CEO blasted for defending 400 percent drug price hike

The head of a small pharmaceutical company in Kansas City is under fire after defending a 400 percent price increase on a common antibiotic by saying he had a “moral requirement” to make as much money on it as possible.

Nirmal Mulye, the founder of Nostrum Laboratories, has said his comments to the London-based Financial Times were taken out of context.

But as the story has spread they’ve put him at the center of the national storm over drug prices, even drawing a sharp rebuke from Scott Gottlieb, the head of the U.S. Food and Drug Administration.

Reached by phone Thursday at his home in New Jersey, Mulye said he’s been threatened and he’s worried about keeping his company afloat.

“I have lost money in eight of 11 years, and if they keep attacking me like this I will have to shut down the plant, and all the people in Kansas City will lose their jobs,” Mulye said. “And these are highpaying jobs, by the way.”

Mulye said Nostrum employs about 100 people in Kansas City, at salaries that range from $40,000 a year to $200,000.

Mulye was interviewed by New York-based Financial Times reporter David Crow for a Sept. 11 report about Nostrum’s plan to hike the price of nitrofurantoin, an antibiotic used to treat bladder infections. The World Health Organization includes it on its “List of Essential Medications.”

In the report Mulye defends the eye-catching price increase of $474.75 to $2,392, saying, “I think it is a moral requirement to make money when you can … to sell the product for the highest price.”

Mulye has since said the quote was misleading. He said he was talking about his obligation to his employees.

“My exact words to the guy was, ‘Listen, I don’t have a moral obligation to breathe and eat, but if I don’t do those things I’ll die,” Mulye said. “It’s common sense that if a business doesn’t make profit or at least break even it’s not going to be able to stay in business, right? … American jobs will be lost.”

The Financial Times has said it sticks by the story.

The day the story went online, Gottlieb referenced it in a series of tweets critical of Mulye.

“There’s no moral imperative to price gouge and take advantage of patients,” Gottlieb posted. “FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine.”

Mulye said he came to the United States as an immigrant who barely spoke English and worked several minimum wage jobs to pay his way through graduate school.

“This is the greatness about this country, right?” Mulye said. “The sad thing is people are out to bash me. . Nobody talks about the fact that I saved these jobs. I’m committed to keeping the jobs in Kansas City.”