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Citing 'Moral Requirement To Make Money', Pharma CEO Jacks Drug Price 400% (arstechnica.com)
The chief executive of a small pharmaceutical company defended hiking the price of an essential antibiotic by more than 400 percent and told the Financial Times that he thinks "it is a moral requirement to make money when you can." From a report: Nirmal Mulye, CEO of the small Missouri-based drug company Nostrum Laboratories, raised the price of bottle of nitrofurantoin from $474.75 to $2,392 last month. The drug is a decades-old antibiotic used to treat urinary-tract infections caused by Escherichia coli and certain other Gram-negative bacteria. The World Health Organization lists nitrofurantoin as an essential medicine. In an interview with the FT, Mulye went on to say it was also a "moral requirement" to "sell the product for the highest price," and he explained that he was in "this business to make money."
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Either that or he just thinks his campaign contributions are best placed with them.
Actually it was I, not Ms Mash, who posted this story.
I’m always amoused when these low-budget shkrelis claim to be defenders of the free market when they make insane price moves. If we actually did have a free market in pharma, we would be able to fill our prescriptions for this compound at the world market price of $18, as per the closing line that was oddly edited out of my post.
The only way price increases like this can be made to stick is to have the FDA on your side, preventing us from being able to compete. Time to rip out the FDA’s ability to keep competition out of the market. Let it manage testing, not price manipulation.
It is a recurring myth that corporations are somehow absolutely required by law to seek profit. It seems now is a good time to mention that this is absolutely not true. Corporations are only required to do what their charter says, which usually includes some notes about profit, but also more importantly defines the role the company will take (like improving healthcare).
This CEO is avoiding the legal implication by claiming it's a "moral" requirement. Of course, that means there's no written guideline to which we can refer that will identify this as blatant greed, so it becomes a matter of personal judgement. I hope that's remembered in the future whenever the CEO tries to claim he's always acting in the public interest.
You do not have a moral or legal right to do absolutely anything you want.
What keeps other companies from selling exactly the same substance? Nothing; Actavis Labs FL INC, Impax Labs INC, Mylan, Novel Labs INC, Sun Pharm Industries, and Zydus Pharms USA INC are all manufacturers of generic nitrofurantoin.
There's fairly strong evidence against your primary assumption. Most drug discovery is done by academic, publicly funded researchers, who get paid fairly poorly considering their education, and the hazards of the field.
The ones who rake in the big profits are business and investor types who mostly buy and sell existing IP.
Other companies do sell exactly the same substance. This appears to be an example of a company taking advantage of either (a) consumer gullibility where brand names are concerned or (b) corrupt physicians.
Although from the article it sounds like the competition might be cranking the price up as well, so perhaps it's (c) collusion.
In the rest of the world, apparently actual government regulation successfully keeps the price between $0.10 and $10.
Anyhow, time to decommercialise medicine. Yes, I know it sounds pinko commie socialist. Even so.
The market is working to correct this behavior. Remember, there are intermediaries between the drug companies and the patients. They're pissed off too.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
I'm Canadian, and I can assure you that our "socialised" system is:
So please, don't say our system is better than in the US. People are not dying in the streets up here, but when you have a condition, you better be patient. A patient patient.
I'm a Canadian too, and the circumstances you've cited are worst-case and relatively uncommon. Non-critical illnesses are at a lower priority than critical ones, but people get the care they need, regardless of the depth of their pockets. So yes, our system is better, in most ways.
"Oh no... he found the
Because these systems are always partially or entirely tax-funded this obviously means that wait times for some non-critical operations can be higher, because people in immediate risk take priority but this is true in the states as well. If you actually compare waiting times for a specialist for example, you'll note that US is pretty much on par with the UK, and that Canada is on the slower side of other universal model countries (which, is all advanced countries other than the US). I work for the largest health care district of the Finnish single payer health care system with about a million people under it, I can quote you some numbers (these are from 2015 because they're publicly available (Finnish only though), can't access the current stats from home). Of the 27 most common types of surgery, we had altogether 26 658 people in queue in 2015, of which 19,5 % waited for more than 6 months. The median wait time was 87 days. For the 2 heart-related surgery-types on the list (bypass and percutaneous coronary intervention the median was below 30 days). The question here is: would it be better for the uninsured in the US to wait a bit to get good health care from the existing system with public money, or wait til' they die or go bankrupt? Is it beneficial for the US economy as a whole to remain the only country where people have to go into debt due to medical problems?
Thing to realize is that this is about availability, not quality. Quality-wise the US model is not significantly better nor is it worse. In fact, quality-wise the system is just fine for the people who're insured, the main difference is that the lack of universal public insurance leaves some people outside of the system driving up deaths. And the far more commercialised nature of the systems drives up margins and administrative costs (which is a large part of the huge spending difference (about twice the average spending of comparable countries) between the US and the rest of the world. In fact, medicare for example is already cheaper (per head covered) costs-wise than private options, largely cause it has better costs-management and lower administrative costs).
The are plenty of universal models out there which aren't single payer like Canada or here. All the US would have to do to implement such would essentially be to allow medicare/medicaid like option for all , and it would likely bring total costs down in the long term and better care for everyone.
But sure, keep posting anecdotal stuff about wait times instead of the larger picture., that's always constructive!
"It is the business of the future to be dangerous" -Alfred North Whitehead
Not really. You don't found a pharma startup unless you've got a promising candidate already. Basic discovery happens mostly in universities. The academic researchers find something interesting, use animal models to work out the mechanism and test efficacy, and occasionally even do some human studies. Startups are then either spun out of the university, started independently in conjunction with one of the university researchers, or in some cases just troll through the published literature looking for good ideas. The startup, or sometimes a bigger pharma company, then runs the basic human trials, and, if successful, sells the drug (or the company) to one of the major pharma corps for marketing and distribution.
Basic discovery is still very much a publicly financed endeavour.
Not really. You don't found a pharma startup unless you've got a promising candidate already.
Pharma startups spend millions to test millions of candidates. When they find one that looks useful, they do each testing round to prove it out. For the publicly traded ones, you can see the stock price move 10x each time they pass one of those gates. Once they get FDA approval, or sometimes one gate before that, they get bought.
"Basic discovery" is very far removed from product. It's the first link in a very long chain. Of course, you need that first link, or you have nothing, but it's not the universities trying millions of minor variations on an idea, risking millions of dollars on the hope it leads somewhere.
Socialism: a lie told by totalitarians and believed by fools.
And they spend two to three times as much on advertising as they do on R&D. There may be risk involved, but the bulk of the money is going on pimping their wares, not developing new ones.
actually there is, its called fiduciary responsibility.
Fiduciary responsibility just means acting with the best interests of those represented as opposed to serving your own interests. It does not obligate a company or corporate officer to prioritize profits above everything else.
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