Turns out honesty isn't always the best policy

[Ovinomancer]

Ah, I find your source. The actual wrote is that the FDA is currently so backed up that it "could" take up to six years to bring a drug to market. That's a tax different from what you presented, and make a good bit more sense. As I was more curious in understanding why that was and that's the reason I asked, I'll call this a win.

On a side note, I think you are dramatically underestimating the complexity of building a modern airplane. Just dealing with the new materials has radically changed and increased the complexity involved. It's easily on par with the complexity of a drug manufacturing line.

 

[tomBitonti]

From one of the linked articles:

"You only need less than 100 pills so at the end of the day, the price for treatment – to save your life – was only $1,000," Shkreli told Bloomberg TV on Sept. 21, 2015. "These days, in modern pharmaceuticals, cancer drugs can cost $100,000 or more, rare disease drugs can cost half a million dollars. Daraprim is still underpriced, relative to its peers."

The conclusion of the article was that the comparison was false, but, I think the article gets the comparison wrong, at least in part.

The basis for the comparison was the price to value ratio, not the cost of production to price ratio.

In that sense, the drug is more closely aligned to the price of "drugs which are life saving and which have a very small market". This seems to be pure value based pricing.

I find a similarity between this pricing and Uber's demand based pricing. There are differences, sure: Uber's pricing does help to encourage supply, and is moderated by competition, but the underlying mechanism, which is for suppliers to increase price until otherwise moderated, the the same.

While I do think that there is something amiss in this drug pricing example, I am wondering what is the reasoned objection to this example? And, what existing laws and legal theories apply?

Thx!
TomB

 

[Homicidal_Squirrel]

Being a former hedge fund manager says to me he is *less* likely to be operating in accordance with industry norms, not more.

So what? Why does he have to operate like the rest of the industry? The rest of the industry has been charging exorbitant prices for drugs for far longer than this guy. Why does he have to do what they do? What he is doing is perfectly legal.

Well, then perhaps he should find himself some venture capitalists or investors,

That would defeat the purpose. He would have to pay those guys back for their investment. He'd be in the hole from the start. Hiking up the price would get him funds he doesn't have to pay back.

rather than trying to take it out of the pockets of immune-suppressed patients.

Appeal to emotion. By that logic, people dying of cancer shouldn't have to pay high prices for their medications.

Yeah, about that - having asked around a bit, it seems there's no *medical* reason to develop a new drug for toxoplasmosis. The drug in question is 60 years old, and is still used because it works well and isn't very expensive. So, his excuse that he wanted to develop new treatments seems to lack a solid basis.

So what if it's been around for 60 years? It wouldn't matter if it had been around for 100 years. Hell, it doesn't even matter that doctors don't want a new drug. When you have an effective monopoly on a drug like this, you can do whatever you want. You can create the demand. He could develop a new drug and force it on people. With a new drug comes a new patent.

Only if people can/will pay that price.

No, you're wrong. It's not if people can/will pay that price. It's if they must pay that price. Whatever the price ends up being is the price that must be paid for the drug, or you just don't take the drug and possibly die.

Insurance companies may not cover the increased cost, and the patients, already on a rack of other expensive drugs, likely don't have the funds.

Some insurance companies may not cover the drug. Others may cover the drug. You don't until insurance companies are forced to decide.

And? None of those cited drugs have been on the market for more than a decade. The drug we are talking about now has been around for half a century longer than any of those.

So what? Let's pretend that 100 years from now the number of people that use those expensive drugs remains the same as they are today. Do you believe that the price of those drugs will decreased based solely on the time the drug has been around?

And, are any of those drugs really comparable?

Depends on your criteria for comparison.

Politifact says, "No."

Going by the criteria they used to determine if it was comparable, they opine that it isn't. It's just their opinion.

No. And this is *hardly* the only complaint about the high price of drugs.

This is a particular case of a drug that has not been high priced in living memory, that jumped by 5000% in price. This is not comparable to a drug that is fairly new, and has never been low-priced. It is a new, slightly different case, and thus gets new, separate attention.

[sblock=It's not new. It's not different.]

There are also some extreme cases (17 drug groups) where price increases of more than 1000% were seen. One such product is tetracycline, which is commonly prescribed for bacterial infections. During the same period (between Nov’13 and Nov’14), it’s per tablet price increased from $0.0345 to $2.3632. That is a 67-fold increase in one year!

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.

[/sblock]It's just the one being paraded around for public bashing.

I doubt his physical appearance has much to do with it.

Really? You truly believe that people's reaction to this aren't affected by the way this guy looks? This guy?

It got attention because it was a *change*. That drugs are expensive is nothing new, so it doesn't pop up on news unless there's something new to the story, like a political campaign, or a particularly egregious example like this one.

Drug increases may not pop up on your local news, but there are plenty of articles written about the increase in drug prices. People just don't read them or pass over them.

Well, the price change came in August, and good policy changes take time to develop. I hope/expect Clinton's policy was already in the works before this happened, as it is a realistic thing for her to have for her campaign, and she's nothing if not well-planned. So she could whip it out when the story hit. And the GOP is not known for policies to curtail corporate overreach.

You don't need to have a policy developed to give your opinion on whether you believe this is right or wrong. Look, here is Donald Trump giving his opinion. I'm not seeing anything regarding his policy on this. It's just his opinion.

No, but since when do we ever expect to hear companies suggest reasonable self-regulation?

All the time. The problem is what they consider reasonable. This is the problem with self-regulation. You can come up with whatever you think is reasonable.

I think you are mistaking, "This is the current example of people being mad at the industry" for "this is the *only* example of such". And, you can lump many people's dislike for the GOP on their policies with regards to regulation of companies, and their approach to health care in general as lacking.

So, really, your suggestion that folks are somehow off on this topic doesn't seem to hold water, to me.

Nope, you're wrong. That's not what I'm saying. I've said it several times. People are taking it out on this guy when they should be taking it out on the industry and the politicians that have allowed the industry to do what it wants. As I've said, this guy is a perfectly viable target, but he shouldn't be the only target of people's anger. He isn't doing anything that other Pharmaceutical companies can't do, or haven't done in some way. He isn't doing anything that is illegal. Everything he has done has been perfectly legal, and if it wasn't because of it becoming widely known, no pharmaceutical company would have told him it was wrong or tried to stop him. Really, why are people focusing so much on a guy that is playing within the rules?

 

[tomBitonti]

This two articles seem to directly speak to the issue:

This article in the New England Journal of Medicine, which talks about the rising prices for generics:

http://www.nejm.org/doi/full/10.1056/NEJMp1408376?viewType=Print&

This article talks about the difficulties of entering the market:

https://www.quora.com/What-are-the-difficulties-for-competitors-to-create-cheaper-Daraprim

I'm predicting a few new trips to Canada ... see:

http://www.pharmacychecker.com/brand/price-comparison/daraprim/25+mg/

Thx!
TomB

 

[Bedrockgames]

Martin Shkreli admits to raising the price of a drug to make money, and people get mad at him. This article says the drug Daraprim cost $18 per pill, but I've seen other articles claim it cost $13.50, so who knows what the actual cost of it is. In any case, he raised the prices up to $750 per pill because he could. It's totally legal for him to do it. People get upset at this one guy because he is actually honest about how the drug industry works. There's a bunch of meds being ridiculously priced, and yeah, it's a jerk move, but why are people getting so riled up by what this one guy did? Why not get upset tat the whole pharma-industry?

First, this looks like a case of patent trolling and that is becoming a big problem that we need to do something about.

Second, it is entirely unethical to raise the price of a drug that was 13.50 to 750 when it has been on the market that long. The issue isn't that is costs money to produce, he is claiming they want to raise money to reinvest into research. Research is fine, but should they be using established medicines that are inexpensive to raise these costs?

Third, this only increases the overall cost of medical care in the US for everyone.

Fourth, yes he is just a symptom of a much bigger problem. He was singled out because of his youth and obnnoxious personality.

 

[Umbran]

First, this looks like a case of patent trolling and that is becoming a big problem that we need to do something about.

It can't be patent trolling. The drug's patent ran out *decades* ago.

 

[Bedrockgames]

1) As noted above, he wasn't operating in the way the whole pharma-industry operates. We are talking about a drug that's been in the market since 1953 - if he wanted a cash-cow, this was not a good candidate.
.

I could have sworn there was some reporting that what he did here with an old medication is actually becoming fairly common. I think increase was just bigger than it normally is under those circumstances. If that is the case, and I may be wrong on that front, I definitely think journalists should take a much closer look at this practice across the industry. It looks like what he did was perfectly legal, so I suspect there are others doing it.

 

[Bedrockgames]

It can't be patent trolling. The drug's patent ran out *decades* ago.

It is basically the same principle, but applied to marketing rights.

 

[Homicidal_Squirrel]

First, this looks like a case of patent trolling and that is becoming a big problem that we need to do something about.

As pointed out, it isn't patent trolling as the patent ran out long time ago in a universe far far away. It's more like having a monopoly, but he doesn't actually have one. He basically has an effective monopoly on the drug, and can do as he pleases with it.

Second, it is entirely unethical to raise the price of a drug that was 13.50 to 750 when it has been on the market that long. The issue isn't that is costs money to produce, he is claiming they want to raise money to reinvest into research. Research is fine, but should they be using established medicines that are inexpensive to raise these costs?

Third, this only increases the overall cost of medical care in the US for everyone.

And yet, it's all perfectly legal. It might be unethical, but ethics don't matter in this case. It may raise the cost of healthcare in the U.S., but that doesn't matter either. He hasn't broken any laws.It's a complete abuse of power, and it's totally legal. He could have raised the price to $5,000 per pill, and it would still be legal. That's a problem that people should be getting mad at.

Fourth, yes he is just a symptom of a much bigger problem. He was singled out because of his youth and obnoxious personality.

Agreed.

 

[Bedrockgames]

As pointed out, it isn't patent trolling as the patent ran out long time ago in a universe far far away. It's more like having a monopoly, but he doesn't actually have one. He basically has an effective monopoly on the drug, and can do as he pleases with it.

I agree it technically isn't patent trolling. But it is the closest thing in my mind. They bought the marketing rights to something that has been on the market forever and did so soley to milk it for a quick burst of revenue. It is the same mindset and business strategy.