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."

Comments

Making money is not a "moral requirement"

[Anonymous Coward]

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.

Re:Making money is not a "moral requirement"

[fishscene]

I reckon the same logic can be applied for taxes for this company too. It's a moral requirement for the federal government to make money.. by jacking up your corporate taxes by 400%.

Re:Making money is not a "moral requirement"

[layabout]

Markets can't correct this behavior because drugs are effectively a monopoly situation. Not just from the patent perspective but from the biological. When treating a condition, it's not uncommon to find that a patient can't tolerate one drug but can another. A classic example of this is statins. The protocol for using statin says if a patient can't tolerate the cheap ones, gradually try the increasingly more expensive ones until you find one that works. If the patient can only tolerate one particular drug to treat a condition, there is no market (i.e. only one supplier, the drug that works). The only power the patient has is to decide whether or not to treat the condition. There is no way the patient can put any pressure on the drug manufacturer to change pricing. If anything, the drug manufacturer is saying "you want to live? Don't ask about the price, just pay it."

Re:Making money is not a "moral requirement"

[Calydor]

No, this is just how a sociopath thinks. Quite literally, a sociopath thinks that anything that benefits him (regardless of what happens to the rest of the world) is morally right.

Re: Making money is not a "moral requirement"

[c6gunner]

You've got that exactly backwards, I'm afraid.

Re:Making money is not a "moral requirement"

[bondsbw]

However, you can't make it illegal for competition to exist ... without expecting the prices to be high.

Yes we can. We regulate them.

What we can't do is assume the free market will sort out a situation when we can't allow free market conditions.

I love free market competition. It works in the vast majority of economic situations. But it cannot work for markets we must heavily regulate and we shouldn't try to force it.

Re:Making money is not a "moral requirement"

[Zmobie]

Can the law of supply (his lab's production) and demand (price people are willing to pay) make this self-regulating?

This is the inherent flaw in that type of argument and the main reason that healthcare needs to be single-payer and pharma companies (and other medical type companies) need to be heavily regulated. Demand is not, "price people are willing to pay", demand in the healthcare world is how healthy do people want to be. Incidentally this is always as healthy as they can be (and fun fact, in many cases if a person decides they don't want to be healthy we consider that to be a disease, potentially even criminal!). This is why healthcare costs go up every year and don't actually ever go down.

Building on this, basic macro-ecnomoics tells us that the supply and demand of a free market is supposed to rise and fall against each other until a general state of price equilibrium is attained. Want to know what happens when demand literally will not (possibly cannot if we want the species to survive) fall? The price can be raised ad infinitum. The execs and many of their politician buddies know this, but they don't ever acknowledge it. Healthcare is literally a money pit if left in the current system and will far out pace wage earnings in all industries eventually. If you don't believe me look at the wage growth over the past several years vs healthcare costs for yourself.

Based on these simple facts (and yes I do mean facts), to me, there is really only one way to fix this appropriately. By changing the system and acknowledging that you cannot apply a free market model to healthcare in any sustainable way. Pricing and costs would be regulated and made equal across socio-economic areas/demographics and then we take all of that excess money that was a result of price gouging and reinvest that into medical research, hospitals, etc. Seriously if we switch to a single-payer system tomorrow we would actually SAVE money as a country.

Most sane people are not asking the business to operate for free or at a loss. They are allowed to make a profit, but not to gouge it simply because they recognized the flaw in the current system. The numbers have been stated over and over, we pay by far the most money per person into healthcare of any 1st world country. If we used that money to improve healthcare availability we would have an affordable system for everyone that you don't have to wait forever for anything to happen. Everyone loves citing Canada having long waits, but that is only for more difficult procedures or tests and even then they are not the only country with universal healthcare (and gasp! there are countries that don't have that same issue).

For me, the solution is sitting right in front of us, but because of the fervor like devotion many people have to "free-market" everything we can't actually implement it yet. This, just like with everything else, is a perfect example of there is no one-size fits all solution for all problems and we as a country need to stop acting like that.

Re:Making money is not a "moral requirement"

[Immerman]

> but the regulations could be modernized and improved.

They certainly could - patents could be made perpetual, and it could be made illegal to make a drug that competes in any way with any competitor's drug.

Oh, you meant better for patients and the public good? First we'd need to hire politicians that are more interested in serving the public good than lining their pockets. Good luck with that.

sad

[fluffernutter]

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.

He's not wrong

[rsilvergun]

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?

This man gives off

[fredrated]

the stench of evil.

Another one of these

[Kohath]

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.

Yep

[American AC in Paris]

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.

:|

Re:Same Thing

[Anonymous Coward]

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.

Re:Same Thing

[Rob Y.]

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.

Re:Same Thing

[j-beda]

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!