Did Turing Pharmaceuticals use their AIDs drug to manipulate the biotechnology market?
Share This Article:
On 20th September Turing Pharmaceuticals raised the price of their recently acquired AIDs drug Daraprim from $13.50 to $750, a 5000% increase overnight. The drug treats a parasitic affliction called toxoplasmosis, affecting people with compromised immune systems. The massive price hike is a result of the free biotechnology market that exists in the United States. In the UK profits are capped to stop prices creeping too high, but in the US this is not the case. As a result prices can go up and down, depending on what people are willing to pay. The company had argued that even though the pill costs only $1 to produce, the $13.50 was not enough to cover other costs like marketing and distribution. The drug costs 43p per tablet in the UK. Three days later however, Turing Pharmaceuticals CEO Martin Shkreli announced they would lower the price of its drug after facing a public backlash. So was the dramatic price increase a mere mistake, or was this part of a ploy to profit from fluctuations in the US biotechnology markets? If the latter is the case, then the former hedge fund manager Shkreli will have engaged in something similar to short-selling. People often believe that investing is the act of acquiring an asset, holding it while it appreciates in value, and then finally selling it to make a profit. Short-selling is the opposite: an investor will only make money when a shorted security falls in value.
- Article continues below...
- More stories you may like...
- EU students will continue to pay home tuition fees
- SOAS lecturer elected as MEP for far-right party
- This Week in Gaming: Sony and Microsoft team up