SAN FRANCISCO (CBS) -- AIDS and cancer patients were hit with massive sticker shock after a 5000% price hike of a popular life-saving drug. The drug company defends the move while one presidential hopeful vows to fight it.
After acquiring the rights to the drug Daraprim last August, Turing Pharmaceuticals raised the price from $13.50 to $750 per tablet last month. The increase raises the annual cost of treatment for patients from about $1,130 to $63,000.
Why was it necessary to raise the price so drastically?
"It depends on how you define drastically," says Martin Shkreli, the company's founder and CEO.
"The drug was unprofitable at the former price, so any company selling it would be losing money," says Shkreli. "At this price it's a reasonable profit. Not excessive at all."
Daraprim was developed in 1953 as a treatment for toxoplasmosis, an infection caused by a parasite. It comes from eating undercooked meat or drinking contaminated water and affects those with compromised immune systems, like AIDS and cancer patients.
The drug is used by a small and vulnerable group of patients. Shkreli insists the price hike was an altruistic move, but critics say it makes the company look greedy.
"I can see how it looks greedy. This is a disease where there hasn't been one pharmaceutical company focused on it for 70 years," said Shkreli. "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."
"Patients shouldn't be taxed and charged for future research and development," says oncologist, Dr. David Agus. "Patients should pay for the drug they're getting and what they need in the situation that they are. It's predatory practice and it's inappropriate and we have to take a stand.
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 says. "We're trying to flourish, but we're also -- our first and primary stakeholders are patients, there's no doubt about that."
Another drug that treats tuberculosis went from $15 to $360 after the rights to the drug were sold to a smaller company last month.
Amid considerable backlash, the price hike was reversed.
Democratic presidential hopeful Hillary Clinton spoke out in on the issue.
She told the BBC "price gouging like this in the specialty drug market is outrageous," and announced a plan that would cap out-of-pocket costs at $250 a month.
Hillary's prescription plan would cap out-of-pocket costs at $250 per month. What would you do with your savings? pic.twitter.com/bTIkVKAdkl
— Hillary Clinton (@HillaryClinton) September 22, 2015
Meantime, the Infectious Diseases Society of America and HIV Medicine Association have written an open letter to Turing, asking the company to lower the price of Daraprim.
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