Page 224 - The Case Lab Book

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,' by distributing Daraprim through a limited number
of specialty pharmacies in order to prevent generic manufacturers from
obtaining access to samples to make their own version.

What Turing has done sounds more like trading – buying up the rights to a
drug and then increasing the price.

When criticised Shkreli did not take the criticism of him and his company's
actions lightly. He responded vociferously in tweets. Moreover, he
ultimately drew the attention of Hillary Clinton who criticised his actions and
attitude. All at a time when the scrutiny of US drug prices was increasing.

SHAREHOLDERS: REACTIONS & EXPECTATIONS

CorePharma’s shareholders have been dragged into the Daraprim price
hike story. They are not the villains of the piece but their pricing strategy is
a substantive element. What is more, their shareholders should be asking
why their management weren’t making more money on a vitally important,
seldom used drug for which they were the only manufacturers.

CorePharma had already raised the price of Daraprim from $1/pill to $13.50
to which there was little complaint.

Turing’s assessment of the situation, CorePharma missed a massive
opportunity to go higher, and in doing so, did a disservice to its
shareholders.

This is not to say that the raise to $750 was right, but certainly the market
could have withstood something in between for an important drug with few
prescriptions per year.

CorePharma shareholders should have demanded a pricing premium given
the strategic situation as sole supplier.