Express Scripts is partnering with San Diego-based Imprimis Pharmaceuticals to offer a $1 per capsule alternative to Turing Pharmaceutical’s Daraprim (pyrimethamine). Daraprim treats toxoplasmosis patients with compromised immune systems caused by HIV and other conditions.
Turing made news in September when its new CEO, previous hedge fund manager Martin Shkreli, raised the price of the 62-year old drug from $13.50 to $750 per dose. The move drew the ire from lawmakers, consumer advocates and presidential hopefuls Donald Trump and Hillary Clinton.
"We believe we now have an extremely cost-effective way to provide access to a Daraprim alternative," Dr. Steve Miller, senior vice president and chief medical officer of Express Scripts, said in a statement. "We will share our solution with other payers to make sure all appropriate patients around the country have access to the treatment they need at the lowest possible price."
Imprimis will offer a compounded oral formulation of pyrimethamine and leucovorin (a form of folic acid) for $1 per capsule for people whose pharmacy benefit is managed by Express Scripts. According to Imprimis, physicians will be able to send a patient-specific prescription for the combination formulation of pyrimethamine and leucovorin to Imprimis for compounding.
Our Take: The free market is alive and well.
Not only was Turing’s move in September questionable, Shkreli’s tone deaf response in a CNBC interview shed a negative light on an industry already embattled over high prices for specialty medications. Shkreli walked back his comments in the days following the interview in remarks made to ABC News.
“We’ve agreed to lower the price on Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit,” he said. “We think these changes will be welcomed.”
In late November, Shkreli reversed course again, saying that rather than lower the price, it would offer samples and discounts to hospitals.
And Shkreli keeps stepping in it. At the Forbes annual Healthcare Summit last week, he was interviewed by Forbes reporter Matthew Herper, who previously defended the CEO in an article, suggesting that Shkreli was perhaps misunderstood by a media that pounced on the story early without all the facts. (To be fair, Herper does note that Shkreli is “very smart, but also callow and possibly sociopathic.”
One of the participants at the Healthcare Summit asked Shkreli about whether he regretted the move, and whether he would have acted differently. “I probably would have raised prices higher,” Shkreli told Herper in front of the crowd.
He continued: “I think health care prices are inelastic. I could have raised it higher and made more profits for shareholders. Which is my primary goal. And again, no one wants to say it, no one’s proud of it, but this is a capitalist society, a capitalist system and capitalist rules. Investors expect me to maximize profits.”
That’s exactly what Express Scripts is doing: seizing a market opportunity to partner with little-known Imprimis to fill a need, reduce costs and boost profits. What they are also doing is signaling to other drugmakers that they have an answer to pricing strategies embraced by companies like Turing.
At the same conference, Dr. Miller questioned Shkreli about the price hike, and in an awkward exchange Miller acknowledged that Daraprim was available without restrictions on the Express Scripts formulary. “Sounds like we’re all good,” said Shkreli. “Awesome, man. Thanks for your business.”
Shkreli is in for a surprise.