US drug firm raises price of Aids drug by 5,000%

Martin Shkreli, the CEO of Turing Pharmaceuticals. Picture: Facebook
Martin Shkreli, the CEO of Turing Pharmaceuticals. Picture: Facebook
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THE chief executive of a US pharmaceutical firm has sparked outrage after increasing the price of an Aids treatment drug from $13.50 to $750 virtually overnight.

Drugmaker Turing Pharmaceuticals hiked the price of a 53-year-old drug for a potentially deadly parasitic infection by more than 5,000 per cent. The price increase on Daraprim, which treats patients with compromised immune systems, was censured by medical groups representing doctors who care for patients with HIV and other infectious diseases.

The Turing decision, which has coincided with a mjor slump in biotech stock in the US, is the latest - though perhaps most outrageous - example of sky-high prices for newly launched drugs.

Insurance companies, politicians, advocates for patients and other critics have been blasting those prices as outrageous and unsustainable for the health care system, not to mention patients who sometimes must pay up to 30 percent of the cost.

In the case of Turing’s Daraprim, the company obtained rights to sell the drug – the only US-approved treatment for toxoplasmosis – in August and hiked the price overnight. The company, run by a former hedge fund manager named Martin Shkreli, said they hoped to improve drug’s formulation and develop new, better drugs for the infection. It also stressed that some patients can get financial aid from the company to obtain the drug.

Biotech analyst Steve Brozak, president of WBB Securities, said that because of the furore over Turing’s action, pharmaceutical and biotech drugmakers will have to defend themselves “against the coming onslaught.”

“I don’t think Turing has a defense,” Brozak said, adding, “As long as this is debated, nothing good for the biotech industry and biotech investors can happen.”

Clinton’s chief rival for the Democratic nomination, Bernie Sanders, has been railing about high drug prices for about a year and recently reintroduced legislation that would enable the Medicaid program to get lower prices for some drugs and allow US residents to buy cheaper drugs from Canada.

Trade groups representing pharmaceutical and biotech companies oppose letting Americans buy drugs overseas and have repeatedly said in the past couple of years that price controls would limit the amount of money their companies can spend on research, limiting the number of new drugs developed.