Turing Pharmaceuticals sparked nationwide outrage and government investigations when it raised the cost of a generic drug used for AIDS and cancer from $13.50 to $750 a capsule.

Today, a San Diego biomedical company today introduced a competitor to that drug that sells for $1 a capsule.

Moreover, the company, Imprimis Pharmaceuticals, plans to compete against other manufacturers who sell generic drugs far above their cost. Like Daraprim, these drugs tend to be used in niche markets that don’t attract much competition.

Turing’s drug, Daraprim, is a brand-name formulation of the generic drug pyrimethamine. Turing’s CEO, Martin Shkreli, gained notoriety last month when his company acquired the drug and raised the cost by 5,000 percent.


Imprimis’ version is a combination of pyrimethamine along with another generic, leucovorin, a form of folic acid. Leucovorin helps cancer patients cope with chemotherapy.

Turing isn’t the first company to suddenly raise the price of a generic drug. Valeant Pharmaceuticals became well-known for the practice. It raised the prices of two heart drugs, Nitropress and Isuprel, by a respective 212 percent and 525 percent immediately upon acquiring them.

Valeant also raised the price of the San Diego-originated heartburn drug Zegerid by 550 percent this year, according to Deutsche Bank. Zegerid was developed by San Diego’s Santarus, which was bought in November 2013 for $2.6 billion by Salix Pharmaceuticals. Valeant purchased Salix in March of this year for $11 billion.

Valeant’s actions provoked a storm of opposition, including criticism from those inside the pharmaceutical industry.


Politicians joined the fray, including Democratic presidential candidates Hillary Rodham Clinton and Bernie Sanders, the senator from Vermont who calls himself a democratic socialist.

But Turing took the practice to a previously unheard-of level, Imprimis CEO Mark L Baum said in a Thursday interview. Baum said the response of Imprimis provides a market-based answer to exorbitant drug pricing.

Pharmaceutical companies typically respond to complaints about high prices by saying much of the price represents recovery of the cost of expensive research. That is Shrekli’s explanation for the price increase, that the money helps pay for bringing innovative new drugs to market, and provides a financial incentive to bring more existing drugs to market that right now aren’t sold because there’s not enough profit.

“We spend more than 50% of our revenue on R&D,” Shkreli said on Twitter in response to criticism. “Please get your facts straight before lumping us in with others.”


Turing also says it offers major price discounts for patients in such programs as Medicaid, selling for as low as $1 a bottle.

However, a company that buys a generic drug didn’t pay for the research, and pays much less than if the drug had still been under patent. Industry groups such as PhRMA, the Pharmaceutical Research and Manufacturers of America, have condemned the practice.

Mark L. Baum, Imprimis CEO. ( / Imprimis Pharmaceuticals)

Joe Panetta, CEO of the San Diego-based life science trade group Biocom, said the Imprimis announcement was good news. Panetta said the actions of companies like Turing were counterproductive.


“There was no justification for it other than profit,” Panetta said. “If they were truly recovering the cost of research or investing in new, innovative drugs, you could begin to justify the increase in cost.”

Monopoly challenged

Turing could raise the price of its drug so drastically because it was the only seller of pyrimethamine, which is used to treat toxoplasmosis and other infections. Toxoplasmosis is dangerous for people with weakened immune systems, such as those with HIV disease and chemotherapy.

Pyrimethamine is generic, meaning that any qualified drug maker could introduce a competitor. However, it occupies a niche market, and its previously low price meant that other companies didn’t see a market opportunity.


With its huge price hike, Turing changed that picture.

Imprimis said it now offers customizable compounded formulations of pyrimethamine and leucovorin in in capsules for as low as $99 for a bottle of 100 capsules. For more information, visit www.imprimiscares.com.

There’s a limitation, Baum said: The formulation is not FDA-approved, and can legally only be sold through a doctor’s prescription to a specific individual. The specific ingredients are FDA-approved, Baum said, and its compounding operations are FDA-inspected.

Filing for FDA approval of the compound itself would take years and millions of dollars, Baum said. By not filing, Imprimis can keep prices down and make a significant profit, even for less than $1 a capsule, Baum said in a Thursday interview.


The company has formed a division called Imprimis Cares to make special formulations including such high-priced generic drugs, he said. The division serves all 50 states, he said, and many more drugs are forthcoming.

“This is the tip of the iceberg,” Baum said.

Imprimis sells drugs for use in the eye and for urologic applications. Its ophthalmic products offer formulations of generic drugs made so they can either be injected into the eye, or require fewer applications of eye drops. The injectable products are intended to reduce the need for patient-administered eye drops, improving compliance.

Avoiding hurdles


Imprimis has found a legitimate way around the cost and regulatory hurdles to competition, said Ed Silverman, a veteran pharmaceutical industry observer. Silverman runs the longstanding Pharmalot blog, which recently moved to Stat, the Boston Globe’s new life science Web site.

Silverman said it would be even better if Imprimis had registered its compounding operation with the FDA, which would give doctors and patients a higher measure of confidence.

Dr. Sherry Franklin, a Solana Beach pediatric endocrinologist, said she feels more comfortable prescribing compounded formulations that are FDA-approved. While the FDA inspects facilities to ensure they use good manufacturing practices, the compounded drugs themselves are not approved.

However, Franklin said she understands that requiring FDA approval of the compounded drug is time-consuming and expensive, and that makes competition more difficult.


“It’s a conundrum,” Franklin said.

While complaints about high-priced drugs are long-standing, what’s new is that the prices of formerly inexpensive drugs are now being raised, which may make them unaffordable, Franklin said.

For example, she said the rising cost of doxycycline, used to treat acne, makes it impractical for that indication. The price has reportedly increased in recent years by 600 percent or more.

“The bottom line is the price of drugs in the United States of America is ridiculous,” Franklin said. “We are paying the cost for other nations to get medications. I think it’s reached a point where we can’t continue to do this.”