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Price Gouging CEO Now Targeting AIDS Drug Assistance Programs

When Turing Pharmaceuticals made headlines this week for jacking up the price of the lifesaving drug Daraprim (pyrimethamine) by 5,000 percent to $750 per pill, there was a silver lining for some. 

It meant that, due to federal 340B laws that require certain drugs to be priced more affordably for qualifying organizations such as AIDS Drug Assistance Programs (ADAPs), Turing only would be able to charge a penny per pill.

But it appears Turing has found a way around that, too.

In an interview Wednesday with HIV Equal, Sean Dickson of the National Alliance of State & Territorial AIDS Directors explained that Turing now is requiring 340B qualifying agencies such as ADAP to jump through extra hoops to buy Daraprim. Now, 340B pharmacies will have to get it through a separate, “drop-ship mechanism” called ICS (Integrated Commercial Services) Connect.

In a nutshell, it means more red tape for cash-strapped state ADAP programs. In the case of the Georgia ADAP program, the state has had to drop Daraprim from its ADAP formulary altogether. That’s because Georgia, like many other states, can only purchase drugs through vendors that have jumped through various approval processes that can take a long time.

“Because the 340B price was not available through Walgreens Specialty Pharmacy and thus not available through any of the Georgia ADAP’s standard purchasing channels, Georgia was forced to remove Daraprim from the formulary because of the excessive price,” NASTAD Executive Director Murray C. Penner wrote in a letter to Krista Pedley at the Office of Pharmacy Affairs at the Health Resources and Services Administration in Rockville, Md. “ADAP clients in Georgia who need Daraprim must access it through charity care or a patient assistance program, which can lead to delays in care that impact patient health.”

The letter alleges that other states have been able to establish ICS Connect accounts after receiving special approval from state purchasing authorities, but added, “This extra administrative process to receive 340B pricing is precisely the type of discriminatory barrier prohibited in the 340B program.”

Good for business. Bad for your health.

The decision by Turing Chief Executive Officer Marin Shkreli to gouge consumers has won him accolades from some in big business, but others have labeled him a bully and likened him to a scarecrow. Shkreli’s outrageous price hike is legal because the 62-year-old drug is off patent. It is not feasible, however, for a company to create a generic equivalent because there is no data available for drugs manufactured prior to 1962 for companies to compare it to.

Daraprim was approved by the FDA in the 1950s. It treats an opportunistic infection that can be deadly in people with AIDS and cancer patients.

In a letter to Turing Pharmaceuticals from the Infectious Diseases Society of America and HIV Medicine Association, the physicians groups explained that under the new price the cost of treating a patient with toxoplasmosis would be between $336,000 and $634,500.

For people who do not qualify for ADAP, obtaining the drug will mean outrageous co-pays due to the formulary being placed in specialty tiers. Turing offers a patient assistance program, but patients cannot make more than about $24,000 annually.

Dickson explained that in an era where some at-risk groups who do not get tested regularly, such as young MSM and black MSM, the pricing of Daraprim is extra scary. Many people who get their HIV diagnosis these days are learning at the same time that they already have progressed to AIDS. It’s yet another reason why getting tested regularly and immediately into treatment if positive so important.

More than 22 percent of people in the U.S. carries toxoplasmosis, according to CDC surveillance.

“This deplorable pharmaceutical company action reminds me of when another company raised the price of a critical HIV drug, ritonavir, by 500 percent in one fell swoop in 2003, and ended in a barrage of lawsuits,” said Dr. Gary Blick, HIV specialist and Chief Medical Officer of Norwalk-based World Health Clinicians. “In the latest HIV statistics, almost 27,000 people were diagnosed with AIDS in 2013. This tremendous price hike for Daraprim, the first-line treatment for the AIDS-related infection known as Toxoplasmosis, is simply unfathomable. Turing's CEO says the price hike will help Turing develop newer and better drugs to treat Toxoplasmosis. This kind of action could be viewed as big business profiting from medication developed to save people’s lives. Others call it ‘blood money.’ But regardless of its name we’ll never know publicly where this financial profit will be used.”

Meanwhile, Shkreli has said he will lower the price of the drug after national outrage this week, including lashings by presidential candidates Hillary Clinton and Bernie Sanders. He has not said when or by how much. In a letter on Congressional letterhead, Sanders and U.S. Rep. Elijah Cummings have demanded information from Turing about Daraprim to justify the astronomical cost.

Similar letters to Gilead requesting pricing justification for the lifesaving hepatitis C drugs Sovaldi and Harvoni have produced little to no results.

“This is clearly a trend in the industry and a cautionary tale that others are going to do it,” Dickson told HIV Equal.

Last month, the price of a drug called Cycloserine ballooned from $500 for 30 capsules to $10,800 overnight when it was acquired by Rodelis. The drug treats resistant strains of tuberculosis.

Under pressure, Rodelis later returned the drug to its previous owner, according to the New York Times.