The Company and the Controversy
Turing Pharmaceuticals LLC acquired Daraprim, a 62-year-old antiparasitic drug, in August 2015 and raised its price from $13.50 to $750 per pill. A standard treatment course went from $1,350 to $75,000. Daraprim is the only FDA-approved treatment for toxoplasmosis, a parasitic infection that threatens HIV/AIDS patients, transplant recipients, and others with weakened immune systems. No replacement has emerged in more than 50 years.
Hospitals shifted patients to less effective alternatives. Pills sold fell 98% in four months. Congressional hearings followed. The company's founder, Martin Shkreli, became a focus of anger from patient advocates, physicians, and elected officials.
The Drug
Daraprim (pyrimethamine) has been on the market since 1953. Developed by Nobel Prize winners Gertrude Elion and George Hitchings, it remains the standard treatment for toxoplasmosis. HIV/AIDS patients with CD4 counts below 100, organ transplant recipients, cancer patients on chemotherapy, and newborns infected during pregnancy all depend on it. No substitute exists for severe cases.
For decades, the drug cost about $1 per tablet. It passed through CorePharma and then Impax Laboratories, reaching $13.50 before Turing acquired it.
The Price Hike
On August 10, 2015, Turing purchased the US marketing rights to Daraprim from Impax for $55 million. By September, the company had raised the price to $750 per tablet. Maintenance therapy for one patient cost $336,000 to $634,000 per year.
Shkreli said the increase would fund research into improved toxoplasmosis treatments. Former General Counsel Howard Dorfman later testified under oath that the increase was "not justified by any such actual expenditure" and that Turing had no formal study protocol for next-generation drugs.
Hospitals reported running out of Daraprim or refusing to stock it. Massachusetts General switched patients to alternative regimens. Grady Memorial Hospital in Atlanta lost access for extended periods. One large public hospital saw its toxoplasmosis drug costs rise from $50,310 across 66 admissions to $1,026,006 across 61 admissions.
The Criminal Case
Shkreli was arrested on December 17, 2015, but not for Daraprim pricing. The charges were securities fraud and conspiracy tied to his earlier hedge funds, MSMB Capital and MSMB Healthcare, and his former company Retrophin. Prosecutors called the scheme "Ponzi-like." A jury convicted him on three of eight counts in August 2017. He was sentenced to seven years in federal prison and released in approximately September 2022.
Congressional Hearings
Two congressional hearings in 2016 examined the pricing. At the House Oversight hearing on February 4, Shkreli invoked the Fifth Amendment in response to every substantive question and smirked at committee members. He later tweeted that they were "imbeciles."
The Senate Aging Committee hearing on March 17 produced 400,000 pages of subpoenaed company documents. The Weston family testified about paying $28,000 per month for their infant's toxoplasmosis treatment. Former executive Howard Dorfman testified that Turing's Chief Commercial Officer had privately raised concerns about the price increase while publicly defending it.
The Rebrand and Antitrust Case
Turing rebranded as Vyera Pharmaceuticals in September 2017. The pricing and distribution restrictions stayed in place.
In January 2020, the FTC and seven state attorneys general filed an antitrust complaint alleging that Vyera maintained its monopoly through three strategies: a closed distribution system that blocked generic manufacturers from obtaining samples for FDA testing, exclusive supply agreements that locked up the raw ingredient, and data restrictions that obscured sales figures from potential competitors.
The settlement, reached in December 2021, required Vyera to provide Daraprim at no more than $1 per tablet to certain buyers and to pay up to $40 million over 10 years. Shkreli personally owed $64.6 million in disgorgement and received a lifetime ban from the pharmaceutical industry. Vyera filed for Chapter 11 bankruptcy in May 2023.
Generic Competition
Generic pyrimethamine became available in February 2020, when the FDA approved Cerovene's version. Multiple manufacturers now produce the drug, including Dr. Reddy's, Teva, and Oakrum Pharma. The FTC documented that generic entry had been delayed by about five years through anticompetitive practices.
Key Facts
| Item | Detail |
|---|---|
| Founded | February 2015 by Martin Shkreli |
| Daraprim acquired | August 10, 2015 from Impax Laboratories for $55 million |
| Price before | $13.50 per tablet |
| Price after | $750 per tablet (5,455% increase) |
| Shkreli arrested | December 17, 2015 (securities fraud, not pricing) |
| Shkreli convicted | August 4, 2017, three of eight counts |
| Shkreli sentenced | 7 years, served approximately 5 |
| Company rebranded | September 2017 as Vyera Pharmaceuticals |
| FTC complaint filed | January 27, 2020 |
| FTC settlement | December 2021: $1/tablet provision, $40M over 10 years |
| Shkreli's personal penalty | $64.6 million disgorgement, lifetime pharmaceutical industry ban |
| First generic approved | February 26, 2020 |
| Vyera bankruptcy | May 2023 |
What the Record Shows
No federal law prevented Turing from raising the price of a decades-old drug by 5,455%. The criminal conviction was for securities fraud at a previous company, not for the pricing. The antitrust case took five years to reach settlement. The FTC found that generic competition, which could have arrived years earlier, was blocked by anticompetitive strategy.