I’m sure everyone has heard way too much about Martin Shkreli, the jerk who somehow managed to give hedge fund managers a bad name (make that a worse one than they already had).
What was the most terrible thing he did? Was it buying a 62-year-old inexpensive drug and increasing its price to $750 per pill? Or was it claiming that it was still underpriced, because the people who needed to buy it would likely die without it? Or was it when he took to twitter and started calling people “moron” (and other names) when they questioned his almighty profit motive?
Never mind that when he was a hedge fund manager he tried to manipulate FDA regulations on drug companies so he could short their stocks. Or that the last drug company he started fired him and is now suing.
Ok, there is plenty of evidence that he is an asshole. But don’t take everyone’s word for it, just listen to him yourself (if you can):
The real question is, what are we going to do about it? Shkreli has done us a huge favor. He has shown us the natural result of unregulated capitalism in an inelastic market. This is why monopolies used to be illegal, and should be again. When somebody corners the market on something you can’t live without, that isn’t commerce, it is robbery, extortion, and homicide.
And Shkreli is not the first robber baron to do this. Not even close.
But now that Shkreli has rolled back the price, are we just going to forget about this? I hope not. There is nothing preventing this from happening over and over again.
And if you aren’t worried because you don’t take any of those drugs whose price can skyrocket, just remember that he is still an asshole. Just wait until someone like Shkreli manages to corner the market on clean water.
I am for free markets, but free markets must be regulated. In fact, free markets cannot exist without regulation. There have to be rules that set a level playing field, otherwise we sink back into feudalism.
I was on steroids for asthma, then read that the body produces its own steroids. Since I exercise a lot, I produce steroids so went to my allergist to ask about cutting back on the steroids. She suggested a generic medication that was new on the market to replace the not generic. The generic was $1500. That was medicine to cut back on the steroids. I haven’t been back to her. I cut back on my own.
A class mate boasted at our class reunion of all the money he made as a hedge fund manager and all the fancy parties he has been to. As far as I could tell, he had lost his boyfriend and in the long run wasn’t happy.
Some may say Money buys happiness. I grew up in a family flowing with money (that my mother gave my father to support the life style he wanted to become accustomed to). None of us were happy.
“. . . otherwise we sink back into feudalism.” ??? Back?
Capitalism is just feudalism all dressed up for the Industrial Revolution.
I’m not excusing what he did but actually I think he made some good points. But he’s right about the need to continue searching for alternatives to older medications. And I’m pretty sure he’s not the one to be doing the searching.
There was an article last week on this topic in the NYT, showing we spend about twice annually what they do in most other developed countries, and the gap seems to be growing. http://nyti.ms/1P1TeUD
Some drugs here cost 10x or more than in Europe, which begs the question. Is it our responsibility or fate to bankroll R&D for the rest of the world, or is something else going on behind closed doors? I’ve worked in drug R&D for over 25 years and people have always complained about the cost of their drugs, rightly so at times, but there’s something quite different about what’s going on lately, with prices totally unhinged from normal market forces even for generics now. Oh wait, that right…healthcare has never been, and never will be, a “normal” market. I knew things were going off the rails in my industry when lawyers began to outnumber scientists.
Your money or your life, indeed!
P.S. With all the public shaming, Shkrumbag recently backed down and agreed to lower the price of Daraprim, though didn’t say by how much. We shall see, but I wouldn’t expect too much. http://bit.ly/1Fx5mec
I use a certain, fairly well known mail order pharmacy for most of my scripts. I take a newer blood thinner for AFib. The first year, 2014, I was notified, for the first time that I was going to hit the donut hole. Since this, of all my drugs, was by far the most expensive, I talked to cardiologist and he said he would provide me with samples. So for a year I’ve been running over to his office to pick up samples. The other day I went to the mail order site because it’s getting near the end of the year and I thought I might be able to get one 90 supply of the med before the year was up before I reached the magic donut hole number. I checked the website for the price and they said it would be $52,000 for a 90 day supply. I figured this was a mistake and emailed them. Never got a response, so I called them. Turns out I don’t have to worry about the donut hole with my insurance, (not sure why last year I got a letter stating I did), and that the drug did not cost $52,000 and even if it did, it wouldn’t cost me more than $70. Now I can’t decide if I believe the person I talked to, but I’m going to try and order a supply and see what happens. Debtors prison, here I come. There are so many insurances companies, so many drugs, so many dispensers and so little information about any of it. I dread this time of year just for the fact that I’m going to have to wade through reams of information on whether to change insurance companies this year. If the rep was correct, I think I’ll stick with what we have if it’s still available. It would be, (after this last year) nice to not have to worry about the damned donut hole.
Drug prices are completely out of control, but I think the insurance companies take most of it on the chin. Ad then of course those costs are passed on to the insured with costlier premiums.
You’re also right about monopolies being anti-market capitalism. We’d need to fix that to bring about more competition. But then who would donate to the ruling parties?
I believe a company has a right to make a decent profit from risk based product development, but…
Also, I don’t want to stymie companies taking those risks either. This problem may take some big thinkers to forge a workable solution. Prhaps if the insurance companies set they’re price limits. If no one can buy the drug, supply and demand says the price should come down.
The interviewer asked whether other companies might not now be more able to compete with Daraprim.
The honest answer is that, yes, they will as is generally be the case now be more free to compete by making more profits on the drugs THEY were already making that compete with Daraprim, allowing them ALSO to increase profits.
The only real ceiling here is, what people (and by extension insurance companies) really are willing to pay for life-saving medications… and that ceiling is very high.
As for insurance companies “taking it on the chin,” the AFA limits the overhead and profit component of health insurance to 15%. Medicare operates with an overhead cost of a little less than 4%, but let’s call it 4% for purposes of math. 15% minus 4%, assuming the oh-so-efficient private sector is at least as efficient as Medicare, allows 11% profit for insurance carriers, above and beyond all other costs. 11%. How a basically guaranteed return of 11% equals “taking it on the chin,” I do not for a minute understand. VERY few industries operate with that kind of margin.
Drug manufacturers are an exception, with a historical return on investment north of 25%. Year after year after year, because they make things that save lives and which people are willing to pay their last dollar for, of course.
There is no risk.
Gleevec is another example. Roughly $9,000/month retail, and people with CML need to take the drug for the rest of their lives, literally.
Some health insurances (i.e. associations of people who consume health care costs) cover a large majority of the cost.
Medicare D is supposed to reduce the cost to a “mere” $2707/month.
Do the math.