The most hated man in America has met his match.
After Turing Pharmaceuticals CEO Martin Shkreli raised the price of the toxoplasmosis drug Daraprim from $13.50 to $750 a pill, it was only a matter of time before another pharmaceutical company undercut him. First, Shkreli promised to lower the price. Two weeks later he still had not changed the price, returning to Twitter and telling his critics that the process “takes time.”
Well, time’s up.
San-Diego based Imprimis Pharmaceuticals has announced that it will create a Daraprim alternative using its active ingredients—pyrimethamine and leucovorin—and sell it for just under $1 a pill. Pyrimethamine is used to treat Toxoplasma infection, which can be especially severe for pregnant women and for immunocompromised individuals like AIDS patients.
With concerns about the price-gouging of generic medication in the public spotlight, Imprimis, a young company that compounds available drugs to create affordable medications, seems to have found its calling.
“This is not the first time a sole supply generic drug—especially one that has been approved for use as long as Daraprim—has had its price increased suddenly and to a level that may make it unaffordable,” Imprimis CEO Mark Baum said in a press statement, in which he announced that his company will be launching a new program called Imprimis Cares that will “help control costs by offering compounded alternatives to several source legacy generic drugs.”
In an interview with The Daily Beast, Baum said that the Daraprim price hike caught his eye because of its disproportionate effects on the HIV population, whom he has worked with in the past. Earlier in his career, Baum developed an HIV-focused pharmacy program and served on the board of Chembio Diagnostic Systems, which developed an FDA-approved rapid HIV diagnostic test.
“I have a special affection for this patient population,” Baum said. “I’ve worked with this patient population for a long, long time…When this guy [Shkreli] did this, I said, ‘Someone’s got to stand up’ and we decided we were going to take a stand.”
Compounded drugs—like the pyrimethamine capsules that Imprimis plans to sell—are made by mixing available drugs, and they aren’t FDA-approved. A statement on the FDA website notes that the “FDA does not verify the safety, or effectiveness of compounded drugs” and that there can be “health risks associated with compounded drugs that do not meet federal quality standards.” But doctors can and do prescribe compounded drugs if they deem them necessary to meet “the needs of an individual patient.”
In a case like toxoplasmosis, doctors might choose a compounded alternative over a high-cost drug like Daraprim that will cost more for insurers and potentially require patients to navigate Turing’s reimbursement and financial assistance program.
Baum stressed that pyrimethamine—the key ingredient in the new Imprimis capsules—is a well-known, decades-old drug that is FDA-approved and manufactured in an FDA-registered facility. Drug compounding facilities are generally overseen by state pharmacy boards, an oversight that applies to Imprimis in the states in which they are licensed.
When asked if he believes the lack of FDA approval will affect prescriptions of his new Imprimis formulation, Baum said, “To a certain extent. There will always be physicians who will only prescribe a drug that is FDA-approved with an FDA-approved label for indication of use.”
But Baum is confident that pyrimethamine is familiar enough that many physicians will not hesitate to prescribe a compounded alternative instead of dealing with Daraprim.
“I think by and large most physicians don’t require the FDA to explain to them how to use this particular chemical because they’ve used it for so, so long with so many people,” he said.
Never one to stay silent for long, Shkreli has already mouthed off to press about his new competition.
“It’s not a threat to us,” Shkreli said Friday in an interview with Fox Business. “I think that it’s a publicity stunt. I wish this company the best of luck but I have faith in our team and our competitive standpoint.”
When asked for comment by The Daily Beast, Shkreli referred to his Fox interview.
The hotheaded CEO is, as Fox reported, “unapologetic” over the price hike, which Turing still has not reversed. Earlier this month in an interview with Business Insider, Shkreli appeared to take a step back from his late September promise to lower the price. One month ago, Shkreli told NBC that he expected to determine a new price within a few weeks.
It has been a few weeks.
Shkreli explained to Business Insider, “In essence, we do think it’s possible that we’ll lower the price. We have to understand better what the demand is. We need to get our money back. It’ll be depending on our level of profitability as I’ve said before.”
“Until we figure out demand, we won’t lower the price,” he added.
The Daily Beast also asked Turing directly about new competition from Imprimis. In a statement, the company said: “[Turing] is not concerned with competition in the space. Daraprim is fully FDA approved and continues to be the preferred course of treatment for patients suffering from toxoplasmosis. Turing’s top priority continues to be ensuring patients with ready, affordable access to Daraprim.”
Turing added that its patient assistance program will allow “nearly all” patients to receive Daraprim at “$10 out of pocket or less per prescription.”
But Baum believes that Turing could be underestimating the potential effects of compounded alternatives.
“Some politicians started talking about price controls [and] more regulation,” he told The Daily Beast, a reference to recent comments on the pharmaceutical industry made by Hillary Clinton and Bernie Sanders. “[But] we have a market-based solution to address this problem and create a pricing equilibrium that will be good for patients and payers as well.”
The Imprimis CEO is also unfazed by Shkreli’s accusation that his company is developing a Daraprim alternative merely as a “publicity stunt.”
“Drug companies should stay focused on the welfare of patients. When you stay focused on the welfare of patients, your drug company does really well,” he said. “[Shkreli] would be far better off listening to the patient population that he is supposedly trying to serve and better understanding the market dynamics for these types of formulations.”
Daraprim, Baum adds, is just one case of generic drug price-hiking among many that Imprimis hopes to target with compounded formulas.
“This is much, much bigger than him,” he said.