(Bloomberg) — Turing Pharmaceuticals AG’s decision to raise the price of a decades-old drug it company acquired by 50-fold was a “perversion of the system,” said the leader of one of the U.S. largest biotechnology companies and the incoming head of the drug industry’s lobby group.
The pricing decision by Martin Shkreli, Turing’s founder and chief executive officer, “dropped down a storm on the whole industry” that drugmakers don’t deserve, Biogen Inc. Chief Executive Officer George Scangos said Friday in a telephone interview. He called the move by Turing’s CEO “arrogant” and “naïve.”
Scangos is next in line to be chairman of the pharmaceutical industry’s Washington lobbying group, Pharmaceutical Research and Manufacturers of America (PhRMA), which has defended drugmakers this year as they’ve come under criticism for the price of medicine.
The increase in the price of the drug, Daraprim, to $750 a pill from $13.50 brought the ire of Democratic presidential candidate Hillary Clinton, who on Monday tweeted that the change was “outrageous” and that she would reform the industry. Since her comment, the Nasdaq Biotechnology Index has fallen 13 percent in its worst week since August 2011, and is on the brink of entering a bear market.
Turing didn’t conduct extensive research to invent Daraprim before raising the price. Shkreli has argued that when he bought the drug in August, he raised the price 50-fold so that he could turn a profit and fund other discovery and clinical trials at his company.
“We are a research-based company who intends to initiate four phase 3 clinical trials in the next 12 months,” Shkreli said in an e-mail Friday.
See also: Cost to develop a drug more than doubles.
“Turing is to a research-based company like a loan shark to a legitimate bank,” Scangos said in the interview.