There’s a standard response when people feel the sticker shock at seeing the prices on brand new drugs: that cost is necessary to subsidize the expense of drug development. And that’s true! Bringing a new drug to market takes a lot of time and money and multiple levels of testing and clinical trials. It hurts to pay it, but you’re paying all the costs of development (would that companies that tear up the environment had to obey the same principle).
But now Martin Shkreli comes along, and ruins the whole defense. Shkreli bought the rights to a drug, Daraprim, and immediately jacked up the cost from $13.50/pill to $750/pill, all for a drug that cost him $1/pill to manufacture.
He’s not trying to recoup development costs for Daraprim — the drug has been around for years, and was developed by a different company. Let’s call this what it really is: extortion.
The drug is listed by the World Health Organization as an essential medicine — it’s vital for treating pneumocystosis and toxoplasmosis, diseases that you don’t worry about too much, unless you’re an AIDS patient, or have been exposed to these parasitic infections. Then Daraprim will save your life. If you don’t get it, you die.
Shkreli knows this. He knows he’s got his grubby hands on the rights to an essential medicine, and that if he inflates the price to just about whatever he wants, people will have to pay it. And that’s the rotten greedy heart of his pricing decision: not that it’s a fair price to cover his costs with a reasonable profit, but that he can gouge whatever he wants out of deathly ill people.
I don’t think such a venal little man is going to care much about what people say. But I do wonder what the other pharmaceutical companies are going to do: this shabby tactic makes them vulnerable to exposure, and is going to fuel efforts to take drug pricing out of the hands of greedy marketers.
Oh, look. I should have just waited a few minutes: drug companies are showing some signs of panic.
A huge overnight price increase for an important tuberculosis drug has been rescinded after the company that acquired the drug gave it back to its previous owner under pressure, it was announced on Monday.
However, outrage over a gigantic price increase for another drug spread into the political sphere on Monday, causing biotechnology stocks to fall broadly as investors worried about possible government action to control pharmaceutical prices. The Nasdaq Biotechnology Index fell more than 4 percent.
“Price-gouging like this in the specialty drug market is outrageous,” Hillary Rodham Clinton, a contender for the Democratic presidential nomination, said in a tweet on Monday. She said she would announce a plan on Tuesday to deal with rising drug prices.
I’d say I was a prophet, except it’s a cheap kind of prophet who makes a prediction that’s already confirmed in the morning paper…he just hadn’t read it yet.