Tag: Martin Shkreli

Contributor Post Created with Sketch. Martin Shkreli and the Imbeciles

 

martin shkreliIt’s not often that I say, “Thank God the New Yorker cut right through all this leftist cant,” but let’s give them credit where it’s due. On this one, they’re exactly right. Everyone hates Martin Shkreli and everyone’s missing the point:

But was Shkreli’s performance actually more objectionable than that of the legislators who were performing alongside him? Elijah Cummings, of Maryland, is the ranking Democrat on the committee, and he used his allotted time to deliver a scolding. … Cummings acted as if Shkreli were the only thing preventing a broken system from being fixed. “I know you’re smiling, but I’m very serious, sir,” he said. “The way I see it, you can go down in history as the poster boy for greedy drug-company executives, or you can change the system—yeah, you.” Cummings has been in Congress since 1996, and he is a firm believer in the power of government to improve industry through regulation. And yet now he was begging the former C.E.O. of a relatively minor pharmaceutical company to “change the system”? …

The Republican-led committee was no more impressive. As if to establish that Turing was unnecessarily profitable, the committee released documents showing that the company had thrown a lavish party—fireworks included—and given some executives six-figure raises. (If this now counts as corporate behavior worthy of oversight and reform, the committee may soon find its schedule overbooked.) And then there was John Mica, a Republican from Florida, who has vowed to “keep the government out of patients’ sick beds.” Notwithstanding his skepticism of government intervention, he expressed alarm that some drug prices have “skyrocketed.” Even more than his colleagues, he seemed taken aback by the star witness’s recalcitrance, as if he couldn’t fathom why a private citizen wouldn’t be more deferential to his government—at one point, he threatened to move to hold Shkreli in contempt.

Contributor Post Created with Sketch. Anatomy of a Market Failure

 

ShkreliDespite all the pushback Pope Francis has been getting from free-marketeers, two important stipulations are in order: markets are not equally good at solving all problems, and many of their best features can be undermined by the greedy or immoral. They can work miracles like nothing else, but they’re also somewhat dependent on flawed human beings

As David Sussman notes on the Member Feed, the Interwebs are currently awash with news of alleged price gouging by Turing Pharmaceuticals. The drug in question, Daraprim, was developed decades ago and is used to treat toxoplasmosis, a parasitic infection that’s a minor problem (at worst) for the healthy, but a serious one for the immunodeficient or babies whose mothers were infected while pregnant. The drug was developed decades ago and has a tiny market — currently, under 9,000 prescriptions per year. It had been available for as little as $50 per prescription as recently as five years ago. After being sold to another company, the price of the drug rose to $500 per prescription in 2011, then to $1,100 last year. Assuming everything remains constant, the same prescription under the newly-announced price would cost just shy of $63,000. I’m not sure about babies, but the Mayo Clinic reports that the immunodeficient may need treatment for life.

As Megan McArdle wrote a few weeks ago, drugs that are in fierce demand by a small number of people are an inherently difficult problem for markets — or, really, any system — to solve. When you also factor in the regulatory costs, the fact that most drugs are actually purchased by third parties, and the fact that drug manufacturing is relatively inexpensive, you’ve got what looks like a perfect storm of grossly unfair and exploitative price gouging. Even if it’s genuinely the best a market can do under difficult circumstances, it sure looks bad.