Ex Hedge-Funder ups price of aids medication by 5,500%

[shauni27]

This is my first time starting a thread on this board, apologies if I missed something on this already (I didn't see one). 

This has been making the rounds on my social media and in the news a bit.  My gut reaction is "what a piece of fucking garbage" but then when I watched the video at the link I felt his points *could* be valid.  But not having a clear understanding of economics or pharmaceuticals/drug manufacturers, I come to you.  Is it as simple as it seems, and is he just an asshole trying to make a profit and spewing propoganda?  Or is it more complex and really he is doing nothing different than a million others and could in fact, as he says, be bettering the way drug companies produce aids medication?

**************************************************************************************************************

www.rawstory.com/2015/09/ex-hedge-funder-who-hiked-aids-pill-cost-by-5500-percent-says-drug-still-underpriced/#.VgB4DKHFjNU.facebook

Appearing on Bloomberg TV, the CEO of a pharmaceutical company that recently hiked the price of a drug used for critically ill infants and AIDS patients by 5,500 percent , defended the price increase by promising better things to come for future patients.

Martin Shkreli, 32, the founder and chief executive of Turing Pharmaceuticals, recently purchased the rights to Daraprim and immediately increased the cost from $13.50 to $750 per pill.

Asked why the huge increase in cost, Shkreli explained that the old companies who owned the drug were “practically giving it away almost,” and he needs to turn a profit.

Noting that the pill sold for $13.50 and the course of treatment “to save your life was only a $1,000,” Shrkeli said he had to make a change.

“We know, these days, in modern pharmaceuticals, cancer drugs can cost $100,000 or more, whereas these drugs can cost a half of a million dollars,” he explained. “Daraprim is still under-priced relative to its peers.”

Asked if the pill really only costs $1 to manufacture, Shkreli agreed and said, “It costs very little to make Daraprim.”

Shkreli then listed off manufacturing, distribution, and FDA costs as well as paying the people “who make it to specifications.”

Pressed even further on the $750 cost per pill, the CEO defended the price by noting how much it brought into the pharmaceutical company annually.

“This drug was making $5 million in revenue,” he said with a smile. “And I don’t think you can find a drug company on this planet that can make money on $5 million in revenue.”

Shkreli stated that the drug is made for a “very very tough disease.”

“It requires a lot of attention and focus. The drug company needs to partner with the patients and make sure that it’s a very cared for community. And that costs a lot of money too,” pointing out that the company also “gives away” the drug for $1 for those who can’t afford it.

Shkreli added: “Patients now have a powerful ally in our company.”

Watch video below from Bloomberg TV:

[scout8]

Well, if you think that his company making a profit is the most important thing, that yes, he has a point. Otherwise, he is just an asshole. From what I understand, he buys drugs from other companies and then jacks up the price to a ridiculous amount to turn a profit.

[escrow]

They have announced they will lower the price after the outrage

[nursewife]

It's unfortunate he needed to be publicly shamed to drop the price. I was reading it's one of the only medications to treat toxoplasmosis. Any decent human wouldn't price gouge just because they have the only treatment. I am biased though. My mom had toxoplasmosis, which resulted in eclampsia. I was born at 26 weeks with many complications as a under 2lb micropreemie. My mom also had 3 brother born earlier due to the same circumstances that didn't make it. I'm assuming that med wasn't around back then, but it makes me mad someone could go through such an awful experience if they didn't have the funds to acquire the medication.

[shauni27]

Right, my initial reaction is "go fuck yourself with a rusty spoon." I wanted to make sure I wasn't simply not seeing the "other" side.

[penguingrrl]

This is the obvious offshoot of having a medical care system predicated on profit. As long as we consider people's health and lives something to be profited off of people will do all they can. And the free market can't and won't step in since nobody is going to refuse to buy lifesaving medicine.

I'm glad that the bad press convinced them to change their minds, but would be unsurprised if instead the price slowly went up so it was less noticable.

[josieposy]

As cocky as this guy has been in his initial responses to the rage, I kinda want Eminem to tell him he sucks. Well I want him to tell him more than that, but I'm simplifying.

[IIOY]

Sept 23, 2015 7:32:43 GMT -5 escrow said:

They have announced they will lower the price after the outrage

www.washingtonpost.com/news/to-your-health/wp/2015/09/22/turing-ceo-martin-shkreli-says-hell-lower-cost-of-drug-previously-hiked-4000-percent-but-would-not-say-by-how-much/

[pescalita]

Besides all the economics of it, this guy is just a tone deaf turdburger too far up his own asshole to realize how much he's fucking shit up. Fucking millenials.

[W.T.Faulkner]

Hope that asshole burns in hell.

[Deleted]

I believe he just got a hard lesson in marketing and PR.

[escrow]

Sept 23, 2015 8:42:18 GMT -5 IIOY said:

Sept 23, 2015 7:32:43 GMT -5 escrow said:

They have announced they will lower the price after the outrage

www.washingtonpost.com/news/to-your-health/wp/2015/09/22/turing-ceo-martin-shkreli-says-hell-lower-cost-of-drug-previously-hiked-4000-percent-but-would-not-say-by-how-much/

Yeah, he's still a grade a douche bag with a smarmy smile

[YeahSure]

Personally, I think he's saying that he will lower it, to take the heat off. If I were a betting person, I would lay odds that it's still going to be an extreme amount. And basically, he's an asshole:


Pharmaceutical Company CEO Defends 5,000% Price Hike of Drug on Twitter

The 32-year-old CEO and founder of a pharmaceutical startup took to Twitter to staunchly defend himself from a barrage of criticism after it was revealed that his company had raised the price of a common medication by 5,000 percent.

Immediately after Turing Pharmaceuticals acquired the rights to the drug Daraprim, a common anti-parasitic drug that is used to prevent malaria and fight infections like toxoplasmosis that can arise from AIDS and cancer, the company hiked the price up from $13.50 to $750 per pill. The company and its CEO Martin Shkreli quickly became the subject of a furious backlash.

Shkreli not only seemed unbothered by the outcry, he appears to be actively enjoying the attention online. Take his reply to one exchange in which he was asked how he manages to sleep at night:





In another response, Shkreli said it was not his fault if people who needed the drug could no longer afford it. He also quoted a lyric from the rapper Eminem about his feelings toward the media. He tweeted more than 125 responses to people calling him out online on Monday after the price increase gained traction over the weekend, noted Tech Crunch, but later deleted many of them.



Shkreli also defended his company's price hike on Bloomberg TV on Monday, insisting that his company "needed to turn a profit on the drug" despite the pill costing less than a dollar to manufacture.

"Its still underpriced compared to its peers," Shkreli added.

A former hedge-fund manager, Shkreli has come under scrutiny in the past for accusations that he attempted to illegally manipulate the prices of drugs made by companies whose stock he was shorting.

[Deleted]

Sept 23, 2015 8:34:48 GMT -5 penguingrrl said:

This is the obvious offshoot of having a medical care system predicated on profit. As long as we consider people's health and lives something to be profited off of people will do all they can. And the free market can't and won't step in since nobody is going to refuse to buy lifesaving medicine.

I'm glad that the bad press convinced them to change their minds, but would be unsurprised if instead the price slowly went up so it was less noticable.

What is the alternative?

[scout8]

A former hedge-fund manager, Shkreli has come under scrutiny in the past for accusations that he attempted to illegally manipulate the prices of drugs made by companies whose stock he was shorting.

How is this not illegal? Why don't we go after these people? This guy gets to walk around freely, but we throw poor people in jail for the most minor transaction. It really is sickening. 

[penguingrrl]

Sept 23, 2015 9:12:30 GMT -5 @adobeclay said:

Sept 23, 2015 8:34:48 GMT -5 penguingrrl said:

This is the obvious offshoot of having a medical care system predicated on profit. As long as we consider people's health and lives something to be profited off of people will do all they can. And the free market can't and won't step in since nobody is going to refuse to buy lifesaving medicine.

I'm glad that the bad press convinced them to change their minds, but would be unsurprised if instead the price slowly went up so it was less noticable.

What is the alternative?

Government regulation to prevent price gouging. Clearly this drug was making enough prior to this price increase, so why should someone be able to increase it like they just did? But then I also think that pharmaceutical CEOs raking in money hand over fist needs to end when it's at the expense of people who are dying for want of their medicine.

[debatethis]

Sept 23, 2015 9:12:30 GMT -5 @adobeclay said:

Sept 23, 2015 8:34:48 GMT -5 penguingrrl said:

This is the obvious offshoot of having a medical care system predicated on profit. As long as we consider people's health and lives something to be profited off of people will do all they can. And the free market can't and won't step in since nobody is going to refuse to buy lifesaving medicine.

I'm glad that the bad press convinced them to change their minds, but would be unsurprised if instead the price slowly went up so it was less noticable.

What is the alternative?

Single payer healthcare with a healthy sprinkling of med pricing regulations a la many other countries. I can't speak to this particular drug but when DH was diagnosed with Hep C and he was prescribed Olysio and Sovaldi, our (very VERY good) insurance repeatedly denied to cover it due to the $280,000 price tag. We seriously looked into traveling to India or Egypt where the entire course of treatment would have been between $900 and $2,700.

[wawa]

Sept 23, 2015 9:29:59 GMT -5 debatethis said:

Sept 23, 2015 9:12:30 GMT -5 @adobeclay said:

What is the alternative?

Single payer healthcare with a healthy sprinkling of med pricing regulations a la many other countries. I can't speak to this particular drug but when DH was diagnosed with Hep C and he was prescribed Olysio and Sovaldi, our (very VERY good) insurance repeatedly denied to cover it due to the $280,000 price tag. We seriously looked into traveling to India or Egypt where the entire course of treatment would have been between $900 and $2,700.

I feel like this would need to come with more direct gov't funding of medical research too though.  Because sure the big pharma dudes are making big bucks, but it is actually a pretty expensive business to run too isn't it?  Labs aren't cheap.  Scientists aren't cheap.  There's a lot of failure until you get a winner.  Etc etc. 

Not that i'm not for that.  I'm all for expanded funding of all kinds of science as well as single payer, so bring it on!

Side note - how long does the patent on a medicine last?  How is there not a generic for this one yet?  The NPR news blurb this AM said it's been around for 62 years.

[penguingrrl]

Sept 23, 2015 9:53:31 GMT -5 wawa said:

Sept 23, 2015 9:29:59 GMT -5 debatethis said:

Single payer healthcare with a healthy sprinkling of med pricing regulations a la many other countries. I can't speak to this particular drug but when DH was diagnosed with Hep C and he was prescribed Olysio and Sovaldi, our (very VERY good) insurance repeatedly denied to cover it due to the $280,000 price tag. We seriously looked into traveling to India or Egypt where the entire course of treatment would have been between $900 and $2,700.

I feel like this would need to come with more direct gov't funding of medical research too though.  Because sure the big pharma dudes are making big bucks, but it is actually a pretty expensive business to run too isn't it?  Labs aren't cheap.  Scientists aren't cheap.  There's a lot of failure until you get a winner.  Etc etc. 

Not that i'm not for that.  I'm all for expanded funding of all kinds of science as well as single payer, so bring it on!

Side note - how long does the patent on a medicine last?  How is there not a generic for this one yet?  The NPR news blurb this AM said it's been around for 62 years.

I'm a damn dirty socialist, so I would love to see the government sponsoring the research into new pharmaceuticals and not have them have CEOs bringing home $50 million a year.. I know that rolled into the cost of new meds is all the costs associated with research that didn't work out on drugs that failed or otherwise didn't make it to market and I know just how expensive that is. But I think there are better ways of finding it that doesn't treat pharmaceuticals as a consumer model when people generally have no say in what they utilize.

[CloudBee]

Sept 23, 2015 9:26:36 GMT -5 @koko said:

I call bullshit. Because this drug effectively treats the issue, is inexpensive to produce, and is widely used with no massive side effects that would create large scale issues.

So there's no fucking need to try and do "more research in how to cure toxoplasmosis" when you already have a cheap, effective cure right the fuck there.

Dickface.

And if there IS a true need to increase research, then diversify your funding. Don't target the one drug which is the most efficient (cost-efficient, too!) as your way to generate funding. Increase the price of all your meds by pennies, instead!

[smylei9]

Sept 23, 2015 9:53:31 GMT -5 wawa said:

Sept 23, 2015 9:29:59 GMT -5 debatethis said:

Single payer healthcare with a healthy sprinkling of med pricing regulations a la many other countries. I can't speak to this particular drug but when DH was diagnosed with Hep C and he was prescribed Olysio and Sovaldi, our (very VERY good) insurance repeatedly denied to cover it due to the $280,000 price tag. We seriously looked into traveling to India or Egypt where the entire course of treatment would have been between $900 and $2,700.

I feel like this would need to come with more direct gov't funding of medical research too though.  Because sure the big pharma dudes are making big bucks, but it is actually a pretty expensive business to run too isn't it?  Labs aren't cheap.  Scientists aren't cheap.  There's a lot of failure until you get a winner.  Etc etc. 

Not that i'm not for that.  I'm all for expanded funding of all kinds of science as well as single payer, so bring it on!

Side note - how long does the patent on a medicine last?  How is there not a generic for this one yet?  The NPR news blurb this AM said it's been around for 62 years.

The patent on pharmaceutical products lasts about 20 years. It takes years for a drug to come to market so generally it is promoted 7-12 years before the patent expires. This drug is generic and has been for years but no one is making a generic version because it isn't profitable enough. Generic companies generally only swoop in and made versions of blockbuster drugs. When this product was sold in 2010, it was making the original company about $670,000 a year. That's not enough profit for a company to set up a whole production line to make a generic version.

[debatethis]

Sept 23, 2015 10:00:40 GMT -5 penguingrrl said:

Sept 23, 2015 9:53:31 GMT -5 wawa said:

I feel like this would need to come with more direct gov't funding of medical research too though.  Because sure the big pharma dudes are making big bucks, but it is actually a pretty expensive business to run too isn't it?  Labs aren't cheap.  Scientists aren't cheap.  There's a lot of failure until you get a winner.  Etc etc. 

Not that i'm not for that.  I'm all for expanded funding of all kinds of science as well as single payer, so bring it on!

Side note - how long does the patent on a medicine last?  How is there not a generic for this one yet?  The NPR news blurb this AM said it's been around for 62 years.

I'm a damn dirty socialist, so I would love to see the government sponsoring the research into new pharmaceuticals and not have them have CEOs bringing home $50 million a year.. I know that rolled into the cost of new meds is all the costs associated with research that didn't work out on drugs that failed or otherwise didn't make it to market and I know just how expensive that is. But I think there are better ways of finding it that doesn't treat pharmaceuticals as a consumer model when people generally have no say in what they utilize.

Yep. And, frankly, pharma and med devices companies are growing in highly regulated socialist countries on par with their growth in the US, so you can't tell me we need a completely unfettered capitalistic system in order to promote R&D of new drugs.

[05heel]

Sept 23, 2015 12:21:07 GMT -5 debatethis said:

Sept 23, 2015 10:00:40 GMT -5 penguingrrl said:

I'm a damn dirty socialist, so I would love to see the government sponsoring the research into new pharmaceuticals and not have them have CEOs bringing home $50 million a year.. I know that rolled into the cost of new meds is all the costs associated with research that didn't work out on drugs that failed or otherwise didn't make it to market and I know just how expensive that is. But I think there are better ways of finding it that doesn't treat pharmaceuticals as a consumer model when people generally have no say in what they utilize.

Yep. And, frankly, pharma and med devices companies are growing in highly regulated socialist countries on par with their growth in the US, so you can't tell me we need a completely unfettered capitalistic system in order to promote R&D of new drugs.

This is true, but the growth in regulated countries is largely due to the revenue generated in the US or unregulated, developing countries.  They can maintain their low costs on the backs of US consumers/insurers who pay through the nose.  And what makes it more complicated is that the regulated countries (specifically the EU) can promote with abandon, while the US promotional landscape is unreasonably restrictive.  There's no easy answer, but in my opinion, the FDA actually drives a lot of the costs of doing pharmaceutical business in the US. 

[downtoearth]

Sept 23, 2015 12:30:21 GMT -5 05heel said:

Sept 23, 2015 12:21:07 GMT -5 debatethis said:

Yep. And, frankly, pharma and med devices companies are growing in highly regulated socialist countries on par with their growth in the US, so you can't tell me we need a completely unfettered capitalistic system in order to promote R&D of new drugs.

This is true, but the growth in regulated countries is largely due to the revenue generated in the US or unregulated, developing countries.  They can maintain their low costs on the backs of US consumers/insurers who pay through the nose.  And what makes it more complicated is that the regulated countries (specifically the EU) can promote with abandon, while the US promotional landscape is unreasonably restrictive.  There's no easy answer, but in my opinion, the FDA actually drives a lot of the costs of doing pharmaceutical business in the US. 

So are you saying the required paperwork for FDA approval is the driving cost?  How does that come into play here?

I agree that the driving cost for R&D and human health studies is always higher at first and that sometimes drug lines or research is avoided in the profit-based companies based on this.  (And luckily we have non-profits raising money and medical researchers with grants that hopefully fill in some of the research that is theoretical and more intensive and not cost-efficient.)  However, in this particular case of Turing Pharmaceuticals purchase, the R&D is done, the patent is reviewed/up, the upfront costs were done. The regulations did not have anything to do with the increased cost of this particular drug - it was a market/profit decision based on the purchasing of a relatively cheap drug line that was already developed and gouging customers.  Now it's time for the another branch to review him... something like the Consumer financial protection bureau, IMO, should have some jurisdiction here and in the health care insurance world.

[05heel]

Sept 23, 2015 12:50:19 GMT -5 downtoearth said:

Sept 23, 2015 12:30:21 GMT -5 05heel said:

This is true, but the growth in regulated countries is largely due to the revenue generated in the US or unregulated, developing countries.  They can maintain their low costs on the backs of US consumers/insurers who pay through the nose.  And what makes it more complicated is that the regulated countries (specifically the EU) can promote with abandon, while the US promotional landscape is unreasonably restrictive.  There's no easy answer, but in my opinion, the FDA actually drives a lot of the costs of doing pharmaceutical business in the US. 

So are you saying the required paperwork for FDA approval is the driving cost?  How does that come into play here?

I agree that the driving cost for R&D and human health studies is always higher at first and that sometimes drug lines or research is avoided in the profit-based companies based on this.  (And luckily we have non-profits raising money and medical researchers with grants that hopefully fill in some of the research that is theoretical and more intensive and not cost-efficient.)  However, in this particular case of Turing Pharmaceuticals purchase, the R&D is done, the patent is reviewed/up, the upfront costs were done. The regulations did not have anything to do with the increased cost of this particular drug - it was a market/profit decision based on the purchasing of a relatively cheap drug line that was already developed and gouging customers.  Now it's time for the another branch to review him... something like the Consumer financial protection bureau, IMO, should have some jurisdiction here and in the health care insurance world.

I'm saying that the entire regulatory framework of the FDA drives a lot of R&D costs in the US.  The filing fees are large, but a small proportion in the grand scheme of things.  The studies required to get approval are unwieldy and unnecessarily expensive.  Now the FDA has alternative processes to allow to speed up or simplify approval for important medications that may have limited use, which were unfortunately exploited in this case.  But it happens all the time.  This is a particularly egregious case, but this is exactly how things are done.