How an old drug became a pricing choke point
Daraprim’s active ingredient, pyrimethamine, had been used for decades when Turing Pharmaceuticals acquired the drug’s U.S. marketing rights in 2015. The company did not need to invent a new treatment to gain control over its sale. It gained control over access to a medicine that clinicians still relied on, including for treating toxoplasmosis, a potentially serious infection.
That distinction matters. The price increase was not payment for a newly developed drug; it was made possible by control over the existing product. Shkreli’s company raised the U.S. price from $13.50 to $750 per tablet. Patients’ need for the medicine did not change, and neither did the tablet’s active ingredient.
The economics of a narrow market
A medicine can be old and still face little effective competition. For a drug used in a relatively small patient population, another company may see limited potential sales compared with the expense and time involved in bringing an alternative to market. Meanwhile, doctors cannot simply substitute an unapproved product whenever the price rises. These conditions can leave buyers with few practical options, even when the underlying compound is familiar.
This is where rent-seeking differs from earning returns by creating something new. In economics, rent-seeking means using control, rules, or barriers to capture more income from an existing opportunity rather than increasing the value available to society. The term describes the economic mechanism; it does not, by itself, establish whether a particular action was legal.
Who bears the cost
When a seller has room to raise prices, the bill can reach patients, insurers, hospitals, and public health programs. Some costs may be absorbed by insurers or institutions, but they do not disappear; they are shifted among people and organizations paying for care. The episode shows why a drug’s age alone does not guarantee affordability: what matters is not only how easy the medicine is to make, but who controls access to it and whether buyers have another option.
