The CEO of a small pharmaceutical company recently channeled ‘Pharma Bro’ in defending his decision to raise the price of an antibiotic more than 400 percent, telling the Financial Times that “it is a moral requirement to make money when you can.”
Nirmal Mulye, CEO of the small Missouri-based drug company Nostrum Laboratories, raised the price of bottle of nitrofurantoin from $474.75 to $2,392 last month. The drug is a decades-old antibiotic used to treat urinary-tract infections caused by Escherichia coli and certain other Gram-negative bacteria. The World Health Organization lists nitrofurantoin as an essential medicine.
Mulye said he was in “this business to make money”, and that it is a “moral requirement” to “sell the product for the highest price”, Arstechnica noted.
The executive also defended Martin Shkreli — known affectionately to many of his critics as 'Pharma Bro':
In line with this perspective, Mulye took a moment to defend Martin Shkreli, who gained notoriety for buying exclusive rights to another decades-old drug and ruthlessly raised its price by more than 5,000 percent virtually overnight. (Shkreli was sentenced to seven years in prison in March on unrelated fraud charges.)
Mulye explained it this way during his interview with the FT:
I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders... If he's the only one selling it then he can make as much money as he can... We have to make money when we can. The price of iPhones goes up, the price of cars goes up, hotel rooms are very expensive.
After Mulye attacked the Food and Drug Administration in the interview, saying the fees it charges to drug makers are “highway robbery” and that the regulatory body is “incompetent and corrupt”, FDA Commissioner Scott Gottlieb fired back:
[T]here’s no moral imperative to price gouge and take advantage of patients. FDA will continue to promote competition so speculators and those with no regard to public-health consequences can’t take advantage of patients who need medicine.
Both Gottlieb and Mulye noted that Nostrum’s antibiotic had been pulled from the market—as were rivals’ such as Furadantin—to meet new impurity regulations set by the FDA. Nostrum has not yet begun reshipping the drug, and Mulye warned that the price could change again “according to market conditions.”