Your disease is their cash cow
If you want to feel completely nauseated at capitalism in a matter of seconds, you could do worse than to read the New York Times article by Andrew Pollack on price gouging in life-saving drugs.
It starts with the jacking up of the toxoplasmosis drug Daraprim from $13.50 a table to $750, which is not an isolated example.
Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”
Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients.
It’s not just “needy” people who can’t afford 11 grand for 30 pills. Also, commodities that are necessary for life should not be price-gouged in that way. It’s immoral. Capitalism has no truck with morality, which is why stuff like this can make you so nauseated so fast.
The Infectious Diseases Society of America and the HIV Medicine Association sent a joint letter to Turing earlier this month calling the price increase for Daraprim “unjustifiable for the medically vulnerable patient population” and “unsustainable for the health care system.” An organization representing the directors of state AIDS programs has also been looking into the price increase, according to doctors and patient advocates.
Daraprim, known generically as pyrimethamine, is used mainly to treat toxoplasmosis, a parasite infection that can cause serious or even life-threatening problems for babies born to women who become infected during pregnancy, and also for people with compromised immune systems, like AIDS patients and certain cancer patients.
Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.
Pardon me if I fail to believe that.
In 2011, Mr. Shkreli started Retrophin, which also acquired old neglected drugs and sharply raised their prices. Retrophin’s board fired Mr. Shkreli a year ago. Last month, it filed a complaint in Federal District Court in Manhattan, accusing him of using Retrophin as a personal piggy bank to pay back angry investors in his hedge fund.
But hey, he totally just wants to make better versions of existing drugs. It’s his dream.
With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
The switch from drugstores to controlled distribution was made in June by Impax, not by Turing. Still, controlled distribution was a strategy Mr. Shkreli talked about at his previous company as a way to thwart generics.
Nothing sleazy about that.
The drug is available on the NHS. I looked up how much it costs the NHS. £14 for 30 tablets.
Even before the extortionate price increase the US being overcharged.
It’s unlikely that other manufacturers would jump into the Daraprim business, as it would make no economic sense. They’d have to reverse-engineer the drug, figure out how to make it and build a manufacturing facility to FDA specs, which would cost somewhere around $100 million. The market is very small, so not gona happen.
This is not industrial capitalism in the sense which Smith, Marx or Ricardo would have understood it, rather it is what Ricardo called “rent seeking.” The point is that the prices do not reflect the value of the product on a competitive free market but rather the “economic rent” you can levy in virtue of “owning” property, in this case so-called intellectual property. Ricardo warned that we may end up in a sort of neo-feudal society run by a few rentiers who own all the property, be it real estate, intellectual property or so-called financial assets. Just as the serf could only exist if he/she paid whatever tithe to the feudal lord demanded, so the ordinary person will only be able to exist by payiing whatever rents the rentiers demand.
One of the problems for the left is that Marx argued that this “Richardian Hell” as one 19th century commentator put it, is impossible because the financial sector could never become more powerful than the industrial sector. This leads to some orthodox Marxists denying that this is happening and actually supporting many neo-liberal policies, after all, if the “iron laws of history” tell you that society cannot revert to some sort of feudalism then it obviously cannot be happening.
You are right PieterB #2 but this just goes to show this price rise has nothing to do with a competitive free market but is rather rent-seeking supported by “intellectual property rights” if there were an intellectual commons this could not happen.
We need to socialize pharmaceuticals. Overcharging, which is done with “your money or your life” type drugs; fudging safety test results; unnecessary tweaks for patent extensions; shady marketing ploys; etc. — the industry is rife with unethical behavior which could be gotten rid of simply by making it no longer private sector. The researchers will be just as happy, if not happier, doing their work in government labs, based on areas of need more than marketability. Marketing would be replaced with the publication of newly available drugs with specifications; doctors would skim the reports to see which ones might be valuable to their patients. The whole system should be self-supporting, but research on rare diseases could be funded off of money earned from sales of drugs for common problems.
“Rent-seeking” is the perfect term. I don’t think this is even an IP issue, as the drug went off patent decades ago. One approach could be for the US to outlaw the sort of exclusive-rights arrangements that allow this to happen. This is becoming a trend.
I have a friend who’s a former “Big Pharma” executive and about as liberal as I am who just wrote a piece about this. Apparently this will not affect most of the people who use the drug, and there are other drugs for toxo at least as effective if not more so. Give the article a read.
[…] a comment by Bernard Hurley on Your disease is their cash […]
When this news initially broke on Reddit, a user posted a link to a post on Fierce Biotech wherein the author had had a Twitter exchange with Shkreli where he asked about the price hike.
I was going post some of his other choice tweets as well, but apparently only confirmed followers can see them now…
PieterB,
Good link, thank you.
Well, here’s what the government simply needs to do. Pass legislation that removes all patent/copyright/trademark etc. encumbrances from these “old and neglected drugs” and allow any generic manufacturers to produce them as long as they promise not to jack the prices up like this asshole bastard did with this drug.
In other words, simply remove the financial incentive for investment bastards like this to make money off old drugs that still happen to be used.