pic thx to david goehring flickr creative commons

For the second time in a week, Turing Pharmaceuticals is facing anti-trust scrutiny. The New York State Attorney General wants to know more about a controlled distribution system for its pricey Daraprim pill and the extent to which this program may thwart generic rivals. Last week, a US Senator asked the Federal Trade Commission to investigate the New York-based company over the same concern.

Daraprim is an anti-infective pill that Turing purchased this past summer for $55 million and then boosted the price from $13.50 to $750. As we noted previously, the 5,000 percent price hike triggered a new round of scrutiny of prescription drug costs and has spilled over into the presidential election campaign.

Drug makers often use closed distribution systems to control shipments if special handling or storage is needed. This may be because a company has limited supplies and wants to avoid shortages, is trying to thwart counterfeiting, or is required by a risk mitigation plan to ensure its medication is prescribed appropriately.

Turing maintains a select list of qualified buyers, including the Walgreens specialty pharmacy to fill individual prescriptions, as well as certain hospitals and clinics. But all shipments come from a division of a major wholesaler that must clear any other purchase requests with Turing.

We should note that Turing inherited the closed distribution program when it purchased Daraprim this past summer from Impax Laboratories. Although Jon Haas, who heads patient access at Turing, acknowledged that he would reject any orders from a generic drug maker.

“We spent a lot of money for this drug,” Haas told Pharmalot last week. “We would like to do our best to avoid generic competition.”

For this reason, New York Attorney General Eric Schneiderman  wrote a letter yesterday to Turing chief executive Martin Shkreli to say “Turing’s actions may be restraining competition unlawfully, and have the potential to greatly impede access to a drug that is critical for public health.” He asked Shkreli to contact his office and retain all documents related to the inquiry. We asked Turing for comment and will update you with any reply.

Shkreli, you may recall, became a poster child for expensive medicines by using social media to deride people who complained about the price hike. In doing so, he made it possible for the largest drug makers to distance themselves from his actions, a posture made still easier by the fact that Shkreli is a 32-year-old former hedge fund manager with a reputation for speaking off the cuff.

Nonetheless, the Daraprim price hike is seen as emblematic of the larger issue of prescription drug costs and the impact on the US health care system. And if Shkreli winds up testifying before Congress –  Vermont Senator Bernie Sanders  and New York Congressman Elijah Cummings  have begun an investigation – his appearance is likely to haunt the rest of the pharmaceutical industry.