Page 103 - CL Armchair Case
P. 103
Price Competition
In the face of his massive price hike, the obvious solution is
for someone to undercut his price - especially since Dara-
prim is fairly simple to make - but thanks to the complex
rules governing drug sales in the U.S., that’s not so easy. A
potential competitor would have to go through the arduous
process of getting approval from the Food and Drug
Administration (F.D.A.) by showing that its drug is equivalent
to Daraprim. This is difficult, because Shkreli’s company,
Turing Pharmaceuticals, tightly controls its distribution,
making it hard to get the samples to do testing. Only about
15 percent of drugs that begin clinical trials are ever
approved by the F.D.A.
On October 22, 2015, San Diego-based Imprimis
Pharmaceuticals Inc., which mixes approved drug
ingredients to fill individual patient prescriptions, said it
would begin selling a very similar, but not identical drug to
Daraprim , for $1 per pill (a 100-capsule bottle for $99)
"This is not the first time a sole supply generic drug —
especially one that has been approved for use as long as
Daraprim — has had its price increased suddenly and to a
level that may make it unaffordable," Imprimis CEO Mark
Baum said.
