“We are dedicated to helping patients, who often have no effective treatment options, by developing and commercializing innovative treatments”. This is the statement waiting for visitors to the ‘About’ section of Turing Pharmaceuticals website. However, having seen any of the myriad news coverage recently you could be forgiven for not finding this sentiment particularly credible. This week, the “fully integrated” biopharmaceutical Company returned to the world’s headlines, and whilst in the UK it may have been overshadowed by the Autumn Statement, it deserves no less attention.
Turing Pharmaceuticals has been courting controversy since August, when it acquired the exclusive rights to market Daraprim from Impax Laboratories. Contract Pharma reported that this was a strategic effort by Turing to begin fulfilling its promise to combat serious infectious diseases. Prior to the acquisition, Turing had been a one drug shop, having acquired Vecamyl, a hypertension medication, earlier in 2015. However, the acquisition of Daraprim was undoubtedly what brought Turing into the public eye.
Daraprim is a drug that is an antiparasitic medicine used for the treatment of toxoplasmosis and acute malaria. Both toxoplasmosis and malaria prey on those with weakened immune systems, and therefore are likely to infect those suffering from HIV and AIDs. Additionally the drug has a number of “off label” preventative uses, again, for those suffering from HIV. Clearly, Daraprim is an invaluable life line, and significantly improves the quality of life for those suffering from HIV or AIDs by helping protect them from additional debilitating diseases.
Initially, the purchase of Daraprim was positively received in the media. Turing’s Chief Executive, Martin Shkreli, was quoted as saying that the acquisition put the Company on target to bring “novel medication to patients with serious disorders”. Shkreli also stated his intention to invest in the further development of the drug to yield an even better clinical profile, as well as plans to launch educational efforts to raise awareness and improve diagnosis for patients. Shkreli’s intentions appeared, at least on the surface, honourable, it seemed as though his primary interest and that of his Company was the welfare of patients suffering from unquestionably awful diseases. Medical professionals were similarly impressed with Shkreli, noting, “Turing’s commitment to improving treatment for patients with toxoplasmosis is commendable” (Louis M. Weiss, M.D., M.P.H., Professor, Departments of Medicine and Pathology, Albert Einstein College of Medicine in New York City). Unfortunately, the positive stride that Weiss and other medical professionals perceived Turing’s actions to represent was not to be.
What came next will surely go down as how not to handle situations when sentiment turns against you, as the New York based start-up destroyed any good will the medical industry or public may have held towards it by immediately hiking the price of its drug by over 5000%. The New York Times noted that the drug originally retailed for $13.50, compared to the $750 per tablet Turing was expecting people to pay. This controversial move would make the drug unavailable to many people and clearly at odds with Turing’s company mantra. In an interview with CNBC, Shkreli was even unapologetic about the decision, arguing that the drug had been priced too low and his Company needed to make a profit, stating that it had previously been like selling an Aston Martin for the cost of a bike. Following the ensuing backlash from both media and medical professionals Turing cowed to public pressure, and pledged to roll back the increase to ensure the drug remained affordable. However, following this week’s announcement, it is clear that this was an empty promise. The Guardian reported this week that Martin Shkreli has declared he will not lower the price of his medication after all.
Turing Pharmaceuticals, and in turn Shkreli’s, actions are perceived as the worst kind of profiteering through incontestable monopoly comparable. However, there is hope for the patients who have had their medication taken away from them, and as Tim Worstall argued in Forbes, “markets work”. In the face of the gross (potential) profit taking by Martin Shkreli, Imprimis Pharmaceuticals announced that it has made an alternative to Daraprim that would cost roughly a dollar a pill, or $99 for a 100-pill supply. The fact remains that, Turing’s monopoly although threatened, may remain if the new drug is proven to be less effective than Daraprim. Also, the irreparable damage that has been done to the reputation of the nascent Turing Pharmaceuticals in both the medical and financial worlds might eventually lead to the Company folding, leaving the world without the sole producer of Daraprim. With this in mind, it seems Shkreli should be asking himself the pertinent question; were the potential profits worth it? Did his workforce deserve the wave of negativity he has foisted upon them?
Reputation management is vital to corporate relationships, and if Turing has plans to acquire further companies or source more investors, it is conceivable that the private equity firm would need to reconsider its public relations strategy. If Shkreli and the Company does not show willingness to change, it is arguable that will burn the bridge of ever taking his Company public, surely the exit he envisaged when he founded it…