One in five Americans (including cancer patients) cannot afford to fill the prescriptions doctors write for them. Why is it that Americans pay high prices for prescription drugs?
While there are many factors as to why healthcare is expensive, you should be aware that a company buying “underpriced” generic drugs and then astronomically raising them is a somewhat common practice in this industry.
A 32-year old lavish hedge fund manager by the the name of Martin Shkreli has recently drawn massive outrage for what I believe effectively amounts to his attempts to exploit the physically ill.
In September of this year, Shkreli, founder and CEO of Turing Pharmaceuticals, hiked the price of an important, generic drug called Daraprim by 5,455 percent.
It was originally $13.50.
It now costs $750.00.
That is a big deal, and should rightfully have my fellow Americans repulsed that this kind of practice is possible, especially if you have friends or family affected by conditions that Daraprim treats.
Daraprim is targeted towards treating toxoplasmosis, a highly dangerous infection fatal to babies born to mothers infected with the disease. It’s also for adults with immune systems typically weakened by AIDS or cancer-related conditions.
According to various press reports, although the drug is around 60 years old, it only costs roughly $1 to produce a tablet of Daraprim.
Any treatment requiring this drug requires 100 pills, so if you wanted to make a profit for this as a pharmaceutical company, you would need to charge somewhat over $100 to recoup any costs of producing 100 tablets.
Thus, the price of $13.50 that patients originally paid for a prescription of Daraprim is extremely generous in the eyes of the pharmaceutical industry.
According to a Telegraph post, this drug was prescribed worldwide 8,821 times in 2014. Although there is a relatively small market for this drug in the global health sector, you know there’s something messed up about the healthcare system when even doctors are telling The New York Times that they themselves cannot afford to order this item for their patients. Martin Shkreli, a “hedge fund manager” who effectively makes a rockstar living by placing financial bets (to put it very simply) in the health sector, has cornered a niche market in healthcare.
As an average American citizen, it’s price gouging, plain and simple. After all, it was only last month that Shkreli’s company bought the rights to Daraprim.
Normally, when a pharmaceutical company raises the price of a particular drug, it is allegedly to help cover the costs of research and development, helping them to figure out ways to improve a drug and eliminate its side-effects, since the R&D investment costs tend to be expensive—millions to billions of dollars expensive. This is a fair point, considering the nature of the costs that goes into researching drugs, with the hope that improved generic versions can be distributed.
When asked by a journalist why the price was hiked to such a high amount, the biggest point Shkreli made was that the journalist was a “moron.”
If there’s anything you need to know about Martin Shkreli and why he is such a dangerous individual to be gambling in the healthcare sector, this tweet by him from 2012 represents how he sees healthcare: “Every time a drug goes generic, I grieve. Let us not mourn the dearly departed, instead celebrate the profits and new assets it brought us.”
He’s been having a fun time in the national spotlight with politicians and health associations calling him out. When asked how he can sleep at night raising these prices, he simply retorted “You know, with Ambien.”
In a sense, Shkreli’s philosophy is that the U.S. healthcare system is meant to exploit the physically suffering. He’s playing the game of life — literally.
Cheap, generic drugs like Daraprim get in the way of Shkreli making a profit. Even Shkreli admitted in an interview that the companies selling Daraprim before were practically “giving it away.”
How blasphemous of them to see treatable conditions cured in an affordable manner— apparently.
The ugly reality is that the pricing strategy of Turing Pharmaceuticals is a core reason why healthcare is expensive, especially in the United States.
I do not care about whether or not Shkreli’s actions can be seen as an argument to show how capitalism can go wrong, as some critics have been quick to point out with this situation.
But I do care that lives can quickly be ruined by another Shkreli of the world placing a financial bet in the healthcare system to obtain quick profits, with no regard to how he increases the suffering of human life.
Turing Pharmaceuticals recently announced that it intended to roll back its price-hike decision after a two-week deadline, by “lowering the price” to a more agreeable (or rather, less controversial) amount. That deadline has passed, and no price change has occurred or been announced since then.
Shkhreli is banking that all of us forget about this issue, but I for one don’t want to give him such leisure. Although their PR has taken a huge hit, it will sadly likely do nothing to curtail their exploitative price gouging practice, since they have exclusive rights to the drug patent (and therefore a monopoly now). The system is broken this way.
Congress needs to put a check on these ridiculously profitable pharmaceutical companies. As Bernie Sanders nicely put: “the pharmaceutical industry has become a health hazard for the American people.”
Americans shouldn’t have to live in fear they will die or go bankrupt if they can’t dole out the money needed to buy life-saving medication.
Asad Uddin is a senior public policy major from Oxford.
