A biotech company founded by a former hedge fund manager recently purchased the rights to a critical anti-parasitic drug and jacked up the price by more than 5,000 percent.
Start-up Turing Pharmaceuticals acquired Daraprim, a drug used to treat toxoplasmosis, in August. Toxoplasmosis is a disease caused by a common parasite that can be deadly, especially for those who are immunosuppressed.
Turing immediately increased the price of Daraprim from $US13.50 per pill to $US750, The New York Times reported.
That has some people expressing concern.
Judith Aberg, the chief of the division of infectious diseases at the Icahn School of Medicine at Mount Sinai, told The New York Times: "This seems to be all profit-driven for somebody … and I just think it’s a very dangerous process."
In an interview with Bloomberg TV’s Betty Liu on Monday, the company’s CEO Martin Shkreli defended the move, explaining that they "need to turn a profit on the drug".
Daraprim, which has been around for 62 years, has had multiple owners. Shkreli said that other companies were "giving it away almost". He added that even at $US750 per tablet, it’s "still underpriced relative to its peers".
It costs very little to make Daraprim, but Shrkeli said there are other costs such as distribution costs that have increased over the years.
He said that they plan to use the money they make from Daraprim for alternative research to make "a better version" of the drug.
In the meantime, he said if someone can’t afford the drug, they will "give it away totally for free".
Shkreli, 31, previously ran now-closed MSMB Capital Management, a healthcare-focused hedge fund. Before that, he did stints at Intrepid Capital and Jim Cramer’s former firm Cramer Berkowitz & Co, according to his LinkedIn profile. He graduated from Baruch College in 2004.
This article was originally published by Business Insider.
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