Turing sued over 5,000% drug price hike
Calif. firm says Turing breached contract for sale rights of Daraprim
The drug firm previously headed by Martin Shkreli was sued Monday for allegedly breaching a contract that let it sell Daraprim, the medication whose price the company marked up 5,000%, sparking nationwide criticism.
New York City-based Turing Pharmaceuticals neglected to provide and certify accurate pricing data for the drug and failed to assume responsibility for Medicaid rebate liability linked to the medication’s sales, the federal lawsuit filed in New York by Impax Laboratories charged.
Impax, a California company that sold its Daraprim sale rights to Turing in August, also charged that Turing violated the agreement that it would “use best efforts not to do any act (that) endangers, destroys or similarly affects the value of the goodwill” of Impax’s corporate name.
Turing did not immediately respond to a message seeking comment on the allegations. Daraprim is used to treat toxoplasmosis, a potentially life-threatening illness that afflicts those with AIDS, cancer or other condi- tions that weaken the immune system. Turing ’s 2015 price hike on the decades-old drug last year under Shkreli’s leadership raised the per-pill cost from $13.50 to $750.
The price increase generated complaints from patients, health industry experts and presidential candidates. It also prompted scrutiny of Turing by two congressional panels examining how drug price hikes affect patients.
Shkreli resigned from Turing in December, one day after he was arrested and pleaded not guilty to unrelated charges of securities fraud. The embattled pharmaceutical entrepreneur, who had defended the Daraprim price hike, invoked his constitutional right not to testify and incriminate himself when he appeared under subpoena for a February hearing by the House Committee on Oversight and Government Reform.
But a May 27, 2015, Shkreli memo obtained by the House panel showed he wrote “$1bn here we come,” as Turing moved to acquire the Daraprim sale rights.
Impax’s lawsuit said the company “had no forewarning ” of Turing ’s price hike and would receive “no financial remuneration” linked to the increase.
“It nonetheless found itself subject to significant liability due to Turing ’s actions,” Impax’s lawsuit alleged. “Turing retains the profits from its stunning price increase and at the same time refuses to provide complete and timely information to Impax.”