# Hedge Fund Manager Buys Rights To Critical Drug, Hikes Price By 5000% **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 21, 2015, 8:02pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144 "2015-09-21T20:02:28Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [September 22, 2015, 3:25pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/21 "2015-09-22T15:25:45Z")
In economics terms, the drug is one that you’re kind of locked into - you don’t have an alternative and you absolutely need the drug, and this clown is the producer of the drug. By comparison, something like Zantac is one that you don’t absolutely need, and that there are abundant substitutes for. What this means is that the price the market will bear for the first drug is much higher than the price the market will bear for the second. That’s the explanation of what he’s thinking, but it doesn’t explain why he thinks that this is the right thing to do, or that it’s a good thing to do. This is out and out price gouging- he could make a handy profit by merely doubling or tripling the cost of the drug, and still not have priced it out of very many people’s reach, yet he decided to go for the 5000% increase anyway, because he’s an uncaring dick. From everything I’ve seen, he seems like a massive douchebag and asshole in general, and this is pretty much par for the course. ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [September 22, 2015, 3:36pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/22 "2015-09-22T15:36:03Z")
> [@nearwildheaven](#): > > This is absolutely insane. It’s one of the few drugs approved for use in pregnant women with malaria or toxoplasmosis, and whenever I’ve dispensed it (and it’s been a while), it was for toxo prophylaxis in people with AIDS. > > It’s not the first time he’s done something like this. He needs to be thrown in the slammer. > > [Martin Shkreli - Wikipedia](https://en.wikipedia.org/wiki/Martin_Shkreli) > > I’d love to see some of the “vandalism” on that Wiki page before it was locked. Well, seeing as how he’s a big League of Legends player, you could start playing the game with the intent of just killing him over and over and over again, thereby denying him the glory he seeks in that game. > [@](#): > > Shkreli is a League of Legends player who goes by the name “Cerebral” and began expressing interest in purchasing an esports team in 2014.[14] Enemy eSports announced that they had rejected a $1.2 million offer from Shkreli. Eventually he founded his own team, Odyssey eSports, and aimed to qualify for the 2015 North American League of Legends Challenger Series. The team lost to Cloud9 Tempest in the qualifying tournament and failed to qualify. In August, Odyssey merged with Imagine, with Shkreli becoming Chairman of the team.[15][16] ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [September 22, 2015, 4:09pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/23 "2015-09-22T16:09:57Z")
> [@bump](#): > > In economics terms, the drug is one that you’re kind of locked into - you don’t have an alternative and you absolutely need the drug, and this clown is the producer of the drug. By comparison, something like Zantac is one that you don’t absolutely need, and that there are abundant substitutes for. > … Not to hijack this thread but FYI, Zantac, Prevacid, etc. are in fact drugs that are absolutely needed by some people. Repeated severe reflux can be extremely uncomfortable and can lead to a damaged esophagus or even throat cancer. I take Omeprazole (generic Prevacid) every day and suffer if I miss a dose. Fortunately, as you say, there are numerous substitutes and generics so an asshole like Shkreli can’t bankrupt those who need it. ---
**Author:** ![Dinsdale](https://avatars.discourse-cdn.com/v4/letter/d/97f17d/32.png) [@Dinsdale](https://boards.straightdope.com/u/Dinsdale)\ **Post date:** [September 22, 2015, 4:24pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/24 "2015-09-22T16:24:08Z")
This seems a pretty blatant example of why - IMO - capitalism does not obtain optimal results in many health care matters. The difficulty with addressing this egregious example is that it is simply the most extreme example of very common practices. ---
**Author:** ![GrumpyBunny](https://avatars.discourse-cdn.com/v4/letter/g/bc8723/32.png) [@GrumpyBunny](https://boards.straightdope.com/u/GrumpyBunny)\ **Post date:** [September 22, 2015, 4:32pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/25 "2015-09-22T16:32:28Z")
None of what this guy has done is illegal; I suspect it’s getting a lot of play because a) it’s an election year, and b) the photos of the guy show a douchey-looking dudebro who you want to smack into next week. Another trick is for Company A to pay Company B to not manufacture the drug. After paperwork is signed, Company A then has a corner on the market and jacks up the price. Happens all the time, and a lot of what people have blamed on “Obamacare” is actually the result of these shenanigans. > [@davidm](#): > > According to Wikipedia, tablets of this drug are available in India in a price range of U.S. $0.05–$0.10 each (3–7 rupees). > [Pyrimethamine - Wikipedia](https://en.wikipedia.org/wiki/Pyrimethamine#Availability_and_price) Because India has fought against “Big Pharma” for decades, and due to its size, can demand that prices be kept reasonable (something the US won’t do, because freedom or something). It is technically illegal to “import” drugs from India to the US, though some people have done so on a small scale. (After US rescue asthma inhalers were reformulated to be CDC-free – and less effective – a friend’s mom included some from India for me in a care package to her daughter, hidden among a bunch of saris with her daughter’s meds.) ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [September 22, 2015, 5:08pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/26 "2015-09-22T17:08:49Z")
> [@GrumpyBunny](#): > > None of what this guy has done is illegal; I suspect it’s getting a lot of play because a) it’s an election year, and b) the photos of the guy show a douchey-looking dudebro who you want to smack into next week. I suspect it is getting a lot of play because it is something only a psychopath would do. ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [September 22, 2015, 5:10pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/27 "2015-09-22T17:10:59Z")
> [@GrumpyBunny](#): > > None of what this guy has done is illegal; I suspect it’s getting a lot of play because a) it’s an election year, and b) the photos of the guy show a douchey-looking dudebro who you want to smack into next week. > … Why look for another reason beyond the obvious one? It’s getting a lot of play because an important and inexpensive generic drug had it’s price increased %5000 overnight. That not only harms people who need this particular drug, but it exposes a flaw in the market which could bite any number of us at any time. And the fact that it isn’t illegal justifies nothing. It’s unethical and immoral. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [September 22, 2015, 5:24pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/28 "2015-09-22T17:24:48Z")
> [@davidm](#): > > That not only harms people who need this particular drug, but it exposes a flaw in the market which could bite any number of us at any time. And increases premiums for the rest of us. ---
**Author:** ![Greg\_Charles](https://avatars.discourse-cdn.com/v4/letter/g/839c29/32.png) [@Greg\_Charles](https://boards.straightdope.com/u/Greg_Charles)\ **Post date:** [September 22, 2015, 5:42pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/29 "2015-09-22T17:42:55Z")
> [@GrumpyBunny](#): > > None of what this guy has done is illegal; I suspect it’s getting a lot of play because a) it’s an election year, and b) the photos of the guy show a douchey-looking dudebro who you want to smack into next week. It feels like an election year, but by the strict definition of “a year with an election in it”, it’s not. It’s going to be a long slog. ☹ > [@Ravenman](#): > > I suspect it is getting a lot of play because it is something only a psychopath would do. +1 ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [September 22, 2015, 5:56pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/30 "2015-09-22T17:56:07Z")
> [@GrumpyBunny](#): > > Because India has fought against “Big Pharma” for decades, and due to its size, can demand that prices be kept reasonable (something the US won’t do, because freedom or something). India’s also notorious for allowing local patent infringement if they think the drugs are beneficial to their own populace. Whether or not that’s condoning/legalizing theft or sticking it to Big Pharma, I don’t know. Go google “indian pharmaceutical companies patent infringement” if you want scores of articles about it. ---
**Author:** ![Lemur866](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lemur866/32/434_2.png) [@Lemur866](https://boards.straightdope.com/u/Lemur866)\ **Post date:** [September 22, 2015, 6:19pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/31 "2015-09-22T18:19:10Z")
Except this particular drug is not patented. And the hedge fund manager didn’t buy the “rights” to the drug, he bought a company that manufactured the drug, which turns out to be the only legal outlet for the drug in the US. Other companies could produce the drug, but it happens that they don’t. And given that it seems that you can buy this drug overseas for a few dollars, there’s no real motive for any other company to start producing it, since the marginal cost of the drug seems to be a few pennies, not even the $13.50 price tag mentioned at first. Seems like the government response should be to remove the import prohibition and allow purchase of the drug from reputable European sources. It’s not exactly a free market when it’s the government that prohibits overseas companies from competing with Señor Douchebag. ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [September 22, 2015, 6:28pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/32 "2015-09-22T18:28:48Z")
It’d be easier and cheaper to just have the douchebag whacked. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [September 22, 2015, 6:29pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/33 "2015-09-22T18:29:10Z")
> [@septimus](#): > > Have the Board’s Hyperlibertarians weighed in? Market principles in action at their Godliest? I’m not a hyperlibertarian, but I’ll admit to having expected that there would be some sort of counter-argument or that the article was mis-representing the factualities of the matter. But no, that guy just seems to be a genuine asshole. There may be no law against what he’s doing, but for most of American history I think that this is the sort of case that would have been dealt with by a mob rather than by the courts. Since tarring and feathering is no longer given a blind eye, I think the only recourse would be that Congress holds a special investigation into the topic, like they do with baseball (since, clearly, baseball is where Congress is most needed). ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [September 22, 2015, 6:47pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/34 "2015-09-22T18:47:21Z")
> [@silenus](#): > > It’d be easier and cheaper to just have the douchebag whacked. Instructive, too. _Pour encourager les autres._ ---
**Author:** ![Larry\_Borgia](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/larry_borgia/32/156_2.png) [@Larry\_Borgia](https://boards.straightdope.com/u/Larry_Borgia)\ **Post date:** [September 22, 2015, 7:20pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/35 "2015-09-22T19:20:00Z")
Here’s an interview he gives defending the price hike. He's not helping his case by looking like the Platonic form of an 80s comedy villain. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [September 22, 2015, 7:47pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/36 "2015-09-22T19:47:59Z")
> [@Dinsdale](#): > > This seems a pretty blatant example of why - IMO - capitalism does not obtain optimal results in many health care matters. The difficulty with addressing this egregious example is that it is simply the most extreme example of very common practices. This situation is enabled by regulations that create barriers to entry by new businesses and barriers to import by existing ones. So more capitalism could get us a lower price. But we do have some of those regulations for good reasons. ---
**Author:** ![Gatopescado](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gatopescado/32/5711_2.png) [@Gatopescado](https://boards.straightdope.com/u/Gatopescado)\ **Post date:** [September 22, 2015, 7:57pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/37 "2015-09-22T19:57:38Z")
> [@silenus](#): > > It’d be easier and cheaper to just have the douchebag whacked. After reading the OP, my first thought was, “I wonder what kind of personal security this guy has?”. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [September 22, 2015, 8:21pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/38 "2015-09-22T20:21:58Z")
> [@Sage\_Rat](#): > > I’m not a hyperlibertarian, but I’ll admit to having expected that there would be some sort of counter-argument or that the article was mis-representing the factualities of the matter. But no, that guy just seems to be a genuine asshole. I would expect the hyperlibertarians to be arguing that the restrictions on trade should be lifted so you can get cheap Indian knock-offs for a few cents a dose. Or perhaps reduce the barriers to market so some other company can start producing the stuff. It doesn’t sound to me like this guy has a natural monopoly, more an accidental one. The drug isn’t even under patent anymore. Yes, it sucks when someone wants me to pay more than I want to. Regards, Shodan ---
**Author:** ![billfish678](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@billfish678](https://boards.straightdope.com/u/billfish678)\ **Post date:** [September 22, 2015, 8:37pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/39 "2015-09-22T20:37:10Z")
Dudes like this make people wish for a Batman with a bad attitude towards legal complications. ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [September 22, 2015, 8:39pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/40 "2015-09-22T20:39:10Z")
Another pharmaceutical company which was only so bold as to increase the price of its newly-acquired tuberculosis medicine by a mere 2000% [has decided to annul the purchase](http://thinkprogress.org/health/2015/09/22/3704183/drug-company-gives-back-rights/) in light of the recent attention brought to the issue. [Previous page](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144.md?page=1) [Next page](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144.md?page=3)