Drug Company Under Fire For 5,000 Percent Drug Markup

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MIAMI (CBSMiami) -- The company that makes the life-saving drug Daraprim increased the price for one tablet by 5-thousand percent, from $13.50 to $750.00.  The move has drawn protests in the medical community and among investors, but the company, Turing Pharmaceuticals is standing by the price hike.

When asked why it was necessary to raise the price of Daraprim so drastically, company founder and CEO Martin Shkreli replied, "Well it depends on how you define so drastically. Because 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."

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.

When Turing Pharmaceuticals raised the price of Daraprim to $750 per tablet last month, the annual cost of treatment for patients rose from about $1,130 to $63,000.

This drug is used by a small group of patients but Shkreli doesn't think the company is being greedy.

"Yeah, I can see how it looks greedy, but I think there's a lot of altruistic properties to it," Shkreli told CBS News.  When asked how is it altruistic, he replied, "This is a disease where there hasn't been one pharmaceutical company focused on it for 70 years. 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. "

Dr. David Agus, an oncologist and CBS News Medical Contributor does not agree.

"Patients shouldn't be taxed and charged for future research and development, patients should pay for the drug they're getting and what they need in the situation that they are," said Dr. Agus. "It's predatory practice and it's inappropriate and we have to take a stand."

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. We're trying to flourish, but we're also, our first and primary stakeholders are patients, there's no doubt about that," he said.

Increased scrutiny on this practice has already led another company that sells a tuberculosis drug to rescind a major price hike enacted just last month.