# 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:** 5
**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 23, 2015, 6:27pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/81 "2015-09-23T18:27:41Z")
It would be perfectly legal for you to make this drug and sell it. Except it turns out that manufacturing drugs takes some know-how and infrastructure. Plus you need to make sure you’re complying with various laws related to manufacturing and selling drugs intended for human use. But yes, any pharma company could start making this drug tomorrow. OK, not tomorrow, but pretty quickly. They have the lawyers and experts who can make sure they’re complying with regulations, they have chemists who know how to turn one molecule into another molecule, they have salespeople who know how to call hospitals and pharmacies and fill orders, they have trucks and guys in coveralls who can pack up boxes of pills and send them all over the country. The problem is that the market for the drug is very small, it costs a lot to set up a manufacturing line for a drug, and the price you could charge for the drug is a lot less than $750 per dose. There is no natural or legal monopoly on this particular drug, it’s just that this company happens to be the only company in the United States that has bothered to make it, because it was a low-profit product. Then the price gets jacked up to $750 a dose, and the drug would be extremely profitable. Except if there was another company making it, you wouldn’t have a monopoly and couldn’t charge $750, or even the $13.50 that’s been cited as the “original” price. You’d get a few bucks per user, for a few thousand users. Of course, this whole thing has been a PR disaster not just for this particular douchebag and his company, but for the whole pharmaceutical industry. I’m surprised that some of the big companies haven’t got on TV and announced that they’re going to start making this stuff and pricing it at cost, just to end the story. ---
**Author:** ![Fiveyearlurker](https://avatars.discourse-cdn.com/v4/letter/f/da6949/32.png) [@Fiveyearlurker](https://boards.straightdope.com/u/Fiveyearlurker)\ **Post date:** [September 23, 2015, 7:14pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/82 "2015-09-23T19:14:24Z")
> [@Ruken](#): > > How do I proceed with my sale? After all, “nothing is stopping” me. The same way every one else does it. Because nothing is stopping you. ---
**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 23, 2015, 7:18pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/83 "2015-09-23T19:18:02Z")
Turns out that “Mr.” Shrekli was financing an independent punk label. [Several of the bands who work for him, and the head of the label itself, have made it clear exactly what they think of him.](http://thinkprogress.org/health/2015/09/23/3704603/shkreli-punk/) ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [September 23, 2015, 7:29pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/84 "2015-09-23T19:29:14Z")
> [@Lemur866](#): > > But yes, any pharma company could start making this drug tomorrow. OK, not tomorrow, but pretty quickly. They have the lawyers and experts who can make sure they’re complying with regulations, they have chemists who know how to turn one molecule into another molecule, they have salespeople who know how to call hospitals and pharmacies and fill orders, they have trucks and guys in coveralls who can pack up boxes of pills and send them all over the country. Define, pretty quickly please. Is that a year? Maybe two years? In that interim period, isn’t this a monopoly? ---
**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 23, 2015, 7:33pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/85 "2015-09-23T19:33:22Z")
> [@Ruken](#): > > How do I proceed with my sale? After all, “nothing is stopping” me. I sure hope some kind of regulation is stopping you. In another thread, we’re discussing how a fucking peanut butter manufacturer acted with extreme malice that resulted in people dying from food poisoning. That guy is now going to prison for 28 years. In my view, there’s no difference between this profiteer and that peanut CEO: they don’t care if people die if the profits roll in. I should certainly hope that the FDA would want some assurances that you’re not another one of those people before you start selling your homemade pharmaceuticals. But we’re a loooong way from saying that things would be better if we had more unregulated, uninspected, fly-by-night pharmaceutical companies, such as the one you wish to open in your garage. ---
**Author:** ![Snarky\_Kong](https://avatars.discourse-cdn.com/v4/letter/s/a183cd/32.png) [@Snarky\_Kong](https://boards.straightdope.com/u/Snarky_Kong)\ **Post date:** [September 23, 2015, 7:34pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/86 "2015-09-23T19:34:55Z")
> [@Fiveyearlurker](#): > > This one example is being used to suggest policies such as Hillary Clinton’s proposals yesterday. This example is not typical. Not to say that it doesn’t ever happen, but it is enough of an anomaly that it shouldn’t be used to set broad policies on drug prices. > > And, yet that’s what the rhetoric seems to be. Everyone seems to think that there is a number above which a drug should not cost. This is silly. > > In this case, I get the outrage. Really, I do. I might even be willing to join in on the outrage if it were limited to this one example. But, when the OP starts off demonizing an entire industry with: > > that’s where you lose me. And, I know that the rhetoric is little more than posturing, because as I point out, you have an option to do something about it other than just sharing facebook outrage. This drug is off patent. You can make and sell it. You can sell it at whatever price seems fair. Even if that means losing money. Why is no one doing this? > > If you think that you can develop a drug, and sell it for whatever dollar amount you think is fair, there is nothing stopping you from trying. If it’s that easy to develop a drug and sell it for a few dollars a month, then why is no one doing it? I don’t think any of the outrage is that the medicine is expensive. If the medicine is expensive to research and expensive to produce, then absolutely you should charge a lot of money for it. That is not what people are upset about. ---
**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 23, 2015, 7:37pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/87 "2015-09-23T19:37:26Z")
> [@Fiveyearlurker](#): > > And, I know that the rhetoric is little more than posturing, because as I point out, you have an option to do something about it other than just sharing facebook outrage. Indeed. That’s why I wrote to my representative in Congress, to urge a national, single-payer system where monkeyshines like this would not be allowed. ---
**Author:** ![bup](https://avatars.discourse-cdn.com/v4/letter/b/6bbea6/32.png) [@bup](https://boards.straightdope.com/u/bup)\ **Post date:** [September 23, 2015, 7:38pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/88 "2015-09-23T19:38:22Z")
If he’d smart enough to only jack up the price from $13.50 a pill to $25 a pill, people would have pissed and moaned but nobody would have questioned him if he gave some vague bullshit about overhead. There would have been no news story. I guess I’m glad he was brazen/stupid enough to increase the price fifty-five-fold. ---
**Author:** ![lazybratsche](https://avatars.discourse-cdn.com/v4/letter/l/ba8739/32.png) [@lazybratsche](https://boards.straightdope.com/u/lazybratsche)\ **Post date:** [September 23, 2015, 8:04pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/89 "2015-09-23T20:04:23Z")
> [@LonghornDave](#): > > Define, pretty quickly please. Is that a year? Maybe two years? In that interim period, isn’t this a monopoly? However long it takes to go through the FDA Abbreviated New Drug Approval process. That’s the process for generics, and determines whether the generic is “bioequivalent” to some original drug. It’s got to be chemically identical, and you have to give it to healthy individuals to prove that it is absorbed and processed by the body just like the original drug is. WAG, at least several months of testing. Plus you’ve got to show that your drug is shelf-stable. That’s many months of testing. You’ve got to do this using a few pilot production-scale batches. So you can’t start dosing test subjects using whatever \*\*Ruken \*\*whips up this weekend. Those are just a few of the requirements. All the gory details about ANDA approvals [are here on the FDA website](http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/AbbreviatedNewDrugApplicationANDAGenerics/default.htm). Oh, and [the FDA has a backlog](http://www.fdanews.com/articles/169299-office-of-generic-drugs-to-focus-on-approvals-in-addressing-anda-backlog). Once you submit you’re completed application (after completing the necessary testing) it’ll take an average of 40 months before you hear anything back. They’re hoping to get it down to only 10 months. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [September 23, 2015, 8:10pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/90 "2015-09-23T20:10:18Z")
> [@Ravenman](#): > > Which rule, exactly, makes government partially to blame for this idiot? Maybe it is the rule against this man’s parents leaving a young, greedy, antisocial monster alone in the woods to let him fend for himself against the elements? It’s the set of rules that make the FDA certification process time consuming and expensive. The set of rules that prohibit foreign makers of this drug to import them without going through that same time consuming and expensive process. It’s the set of regulatory rules that maintains the temporal monopoly on this drug enabling the company to extract monopolistic profits. ---
**Author:** ![Fiveyearlurker](https://avatars.discourse-cdn.com/v4/letter/f/da6949/32.png) [@Fiveyearlurker](https://boards.straightdope.com/u/Fiveyearlurker)\ **Post date:** [September 23, 2015, 8:11pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/91 "2015-09-23T20:11:15Z")
> [@Snarky\_Kong](#): > > I don’t think any of the outrage is that the medicine is expensive. If the medicine is expensive to research and expensive to produce, then absolutely you should charge a lot of money for it. That is not what people are upset about. Agreed. And if there were a nuanced view that this guy is not the industry as a whole, then that would be a legitimate discussion. But, the OP started this discussion with excitement that the entire industry dropped as a result of legislation that would be proposed that would cap the price of drugs regardless of their origin. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [September 23, 2015, 8:20pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/92 "2015-09-23T20:20:30Z")
> [@LonghornDave](#): > > Define, pretty quickly please. Is that a year? Maybe two years? In that interim period, isn’t this a monopoly? It’s actually gotten a lot better than it used to be. While GDUFA underestimated volume, the initial application approval (“we have your stuff and you didn’t fax it upside down”) is down to ~1 month, and final ANDA approval is averaging ~42 months as of whenever this report is from in 2014. [PDF](http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/BudgetReports/UCM432322.pdf) ---
**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 23, 2015, 8:52pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/93 "2015-09-23T20:52:34Z")
> [@Bone](#): > > It’s the set of rules that make the FDA certification process time consuming and expensive. The set of rules that prohibit foreign makers of this drug to import them without going through that same time consuming and expensive process. It’s the set of regulatory rules that maintains the temporal monopoly on this drug enabling the company to extract monopolistic profits. Are these the same set of rules that make sure that you don’t take sugar pills instead of, say, medication to treat parasitic infections? Just want to make sure we’re talking about the same thing. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [September 23, 2015, 9:54pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/94 "2015-09-23T21:54:00Z")
> [@Ravenman](#): > > Are these the same set of rules that make sure that you don’t take sugar pills instead of, say, medication to treat parasitic infections? Just want to make sure we’re talking about the same thing. Yes, those ones. ---
**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 23, 2015, 11:36pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/95 "2015-09-23T23:36:04Z")
> [@Bone](#): > > Yes, those ones. Well, we better get rid of those then. What’s a few lives lost to bogus drugs when it comes to liberty? ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [September 24, 2015, 3:28am UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/96 "2015-09-24T03:28:07Z")
> [@Ravenman](#): > > In my view, there’s no difference between this profiteer and that peanut CEO: they don’t care if people die if the profits roll in. Due respect, I think there’s a big difference. The first one’s a dick, the second one’s a criminal. This guy is honest and upfront about what he’s doing. He’s not hiding anything, he’s simply charging a lot. But, really, he’s charing a lot to those who can afford it. I saw an interview with him, and he stated clearly that no one would be unable to get the drug because they were unable to pay. People who don’t have insurance or money will get the drug at cost ($1 or 2 a pill). Basically, his whole plan is “soak the insurance companies”. Now, that’s still harmful, since insurance premiums will go up. It’s still a dickish selfish thing to do. But, welcome to our shitty medical/financial system. There are hundreds of other bullshit processes that raise costs and funnel the profits into someone’s pocket. This guy is small potatoes. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [September 24, 2015, 4:13am UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/97 "2015-09-24T04:13:51Z")
Do we know if the low prices for this drug manufactured by other companies (e.g. GSK) in other countries are set by governments or are they market prices? Or some combination? It’s really really cheap elsewhere. The old price here looks expensive. But there are multiple manufacturers outside of the U.S. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [September 24, 2015, 4:09pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/98 "2015-09-24T16:09:02Z")
> [@Ravenman](#): > > Well, we better get rid of those then. What’s a few lives lost to bogus drugs when it comes to liberty? They could be good or bad, a net good or a net bad with isolated bad items. In any event, the regulations exist and create the environment that makes it difficult to get approval for new manufacture. Maybe on balance this is a good thing, or not. In any event, the exact drug is manufactured much less expensively in other countries. Shouldn’t there be a mechanism that allows those to be imported without monumental expense? ---
**Author:** ![bup](https://avatars.discourse-cdn.com/v4/letter/b/6bbea6/32.png) [@bup](https://boards.straightdope.com/u/bup)\ **Post date:** [September 24, 2015, 4:20pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/99 "2015-09-24T16:20:32Z")
> [@iamthewalrus\_3](#): > > This guy is honest and upfront about what he’s doing. He’s not hiding anything, he’s simply charging a lot. But, really, he’s charing a lot to those who can afford it. I saw an interview with him, and he stated clearly that no one would be unable to get the drug because they were unable to pay. People who don’t have insurance or money will get the drug at cost ($1 or 2 a pill). I’m not sure we should believe him. I think the government has a chance to send a message here. This drug is 70 years old or whatever; I think it’s safe to import. They should allow importation of this one drug. The message would be, people who have _de facto_ drug monopolies can be dicks to the level of highway robbery, but not to the level of holding patients hostage. ---
**Author:** ![Broomstick](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/broomstick/32/246_2.png) [@Broomstick](https://boards.straightdope.com/u/Broomstick)\ **Post date:** [September 24, 2015, 4:43pm UTC](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144/100 "2015-09-24T16:43:13Z")
Read the wiki linked to on page one. You know, when both Donald Trump and Bernie Sanders can agree you’re a dickhead you really are a dickhead. [Previous page](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144.md?page=4) [Next page](https://boards.straightdope.com/t/hedge-fund-manager-buys-rights-to-critical-drug-hikes-price-by-5000/732144.md?page=6)