Page 93 - CL Armchair Case

"Another $7.2 million. Pow!" — Tina Ghorban, senior

director of business analytics, reacting to a purchase order

for 96 bottles at $75,000 a bottle, on Sept. 17. (4)

The US Centers for Disease Control and Prevention,

estimated that about one million people in the U.S. were

infected annually with the parasite. In their treatment

patients typically take the drug, Daraprim, for several weeks.

The antibiotic is used by about 2,000 Americans each year.

“Mr. Shkreli spent no funds on developing Daraprim,

which has been on the market for decades, he

purchased it for the purpose of increasing the price

dramatically and making hundreds of millions of

dollars by exploiting its existing monopoly before any

competitors could enter the market, which Mr. Shkreli

expected would not occur for a number of years.” (3)

Shkreli said that Daraprim had been priced too low and that

his company needed to generate profits that it would spend

on new research and development. PhRMA (the

pharmaceutical industry’s main lobbying group) member

companies have made similar arguments on the need to

price new drugs high enough to ensure that they have

enough to cover their R&D investments.