Hedge fund manager backtracks after increasing cost of AIDS drug by 5500%
A former hedge fund manager has backed down, after acquiring the rights to a drug used to treat AIDS-related illnesses and raised the price by 5,500 percent.
The rights to 62-year-old Daraprim, which is used to treat parasitic infections including AIDS-related infections, were bought by Martin Shkreli.
The 32-year-old founder and chief executive of Turing Pharmaceuticals, bought the rights to Daraprim for $55 million, reports the New York Times.
It emerged this week that he had dramatically increased the price of the drug from $13.50 per tablet to $750 – an increase of 5500%.
Daraprim is used to treat toxoplasmosis – an opportunistic parasitic infection which can cause life threatening problems for people with AIDS.
The drug costs less than $1 per tablet to make, and Shkreli caused controversy when he claimed that his company had a right to make a profit out of the drug.
The entrepreneur has denied attempting to “gouge” patients with the dramatic price increase, but claimed it had been “undervalued” as other life-saving drugs can cost as much as $100,000.
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However, after widespread outcry, and threats from a number of prominent politicians, Shkreli has agreed to back down.
His company confirmed yesterday: “We’ve agreed to lower the price of Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit, and we think these changes will be welcome.”
It marks a turn-around from the businessman, who had repeatedly insisted that he would not lower the cost of the drug.
The new price point of the drug has not been confirmed, but is still expected to be consistently higher than the $1 per pill it costs.