Education Drug's 5,000% price increase, where's the justification?

US pharmaceutical company defends 5,000% price increase,
http://www.bbc.co.uk/news/world-us-canada-34320413
except on reading the article on the BBC I cannot see any real justification for such a massive increase and in fact the CEO Martin Shkreli comes across as a thoroughly unpleasant person.

So justified or not?

 

Sadly, it's purely because they can.

No justification needed.

 

Welcome to capitalism: the ecosystem in which psychopaths are the apex predator.

 

Welcome to any economic model thus far employed by humanity.


Having actually worked at a speciality pharmaceuticals firm, there's simply not enough information present here to draw a real conclusion that takes both sides into account.

All we know is the patient's side. They're clearly in trouble as that's a huge price hike, I'd be bricking myself if I were in that sort of situation. Is it wrong? Well, that depends on a lot of factors. Is the demand reducing? Is production still as straightforward as it must have been? What are their plans for the future? These are all important questions that aren't in the article, which makes sense as you'd expect that info to remain in the company.

 

Considering his defence thus far has been "We need to make a profit, the previous owners almost gave it away" I sincerely doubt that it's gone up in cost.

 

I have nothing against making a profit but a 5000% increase is totally unjustifiable no matter what criteria was used to calculate this. And where is his justification I see little evidence thus far?

 

Considering his justification (as far as I know) is "I want more money" I don't think we'll ever see any evidence other than his own greed.

 

if the article is correct it states it costs them $1 to produce each pill.

Chances are also if the drug has been in production that long too the process wont have changed much, if anything it will have gotten better and more efficient as new processes are invented. I would be very interested to see all the costs and factors they are using to justify yhe price increase, as yes things can get more expensive, new equipment for new processes can cost huge sums of money, not to mention as was pointed out the demand for the drug, what level is this at.

I think the above quote pointed out by Lira is quite a key point in the outrage and anger more than anything, as that just makes it seem like they saw how little the drug costs to make acquired the patent to make it, so they can jack the price up, the fall in share prices I hope goes a long way to bring the price back down to something more reasonable, as at previous costs it is still an expensive drug, $13.50 a pill and if your taking 1 a day in a 30 day month that's $405 dollars for that one prescription. I'm assuming that cost is justifiable to most insurance companies or medicare coverage plans. I'm fairly sure most companies would not be willing to pay $22500 a month for the prescription assuming again 1 pill a day is needed on a 30 day month.

Quite right there is nothing wrong with a company trying to make a profit , the pharmaceuticals industry if something changes in the process to manufacture a drug whereby its better doing it a different way investment in that new process can cost massive amounts of money, so profit isnt bad but as Kronos said 5000% seems absolutely extortionate. We need numbers and justifications NOT we want profit the old makers were giving it away practically.

Certainly going to keep an eye on this story

 

EDIT: double post delete please

 

Yes but you see the issue here is that there's a big difference between "turn a profit" and "I want all the money for myself".

The other point is that companies won't want to declare any issues if they don't have to as it weakens their position against their competitors. As such, we honestly don't know the true reasoning at all, only the public face of it. From the article:

Well that's potentially billions right there. People always underestimate the cost of developing new drugs and treatments. It could be that they acquired this drug on the basis that they figured they could raise the price so that they could fund other ventures. Not exactly altruistic, but still not as morally nebulous as simply upping the price for a nice year end bonus.

In fact, the company I worked for did something very similar, although on a smaller scale. By buying the rights to an existing treatment, they were able to both fund the replacement and use the existing contracts as a means of introducing the new one. Although that didn't involve a massive price hike mind.

 

I cannot deny R&D for a pharmaceutical company is very very expensive, but still we need to see some actual numbers of costs for them to produce then to market and distribute this drug, Cause by saying we are going to put the money into research is one thing, But it then looks like the are jacking the price of this one drug up in order to get extra research money, which will i can imagine being fairly common, Whats the odds that this drug was not in a highly competitive market so there's little to no alternatives available to the people that need it.

There is still alot of facts and things we need to know about this drug and the costs etc, but the article makes it sound very very bad for the company and the CEO, just look their share price is falling due to this PR nightmare, and sure thats pretty bad in its own right.

EDIT: while the money can indeed go to researching new treatments, there are alot of charities no doubt collecting and doing what they can to fund research into HIV and AIDS treatments, so I do feel without knowing more that this reasoning while valid needs alot more justification,

 

My thread is about the justification, or lack of, increasing the price by 5000% from $13.50 (£8.70) to $750 (£484) this is ridiculous and the CEO feels in no way obliged to justify this sort of increase except with some vague reasons.
I think we are all aware of the costs of research in to new drugs, we should do as it is the mantra for all drug companies when justifying the costs of drugs. But such a massive rise is beyond belief. I hope there are alternatives to this particular drug else these companies have us by the b***S and if we need them then what choice do we have but to pay.

 

You have also got to look at the fact they got the patent in August and put the price up a month later.. that to me makes it look like they saw the numbers and how much it sells or whatever and then decided to jack the price, It doesn't to me appear they have come to look at the numbers and the costs have changed dramatically, at face value without figures to justify it, it looks to the public that an entrepreneur CEO, not a Dr or anyone with decades of experience in the pharmaceutical industry has seen somewhere that massive amounts of money can be made and tried that.

One though I had was that how much are other medications for doing the same job, is it possible he has seen how much some other drugs go for and charged a similar price.. I dont know.

 

Costs 5c in India according to wiki:
https://en.wikipedia.org/wiki/Pyrim...org/wiki/Pyrimethamine#Availability_and_price

 

Oh and Turing are soul source of the drug... that doesnt look great either.

 

Justification?
He has something that someone else wants and he can charge what the market will stand whilst making as much profit as humanly possible for their shareholders.

 

thats what i looks like, but obviously in the interview he has said to cover marketing and distribution costs and to help fun research, I think people might be a little less up in arms etc if the rise wasnt so drastic or if figures were released showing that the rise was fair.

But as neither of those 2 things are going to happen...

 

So.. You think doing what countless other charities and foundations are already doing justifies potentially ruining people who already have the diseases life? Okay, sure, let's put the burden on the people who are already overburdened.

The cynic in me doesn't believe that he or his company do such a thing anyway.

He's profiting from peoples suffering, he's not doing it out of the goodness of his heart.

 

There are lots of organisations who do research and as this drug is used for a few different conditions with similar effects, and this company is the ONLY supplier for the drug in the united states its simply nothing more than them trying to justify this as much as they can when all they want is profit.

1 month from buying the patent to the price increasing 5000% this is nothing more than an entrepreneur doing what he does best, seeing an opportunity to make a lot of money and doing so.

You can say all you want about research and R&D costs for the pharmaceuticals industry and I understand that, but when this drug was being made and sold for 60 years with no problems at $13.50 a pill and as soon as all the paperwork was finished and the deal done its a huge price hike.... well what does that tell you about motives.

EDIT: Maki pointed out earlier that there are other factors that could be a cause, one of which being the demand for the drug.. without numbers we can only guess, but my guess is a drug that's existed at the same price for 60 years and treats something this specific and the fact we have no cure for some of the things it helps to treat then i highly doubt the demand is falling by a significant enough amount to justify the cost

 

Medications should not need advertising. If you aren't the doctor, pharmacist or degree holder in pharmacology you shouldn't be advising them on treatment.

I know LOTS about drug costs. Almost none of them cost the ridiculous expenses we suffer with.