Ex-General Counsel of Turing Pharmaceuticals: Closed Distribution of Daraprim “Integral” to Blocking Generic Competitor
Before the Senate Committee on Aging, former general counsel and senior business executive of Turing Pharmaceuticals, Howard Dorfman, testified today that the closed distribution of Daraprim (pyrimethamine) was a key component in the company’s effort to thwart generic competition. In his opening statement, Dorfman wrote,
In the case of Daraprim, the retention of a new specialty pharmacy distributor* [Walgreens Specialty Pharmacy] to carry on a closed distribution system was considered an integral part of the company’s desire to block a generic entrant for at least three years [emphasis added].
Dorfman also testified that he and other Turing executives “repeatedly” objected to the Daraprim price hike (from $13.50 to $750 per pill) in August, (after Turing acquired the US marketing rights) and the exclusive distribution agreement with Walgreens. Before ranking member of the committee Senator Claire McCaskill and others, Dorfman stated,
The objections against an immediate and precipitous rise in the cost of Daraprim included concern as to the availability of the drug for a particularly vulnerable and vocal HIV and AIDS patient community, the lack of any formal study protocol in place to implement research to develop a “next generation” toxoplasmosis therapy, and the failure to develop any of the educational materials for healthcare professionals and patients, all of which were announced as components of the rationale for an immediate price increase [emphasis added]. We made these objections during management committee meetings attended by the senior executives of the company, including the Chief Commercial Officer, Nancy Retzlaff. In fact, Ms. Retzlaff shared these concerns in these meetings and in discussions with other members of the management committee in private discussions.**
According to Dorfman, ex-Turing CEO Martin Shkreli responded to these objections by claiming that he (Shkreli) was the “most knowledgeable” person with respect to the implementation of this particular pharmaceutical business model. Dorfman, who testified that he has more than 30 years of experience in the pharmaceutical industry, was reportedly fired from Turing 2-3 weeks after raising his objections to Shkreli.