Get ready for some twists and turns here. I wrote back in September about the business model of Retrophin, a company whose plans (at least for the foreseeable future) were to find small-market drugs, buy them from their obscure producers, and then raise their prices into geosynchronous orbit. That particular story blew up in unforeseen ways, capped by the company’s CEO, Martin Shkreli, making a bizarre appearance on a public forum (Reddit), which was of a piece along with his often ill-advised activity on Twitter. Shkreli was ousted by Retrophin’s board a few weeks later, amid accusations of stock-trading irregularities.
He went on to form Turing Pharmaceuticals, whose business plan, by contrast, was (at least at first) to find some small-market drugs, buy them from their obscure producers, and raise their prices into geosynchronous orbit. As reported here by Adam Feuerstein, his first target was praziquantel (Biltricide), the antihelmenthic made by Bayer:
Shkreli is negotiating with the German drug giant Bayer to purchase marketing rights to Biltricide, a drug used to treat infections caused by worm-like parasites called liver flukes. A course of treatment with Biltricide typically involves taking six to nine pills in a single day and costs around $100.
If Shkreli acquires Biltricide from Bayer, he plans to raise the price of the drug to $100,000 for a single-day course of treatment, according to people briefed on Turing’s business plans. No other changes or improvements to the drug will be made by Turing. The extra revenue generated by Biltricide is expected to earn Turing a fast profit for its investors and help defray the cost of developing other, experimental drugs, sources said.
But that sale seems to have fallen through. Bayer is not an obscure producer, as opposed to the former manufacturers of Thiola (the drug I wrote about last September), and when Shkreli’s interest alerted them to the drug’s potential for a price raise, they decided to just do that on their own. Effective earlier this month, they raised the wholesale price by 3.5x, apparently because insurance providers won’t care much about such a low-volume drug. That (as Feuerstein pointed out on his on Twitter feed) is at least far less than what Turing planned. (The Thiola price hike was 20x).
But even that price increase by itself is still not the sort of thing that I (or anyone else) would like to see. As mentioned in my second Thiola post, pricing power is a weapon, for sure, but it’s one that if you keep using indiscriminately can be taken away. “Not many people will notice” is not much of a good reason to unsheath it, either.
Praziquantel itself is not in the same category as Thiola, as far as I can see, where there really does seem to have been just one supplier. Several foreign generic suppliers make the compound, and Merck Serono has a long-standing donation program in Africa. So this one is not putting on the screws as hard, not that that’s an excuse.