – Wow, I thought I couldn’t possibly dislike Shkreli more, but that picture… what a d-bag!

    As of now, his Wikipedia entry starts out “Martin Shkreli (born April 1, 1983) is a sociopath, specializing in healthcare …” I’d say that’s accurate!

  28. daveh

    What to do? Find underutilized SJWs and set them on a course to accuse Turing’s suppliers (you all know the names) of aiding the devil. Can’t really be in business without help can they? Finally a use for social media I’ll enjoy.

  29. Ernesto (Palo)

    Rare for me to say: right on, Derek!

  30. ChristianR

    Genentech uses all the tricks in the book to prevent the use of Avastin for macular degeneration, to protect the sale of vastly more expensive Lucentis. That is pure rent-seeking at a scale that dwarfs what Shkreli has been pulling off.

  31. b

    Shkreli probably took all that money and shorted the biotech index. Now he’s just trying to destroy the entire industry so he can profit from that too.

  32. anchor

    I am sure that China and India would use these excuses to make further inroads into breaking patents, flaunt other rules and regulations. And, I see the American people supporting the actions of China, India, Brazil and others and at his rate who can blame them? Impotent congress can do something about it but will not (in the name of free market economy, compettetion and other BS excuses). Besids they all are thinking about their next vacation after working hard on their perpetual recess!

  33. Will

    So, for a 3rd party to bring a generic to market, they have to run clinical trials? Even if the generic is chemically identical to a drug that has already been proven safe & FDA approved?

    Why?

    Surely if they can prove (with external labs, audits, etc) that their drug formulation is chemically identical (NMR, LC-MS should do the job. Relatively trivial analysis to calculate purity & confirm structure – especially with this compound) there is no need to repeat clinical trials?

    1. Barry in reply to Will

      to bring a generic drug to market, you have to show not only chemical identity (easy with small molecules) but also characterize the impurities (also pretty straight-forward) and demonstrate that those impurities are safe (unless they’re identical to the impurities of the approved drug). Then you have to show that your formulation matches the Pharmacokinetics of the approved drug (dissolution rate, absorption into the bloodstream…). It’s all well trodden ground for small-molecules (vastly more complicated for biologicals that have to consider state of aggregation, mis-foldings, alternative phosphorylation patterns…)

  34. CMCguy

    Anoned I have been in the industry about the equal amount of time with my sense being the preeminent of profit driven factors has dominated pharma for much longer being largely was adopted and became the norm during the “greed is good” culture of the 80’s. Perhaps most people in R&D remained sold longer on the concept as legitimate support high drug pricing was justified to overcome “the high failure rate of potential new drugs, development costs and marketing (expenditures)” but IMO appeared the business types in Sales and Marketing plus Corporate Management fully implemented aims to maximize profits over any actual discovery and development of new or improved treatments as the mission. Doubtful we can turn the clocks back due to requirements for ever increasing shareholder value (on a quarterly metric no less) but its still nice to wonder if doing good science as basis for projects might be part of a solution rather than the unfocused restricted efforts common today.

  35. Me

    Would be interesting to see if they buy drug product from GSK still. If they don’t manufacture it themselves then you can just get the product from wherever they source it from to do the BE study. Or do a Phase 2 on a formulation with another drug ( these are used in cocktails).

  36. Eric

    @Will
    For a 3rd party to bring it to market they have to demonstrate that it is bioequivalent. Manufacturing always results in trace amounts of impurities, so defining something ‘chemically identical’ is not easy. Furthermore all of the binders, fillers, etc. that go into making a final drug product can (at least theoretically) have an effect on the plasma concentration. The FDA requires that they demonstrate that they can get the equivalent exposure as the original drug, but there is no need to actually test the efficacy of the drug.
    It’s actually a relatively inexpensive study to conduct (by drug development standards) but if you can’t get access to the original drug, how does one conduct the study? That’s the loophole that Shrkeli is abusing.

  37. Anon7:29 – that’s a different drug, not the Shrekli drug.

  38. James

    Your blog was the first place I turned to in order to get insight on this situation when I first heard of it.

  39. Anonymous BMS Researcher

    That Wikipedia article now says at the top “Editing of this article by new or unregistered users is currently disabled until September 24, 2015, due to vandalism” and the words “Martin Shkreli (born April 1, 1983) is a sociopath, specializing in healthcare …” have been changed back. The article states that his company’s actions are controversial without itself expressing an opinion, per Wikipedia’s Neutral Point of View policy. My own view of the guy is not neutral, but for Wikipedia the neutral tone is correct.

  40. Hap

    They actually did work on Lucentis, though – it’s a Ford vs. Mercury variant, but they made a drug and tested it, two things that Turing probably will never do. There was no guarantee that Avastin would be better or equivalent to Lucentis, or safer. Their pricing sucks, but I’m not sure that anyone can make them sell Lucentis at a price someone will buy, and they aren’t denying Avastin, I don’t think.

    It’s not fair to put Roche in Shrekli’s circle of hell. There’s plenty of room for everyone, unfortunately. The handbasket seems to be rather capacious.

  41. Barry

    Shkreli is just playing the ball as it lies. The incentives were created when the FDA usurped the USPTO’s proper role, offering exclusivity to drugs on which the patents had run out. Might as well blame water for running downhill.There’s always be someone unemcumbered by any moral sense who will play the game as far as the rules allow.

  42. HT

    The pharmas really need to get their act together (read: unified lobbying effort). “Retrophin, Turing, Catalyst, Makena, Valeant and others are warning signs.” NO they are not; they are strangling the goose that’s been laying all the golden eggs for the pharmas. Killing the goose to grab the non-existent eggs is stupid enough, but watching another entity kill your goose and in your face is beyond stupidity.

    Or maybe the pharma executives want to fix the broken US healthcare payer system by sacrificing their jobs and bonuses …

  43. DoctorOcto

    Looks like you finally got your wish Derek

    http://cheezburger.com/8567357952/outrage-of-the-day-hedge-fund-dude-buys-aids-drug-increases-the-price-500-percent-the-internet-aint

    You’ve been pointing at this issue for ages, but all it took in the end was for him to self destruct due to his own greed.

  44. Nick K

    This scandal has even been reported on the other side of the Atlantic in the Guardian:

    http://www.theguardian.com/business/2015/sep/21/entrepreneur-defends-raise-price-daraprim-drug

  45. Anon

    Does anyone know of an Albanian that has done any good for society? Just curious…

    1. Dave in reply to Anon

      Umm….Mother Teresa?

  46. enl

    This behaviour has been seen across a number of markets over the last 20 years (Enron, anyone?) with the excuse of “I took the risk, I deserve the profit”. That holds in a case where risk was actually taken, such as in a new field. The original investors in Apple took a risk. Was there to be enough demand to support sales at a price that would provide ROI in a new market? A new entity entering an established market, or a purchaser of an existing entity in one, takes a lesser risk, but it is still a risk. Their risk is in that they are presuming that they can get additional value from the market. Customer can go to other sources, or do without in many cases, and new players can enter and compete.

    In this case, there is no risk. No development costs. The customers MUST have the product, in general. The market is a monopoly. This is why there are regulations on utilities in exchange for monopoly access to the customers, though in many places in the US these restrictions have relaxed or been removed (again, anyone remember the circumstances that allowed Enron to do what they did?) due to facades that hide the monopoly-in-fact (the local power company still owns the wires and generating, no matter who you mail the check to). In this case, exclusivity means that there can be no other players, even in the fictional way that they have entered the power market.

    I am not a lawyer, I don’t play one on TV, but I would guess that there are existing laws that apply to this very situation that go back well over 100 years in the US.

  47. Ash (Wavefunction)

    Anon: Ferid Murad, Albanian-American Nobel laureate.

  48. Anon

    @Ash (Wavefunction): Thanks, I just needed an example to avoid building up a racist belief that all Albanians are bad.

    I wonder if Ferid Murad would be prepared to speak out against Shkreli …

  49. Anoned

    cville townie and anyone else.
    If anyone is considering buying drugs over the internet, keep in mind that is where many of the counterfeit drugs are marketed. There are many legitimate looking web sites that are frauds.
    If I were going to buy drugs in another country, I would do some research to find a reputable store chain and take a trip. There may still be groups booking trips just for this purpose. Keep in mind the formulations may be different, but that makes little difference for most drugs. Check with the physician who prescribed the drug. But please do not buy anything from some web site that says they are base in Canada or the UK without a lot of verification, not just the word of a friend.

  50. tally ho

    @Shkreli wikipedia – a “sociopath, specializing in healthcare”, now on display in his latest interview with CBS News:

    “Why was it necessary to raise the price of Daraprim so drastically?” CBS News correspondent Don Dahler asked Shkreli.

    “Well, it depends on how you define so drastically. Because 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. Not excessive at all,” Shkreli responded.

    While Shkreli acknowledged that the move might look “greedy,” he said there are “a lot of altruistic properties to it.”

    http://www.cbsnews.com/news/turing-pharmaceuticals-ceo-martin-shkreli-defends-5000-percent-price-hike-on-daraprim-drug/

  51. Anon

    There is already a solution for this, it just needs to be enforced:

    https://en.wikipedia.org/wiki/United_States_antitrust_law

  52. Bill Nichols

    This prick has broken the law (here’s the same Wikipedia link as above
    https://en.wikipedia.org/wiki/Monopoly#Monopolist_shutdown_rule
    scroll down to the paragraph titled, “Law”). He should be charged with monopolistic practices, tried and (if found guilty) punished to the full extent of the law – no plea deals, no time off for good behavior and no leniency. The failure to charge this prick with breaking the law validates his greedy behavior and if he gets away with it, other greedy bastards will follow. Jail seems like a reasonable place for this jerk to spend his time.

  53. ab

    This is a quote from an e-mail Shkreli apparently sent to a former employee’s wife. No joke. Here’s a flavor for the sort of person we’re talking about (and yes, the irony is thick):

    “Your pathetic excuse of a husband needs to get a real job that does not depend on fraud to succeed. … I hope to see you and your four children homeless and will do whatever I can to assure this,” Shkreli allegedly wrote.

    source: http://www.nbcnews.com/business/business-news/controversial-drug-ceo-was-accused-serious-harassment-n431811

  54. Anon

    ^Holy cow! That guy really is psychopathic filth, not that it needed confirming…

  55. anon

    Typo – in “A biotech CEO has already sent a note to Adam Feuerstein, pleading with him to make the case the Shkreli and Turing are not representative of the industry. I agree, but how many people are going to listen?”
    The second “the” should be “that”

  56. Dale

    A representative synthesis of Daraprim is 4 steps. Seems like Merck or some other large company could easily synthesize a ton (literally) of this and distribute it free.

    Such an action would garner enormous ‘good will’ and demonstrate that drug companies are not all demons.

    So who’s willing to step up to the plate?

  57. petros

    For all Shrekli’s comment about pricing and the drug as an Aston Martin, surely the analogy, given the age of the drug, should be charging the price of an Aston Martin for a Model T Ford?

  58. Mucco

    I may be reading this wrong, but this WHO publication (from 2010) seems to suggest that you can buy 1000 25mg tablets for about $4.
    P01BD01 Pyrimethamine
    Page A101: P01BD01 Pyrimethamine

  59. sk

    I wonder if this will generate political impetus to solve two problems with the current incentives for drug development and reduce opportunities for gaming:

    1. Close the closed distribution loophole and require drug companies to provide sufficient amounts of their drug to enable testing for bioequivalence/regulatory approval.

    2. Look seriously at alternatives for incentivizing drug development, such as flexible prizes (such as The Medical Innovation Prize Fund Act proposed by Bernie Sanders) and increased public funding.

    Financial rewards need to be tied to health benefits, not rent seeking through the gaming of govt enforced monopolies.

  60. Rob

    I’ll bet Turing’s new financing is run through their Swiss affiliate at an usurious interest rate therefore moving their profit off shore. I wonder what salary Mr. Shkreli is allocating to the bottom line to further reduce corporate profit? I could manipulate any profit figure needed to justify the 20% profit margin.

  61. Throbert McGee

    Here’s what I don’t get: Despite the “closed distribution” advantage that Turing Pharmaceuticals currently has, it’s not like they’re the only ones in the world who know the recipe for pyrimethamine, the active ingredient in Daraprim. What legally prevents some other company from obtaining a big pile of pyrimethamine from an overseas source, reverse-engineering the formula, and selling it as a generic?

  62. Hi.

    Wow! Lots of comments here. I know this article is a few weeks old now but we are building a community to foster uncensored debate around Turing Pharma and Daraprim. If we can unite the Internet communities we can present a credible force to legislators. This is not spam or stupid money making scheme… just a free central place to help drive change.

    Join up and voice your opinions – http://daraprim.sucks

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