Our View: Vulture capitalists prey on patients

There’s a terrible new trend in the pharmaceutical industry: Buy an old drug that is standard treatment for rare diseases, then jack up the price on the captive market. Those involved in this dispicable practice aren’t venture capitalists, they’re vulture capitalists. They must be stopped.

The New York Times reported Sunday that officials and industry watchers are increasingly concerned; some members of Congress have launched investigations.

Their immediate victims are the patients who rely on these drugs to stay healthy. But we’ll all end up paying as insurers, hospitals and government health plans get hit with price gouging. Clearly, federal regulators need to take a hard look. The Food and Drug Administration must reevaluate its rules for bringing old drugs back into the modern marketplace, and close the loopholes that are being unfairly exploited.

Exhibit A in this travesty is Martin Shkreli, a 32-year-old former hedge fund manager whose business model was to urge the FDA to reject drugs made by companies whose stock price he was betting would drop. His new venture is Turing Pharmaceuticals, which in August paid $55 million for a drug called Daraprim. Approved by the FDA in 1953, it has been used to treat malaria, but is also the drug of choice against parasitic infections for patients with weakened immune systems – including those suffering from HIV.

A few years ago, the drug cost about $1 a tablet. Turing immediately raised the price to an astounding $750 per pill.

Medical groups objected, calling the price spike “unjustifiable for the medically vulnerable patient population.”

The despicable tactics give a black eye to Big Pharma. While its trade group tweeted Tuesday that Turing “does not represent the values” of its members, reputable companies that actually spend the time and money to develop drugs ought to be more loudly condemning these parasitic startups, or they could face regulations they don’t want.

Hopefully, public shame will push Shkreli to reverse his approach. Late Tuesday, he told NBC News the price will drop to a level where Turing will break even or make a “small profit.”

Even vulture capitalists, it seems, don’t want to be hated.

This story was originally published September 23, 2015 at 4:52 PM with the headline "Our View: Vulture capitalists prey on patients."