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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."
But maybe it's what they teach at MBA courses.
Anyhow, time to decommercialise medicine. Yes, I know it sounds pinko commie socialist. Even so.
The sad part is, if making money can be called a "moral requirement", apparently it is more important than the truly moral cause of healing as many people as possible.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
if you accept the premise of private, for profit insurance as a means to access medicine and healthcare and that these companies will be privately traded companies with shareholders then yes, that's where the moral imperative lies. This is one of the consequences of such a system.
We already know the solution is single payer healthcare. We can see it working in a dozen countries. The question is will we swallow our pride long enough to vote the sorts of people in that'll give it to us?
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the stench of evil.
There are no patents on this. It's an old medication. What keeps other companies from selling exactly the same substance? Answer: Government regulation.
Government needs to do more to help more companies make these medicines at reasonable prices.
This is exactly how for-profit industries work.
Maybe instead of trying to find ways to make for-profit healthcare marginally less of a roiling tire fire for Americans, we should instead nationalize healthcare, like the rest of the civilized world.
:|
Obliteracy: Words with explosions
moral (môrl, mr-) adj. Of or concerned with the judgment of the goodness or badness of human action and character: moral scrutiny; a moral quandary. adj. Teaching or exhibiting goodness or correctness of character and behavior: a moral lesson. adj. Conforming to standards of what is right or just in behavior; virtuous: a moral life.
Europeans and Canadians aren't starving.
In fact, they are far better off than the average american.
Americans are just too uneducated and unenlightened to see the benefits of proper socialised medicine.
People in Canada and Sweden get government-facilitated health care but under different systems. Corporations get welfare in the US and the public get potable drinking water and interstate highways under different systems.
None of that has anything to do with Communism though, nor are they pure socialism either. Only retarded Republican ideologues can't grasp the social aspect of helping society as a whole, fight it with full-on uneducated fears.
I'd love to have that guy locked in an airtight room. "I can sell you some air - it only costs $5000 per litre, cash up front." "But, but... I don't have that much cash on me!" "Well, I'm sorry sir, but it's a moral imperative for me to make as much money as I possibly can. Ten thousand people who suffered badly because of your drug-price gouging want to do a group buy of all these air tanks. Unless you can beat what they're offering, I'll have to sell it all to them - it's just the right thing to do!"
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
Obviously, your 'invisible hand of Supply vs Demand' isn't working in this particular Capitalist case. The problem is our perverted version of Capitalism. We grant monopolies on pharmaceuticals, and then act in total denial of the ways monopoly distorts supply and demand.
So, I'll grant this guy his 'moral imperative' to charge as much as he can. As long as we recognize (and insist on) Government's moral imperative to fix the distortions of the market caused by, yes, important government interventions like patent protection. I.e., there needs to be a government enforced limit on how much as he can charge. And then let the market work its magic within that reasonable playing field. And if the market doesn't work in all cases - well, maybe those gaps need to be filled by the government too. That's not fascism or slavery or any of the hyperbolic anti-government names you want to use. It's just a simple acknowledgement of reality.
Posted from my Android phone. Oh, I can change this? There, that's better...
LOL!
Who decides what is "needed"?
Who decides what is a, "priority"?
Do they just give you a pill and send you home?
Yeah! We don't want a faceless government bureaucracy ultimately beholden to elected officials to set health policy! We want all our healthcare decisions to be made by a faceless corporate bureaucracy ultimately beholden to shareholders! Clearly that is the one true path to success!
Legitimate business transactions make money because a legitimate business transaction is a benefit to both buyer and seller. The seller sells the item because he's being paid more than it cost him to make or acquire. The buyer buys the item because it's worth more to him than the price that's being charged. That is, legitimate economic transactions are positive-sum.
Taxes transfer money. And inefficiently at that (you have to pay someone to calculate the taxes, pay to make the payment, and pay someone to collect the taxes). That is, taxation is negative-sum. So taxes in and of themselves cannot make money.
Taxation can be a net gain if the tax revenue is spent on things which benefit the economy more than the amount of money spent. For example, building a road may cost $1 million. But if the amount of money saved by companies transporting goods due to the new road exceeds a cumulative $1 million, then the road is a net benefit and spending to build it was worth it. So government spending can make money, but taxation on its own cannot. However, unlike a business, there is no inherent pressure to force a government to make sure all spending of tax revenue is justified in this manner. That is, a government can't go bankrupt if it wastes money - it can just continue to raise taxes to pay for wasteful spending, up until the amount of its spending equals the sum total productivity of all its citizens (effectively approaching 100% taxation, which is what leads to the runaway inflation Venezuela is experiencing).
In this particular situation, the "proper" price for the drug is the one which maximizes revenue. If the company sets the price too high, then sales decrease enough to offset the higher price, and the company makes less money. The "proper" price is when (units sold)*(price per unit - cost to produce) = a maximum. At that price, the drug is being distributed most efficiently - an equal split in the benefit of the drug between the buyer and the seller. In this way, if the benefit is extremely large, the profit is large, which attracts other manufacturers to enter the market, thus increasing competition and lowering prices (sellers take a smaller cut of the benefit).
Usually when these situations crop up where a company can jack up the price beyond reason, it's due to it being the sole supplier (having a monopoly). That's what happened with Epi-pens. Except natural monopolies are extremely rare, and AFAIK every one which has formed has been dealt with with anti-trust regulations. The remaining monopolies are all due to poor government regulation. In the case of Epi-pens, it was the FDA approval process raising the cost of entry for any competitor so high that nobody else felt it was worth entering the market (competing with an established supplier could lower the price to just above manufacturing cost, meaning it could take decades to make back enough money to pay for the FDA approval process).
According to wiki, Nitrofuratoin has been around since 1953. There are generic versions available, so it would appear the patents on it have expired. The only people having to pay the exorbitant new price are those who insist on buying the name-brand version instead of the generic version. If the generic version is not available for sale in the U.S., then that's a problem with the FDA approval for manufacturing the generic, not with a company jacking up prices. Unfortunately, TFA never explores this aspect of the problem since it appears to be a single-minded hit piece against pharmaceutical companies.