• US stock market daily report (September 22, 2015, Tuesday)

    Daraprim (pyrimethamine), a 62-year-old medication used to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy and also treats people with compromised immune systems, like AIDS patients and certain cancer patients, costs about $1 to produce.

    The rights to Daraprim were sold to privately held Turing Pharmaceuticals in August. Martin Shkreli, CEO of Turing Pharmaceuticals, made a brash move by increasing the price per pill in the USA by over 5,000% - from $13.50 to $750 per pill.

    Shkreli, a former hedge fund manager, said while the cost to produce each pill is about a buck, that doesn't include other costs like marketing and distribution, which have increased dramatically in recent years. He said, “This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business.” He added that, many patients use the drug for far less than a year and the revised price was now more in line with other drugs to treat rare diseases. Turing will use the money it makes from sales to research new treatments.

    Shkreli told Bloomberg TV, "We needed to turn a profit on this drug." He also said, companies before us were actually giving it away almost.

    He says the practice is not out of line with the rest of the industry and told Bloomberg TV, "These days, modern pharmaceuticals, cancer drugs can cost $100,000 or more, whereas these drugs can cost half a million dollars. Daraprim is still underpriced relative to its peers."

    According to IMS Health which tracks prescriptions, in 2011 sales of Daraprim jumped to $6.3 million from $667,000 in 2010 - even as prescriptions held steady at about 12,700. As the number of prescriptions shrank to 8,821 in 2014 and following further price increases of the drug, sales came in at $9.9 million. Data excludes inpatient hospital use.

    In early September, the Infectious Diseases Society of America along with the HIV Medicine Association sent a joint letter to Turing calling the price increase for Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.”

    The National Health Service in the UK is the main buyer, with prices set through a voluntary scheme between manufacturers and the government, as they try strike the right balance of serving patients and generating money to keep the drug pipeline going. Profits are capped to stop prices creeping too high.

    Contributed by Millennium Traders
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