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Drug Company Increases Cost Of Daraprim By 5455%

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http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?ref=business&_r=0

Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.

The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

“What is it that they are doing differently that has led to this dramatic increase?” said Dr. Judith Aberg, the chief of the division of infectious diseases at the Icahn School of Medicine at Mount Sinai. She said the price increase could force hospitals to use “alternative therapies that may not have the same efficacy.”

Turing’s price increase is not an isolated example. While most of the attention on pharmaceutical prices has been on new drugs for diseases like cancer, hepatitis C and high cholesterol, there is also growing concern about huge price increases on older drugs, some of them generic, that have long been mainstays of treatment.

Now that's a price spike to boost GDP!

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How can they actually do that? There's a 20 year time limit on copyright on drugs. Unless there's something strange going on then there's nothing stopping someone else making it for cheaper.

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I was reading about this earlier, and some of these generics were produced by single a manufacturer for a relatively low cost/markup. What seems top have happened is that an opportunistic chancer has bought the rights, in the knowledge that there isn't a competitor in the US who has the FDA approval to create & sell the drug - so they have, at least temporarily, got a free run on it and they can charge what they like. If a competitor springs up, then the chancer can just reduce their price to the old level immediately, so for this reason there isn't a lot of motivation to compete. Sounds like a really screwy situation and it doesn't surprise me in the least that this venture was started by an ex hedge fund manager.

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That's the finance industry for you.

Presumably the previous manufacturers were using a cost-plus pricing strategy, and he thinks in value pricing...

So Mr hedge fund saw an arbitrage where the market would bear a much greater price than was currently charged, and he was in a position to take control of the company.

But I'm rather hoping that he doesn't actually understand the industry as the drug seems generic - so someone else should come in now and undercut him. Doesn't help the staff who might have their jobs at risk, though.

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But I'm rather hoping that he doesn't actually understand the industry as the drug seems generic - so someone else should come in now and undercut him. Doesn't help the staff who might have their jobs at risk, though.

He understands all too well, and knows that any potential competitor needs to go through a lengthy FDA approval process before they can start competing, at which point he just drops the price back down - and he makes sure potential competitors know that that is what he will do. Hopefully the US will just authorise a massive shipment from India and put a stop to it.

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This is the most conclusive proof that capitalism is broken. If drug research and development was treated the same way as other scientific research then we wouldn't be taking a load of prescription drugs that weren't very effective and made other conditions worse requiring more drugs. My asthma drugs are fantastic and have kept me alive but there's a whole load of dross out there e.g. there is no evidence that statins do anything other than lower your cholesterol (i.e. that reducing cholesterol levels by themselves is actually beneficial) - they have not been proven to reduce mortality in women and in men it is thought that they only do so due to their anti-inflammatory properties.

I don't believe that a lot of charities are doing the best that they can either. They're corporate bodies who's CEOs and other chief officers make a load of money and if the charities actually solved the problem they are supposed to then they would be putting themselves out of business.

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The Woodford fund GSK, AZN, and two tobacco producers are the top 4 holdings. - All four produce "drugs", except two are to benefit, and the other two are for recreational use.

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I heard a similar argument propounded about the police not being interested in fighting crime. If they were successful in reducing crime then they would be making themselves redundant, there would be job cuts, less opportunities for promotion and so on. Having said that I'm sure there are many involved in the pharmaceutical industry that have the highest ethical and moral ideals and do try to improve our lives.

Its not a failure of capitalism at all, more a sad reflection of human nature.

Incidentally I just googled the drug and Chemist Direct in the UK are advertising it at £0.56 per 25mg tablet.

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Meet the most despised man in the world: Global outrage as 32-year-old ex-hedge funder buys rights to AIDS drug and promptly raises price overnight by 5500% - from $13.50 to $750.00 per pill
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Martin Shkreli, 32, founder and chief executive of Turing Pharmaceuticals, purchased the rights to Daraprim which is used for treating life-threatening parasitic infections - for $55million. He raised the price of the drug form $13.50 per tablet to $750 per tablet. Since the announcement, people across social media have criticized the price increase, but Shkreli has backed the decision, saying that his company 'needed to turn a profit on the drug'.

I presume the drug for the previous owners was profitable?

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http://www.independent.co.uk/news/people/martin-shkreli-most-hated-man-on-the-internet-breaks-pledge-to-lower-cost-of-hiv-treating-drug-a6750291.html

Martin Shkreli, the man dubbed ‘the most hated on the internet’, has maintained the 5,000 per cent inflated price of HIV-treating drugs despite pledging to lower it after international outcry.

The CEO of Turing Pharmaceuticals bought the rights to Daraprim, a drug used to treat those with weakened immune systems caused by illnesses like HIV. He then hiked up the price of the drug by 5,000 per cent from $13.50 per pill to $750.

After being widely criticised by medical groups, health experts and presidential hopefuls on both political sides, the 32-year-old vowed to lower the cost of the pills but did not specify what this cost would be.

It has now emerged that Turing Pharmaceuticals will not lower the drug as it wouldn’t “translate into a benefit for patients”.

Instead, the company have said they will reduce the price for hospitals by up to 50 per cent.

Cutting the price by 50%......

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http://www.independent.co.uk/news/world/americas/martin-shkreli-the-most-hated-man-in-america-is-raising-the-price-of-another-form-of-drug-a6770661.html

The man who increased the cost of an effective HIV drug by 5,500 per cent has now increased the price of another form of medicine.

Martin Shkreli has now increased the price of a medicine used to treat Chagas disease, a parasitic infection that can cause heart failure.

Mr Shkreli’s company, Turing Pharmacuticals, previously acquired the rights to the anti-HIV drug, Daraprim, before increasing the price from $13.50 to $700.

This time Mr Shkreli has bought a majority share in KaloBios Pharmaceuticals, allowing him to apply for exclusive selling rights to KaloBios’ benznidazole, a common drug used to treat Chigas in South America, where it is very prevelant.

It is reported by the New York Times that benznidazole currently costs between $50 to $100 for two months worth of treatment.

However the New York Times believe that the cost could soon be similar to that of a hepatitis C drug, which costs anywhere between $60,000 and $100,000 per course of treatment.

It is estimated 300,000 in the United States have Chagas disease.

It seems he's found a way to print money.

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