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CEO: 5,000-percent drug price hike "not excessive at all"

The increase drew protests in the medical community from those concerned that many patients will no longer be able to afford the drug
Turing Pharmaceuticals CEO defends Daraprim price hike 03:32

When Turing Pharmaceuticals bought the 62-year-old drug called Daraprim in August, the company immediately raised the price of one pill from $13.50 to $750. The increase drew protests in the medical community from those concerned that many patients will no longer be able to afford the drug. According to Turing CEO Martin Shkreli, however, the move is simply a smart business decision.

"Why was it necessary to raise the price of Daraprim so drastically?" CBS News correspondent Don Dahler asked Shkreli.

"Well, it depends on how you define so drastically. 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," Shkreli responded.

Daraprim was developed in 1953 as a treatment for toxoplasmosis, an infection caused by a parasite. It comes from eating under-cooked meat or drinking contaminated water, and affects those with compromised immune systems, like AIDS and cancer patients.

When Turing Pharmaceuticals raised the price of Daraprim to $750 per tablet, the average cost of treatment for patients rose from about $1,130 to $63,000. For certain patients, the cost can go as high as $634,000.

While Shkreli acknowledged that the move might look "greedy," he said there are "a lot of altruistic properties to it."

"This is a disease where there hasn't been one pharmaceutical company focused on it for 70 years. We're now a company that is dedicated to the treatment and cure of toxoplasmosis. And with these new profits we can spend all of that upside on these patients who sorely need a new drug, in my opinion," he added.

Oncologist and CBS News medical contributor Dr. David Agus disagreed.

"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" Agus said.

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

The topic entered the political debate on Monday, with Democratic presidential candidate Hillary Clinton tweeting: "Price gouging like this in the specialty drug market is outrageous."

Her rival Bernie Sanders sent a letter to Shkreli demanding information on the price increase and called the rate hike "...the latest in a long list of skyrocketing price increases for certain critical medications."

Sanders and Congressman Elijah Cummings have been investigating drugs that have seen jumps in prices.

"Right now it's out of control, and so we as a country, as a government, as individuals, as doctors all have to get together and say, we need to make pricing appropriate," Agus said.

But according to Shkreli, the new cost of Daraprim is appropriate.

"There's no doubt, I'm a capitalist. I'm trying to create a big drug company, a successful drug company, a profitable drug company," he said. "We're trying to flourish, but we're also -- our first and primary stakeholders are patients, there's no doubt about that."

Hillary Clinton says she will lay out a plan Tuesday about how to take on what she calls price gouging in the specialty drug market. The increased scrutiny on this practice has already led Rodelis Therapeutics that sells tuberculosis drug Cycloserine to rescind a major price hike enacted just last month.

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