Following his arrest on charges of fraud, Martin Shkreli is no longer the CEO of Turing Pharmaceuticals. The infamous man behind the 5000% price hike of the life-saving drug Daraprim was taken into custody in New York following security fraud charges related to previously owned hedge funds and Retrophin Inc. drug company.
Even though Martin Shkreli has become the perfect image of everything wrong with the current pharmaceutical market, his move of finding old drugs, buying the production company, and hiking prices, is not a new one. In fact, more and more companies are starting to view this as a viable strategy.
The company Valeant has made a similar moved under the guidance of its CEO, Mike Pearson, earlier this year. After attaining the ownership of two heart-related drugs, named Isuprel and Nitropress, the company raised their price by 525% and 212% respectively. Even though this pales in comparisons to Shkreli’s hike from $13.50 a pill to a staggering $750, it still hints at the birth of a growing trend.
In order to distance his public image from Turing’s as of now former CEO, Martin Shkreli, Pearson claimed that his company does not support a comparison to the aforementioned company due to the fact that it is not reliant on the production of a single drug. After a steady increase in criticisms towards the company, the CEO of Valeant stated that this type of business practice will not become a common one. Even so, he still criticized Big Pharma companies’ direction towards increased funds for research instead of focusing on drug profitability.
Rodelis is another example of this trend, boosting prices for a tuberculosis treatment from $20 to $360. The company claimed that by September it would release the rights for the drug in question, using the profits gained for medicine research along the line. Following a public outcry, the company kept its word and released the drug rights to the non-profit Purdue Research Foundation.
Another older example is the Questcor Pharmaceuticals fiasco that took place between 2005 and 2008. Claiming that it was simply attempting to make the H.P. Acthar drug profitable once again, the company hiked prices by almost 2900%, raising it from $1.235 per vial to the incredibly hefty sum of $29.086. The CEO behind this move, Mallinckrodt, said that this hike was in terms with inflation, be it on the line or below it, even if the public outcry stated otherwise.
Both Valeant and Turing came under the fire of the Pharmaceutical Research and Manufacturers of America lobby group which claimed that the two companies’ business practices were more akin to a hedge fund, not a real and innovative drug company. Turing claimed that their price hike was something common in the drug market while Valeant said that research and development are deemed moot when compared to the amount of drugs brought to the market.
Even if Martin Shkreli is no longer the CEO of Turing Pharmaceuticals, a survey released by the DRX unit of Connecture Inc. showed that from 21.000 types of drugs, almost 3.600 have doubled their price, some of them suffering an even greater increase, since 2007. This is extremely unfortunate, considering that most of these drugs are related to chemotherapy or other life-saving treatments. Some people think that people like Martin Shkreli and Mike Pearson should be brought to justice when they decide to adopt a business strategy that is extremely detrimental to the general public.