Turing Pharmaceuticals, which has been at the center of public criticism for drastically hiking the price of a generic drug for a rare disease, announced Friday the ouster of its unpopular CEO Martin Shkreli in the wake of his arrest this week on charges of securities fraud.
Turing's Board Chairman Ron Tilles will additionally serve as interim CEO until a permanent leadership replacement is determined, the company announced.
The move comes one day after Shkreli was arrested by the FBI over allegations he misled investors of a hedge fund he managed during the time he was head of another biopharmaceutical company, Retrophin.
“We wish to thank Martin for helping us build Turing Pharmaceuticals into the dynamic research-focused company it is today, and wish him the best in his future endeavors,” Tilles said in a statement. “At the same time, I am very excited about the opportunity to guide Turing Pharmaceuticals forward. We remain committed to ensuring that all patients have ready and affordable access to Daraprim and Vecamyl. Research development on new medications continues to be a priority for the company.”
Turing and Shkreli first gained notoriety in September when the company announced it had purchased the rights to sell the generic drug pyrimethamine, the only known treatment for the parasitic infection toxoplasmosis, only to raise the price from $13.50 to $750 per pill under the brand name Daraprim.
The move sparked outrage from health advocates and politicians, who pointed to Turing and Shkreli as prime examples of corporate greed and price-gouging by the drug industry.
Shkreli again made headlines when it was announced he had become CEO of California-based firm KalosBios Pharmaceuticals in November. In early December, he bought the rights to sell another generic drug benznidazole, used to treat Chagas' disease, a parasitic infection mostly found in South and Central America. Like Daraprim, Shkreli planned to raise the current price of benznidazole from about $100 for a course of treatment to as much as $100,000.
As part of that transaction, the company stated plans to apply for Food and Drug Administration approval of the drug to sell it in the U.S., in order to obtain a priority review voucher, which allows drugmakers to speed up review of their products by several months.
The FDA grants the voucher as a reward when a company develops and gets approval for a treatment of one of 17 identified tropical diseases, or develops a therapy for a rare pediatric condition that affects more than 50% of those under the age of 18, and has fewer than 200,000 U.S. cases, according to the agency's guidance.
Companies who obtain such vouchers can either use it to fast-track review another one of their drugs, or opt to sell the voucher to another company. Such transactions recently have become a market of it own, with the last voucher selling for more than $350 million in August.
Critics say that choice exposes a flaw within the voucher program, which was intended to incentivize new drug development.
“It's not that he's exploiting a loophole, he's exploiting the design of the program,” said Robert Weissman, president of the consumer advocacy organization Public Citizen. “The program creates this high-value voucher, without any check that the voucher being awarded is in any way commensurate with the value of the product that was being registered.”
