Two companies join the battle over Daraprim

Source: Aprecia Pharmaceuticals. Two companies are taking matters into their own hands to help make an alternative to an expensive drug more readily available to the public. · CNBC

Meg Tirrell

Updated Mon, Nov 30, 2015, 10:01 PM

Express Scripts (NASDAQ: ESRX), the largest pharmacy benefits manager in the U.S., said on Tuesday it will partner with Imprimis Pharmaceuticals (NASDAQ: IMMY) to provide a $1 alternative to Daraprim, the 62-year-old drug for a rare parasitic infection. In September, the company that owned the drug stoked outrage when it hiked the drug's price by more than 5000 percent overnight.

Imprimis, a California compounding pharmaceutical company, said in October it would make the alternative—a compounded formulation of the active ingredient in Daraprim, pyrimethamine, and another drug, leucovorin—available for $99 for a 100-count bottle, or less than $1 per pill.

That compares with a price of $750 per pill for the drug provided by Turing Pharmaceuticals, the company that acquired Daraprim earlier this year and dramatically raised its price from $13.50 a tablet to $750.

"After the price of Daraprim went up so high, a lot of infectious disease doctors reached out to me about what could be done," Dr. Steve Miller, chief medical officer at Express Scripts, told CNBC in a telephone interview.

Miller added: "A couple weeks later, I read about what Imprimis was offering and thought: 'Could we make this really simple for doctors and patients to access?'"

Under the partnership announced Tuesday, Express Scripts added Imprimis to its pharmacy network and says it will work with organizations including the Infectious Diseases Society of America (IDSA) and the HIV Medicine Association (HIVMA) to communicate the availability of the Daraprim alternative to physicians. The announcement falls on World AIDS Day.

"We have the ability to buy the same exact chemicals and make the exact same formulations that are clinically relevant," Mark Baum, CEO of Imprimis, told CNBC.

At $1 per pill, Imprimis' Baum said the company will turn a profit. Imprimis has already filled dozens of prescriptions, he said, all being paid out of pocket so far. Express Scripts said it plans to start processing prescriptions as early as this week.

Turing's move drew international condemnation after infectious disease groups called attention to it, prompting some to call its young CEO, Martin Shkreli, the most hated man in America.

As the controversy boiled over in late September, Shkreli said Turing would lower the price of Daraprim—though he failed to specify to what level.

Daraprim treats toxoplasmosis, an opportunistic infection seen in people fighting HIV and cancer as well as pregnant women. It's a rare disease, with just 8,821 prescriptions written for Daraprim in the U.S. last year, according to industry researcher IMS Health.

Though Daraprim was approved in 1953, it has no generic competitors. Toxoplasmosis was too rare a disease to make the cost of developing a generic drug worthwhile – at least until Turing hiked the price.

Imprimis, rather than creating a generic version of the drug which would require the time and expense of clinical studies and FDA approval, is taking what it says is a faster route. The company intends to combine the active ingredient in Daraprim with another drug with which it's commonly prescribed.

A generic version of Daraprim would require Federal Drug Administration (FDA) approval. However, Baum says the combination of two drugs – leucovorin is commonly prescribed with pyrimethamine to protect the bone marrow, according to the Center for Disease Control – is clinically distinct enough to escape those restrictions.

Compounding pharmacies typically create tailor-made versions of medicines for patients that can't take a drug as formulated. The process frequently involves changing a pill into a syrup, or formulating a medicine without a specific dye, according to the FDA.

IDSA and HIVMA originally raised concern about the price increase of Daraprim, writing in a September letter to Turing that hospitals were unable to obtain the medication.

Turing said last week it is providing a discount of up to 50 percent for hospitals and plans to offer smaller bottles containing 30 tablets to lower the cost of stocking the medicine. Shkreli said the company raised the price to provide funds to develop new medicines for toxoplasmosis.

"We pledge that no patient needing Daraprim will ever be denied access," Nancy Retzlaff, Turing's chief commercial officer, said in a Nov. 24 statement.

Yet Express Scripts, which covers 85 million people in the U.S., said the drug is still priced out of reach.

"The infectious disease doctors are telling us it's still incredibly difficult for their patients," Miller said.

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