Newly released documents show profit-seeking behind price hikes at Turing, Valeant

Reuters News
Posted: Feb 02, 2016 11:07 AM

By Sarah N. Lynch and Caroline Humer

WASHINGTON/NEW YORK (Reuters) - A decision by Turing Pharmaceuticals to raise the price of a lifesaving drug by 5,000 percent drove up some patient co-pays to as high as $16,000, according to excerpts of documents that congressional committee members released on Tuesday.

The excerpts, which are highlighted in memos released by Democrats on the powerful U.S. House of Representatives Committee in Oversight and Government Reform, give a rare behind-the-scenes glimpse into the business decisions that drove both Turing and Canada-based Valeant Pharmaceuticals <VRX.TO> to drastically increase the price of certain drugs.

The increases sparked a major public outcry, particularly against Turing, which was until recently was led by the colorful and often maligned CEO Martin Shkreli.

Valeant, meanwhile, is facing a federal investigation over drug pricing after it came under fire for increasing the prices of one heart medicine by 525 percent and another by 212 percent.

The documents provided to the committee suggest Valeant has also hiked the prices of an additional 20 drugs by more than 200 percent between 2014 and 2015.

Shkreli is slated to appear before the committee on Thursday, along with Valeant interim Chief Executive Officer Howard Schiller.

The excerpts released on Tuesday show efforts by Shkreli and his staff at Turing to try to maximize profits with the purchase of Daraprim, which is used to treat a parasitic infection called toxoplasmosis, while warding off any public relations backlash that could come from HIV and AIDs patients who often rely on the drug.

"Very good. Nice work as usual. $1bn here we come," Shkreli wrote in a May email to the board.

Not long after Turing acquired the rights to the drug, reports began to pour in about patients who were seeing their co-pays skyrocket.

In one August email, a Walgreens <WBA.O> executive wrote to inquire if the company would grant exceptions for "those patients with a co-pay over the approved amount of $10,000."

(Reporting by Sarah N. Lynch in Washington and Caroline Humer in New York; Editing by Lisa Von Ahn)