CEO Unabashedly Gouges Price for AIDS Drug, Then Rescinds

As CEO of Turing Pharmaceuticals, hedge fund manager Martin Shkreli raised the price of a life-saving drug from $13.50 to $750 per pill. According to Shkreli, 32, the 5,000% price hike was a smart business decision because the drug was no longer profitable.

A CBS News correspondent asked Shkreli, "Why was it necessary to raise the price of Daraprim so drastically?"

"Well, it depends on how you define ‘so drastically,’” he replied. “Because the drug was unprofitable at the former price, so any company selling it would be losing money. And at this price it's a reasonable profit. Not excessive at all."

Daraprim, the drug in question, was first developed in 1953 to treat a parasitic infection. This infection is common to those with cancer and AIDS, and other diseases characterized by weakened immune systems.

With the new $750 per tablet price, the average cost of treatment rose from roughly $1,130 to over $63,000, according to CBS. That same report acknowledged the cost of treatment for many could run much higher.

Shkreli agreed that at face value his business savvy move may look “greedy,” but he argued there were “a lot of altruistic properties to it.”

Here is one of Shkreli’s examples of altruism: “With these new profits we can spend all of that upside on these patients who sorely need a new drug, in my opinion."

Dr. David Agnus, an oncologist and medical contributor to CBS doesn’t see this as a case of putting the patients' needs above business. In fact, he said it was the exact opposite.

"Patients shouldn't be taxed and charged for future research and development. Patients should pay for the drug they're getting and what they need in the situation that they are in," Dr. Agnus told CBS.

"It's predatory practice and it's inappropriate," he added.

The case of hiking Daraprim is part of a newer business strategy within the pharmaceutical industry. By acquiring old drugs used only in rare cases, then turning them into “speciality drugs,” one is able to get away with gouging the price.

Shkreli defended this practice and refused to acknowledge what he was doing was shady business. But under considerable pressure, Turing Pharmaceuticals rescinded their price hike and decided to lower the price. The new price has yet to be confirmed.