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 Shkreli was arrested on Thursday for engaging in what U.S.
prosecutors said was a Ponzi-like scheme at his former hedge fund
and a pharmaceutical company he previously headed. Turing officials
did not respond to multiple requests for comment on the company's
future plans regarding Shkreli or its drug distribution.
Leading pharmacy chain Walgreens Boots Alliance Inc <WBA.O>,
currently the exclusive U.S. supplier of Daraprim, said it has
inventory of the drug, which has a list price of $750 per dose. But
growing public backlash against that price has resulted in the entry
of new competitors - compounding pharmacies able to produce similar
versions for a fraction of the cost.
CVS Health Corp, the No. 2 U.S. drug benefit manager, told Reuters
on Thursday it can provide an alternative to Daraprim that is
compounded by Avella Specialty Pharmacy, at a price of $30 per 30
pills. The 62-year-old treatment is used to fight parasitic
infections in AIDS patients, pregnant women and others.
The CVS arrangement is similar to one between Imprimis
Pharmaceuticals Inc, a compounding pharmacy based in San Diego, and
Express Scripts Holdings Inc, the largest U.S. manager of
prescription drug plans, to offer lower-cost pyrimethamine, the
generic version of Daraprim.
Compounding pharmacies operate differently from drug manufacturers
whose treatments must be approved by the U.S. Food and Drug
Administration for mass sale. Instead, such pharmacies can prepare
medications only for individual patients once they have a
prescription, and must comply with state and federal regulations.
Meanwhile, several major medical groups have started to urge doctors
to seek out such lower-cost alternatives to Daraprim, providing
detailed instructions on how to do so. Walgreens said in an emailed
statement that it has "urged Turing to expand the number of
specialty pharmacies to promote greater access, and it is our
understanding that they will be doing so in the near future." Turing
officials could not be reached for comment.
Turing, founded by Shkreli early this year, has made front-page
headlines since it bought the rights to Daraprim in August for $55
million from Impax Laboratories Inc. With no rival manufacturers
making the drug, Turing quickly raised the price for a tablet of
Daraprim to $750 from $13.50.
The move sparked widespread criticism - first by medical groups such
as the Infectious Diseases Society of America and the HIV Medicine
Association, followed by presidential candidates Hillary Clinton,
Bernie Sanders, and Donald Trump.
Overnight, the tiny company was vilified as an example of
pharmaceutical industry greed, an accusation also leveled at much
bigger players like Gilead Sciences Inc and Valeant Pharmaceuticals
International Inc.
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Turing said last month that it would not change the list price of
Daraprim, but would offer the drug to hospitals at a discount of up
to 50 percent.
"We don't have any reason to believe that the allegations of an
investment Ponzi scheme by Turing's CEO will encumber production of
Daraprim," a spokesman for Kaiser Foundation Health Plan said in an
emailed statement. "However, we are still waiting to see proof of
Mr. Shkreli's promise to reduce the price of this needed generic
drug." Shkreli, who began his career working for various hedge
funds, in 2008 formed a partnership to launch MSMB Capital
Management, which became known for filing requests to the Food and
Drug Administration to reject products developed by Navidea
Biopharmaceuticals and MannKind Corp. MSMB profited by selling short
the stock of both companies.
Retrophin Inc, initially a portfolio company operated from the MSMB
offices, was created in 2011 with an emphasis on biotechnology.
Shkreli was president and CEO at Retrophin, which says it focuses on
treatments for serious, catastrophic, or rare diseases, until
October 2014, when he was fired by the company's board.
Retrophin's board earlier this year accused Shkreli in a lawsuit of
using $65 million in company funds to repay MSMB investors who had
lost money. Shkreli also sits on Turing’s board along with Chairman
Ron Tilles, who formerly worked at Retrophin, and one other member,
Walter C. Blum, according to the company's website.
Imprimis CEO Mark Baum said that even if Turing's other investors
decided to remove Shkreli, that alone would not be enough to change
the fortunes of Daraprim. While at Retrophin, Shkreli hiked the
price of its key drug, Thiola for kidney stones, to $30 a pill from
$1.50. That price has not changed since Shkreli left.
"Once Turing went and paid what it did to buy that drug, they were
locked into raising the price," Baum said.
(Additional reporting by Caroline Humer; Edited by Michele Gershberg
and Bernard Orr)
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