Turing offers discounts instead of cutting controversial list price on Daraprim

Martin Shkreli

Turing Pharmaceuticals has been saying for a while now that it would lower the price of its toxoplasmosis med, Daraprim, responding to growing backlash from lawmakers and the public after it bought the drug in August and jacked up its price by more than 5,000%. Now the company is taking a different route, opting to negotiate discounts with hospitals rather than cut the drug's list price.

A couple of weeks ago, Turing CEO Martin Shkreli said that the company would reduce Daraprim's price a "modest" amount, or about 10%, by the end of the year. But the company decided that "a reduction in Daraprim's list price would not translate into a benefit for patients," Nancy Retzlaff, Turing's chief commercial officer, said in a statement. Instead, Turing will offer hospitals up to 50% off Daraprim's list price, and early next year it will roll out new, smaller bottles with 30 tablets instead of 100, making it easier to stock the drug.

Turing also said it will offer free starter packages of the med in early 2016, ensuring that docs have "immediate access" to the drug in emergency situations, it said in a statement.

But the company did not provide many details about the size of its discounts for hospitals. Discounts will depend on how much of the drug hospitals use, a personal familiar with the matter told The Wall Street Journal. Turing could announce the exact dollar amount as early as next week, they added.

For some, the discounts still aren't enough to offset the sticker shock for the drug. Even with a 50% price reduction, Daraprim costs $375 per pill, lower than its full price of $750 but much higher than the $13.50 it cost when Turing bought the drug in August.

Dr. Joel Gallant

"A 50% reduction after a 5,000 percent price increase still makes this an extremely expensive drug, and still prevents most hospitals from keeping it in stock," Joel Gallant, medical director of specialty services at Santa Fe, New Mexico's Southwest CARE Center, told Bloomberg. "Suffice it to say that this announcement doesn't satisfy anyone."

Plus, Turing did not say whether it would offer discounts to health insurers or patients who keep taking Daraprim after they leave the hospital, the WSJ points out. The company already has co-pay programs to lower patient payments to less than $10, and also provides Daraprim free-of-charge to uninsured patients who are at or below 500% of the federal poverty level.

"Physicians, patients, hospitals, and patient advocacy groups have told us time and time again that we need to keep patients' out-of-pocket costs low, have patient assistance programs in place and ensure hospitals can afford to stock Daraprim for treatment of the most vulnerable patients," Retzlaff said. "By providing affordable access for hospitals and reaffirming our commitment that nearly all patients will receive Daraprim for $10 or less out-of-pocket per prescription, that's what we have done."

Still, those answers are unlikely to appease lawmakers who are coming down on the company for its dramatic price hike on Daraprim. The House Committee on Oversight and Government is pushing to have Shkreli subpoenaed to reveal information on drug price increases. And the Senate Special Committee on Aging is looking into "dramatic increases" in prices from companies such as Turing and Valeant ($VRX) that seem "like little more than price-gouging," it said earlier this month.

One company has already rolled out price-friendly alternative to Daraprim. San Diego, CA-based compounding pharmacy Imprimis ($IMMY) sells a $1-per-pill toxoplasmosis med, and so far, the response has been "overwhelming," CEO Mark Baum said earlier this month.

Meanwhile, Turing's controversial CEO has been doing a little holiday shopping. Last week, Shkreli stepped into the CEO role at flailing KaloBios ($KBIO) after helping a group of investors acquire a controlling stake in the company. Some say that a merger with Turing could be on the horizon, but Shkreli is dismissing those ideas for now.

- read Turing's statement
- here's the WSJ story (sub. req.)
- get more from Bloomberg