The aftermath of Martin Shkreli’s drug price hike

On September 23, 2015, BBC News released an article suggesting that Martin Shkreli was the “most hated man in America.” The article was in response to the decision of Turing Pharmaceuticals (the company of which Shkreli is CEO), to substantially raise the price of the drug Daraprim. Since the price hike, a series of events and controversies have developed in response to Shkreli’s decision.

Turing Pharmaceuticals’ CEO, Martin Shkreli Photo  Courtesy of: gannett-cdn.com

Turing Pharmaceuticals’ CEO, Martin Shkreli
Photo Courtesy of: gannett-cdn.com

The initial controversy arose from Turing Pharmaceuticals’ acquisition of the rights to the drug Daraprim. Daraprim is used to treat the infection toxoplasmosis, and many people with weakened immune systems (including AIDS patients) rely on the drug. The drug’s price before the acquisition by Turing was approximately $13.50 a dose, and upon acquisition, the company announced a 5,000 per cent increase in the cost of the drug, meaning it would then cost $750 a dose instead.

After the announcement, Shkreli and Turing came under fire from social media users, politicians and other critics who were shocked at the decision. Hilary Clinton is one of Skreli’s most vocal critics, and she has released several ads, social media posts and comments about her frustration with his decision to raise the price of the drug. Donald Trump has also critiqued Shkreli, making this an issue that both Democratic and Republican figures have criticized.

“This guy is nothing… he ought to be ashamed of himself,” Trump said, as reported on Business Insider. “I thought it was a disgusting thing, what he did. I thought it was a disgrace.”

These events made up the initial controversy that surrounded the Daraprim price hike. However, since the company’s decision, several more events have taken place that have complicated the situation.

Photo Courtesy of: Wreg.com

Photo Courtesy of: Wreg.com

After the negative media attention, Shkreli has been cited by Business Insider as claiming that he intends to lower the price to something more affordable, although he has not yet specified the amount by which he intends to reduce it. This reaction is being held up as an example of how social media and online activism can make a real difference.

On September 25, Fortune.com reported that indie music label Collect Records, for whom Shkreli has been a regular patron, have now cut all ties with the CEO. This loss of support and connection to a well-known music label demonstrates the ways in which Shkreli’s decision has had widespread impact.

On September 30, Business Insider released an article detailing the ways in which generic drug companies and politicians are rising up against drug monopolies and inflated drug prices in order to prevent future decisions like Shkreli’s. This article was released on the same day as a San Francisco Business Times article that talked about potential state intervention into unreasonable price hikes by private drug companies. The article detailed the potential for a California price-control initiative to be included in an upcoming election, demonstrating how politicians are working to try and help prevent future problems with drug companies who substantially raise prices for medication and make it less accessible to those who need it.

The Business Insider article is also significant because it debunks the legitimacy of one of Shkreli’s most substantial claims that he has made in support of the price hike. Shkreli responded to the controversy over the price hike by claiming that proceeds would go towards research that could improve the quality of Daraprim and create better treatment in the future. This claim created some ambiguity surrounding Shkreli’s decision, as it raised the possibility of a benevolent, research-focused side to the price hike that could help patients in the long run. However, Business Insider’s article largely dismissed the claim. The article quotes Sam Peltzman, a University of Chicago health economist and professor.

“It’s total hokum,” Pelzman is quoted as saying. “The sources of research funding are the attraction of getting a return on the research-funding investment. They do not come from someone making a lot of money and saying ‘I’ve got nothing else better to do with it, so I better do some research.’ The economics is backwards in a statement like that.”

After Business Insider’s article on Wednesday, they released another article on Friday, October 2 explaining that Shkreli has now hired four lobbyists from a lobbying firm called Buchanan Ingersoll and Rooney. The involvement of lobbyists is significant because of the political complications currently surrounding the pharmaceutical industry and potential regulations or government interventions, particularly in reference to drugs like Daraprim over which companies currently have competition-free monopolies that allow them complete control over the pricing of their drugs.

The partnership is intended to work with Turing on their relations with the federal government. Turing’s interest in government relations right around the time of this controversy is an interesting move considering the government’s interest in intervening in the current issues surrounding pharmaceutical companies.

As the implications of Shkreli’s price hike and the controversy that surrounded it continue to become more and more complicated, it will become important to observe the currently tense relationship between pharmaceutical companies, the media and the government, as the three navigate the challenging ground of drug pricing and regulation. And, of course, it is also important to remember the people who are most affected by this economic and political environment – the patients who need medication.

Photo from Shkreli’s Twitter account, where he infamously responded to criticism by posting Eminem lyrics Photo Courtesy of: The Huffington Post

Photo from Shkreli’s Twitter account, where he infamously responded to criticism by posting Eminem lyrics
Photo Courtesy of: The Huffington Post

Pin It

Leave a Reply

Your email address will not be published. Required fields are marked *

* Copy This Password *

* Type Or Paste Password Here *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>