Drug distribution becomes weapon to block competition

Before the price hike that made him infamous, the former CEO of Turing Pharmaceuticals had to ensure that no competitor would be able to launch a cheaper version of Daraprim, the 60-year-old anti-infection pill that is no longer under patent.

"The most effective way to improve access and lower prices is to ensure that generic drugs get to market as quickly as possible," says Dr. Ameet Sarpatwari, of Harvard Medical School, who has studied the issue.

At least 40 drugs worth an estimated $5.4 billion are sheltered from competition by distribution hurdles, according to a study commissioned by the Generic Pharmaceutical Association, an industry trade group.

[...] last June — three months before its sale to Turing — Daraprim was moved into a closed distribution program, allowing the manufacturer to refuse sales to competitors.

"Mr. Shkreli set up a very complicated system to ensure profits and patients have really suffered," says Sean Dickson, of the National Alliance of State and Territorial AIDS Directors.

Turing says it has improved access to Daraprim, including making it available through a patient assistance program for those that can't afford it.

Because the drug can cause severe birth defects, it is subject to a rigorous distribution program controlled by Celgene.

"The FDA is hesitant to make a call on whether a manufacture is actually intending to delay generic competition," explains pharmaceutical attorney Kurt Karst.