Turing Pharmaceuticals paid Impax Laboratories $55 million for the U.S. rights to pyrimethamine, also known as Daraprim, a marketed drug used to treat a parasitic infection called toxoplasmosis and some cases of malaria. This drug is for certain AIDS patients a critical component of their care.
After acquiring the rights to the drug, Turing then raised the price of Daraprim from $13.50 per pill to $750 per pill. That will make acquiring the drug cost prohibitive for some people with HIV/AIDS. In response to the concerns over access, Turning issued a press release indicating that they have resolved any access problems for individuals and hospitals.
OAC will be monitoring this to determine what impact the price change has on managed care and OHDAP formularies.
Turing Pharmaceuticals was just started in February 2015 by a hedge fund operator with a $90 million dollar Series A funding from venture capitalists. One report in xconomy.com stated the following about the startup:
“Turing, a startup with offices in New York City and Zurich, Switzerland, closed a $90 million Series A this morning. The funding was led by Shkreli, Turing’s founder and CEO, and included several other unnamed ‘preeminent institutional equity investors,’ according to a statement. Turing also took on some senior secured debt, though it didn’t specify how much.
Most young biotech startups don’t take on debt; the road to generating the revenue needed to pay off loans in life sciences can be several years long and fraught with failure.”
This commentary provides an interesting perspective on the impact the pricing has on insurance premiums for everyone. Only time will tell whether the price change was actually for development of new drug therapies, or for stockholders and debt erasure. OAC will be monitoring that as well.