Karma Is Watching You: Valeant and Turing’s Fortunes Tumble
We at Eye Art Collective know that the concept of Karma is, more likely than not, just wishful thinking. But we’re delighted to be following up the story of the Most Hated CEO in the world with the story of how this very man might be about to get his comeuppance.
Imprimis Pharmaceuticals, a San Diego-based specialty pharmaceuticals company, has developed a very similar, albeit not identical drug, to Turing’s Daraprim. The latter is the patent-expired branded version of the generic drug pyrimethamine that Martin Shkreli, the astonishingly arrogant and unrepentant CEO of Turing Pharamaceuticals, bought in August 2015. The drug that had cost $13.50 a pill had its price increased, within 24 hours of Turing’s purchase, to a staggering $750 per tablet. Directly countering this price hike, Imprimis has priced its own drug at a mere $1 per pill.
In a statement it released on Oct 22, 2015, the drug company’s CEO, Mark L. Baum, said, “Today, some drug prices are simply out of control and we believe we may be able to help control costs by offering compounded alternatives to several sole source legacy generic drugs.” He added that Imprimis intends to continue producing effective solutions to soaring drug prices, both by providing affordable access to FDA-approved drugs as well as customizable compounded drug formulations as alternatives. Both are to be available in niche markets that, like Daraprim’s, do not have much competition.
It is important to note that Imprimis’s drug is not FDA-approved yet, although its formative compounds are. Imprimis’s formulation uses pyrimethamine along with another generic drug, leucovorin, a form of folic acid that helps cancer patients deal with the effects of chemotherapy. Since these two ingredients have received the go-ahead, the drug will be available over the counter if prescribed by a physician.
It goes without saying that Imprimis itself is a profit-based enterprise that isn’t exactly sitting around in a prayer circle singing Kumbayah. It is simply responding to the need of the hour and jumping on its opportunity to rake in the medicinal moolah, as all good capitalist ventures with excellent PR people do. However, the fact that Turing is indeed facing head-on competition from a rival about its unethical practices is a step forward, though its CEO might argue that these people are simply “ignorant about how the pharmaceutical eco-system works”.
In a similar neck of the woods, Valeant Pharmaceuticals, the company that introduced a similar price hike of the drug Cuprimine, used to treat Wilson’s disease, is in deep waters as well. Andrew Left the short seller behind Citron Research, an investment research operation- has issued a damning report on Valeant’s activities. The report questions the company’s relationship with a network of pharmaceutical companies that it controls and accuses it of issuing fraudulent invoices with their help. The company was already in trouble, as investigations were opened by federal prosecutors in October regarding its pricing policy and its practice of operating a subsequent “patience assistance programmes” through partners, with the aim of maximizing profits. In a statement, the company claimed that it received subpoenas from federal investigators and has co-operated accordingly.
Now, the company stands accused of steering customers- desperate patients, in other words- to “specialty” pharmacies that have special relationships with the company, so that they in turn, will direct the patients to Valeant’s exorbitantly priced drugs rather than cheaper alternatives. Specialty pharmacies, in actuality, are available to work with medicines that require cautious handling. Interestingly, this practice, while clearly unethical and capitalist that harms the patient financially, isn’t actually illegal. The part that is, was picked up by Left in his report: allegedly, Valeant engaged in fraudulent accounting to show inflated revenues.
Valeant’s shares have been in free-fall for a long time. Since its peak in July 2015, the company’s market capitalization (the total market value of a publicly-traded company’s shares) has decreased from USD 90 billion to USD 40 billion, a devaluation of almost 60%. In October alone, its shares dropped by 20% once its pricing policy started going public. From ruling the roost in the Canadian pharmaceutical market, Valeant is fast becoming a sinking ship, losing its share values by almost 28% on October 21st, leading to a halt on their trade.
With these recent accusations of fraud at the highest levels in the company, its shares as well as image are bound to be affected further. The company, of course, has “categorically” denied everything, claiming that this was a ploy by Left to manipulate the market.
As things stand, there is no way to disprove the corporate mudslinging. Andrew Left the gun-slinging short seller, again, is no messiah for the disillusioned masses. He is another one playing the profit-game and is no doubt looking out for his own angles. However, in this twisted way, it would seem that the pharmaceutical giants are getting a taste of their own medicine (pardon the terrible pun).
Crime, it would seem, does not, indeed, pay.
Article by White Rabbit.