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KBIO > $1bn here we come.’ — Martin Shkreli told Turing board as Daraprim buy got closer


http://www.marketwatch.com/story/1bn-here-we-come-martin-shkreli-told-turing-board-as-daraprim-buy-got-closer-2016-02-03?siteid=nbih

‘Pow!’
Here’s Shkreli on May 27, 2015 in an email to the chairman of the board of directors after news that Turing was making big progress toward acquiring Daraprim: “Very good. Nice work as usual. $1 bn here we come.”

He sent a couple of emails to company contacts, saying that the drug purchase would be announced, and providing some estimates of how much money the company could make. From one on Aug. 27, 2015 he wrote: “I think it will be huge. We raised the price from $1,700 per bottle to $75,000…So 5,000 paying bottles at the new price is $375,000,000—almost all of it is profit and I think we will get 3 years of that or more. Should be a very handsome investment for all of us. Let’s all cross our fingers that the estimates are accurate.”

The dollar signs seemed to be making some sort of impression inside Turing, if the emails were casting an accurate picture. Here’s Tina Ghorban, the senior director of business analytics and customer insights at Turing in a Sept. 17, 2015 email, commenting as she was forwarding a 96-bottle purchase order, at $75,000 per bottle: “Another $7.2 million. Pow!”

Get activists to ‘sit this out’
The Committee zeroed in on documents that indicated executives were expecting backlash over the Daraprim price hike, but anticipated that HIV/AIDS advocates were manageable. Here’s a snippet of a May 2015 presentation: “HIV patient advocacy may react to price increase.…HIV community is highly organized, sensitive, and action-oriented.” Then: “Physician community less sensitive to price increases, but need to determine the price point at which payers start to increase cost-sharing with patients, which could result in physician switching.”

Here are excerpts of a communication dated Sept. 21, 2015, from an outside consultant who forwarded a press article about Shkreli to senior executives at Turing: “With the price increase comes new research, support systems, patient education and greater awareness, so pragmatically and strategically, the community shouldn’t advocate against its own interests. If we can get HIV/AIDS activists to ‘sit this out,’ we come out way ahead.”

Copays atop $16,000
Documents were highlighted that showed the effects of the drug hike, with copays skyrocketing for patients, to more than $16,000 from $1,000.
In one instance, an Aug. 20, 2015 email was sent from the director of specialty pharmacy development at Walgreens WBA, -1.83% to Turing’s Ghorban, asking if the company would give exceptions to existing copay assistance limits for those patients with dramatically high copays: “Would you be willing to grant an exception for those patients with a copay over the approved amount of $10,000?…Example: BCBS of North Carolina…Claim pays with a high copay of $16,830.00.”

Health-care providers sound the alarm
And then hospitals, clinicians and health-care providers started chiming in to warn Turing about the massive drug-price hikes. The first came in a letter from the American Society for Microbiology post marked Sept. 22, 2015: “Raising the price abruptly from $13.50 per tablet to $750 per tablet will negatively impact both health care costs and individual patient treatments.”

Others followed, with some health-care providers stating that they would be switching out of Daraprim and one particular complaint that raised alarm within the company. On Oct. 8, 2015, Turing got this from Massachusetts General Hospital: “After over a week of trying to secure Daraprim for an uninsured patient requiring Daraprim at Massachusetts General Hospital, I need immediate assistance with expediting this case.…We have been provided with inaccurate/misleading information by the dedicated Daraprim Team.…This is a critical matter, visible at the highest levels of our Infectious Disease Department.”

The head of investor relations at Turing, Ed Painter, wrote: “I think we are acting a little like a deer in the headlights, and need to take some action steps now. If a hospital like Mass General is having issues we are in trouble.”

And then there was this email from Dr. Rima McLeod of the University of Chicago, who was among the few doctors who supported the price hike. But then McLeod began sounding the alarm about a steady stream of reports that patients couldn’t get the drug.

Here’s an excerpt from an email sent Dec. 8, 2015 from McLeod to Nancy Retzlaff, Turing’s chief commercial officer and Eliseo Salinas, Turing’s president of research and development: “I understand I know nothing of what makes Turing solvent and able to do research and of course I value that a lot too.…However, Martin [Shkreli] did say that he had to maximize profit for investors and that was why price is high. He did not say it was for research primarily that it was a high price. He called that the ‘dirty secret’ of pharma.”