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Martin Shkreli faces a new hurdle selling his decades-old anti-infective pill for $750.

Express Scripts, the nation’s largest pharmacy benefits manager, will cover a new compounded version that costs just $1 a tablet. Moreover, two leading physicians’ groups quickly endorsed the move, suggesting that Shkreli’s Turing Pharmaceuticals will encounter substantial — and unexpected — competition.

“This will solve a big point of pain in health care costs,” said Dr. Steve Miller, the chief medical officer at Express Scripts.


The decision comes amid ongoing controversy over Daraprim, which Turing bought last summer from another company and then boosted the price from $13.55 a pill to $750, a 5,000 percent increase. The price hike triggered a new round of scrutiny of pharmaceutical costs and transformed Shkreli — who used social media to deride his critics — into a poster boy for greed and outsized drug pricing.

Moreover, Turing took steps to thwart lower-cost generic competition by using a so-called closed distribution system. The drug maker is unwilling to sell Daraprim to other companies, which would have to purchase the needed active ingredient elsewhere before testing and making a generic version. Meanwhile, testing and making a generic version takes time, a process made still longer because the FDA is behind schedule in approving generics


Daraprim is the preferred treatment for toxoplasmosis, a rare parasitic infection, which can be fatal, especially for people with AIDS or who have weak immune systems. The US market is estimated to be just 2,000 or so patients.

This explains why the compounded version is being embraced. The alternative medicine is being made Imprimis Pharmaceuticals, which only a few weeks ago announced plans to make a combination medicine that includes pyrimethamine, the same active ingredient found in Daraprim. The other medicine is Leucovorin, which is a form of folic acid. Imprimis charges $99 for a bottle of 100 capsules, or about $1 each.

So far, nearly 100 prescriptions have been written, according to Imprimis chief executive Mark Baum. But that is likely to multiply since the Infectious Diseases Society of America and the HIV Medicine Association, the two organizations that first publicly complained about the Daraprim price hike, are welcoming the Express Scripts coverage decision.

“Since the price increase taken by Turing Pharmaceuticals in August, our infectious diseases and HIV medical provider members have reported significant challenges obtaining pyrimethamine for their patients,” Dr. Johan Bakken, the IDSA president, and Dr. Carlos del Rio, the HIVMA chair, said in a joint statement.

“We are optimistic that this arrangement will help address the serious cost and access barriers that have prevented or delayed pregnant women, infants, and patients with HIV infection or following transplantation from accessing this lifesaving treatment.”

They also reiterated the need for insurance coverage for the compounded version after Turing last week lowered the cost of Daraprim by up to 50 percent, but only for hospitals. This means that other patients — or their insurers — will continue to face the full $750 list price, although Turing has argued that it offers patient assistance programs and discounts to some state AIDS Drug Assistance Programs.

For this reason, Nancy Retzlaff, the Turing chief commercial officer, called the compounded version “unnecessary.” And she also maintained that the Imprimis product is “potentially unsafe and ineffective.” The drug maker also noted that one of two facilities that Imprimis uses to compound medicines received a warning letter from the Food and Drug Administration for serious manufacturing violations. The Imprimis drug is not approved by the FDA, and the compounder is not registered with the FDA, although is still subject to FDA inspections and enforcement actions.

Baum acknowledged that the FDA problems occurred at its New Jersey and California facilities in 2014, before Imprimis bought the operations. “I don’t think it’s fair to hold us responsible for facilities that we didn’t own,” he told us. But Baum maintained that improvements have been made and that a more recent FDA inspection at the New Jersey facility found “minor” problems that have since been corrected.

And Express Scripts’ Miller said that “we think compounding is a viable solution in this case. With a large-scale situation, no one compounder can supply those things. But given this is a particular niche, we’re confident they can provide a high quality at an affordable price.” The company has previously warned about problems with compounded drugs, except in special circumstances.

Ironically, there may be a small silver lining — of sorts — for Turing.

Since Turing claims to maintain a closed distribution system, the New York attorney general launched a probe to determine whether any antitrust violations may be taking place. But now that Turing faces competition from a compounded version of Daraprim, one antitrust expert says the probe is less likely to amount to anything.

“I don’t see much of a chance for an antitrust case. I think this makes it less likely,” said Herbert Hovenkamp, a University of Iowa law professor. “You’d have to see some reason for people not opting for the cheaper pill. And when the cost savings are this significant, I don’t see this taking a long time before people start switching over. They’ll decide they have better things to do than go after a brief attempt to get a high price for a drug.”

A spokesman for New York Attorney General Eric Schneiderman said the probe is ongoing but otherwise declined to comment.