The invisible hand of the unregulated free market hoodoo price for pyrimethamine is under a dollar a dose. So these statements make little sense:
I’m not sure why one would expect otherwise. That’s the issue with unregulated drug prices. The actual ideal market price for a life-saving drug would the value of everything you own, plus some of what your close relatives own, regardless how much this is, because most people would pay that if faced with the prospect of death.
Recently, regarding price negociations between the French authorities and some pharma company that is producing a new drug significantly more efficient than currently existing molecules for a rather common ailment (can’t remember which), the price the pharma company wouldn’t budge from was based on the price of the existing inferior drug time some arbitrary factor. Absolutely not on research cost (in fact, acquisition cost, since they had just bought the small company that discovered the new drug jus to get this patent), or production cost, or anything like that.
And there’s no reason to expect something different if you leave it to the market. The company has a monopoly on a life-saving (or life improving) product, why on earth should they price it at a reasonnable cost, rather than at a price that will maximize their profits? Even moreso since even if the “customer” is too poor to afford the high price, the rest of the population will pay for it (in taxes or higher insurance costs, or whatever) since we don’t let people die from curable medical issues. Added bonus : you can even fix different prices for different markets (say, 10 times more in the USA than in poorer India) since drugs typically can’t be resold from one country to another.
Shkreli might have been bolder about it, but that’s how drug pricing is going to work if it’s not closely regulated and monitored but just left to the market. As a previous poster pointed out, if a company owned the exclusive rights to all water, it would sell every glass of it for a fortune unless forced to do otherwise.
Not really you can’t. Medical tourism is a huge and growing industry. There are excellent private hospitals in India and Thailand if you can afford them. If its cheaper to hop on a plane and get treatment elsewhere then people will.
Also, its virtually impossible to stop websites selling the indian version of a drug internationally. The vast majority of the time posted pharmaceuticals in an unmarked envelope will arrive just fine.
The development cost is irrelevant. The only thing that matters if offer and demand. If you’re the only producer of something highly valuable, you’ll make a fortune. If you’re selling something that almost nobody needs, you won’t make any money, even if it costed you billions to develop it.
And as for being undercut by concurrents, at the very least you’ll make a killing until someone else begins to produce it too, which will takes time. But you’re as likely to stay the only producer, because concurrents might reason that as soon as there will be concurrence, the price will drop back to a low level, which will presumably be unprofitable (or else they would already be producing it), so why investing time and money in this?
Development cost is just an argument made to justify pharma companies practices. It has essentially nothing to do with actual drug pricing (or for that matter with the pricing of anything sold on a market).
I think the government should stop recognizing drug patents, and basically take over the whole pharmaceutical industry themselves.
However, if they are not going to do that, and it is allowed to be a profit-seeking corporate capitalistic concern, then it strikes me as ridiculous to expect a Big Pharma CEO to go after profit, but not *too *much profit.
How to best incentivize pharmaceutical innovation and public benefit is a completely separate issue from the pricing of Daraprim, which of course hasn’t involved much innovation since my parents were kids.
The Daraprim issue highlights the current regulatory imbalance between safety and competition. We obviously don’t want people selling dirt pills. But existing barriers are so high that they allow de facto monopolies, even when no patent monopoly is granted. I’m interested in seeing how the compounding pharmacy loophole plays out. The rest of the wold pays low prices for this drug, and not because other governments are setting that low price.
No it’s not ridiculous. A market might work very well with informal rules. But when some players start to violate the informal rules that make the market tolerable we have two choices. We can use some sort of social pressure to enforce the informal rules or we can formalize rules that will make the violator’s actions unprofitable.
We typically don’t make every undesirable action illegal, because it would be too much work to regulate everything. We rely on people mostly doing the right things simply because that’s what regular people do. But when we have too much of a problem with some people, we have to make laws against their behavior.
And so Shkreli is guilty of violating the rules of the semi-free for-profit pharmaceutical marketplace. Namely, he got his face in the news for being a horrible person. But the rest of the Pharma industry doesn’t want us to think they’re all like Shkreli, because if we did we’d abolish for-profit pharma. We don’t have to have pharma patents, we don’t have to protect trademarks, we don’t have to prevent importation of drugs from overseas, we don’t have to make it illegal for Medicare to negotiate prices. We do those things because we think that on balance a for-profit pharma industry is a net benefit for the rest of us. If we didn’t, we could stop it and have everything publicly owned.
So there’s a huge excluded middle ground between unregulated laissez-faire and a nationalized health care system. If the market players aren’t behaving in a way that works for the rest of us, we can change the rules of the marketplace. And this threat is extremely useful in forcing the players to play by the informal rules.
He’s a direct lesson in why a “hands off” policy fails in a monopoly situation.
He’s EXACTLY why regulation is necessary for the public good.
(…and why, when you hear people saying “we need less regulation”, the the people behind it are usually looking to screw over the public in their market the same way as Douche-Boy Shkreli did in Pharma.)
How is the current situation “hands off”? There are plenty of folks making this drug who I imagine would love to sell their product here.
Lemur, I get what you are saying but I still think it’s ridiculous. It strikes me as like telling a bunch of runners that they should compete with each other and try to run the fastest, but not too fast or they will be in trouble. But we’re not going to tell them what their limit is, just yell at people from time to time who are obviously way too fast.
Did you guys see this ludicrous display?
It’s a video of Skhreli “dissing” one of the guys from Wu Tang Clan, over something they said about him, not sure, don’t care.
It’s a bizarre video. Can’t tell if joking or…
Clearly tongue in cheek. I thought it was humanizing in a funny way.
Martin Shkreli… God’s gift to Fabrice Tourre.
In the absence of a monopoly, there is a really big list of life preserving things that should have a virtual infinite cost. None of these drugs that Shkreli is price gouging are under patent. They are really effective drugs that are off patent. They are so effecive that noone really bothers to try to improve on them. But as the sole generic manufacturer, Shkreli figures he can price gouge long for a year or two while the FDA approves other generic drugs to compete with him. And with 5000% margins, you don’t need to do it very long to make a shit ton of money.
To be fair, it is regulation that is giving douche boy his monopolistic power. Its taking the FDA too long to approve generic drugs. The FDA spends too much time approving drugs that are already proven effective. I have no idea what takes them so long but it takes 5-10 years to bring a fresh drug to market, it takes 2-5 years to bring a generic drug to market. Generic drug manufacturers are frequently already manufacturing and marketing a generic drug in another country before it goes off-patent here and it STILL takes them years to get FDA approval. 
And the hits just keep on coming. Martin Shkreli sued over $2 million Wu-Tang Clan album.
I kind of like having Shkreli around, I want him to marry Omarosa like Kanye married Kim K.