Mr. Shkreli has the look of someone who deserves whatever is coming to him.
No one should be able to make Capitalists look that bad and get away with it.
5000% increase in price
- Thread starter theiacowtipper
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Mr. Shkreli has the look of someone who deserves whatever is coming to him.
No one should be able to make Capitalists look that bad and get away with it.
This is what happens when you allow monopolies or very few providers to form in the marketplace. Wealth/income inequality, wage deflation, consumer prices can all be fixed with a more competitive marketplace.
This issue has nothing to do with 'monopolies' or regulations 'preventing other suppliers from forming'; the drugs in question are too small of a market for multiple companies to bother making them, and none of them are under patent. So, the market shrinks down to just one supplier. Until some jerk buys the manufacturing line off and jacks the price up to unethically gouge very sick people for his own benefit.
The functional solution to this is for a government entity, or a university-based pharm manufacturing site, to take on the making of these 'orphan' drugs, since the free market has little interest in the investment to do so, because the ROI is too low.
If the government and medical insurers want patients to have inexpensive access to these obviously cheap, but lifesaving, drugs, they should be taking the steps to support that type of facility or project. Otherwise, this will just become a lather, rinse, repeat activity as other 'entrepreneurs' catch on to the cool formula used to exploit the orphan drug markets. Sooner or later, it will start costing insurers enough money to take notice, and then they'll have an interest to do something; it'd be nice if they had the cooperation of the government to facilitate doing it sooner, rather than later.
If the guy jacks prices by 5000% there will be incentive for others to start manufacturing this drug. You need to ask yourself why only 1 pharma is manufacturing this drug. I get the market is small but so are the barriers to enter this market.
If we got rid of too big to fail in all industries this wouldn't be an issue.
There are few barriers to entry to make an off-patent, generic drug, aside from the pharm infrastructure and basic regulatory requirements; this is why just about any university-based pharmacology center could do it, if there were an incentive to do so.
I can't see how 'too big to fail' has anything to do with this. The issue is the costs and margins on these drugs are so low that there's just no incentive for anyone to mess with it, until some 'entrepreneur' figures out he can buy up the enterprise and jack the prices up to get his 10x or 20x return on capital. Any other drugmaker could easily jump in and undercut him, but for the most part, they don't see that as a good business opp, because once market prices are too high, others will also jump in, reduce prices and they'd end up losing money.
Orphan drugs with very small niche markets do not easily fit into a traditional capitalism framework, because those who need them have to pay out whatever the cost is, and if there are no alternative drugs the market becomes an effective monopoly, just because it's too low a return for any of the big players to care. This is where university-based teaching facilities, which have drugmaking capability, could easily play a role, make the small profit and fulfill the need for the drug; they don't need huge returns, because they are providing a teaching service as their function, not a for-profit model.
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