Martin Shkreli’s Latest Plan to Sharply Raise Drug Price Prompts Outcry

Martin Shkreli is once again provoking alarm with a plan to sharply increase the price of a decades-old drug for a serious infectious disease. This time the drug treats Chagas disease, a parasitic infection that can cause potentially lethal heart problems.

“It’s caused a lot of angst in the Chagas community,” said Dr. Sheba Meymandi, a professor at the University of California, Los Angeles, and director of a Chagas treatment center at Olive View-UCLA Medical Center. “Everyone’s in an uproar.”

The plan also is upsetting some organizations that supply drugs for neglected diseases because Mr. Shkreli has said he wants to take advantage of a federal program intended to encourage companies to develop such drugs. The program awards vouchers that can be sold to other companies for hundreds of millions of dollars.

Mr. Shkreli has said he hopes to obtain such a voucher by getting the Chagas disease drug approved by the Food and Drug Administration for sale in the United States. Critics say that it would be another case of the system being abused by awarding a voucher not for developing a new drug but merely for obtaining F.D.A. approval of a drug already used in tropical countries.

Mr. Shkreli, 32, a former hedge fund manager, declined to comment.

He set off a furor in September after his company, Turing Pharmaceuticals, acquired the rights to a 62-year-old drug for toxoplasmosis, another parasitic infection, and raised its price overnight to $750 a pill from $13.50.

Last month, Mr. Shkreli led an investor group that took control of a failing California biotechnology company, buying a majority of its shares on the open market at an average price of about $1.50 a share. The stock of the company, KaloBios Pharmaceuticals, now sells for about $28,  based in part on expectations that the company will prosper under Mr. Shkreli.

As one of his first moves at KaloBios, Mr. Shkreli agreed to license the worldwide rights to one version of benznidazole, a standard treatment in South and Central America, where Chagas disease is most common.

Benznidazole has never been approved for sale in the United States but is provided free to patients by the Centers for Disease Control and Preventionon an experimental basis.

Mr. Shkreli said on a conference call with KaloBios investors last week that if the company won F.D.A. approval for benznidazole, it would have exclusive rights to sell it in the United States for at least five years. He said the price would be similar to that of hepatitis C drugs, which cost $60,000 to nearly $100,000 for a course of treatment.

In Latin America, benznidazole costs $50 to $100 for the typical two-month course of treatment.

KaloBios’s price would be “pretty devastating,” said Dr. Meymandi of U.C.L.A. “The people with Chagas for the most part are poor” and many lack insurance, she said.

It is estimated that 300,000 people in the United States have Chagas disease, virtually all of them immigrants from Latin America who were infected before they came.

Chagas is caused by a parasite, Trypanosoma cruzi, that is in the feces of an insect called the kissing bug, because it often bites people on the face. The first phase of the infection, the acute phase, can last a few weeks or as long as three months. In most cases, people have no symptoms, though some have feveror swelling at the bite site and in rare cases more severe complications. The parasite persists in the body, and roughly 30 percent of people will develop serious heart problems many years later. The disease can also cause difficulty in swallowing and defecating.

Benznidazole, first used in the 1970s, was developed by Roche. But in 2003, with sales slow, Roche donated its remaining supply and the rights to Lafepe, a company owned by a state government in Brazil. A severe shortage occurred a few years ago. A company in Argentina, Elea Laboratories, then became a supplier.

While the disease control centers provide the drug free, many doctors are deterred by the paperwork involved in applying for each patient. So specialists say that having a commercial supplier with an approved drug, which would allow doctors to simply write a prescription, would be better, if the price was reasonable.

KaloBios paid only $2 million initially for worldwide rights to a version of benznidazole developed by Savant Neglected Diseases, a tiny company in California. It might have to pay an additional $20 million over time plus royalties on sales.

Mr. Shkreli said on the conference call that, based on discussions with the F.D.A., KaloBios would probably not have to do clinical trials to win F.D.A. approval, just some smaller, quicker studies. That would allow KaloBios to apply for approval in about a year.

Mr. Shkreli estimated that 3,000 to 7,000 people would require treatment for acute infection each year in the United States.

But many specialists say that is wildly unrealistic because there are few cases of acute disease in the United States and they are rarely detected.

“I don’t see him having a market at all,” said Dr. Robert H. Gilman, professor of international health at Johns Hopkins University. “At the current rate of diagnosis, I don’t see it.”

Susan Montgomery, who runs the program at the disease control centers that provides benznidazole, said there have been only seven acute cases caused by the kissing bug and detected in the United States since 1955. She said that over all the centers provide 60 to 70 courses of treatment a year of benznidazole or nifurtimox, another Chagas drug.

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