NY Attorney General Probes Turing Pharmaceutical

The New York attorney general began an inquiry last week into Turing Pharmaceutical for allegedly restricting access to the drug Daraprim.

The attorney general, according to The New York Times, sent a letter to Turing Pharmaceutical CEO Martin Shkreli letting the company know of the investigation and advising the company to contact the attorney general's office and to "retain all documents that are potentially relevant to this inquiry." 

"While competition might ordinarily be expected to deter such a massive price increase, it appears that Turing may have taken steps to prevent that competition from arising," said the letter according to the Times which obtained a copy of the letter. 

The drug, which is used to treat toxoplasmosis and malaria, has been on the market since 1953 and is under no patent. It was first developed by GlaxoSmithKline, and in 2015 Turing acquired the marketing rights to Daraprim. Last month, the pharmaceutical company came under fire when it raised the price of the drug from $13 to $750.

After coming under a lot of fire of the rise, Shkreli promised to reduce the price of Daraprim, though over two weeks later a new price has not been reported. 

Daraprim is used by an extremely small market — $10 million in the US — of patients with compromised immune systems (including people living with HIV and cancer as well as pregnant women). Because the market is so small, no real generic competition has developed. 

The recent price rise could open the market to more generic competition, however Turing's competitors would need to get their hands on samples of Daraprim to prove their generics are just as effective. The attorney general is therefore investigating whether or not Turing violated antitrust laws when it restricted access to Daraprim and consequently made it more difficult to develop generic versions, according to The New York Times. 

The newspaper points out that while the move to restrict distribution of Daraprim happened in June before Turing acquired it in August, the restriction may have been a prerequisite for the sale. There could be other reasons for restricting distribution for a rarely used drug, but Shkreli spoke openly about using restricted distribution against competitors at his previous company, Retrophin. 

And though Shkreli is hardly an outlier in the pharmaceutical industry, his Twitter antics and callousness in interviews have brought attention to the large problems plaguing the drug market. Daraprim and Shkreli have even become talking points for presidential candidates, particularly Senator Bernie Sanders and former Secretary of State Hillary Clinton.