The investigation has been triggered by the New York attorney general. According to The New York Times, generic drug competition was expected following a decision by Turing to substantially increase the price of a 62-year-old drug called Daraprim. Turing upped the price by a whopping 5,000 percent in September 2015. The accusation is that Turing took measures to prevent cheaper generics from flooding the market so that it could maximise income from the massive price increase. This is what is known as creating a “closed distribution system.”
Through this process not only is generic completion delayed, Daraprim is also removed from distribution by the standard range of wholesalers and retail drugstores.
Daraprim is a well-established medication designed to treat a disease called toxoplasmosis, which is caused by the parasite Toxoplasma gondii. The parasite is a common parasites and poses a significant risk to the immunosuppressed, such as those suffering with HIV. The most severe symptoms of the disease include seizures, erratic coordination, and swollen lymph nodes. Untreated, the disease can be fatal.
In August 2015, Turning Pharmaceuticals paid out $55 million to purchase all rights of the Daraprim from Impax Laboratories. This, as Digital Journal reported, led to the massive price increase (the cost per pill moved from $13.50 to $750, and given that those affected need to take a pill each day this represented a large price increase.)
The increase led to a media frenzy. This led the Chief Executive Officer of Turing — Martin Shkreli — to declare he would lower the price (which was also reported on by Digital Journal.) However, to date, the price increase has not fallen.
The price rise is certain to feature, along with the issue of distribution, should the antitrust case be taken forwards.
