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Today's installment in WTF

Randy Daytona

Cold War Relic
pilot
Super Moderator
This hedge fund manager needs to go to Federal "pound me in the @ss prison" for price gouging.

I did not know the system was this bad - or widespread. A 5500% price increase overnight on a lifesaving drug used by pregnant mothers / infants, those with HIV, cancer, malaria.

Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.

The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics.


Just found out Rodelis sold the drug back to its original owner who promptly dropped the price back to $1000 for 30 tablets.

http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?_r=0

http://mashable.com/2015/09/21/hedge-fund-drug-price/#Ag4XKGM33Gk5

Here is a photo of said hedge fund manager.

 

picklesuit

Living the GeoBachelor dream...
pilot
Contributor
Supply/Demand. That's capitalism. He may be an asshole, but more than likely within the bounds of law.
 

HokiePilot

Well-Known Member
pilot
Contributor
I don't get it. If it is a 62-year old drug, then it is out of patent protection. Anyone can manufacture it.
 

HokiePilot

Well-Known Member
pilot
Contributor
OK I figured it out. Even though it is out of patent protection, Turing Pharmaceuticals is the only company with an FDA licence to manufacture the drug. They are exploiting the time it will take for another company to get an FDA license.
 

Randy Daytona

Cold War Relic
pilot
Super Moderator
Supply/Demand. That's capitalism. He may be an asshole, but more than likely within the bounds of law.
5500% increase? Overnight? What happens in PCola when a hurricane hits and someone tries to triple the price of gasoline? Price gouging. This is not capitalism - this is monopolistic extortion - and it will have political connotations.
 

Flash

SEVAL/ECMO
None
Super Moderator
Contributor
Supply/Demand. That's capitalism. He may be an asshole, but more than likely within the bounds of law.
He is within the bounds of the law, for now. Don't be surprised to see the law change now though.
 

Treetop Flyer

Well-Known Member
pilot
How hard is it to get a license to produce a fifty year old drug? Seems like that may be the law that needs changing, rather than limiting production then telling companies what they can sell it for to people required to have insurance subsidized by others.
 

jmcquate

Well-Known Member
Contributor
The greatest threat to capitalism is a successful capitalist. The greatest threat to a successful capitalist is capitalism. Deregulation and reforms to licensing structures and patent law will produce more efficient, affordable products. Look at Uber. The guy may be an ass, but he was most likely operating within the constraints of the law.
 

Flash

SEVAL/ECMO
None
Super Moderator
Contributor
How hard is it to get a license to produce a fifty year old drug? Seems like that may be the law that needs changing, rather than limiting production then telling companies what they can sell it for to people required to have insurance subsidized by others.
It is a drug with a very small production run and until the price was jacked up 5000% was only profitable for one company to produce it. So not a flaw in the law though possibly a flaw in the morals of the idiot that jacked up the price.

The greatest threat to capitalism is a successful capitalist. The greatest threat to a successful capitalist is capitalism. Deregulation and reforms to licensing structures and patent law will produce more efficient, affordable products. Look at Uber. The guy may be an ass, but he was most likely operating within the constraints of the law.
Show me a lack of regulation and licensing and I'll show you a third shithole, all first-world countries have been pretty extensive regulation and are better for it. Sure, sometimes it is a bit overboard but those are exceptions to the rule.
 

jmcquate

Well-Known Member
Contributor
It is a drug with a very small production run and until the price was jacked up 5000% was only profitable for one company to produce it. So not a flaw in the law though possibly a flaw in the morals of the idiot that jacked up the price.



Show me a lack of regulation and licensing and I'll show you a third shithole, all first-world countries have been pretty extensive regulation and are better for it. Sure, sometimes it is a bit overboard but those are exceptions to the rule.
I agree Flash, but regulations and licensing has become a barrier to market entry, especially in large municipalities. Successful businesses, give a lot of money to politicians who will pass legislation to protect entry into said business. I've seen the same "third shitholes" and regs and all that go with it should be for basic safety and honor of contracts, not protecting entries into a given market.
 

Spekkio

He bowls overhand.
5500% increase? Overnight? What happens in PCola when a hurricane hits and someone tries to triple the price of gasoline? Price gouging. This is not capitalism - this is monopolistic extortion - and it will have political connotations.
This looks like someone was smart enough to exploit layer upon layer of government red tape preventing an open market. As long as your federally mandated health insurance still pays the bill, where's the problem?
 

Spekkio

He bowls overhand.
It is a drug with a very small production run and until the price was jacked up 5000% was only profitable for one company to produce it. So not a flaw in the law though possibly a flaw in the morals of the idiot that jacked up the price... Show me a lack of regulation and licensing and I'll show you a third shithole, all first-world countries have been pretty extensive regulation and are better for it. Sure, sometimes it is a bit overboard but those are exceptions to the rule.
According to the articles Randy posted, this isn't the first instance of a drug company in the U.S. extorting customers using regulatory red tape to preserve their monopolies. He also did far more than just 'jack up the price,' he worked to restrict distribution so that no one could quickly make a generic.

Of course there has to be a mechanism that drugs are safe, but when someone is able to lobby to restrict distribution and prevent others from obtaining the formula to create a generic alternative, you are bordering on the line of anti-competitive practices.
 

Flash

SEVAL/ECMO
None
Super Moderator
Contributor
I agree Flash, but regulations and licensing has become a barrier to market entry, especially in large municipalities. Successful businesses, give a lot of money to politicians who will pass legislation to protect entry into said business. I've seen the same "third shitholes" and regs and all that go with it should be for basic safety and honor of contracts, not protecting entries into a given market.
Basic safety can be a significant barrier of entry to market if a business isn't up to snuff.

This looks like someone was smart enough to exploit layer upon layer of government red tape preventing an open market. As long as your federally mandated health insurance still pays the bill, where's the problem?
For manufacturing drugs, there should be barriers. Find me an unregulated market and you will find a lot of folks dead due to a lot of bad drugs.
 
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