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Casey McDonald is Senior Editor, Pharmaceutical Executive.
A slightly different take on this Turing Pharmaceuticals/Martin Shkreli business?
This is not going to be a defense of Turing Pharmaceuticals nor the wicked-genius, child strategists (as he is portrayed (really, playing chess?)), Martin Shkreli. Who would dare defend him right now?
After following his steps and missteps at Retrophin, I’ve since wondered why any investor would be willing to put stock in this PR debacle waiting to happen - it’s simply beyond me! His tweet calling for “BIOBabes” to swing by the booth at 2014’s BIO International Convention was all I needed to form my opinion. But don’t forget additional Twitter misdeeds and potential crimes when he tweeted under aliases bolstering the stock and told followers (under his own Twitter handle) how great he felt the day before major share price moving news.
Why raise your public profile to a more loathsome level when you’re already dealing in the business of jacking up drug prices? If that’s your business strategy, why not do it quietly, cautiously, perhaps even slightly apologetically?
One might have expected some maturation from his earlier social media conduct, but judging by his recent troll-like interaction with Fierce’s John Carroll, the industry is still taking body blows from politicians and public opinion polls, just for associating with him while he spits in its face.
As John LaMattina writing for Forbes, there are steps that the industry could take to minimize price hiking by asset maximizing hedge funds/drug peddlers in the future. Though they might be troublesome, clunky, and inefficient to retain small drugs with tiny markets, and puny margins or inconvenient to divest of them responsibly, large pharma should consider these measures to prevent the PR backlash, and the potential for lawmakers and bureaucrats to wrangle further control over the industry.
But while Turing’s chief is portrayed as a wicked genius, how about a look at the previous strategies for of Daraprim and the prior holders of the rights to the toxoplasmosis treatment, CorePharma and even earlier, GSK.
As LaMattina notes, CorePharma had already raised the price of Daraprim from $1/pill to $13.50 to which there was little complaint. But judging by Turing’s assessment of the situation, CorePharma missed a massive opportunity to go higher, and in doing so, did a disservice to its shareholders. This is not to say that the raise to $750 was right, but certainly the market could have withstood something in between for an important drug with few prescriptions per year. CorePharma shareholders should have demanded a pricing premium given the strategic situation as sole supplier.
If CorePharma had possessed a more profitable drug, it likely wouldn’t have parted with it so easily making Turing’s play less obvious. Of course maybe Shkreli would have seen it as an opportunity to raise the price to $1500 per pill!
Regardless, CorePharma’s shareholders should be furious. First, because they're now part of this story. What’s the old PR adage about ending up above the fold of the WSJ or NYTimes cover? CorePharma and its backers are not villains in this narrative, but the firm's pricing strategy is certainly part of the story. And second, shareholders should be asking management why they weren’t making more money on a vitally important, seldom used drug for which they were the only manufacturers.