Drug company reneges on promise to reverse 5,400-percent price hike on Daraprim

Earlier this fall, drug manufacturer Turing Pharmaceuticals was blasted in the media and on Capitol Hill after it raised the price of its toxoplasmosis medication, Daraprim, from $13.50 per pill to $750. At the time, Turing had recently acquired the drug from Core Pharma, which purchased it from GlaxoSmithKline in 2010. Martkin Shkreli (pictured above), the co-founder of Turing, initiated the price hike, but appeared to relent after intense pressure from patient advocates, hospitals, doctors, and members of Congress. Now, Turing has walked back its previous statements -- the company has no plans to cut the price of Daraprim.

The timing of this announcement is an obvious attempt to capitalize on the Thanksgiving holiday -- with many Americans traveling and a four-day glut of turkey and family horror to look forward to, the company is assuming that most will either miss the news or will forget about it by Monday.

Turing is claiming that it will cut the price of Daraprim by up to 50% for hospitals, but this is merely a token gesture -- it can take weeks or months to treat an infection of toxoplasmosis gondii. While many individuals carry the parasite, it's most dangerous to immunocompromised individuals, including those undergoing chemotherapy, suffering from autoimmune disorders, or on immunosuppressant medications. In short, the people taking Daraprim are likely to be facing high medical costs already, and they're not going in for a few pills administered at a hospital.

As the graph above shows, Daraprim cost $1 per pill under GlaxoSmithKline, with total revenue of $667,191. Core Pharma, which bought the drug in 2011, raised the price to $13.50 per pill, which cut the number of people taking it by nearly a third, but raised revenue to $9.9 million. Shkreli's increase from $13.50 to $750 will dramatically increase revenue, assuming doctors and hospitals don't abandon the medication.

The company is already attempting to defend its decision, noting that it will offer the drug as a $10 co-pay to those with insurance, zero-cost "starter" packs (see above for notes on actual treatment duration), and will sell the pill to hospitals in 30-day bottles to help lower the cost of acquisition.

Shkreli is no stranger to these types of maneuvers -- in 2011 he filed requests with the FDA to reject cancer diagnostics from Navidea Biopharmaceuticals and an inhalable insulin therapy developed by MannKind Corporation. The problem with his request is that he was publicly short-selling both stocks at the same time (and both companies saw their stock prices fall in the wake of his requests). He's currently under criminal investigation for activities he engaged in while CEO of Retrophin, another biotechnology firm. The firm has sued him for $65 million alleging criminal misuse of funds, stock-trading irregularities, and other violations of SEC rules.