Turing Pharmaceuticals faces antitrust inquiry following 5,000% drug price hike: 4 things to know

Turing Pharmaceuticals, the company that elicited public outcry after raising the price of its drug Daraprim by 5,000 percent overnight, faces an antitrust inquiry regarding its marketing and distribution of the drug, according to a report from JD Supra.

Martin Shkreli, the 32-year-old CEO of Turing Pharmaceuticals, headed the company's purchase of Daraprim in August from Impax Laboratories for $55 million. Daraprim is an antiparasite medication developed 62 years ago. In September, he increased the price of the drug from $13.50 to $750 per pill overnight, a decision that precipitated public backlash. Ultimately, Mr. Shkreli backed down and said he would lower the price of the drug to an undisclosed amount, according to the report.

However, Turing's original announcement and subsequent public scrutiny captured the attention of the New York Attorney General's office. According to the report, the antitrust chief under Attorney General Eric Schneiderman sent Mr. Shkreli and Turing a letter requesting he contact the Attorney General's office to discuss the company's distribution channel.

Here are four things to know about the latest development with Turing.

1. According to the report, Turing does not permit Daraprim to be sold in retail pharmacies. Instead, Turing distributes the drug through a select number of specialties pharmacies. Only physicians and patients are permitted to obtain Daraprim from these specialty pharmacies.

2. The New York Attorney General's Office is concerned Turing's distribution of the drug is designed to make it tougher for generic drug makers to obtain samples of Daraprim that are needed to develop and seek regulatory approval for generic versions. The Attorney General's office stated Turing's actions "may be restraining competition unlawfully, and have the potential to greatly impede access to a drug that is critical for the public health."

3. Turing's limited distribution of the drug could help explain why the company's leaders believed it could raise the price so substantially without drawing competing generic manufacturers into the Daraprim market, according to the report.

4. The New York Attorney General's scrutiny of Turing comes in the wake of statements from Sen. Amy Klobuchar (D-Minn.) directed to FTC Chairwoman Edith Ramirez requesting an investigation into whether Turing or other pharmaceutical companies have sidestepped regulations by restricting the distribution of their drugs.

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