Will company selling lifesaving drug for $1 still make a profit?
Turing Pharmaceuticals CEO Martin Shkreli caused a public uproar when he drastically raised the price of the 62-year-old prescription drug for cancer and AIDS patients called Daraprim.
Daraprim is considered the most effective treatment for a rare but potentially deadly disease that afflicts persons with lowered immune systems, including cancer and HIV patients.
After facing a global backlash, Shkreli promised to cut the price of Daraprim, which was originally increased from its original price of $10.50 to $750 for a single pill -- a 5,000 percent price hike.
He insisted that it was being sold at a loss at the original price.
He did cut the price, but only for hospitals. Individuals will still pay $750 for a single pill. Shkreli told CBS News' Don Dahler in September that "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."
But last month, Imprimis Pharmaceuticals, a San Diego-based compounding drug company, announced it will offer its version of Daraprim for $1 a pill.
Asked if the company was taking a loss on the drug, Imprimis CEO Mark Baum said, "The chemicals that we use to make this formulation are quite inexpensive. We make a really nice profit on this, but we make what I feel is an ethical profit, a reasonable profit."
"There are many, many examples of formulations like this where companies are really treating drugs like a share of stock, they're just buying and selling them in the marketplace," Baum said.
Shkreli said that he is getting unfairly singled out.
"There are literally a dozen companies just like ours that raise prices dramatically, and higher, might I add, than our company. And I don't see those companies getting the criticism that I get," Shkreli said.
The FDA told CBS News it was looking into the Imprimis announcement and would have no further comment at this time. Imprimis is also considering selling cheaper versions of other high-priced drugs whose costs are afflicting the afflicted.
A U.S. Senate committee is investigating the price increases at Turing and other drug companies, with a hearing on the issue scheduled for Dec. 9.