Chances are, you remember the public outcry and backlash last fall when Martin Shkreli, a hedge fund co-founder and former CEO of biotech firm Retrophin, made a decision to raise the price of a life-saving drug called Daraprim overnight by over 4,000 percent, resulting in an astronomical price of $750 per pill.
Recently, a group of high school students in Sydney, Australia decided to prove a point by demonstrating that the drug itself can be manufactured much more cheaply than Shkreli’s price hike would suggest. The eleventh-grade students successfully synthesized Daraprim for a cost of approximately $2 per pill. This was carried out with help from Dr. Alice Williamson, a postdoctoral teaching fellow in the chemistry department at the University of Sydney.
The students, working with Williamson and their high school science teachers, obtained the recipe for Daraprim from a publicly available patent. During the process, they published their progress online, gaining feedback from other members of the scientific community. They were also able to create a highly pure sample of the drug, which is difficult to do. This exercise served to underscore the fact that ultimately, Daraprim is not particularly expensive to produce, in and of itself.
The Daraprim Controversy
Daraprim (pyrimethamine) has actually been available for over sixty years. Used to treat toxoplasmosis and cystoisosporiasis, as well as formerly used for malaria, the drug inhibits an enzyme called dihydrofolate reductase. This inhibits the production of tetrahydrofolic acid, a necessary component for DNA and RNA synthesis in many species of protozoa.
Daraprim was originally developed in the early 1950s by Nobel Prize winner Gertrude Elion at Burroughs-Wellcome, a pharmaceutical company that was later bought out by GlaxoSmithKline. Much more recently, in 2010, GlaxoSmithKline sold the marketing rights for the drug to a different company, CorePharma. That was the first of several times the rights would change hands. In 2014, CorePharma was acquired by yet another company, Impax Laboratories. Then, in 2015, the rights were bought again by Turing Pharmaceuticals. It was after this acquisition that the price hike occurred, raising the cost per pill in the United States from a modest $13.50 per pill to $750.
In Australia, where the high schoolers successfully synthesized pyrimethamine, the drug is priced at $13 per pill. The students’ achievement demonstrates that there is little reason for Daraprim to be exhorbitantly expensive, other than profit motives.
Martin Shkreli Reacts
Once the story of the students’ success became public, it quickly took off on Twitter. There, many people tweeted at Martin Shkreli directly, who had already been blasted on Twitter in the past over his decision about the price hike. Shkreli’s responses included things like “learning synthesis isn’t innovation,” and “almost any drug can be made at a small scale for a low price.”
Naturally, due to the ownership of the rights, the students would never be able to sell the drug in the United States. That was never the intention, anyway.
So Why Would Shkreli Raise the Price of Daraprim in the First Place?
Martin Shkreli’s tweets during the controversy in Fall 2015 definitely made him look like a bit of a jerk. But it feels like something is missing here. Surely, there was some reason for raising the price, beyond a callous obsession with profit margins.
The problem with the price hike is that it would bring the cost of treatment up to hundreds of thousands of dollars per year for patients with toxoplasmosis. This kind of cost isn’t really sustainable for the healthcare system. $300,000 isn’t the kind of money people have lying around.
According to a spokesperson for Turing Pharmaceuticals, the rationale behind the price hike was to raise prices so that the extra money would fund further research into toxoplasmosis, which is a relatively common food-borne disease that’s prevalent among immunocompromised patients.
Via Twitter, Shkreli justified the decision to John Carroll, the editor-in-chief of online publication Fierce Biotech: “It’s a great business decision that benefits all our stakeholders. I don’t expect the likes of you to process that.” (Again, Shkreli doesn’t say things that make himself look good on Twitter.)
Turing Pharmaceuticals isn’t the only company that’s drawn criticism for raising drug prices. It’s a fairly common practice for these companies to purchase older drugs for relatively uncommon diseases, then raise the price on them. Arguably, the big mistake that Shkreli made was instating a massive price hike that took place overnight. It’s no wonder that it attracted attention.
Despite Turing’s argument in favor of the price increase, it appears that it’s difficult to really justify. Perhaps profit really is the motive at play here — at least, Shkreli’s not-so-self-aware tweets would indicate that.