The Martin Shkreli Daraprim Price Hike Thread

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**whembly**

Kilkrazy wrote:
I don't quite understand how the guy expects to make money. People will just import it from India and undercut his price.

He hasn't purchased the rights to the drug itself, only the brand name in the USA.

Could it be he just wants to gouge the armed forces? One of the main uses of this drug is anti-malarial, so the army for example has to dose lots of troops going into affected areas. Knowing bureauracy, the army probably is requried to purchase the specific brand name from a US supplier.

You can't legally import cheap drugs here in the states, unless it's been FDA approved.

However, it happens quite a bit anyways (folks get that blue pill cheaper up north

).

Automatically Appended Next Post:

sebster wrote:
whembly wrote:
So "free market" isn't really the issue...

Yeah, the free market isn't the issue. The point is that the free market isn't going to be the solution either. Because health is a market where basic free market operations go screwy.

The first issue, which I already mentioned, is that there's no cap on the utility of a product that keeps you alive. If it was a normal product, let's say sandwiches because I'm eating one right now and am not very imaginative, then once the price reached a certain point I wouldn't be willing to pay it, or would start buying them less often. This is the downward slope to the demand curve. But in medicine that line is pretty much a straight line - if it costs $13.75 I will buy my needed dose, if the price is $750 I will buy my needed dose. In this case the demand curve is a straight vertical line - at any point people will purchase the fixed quantity.

The second issue, that I thought on touching on in my last post but decided against, only to have Ouze go through it extremely well, is that drugs have almost all their costs in research and development. Normally supply is controlled by rising costs of production, so if the sandwich maker wants to make more he might need to use a more expensive supplier of ingredients, for instance. That's the upward slope of the supply curve. But with drugs, almost all the cost has been incurred before the drug hit the market, with manufacturing costs being so tiny the supplier will be willing to supply as much as he can sell at $13.75, and as much as he can sell at $750. In this case the supply curve is also a vertical line.

Now, demand and supply works by finding the point where the downward sloping demand and upward sloping supply lines intersect. But where do two vertical lines intersect? They don't.

That's all nice and tidy... but, the larger salient point is that this wouldn't have happen if the patent ran out by year 7. It's a big problem now in the industry where drug companies are extending the patent.

**Sigvatr**

Morally, it's highly questionable. Yes, R&D takes up a large part of your budget, but picking that one was...a strange decision to increase funds. The promise to give them away for free sounds good, but...how do you measure whether someone qualifies as being in need of it or not? The drug was definitely underpriced, though, and not priced competitively so increasing cost in general is A-OK. The amount was just...over the top.

This being said, however, it's fully within his right to do so. It's legally A-OK and if you want to really tackle the problem, you'd have to change the entire system around. Good luck with that.

**sebster**

whembly wrote:
That's all nice and tidy... but, the larger salient point is that this wouldn't have happen if the patent ran out by year 7. It's a big problem now in the industry where drug companies are extending the patent.

Oh for sure. I'm not arguing against patent reform. Quite the opposite.

**Ouze**

Sigvatr wrote:
It's legally A-OK and if you want to really tackle the problem, you'd have to change the entire system around. Good luck with that.

Yeah, none of this really matters. He wound up knocking the price back down for this one specific drug because of the backlash but ultimately, things remain pretty messed up and are totally going to stay that way with not even a token effort at reform in the works.

**Chongara**

Ouze wrote:
Sigvatr wrote:
It's legally A-OK and if you want to really tackle the problem, you'd have to change the entire system around. Good luck with that.

Yeah, none of this really matters. He wound up knocking the price back down for this one specific drug because of the backlash but ultimately, things remain pretty messed up and are totally going to stay that way with not even a token effort at reform in the works.

Jeez man, ease up. He was just doing what MrDwhitey asked us to do at the start of thread.

**Ensis Ferrae**

What's kind of sad about this whole thing is, in just the last two hours, I have seen two political articles involving this clown.

The first was Bernie saying, "I'm coming after you and your type"

The second was Trump saying, "you're scum"

Although I think, at least in Trump's case, he wishes he could do the same thing and get away with it.... OR maybe Trump is calling him scum because he lowered the price back some.

**Kilkrazy**

Patents usually last something like 20 years (it varies between countries.) The problem for drug companies is they have to patent the drug at the start of serious trials, which often take years to complete, leaving less time to commercially exploit the new drug even assuming it is finally approved.

Drug research is expensive, however you can't extend the patent on a drug just by changing the formula of the compound. It becomes a new compound that needs testing and approval. It might be better, it might be worse, it might have no significant change in effectiveness. However it is a different compound. The original compound goes out of patent and can be manufactured as a generic drug.

This is why there is such a problem with the so-called "legal high" drugs. The government can't just ban huge swathes of chemical compounds. Once they ban Fun Pill XXXYYYXXX, the manufacture can usually just make a Fun Pill XXYYYXXXX, which has a methyl group moved around or something and is a different substance.

**Sigvatr**

Ouze wrote:
Sigvatr wrote:
It's legally A-OK and if you want to really tackle the problem, you'd have to change the entire system around. Good luck with that.

Yeah, none of this really matters. He wound up knocking the price back down for this one specific drug because of the backlash but ultimately, things remain pretty messed up and are totally going to stay that way with not even a token effort at reform in the works.

Precisely. In the meantime, be prepared for him to raise the price for other products of his by a high, but non-suspicious amount, ending up causing more trouble than he originally did. Medicine is an extremely strange field. While in theory, free market applies, in fact, it doesn't. Far from it, actually. It's a wicked system with most companies hugging each other, dictating prices. I am at a total loss on how to possibly and realistically fix such a system. The problem is that it takes TONS and TONS of cash to R&D a (new) drug and it takes a very long time until cost are covered. With relatively short patents, producers are at another problem. Prolonging the patent time would be foolish either, though, as you'd end up monopolizing certain drugs.

It's an extremely screwed up system.

**Kilkrazy**

Drug research could be done by universities and other government sponsored organisations, much like nuclear and bio weapons.

**Orlanth**

Hedge fund manager stops funding hedges and goes into phramaceuticals.

He has no lab, just an office and he owns a franchise for a pre-existing drug not a research centre,

What is all this BS about funding new research?

Automatically Appended Next Post:

Kilkrazy wrote:
Drug research could be done by universities and other government sponsored organisations, much like nuclear and bio weapons.

It is done by universities for the most part. A great deal of it in the UK, but the IP somehow always makes it out abroad, even in post development because our industrial elite and government are too damn short sighted.

**sebster**

Kilkrazy wrote:
Drug research could be done by universities and other government sponsored organisations, much like nuclear and bio weapons.

Most early research is done at universities. But universities have historically had minimal success in getting products to the market. This is largely due to the way universities control money, there simply isn't the scope to swing tens of millions of dollars between different projects from quarter to quarter. And the other part is a greater cultural issue, in an environment where 'publish or perish' is still seen negatively, the idea that you must be pushing to get workable drugs available for sale as soon as possible just won't line up.