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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.
So, no patents? Simple solution: contract with some other drug makers to duplicate it.
As much of the money to buy these drugs comes out of the public's pocket, perhaps it would be a better idea to invest public funds in the supply chain up front. Set up a gov't funded manufacturing unit to produce orphaned drugs and steer around patents on things like EpiPens.
Have gnu, will travel.
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.
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.
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.
That's what we should be doing with assholes like these that pull shit like this.
I seem to recall some orange-faced liberal from New York City telling us he'd force drug companies to lower the price of their drugs. You know, use the power of big government to dictate to private companies how they should run things.
He wasn't lying when he said that, was he?
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
On a world scale, the US democratic party is on the right of the center of the political spectrum. Despite being in power for years, they still didn't implement basic social net such as free health care that are considered standard everywhere else in the developed world. Even right-wing political parties support the idea in most places.
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.
You know, the government knew all about Shkrelli's crimes before he raised the price of that drug. And then he got known for being an asshole that raised a generic drug's price in this same way, forcing the government to do something about him. Congratulations, Nirmal Mulye, you've just made yourself very interesting to the FBI.
Patents have never been to spur innovation. Their purpose is to preserve knowledge. We as society decided we would trade a limited monopoly on an invention for the complete description of that invention. The invention was supposed to be innovative such that any other person knowledgeable in the craft would say "hey, that's a really good idea, I can use that". I should want to read patents because they would teach me, they should be a resource when I want to solve a problem. Journalists should publish them in trade journals because of the innovation in them.
Inventors will invent because we want to solve problems, because there is profit in providing solutions to our customers. We don't need patents to do that. (and we don't need drug patents either - our way of developing drugs is wasteful and broken)
Today when someone actually comes up with something innovative they often don't patent it. Manufacturing methods, if they are truly useful are rarely patented. Small companies can't defend a patent and any inventor who is altruistic will publish their idea almost anywhere other than the patent office. Not only are patents now unreadable (I can't make any sense of any of the patents my name is on) but we are told not to read them because it might increase our companies liability.
When companies spend more money on patent lawyers than on new product development (Apple, google, Oracle) or get screwed when they don't (RIM/Black Berry) we have a problem.
It is now your moral duty to shun East Texas and actively fight patent laws.
Whatever perversion of the patent system that still has this drug covered decades later, it needs to be changed.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
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.
This is their goal, to siphon all money they can out of the working class and into the hands of the already rich without consequence for any harm that happens along the way. That is how they stay rich. And like morons we allowed corporations to become these unstoppable money siphoning machines. Good luck fixing this in a peaceful way this since the corporations now own your governments and make their own laws.
In reality, for-profit insurance companies have a vested interest in drug prices being kept in check, because it gets harder to sell people policies when they're stuck increasing their rates sufficiently to cover these inflated medication prices!
One of the negatives of single-payer healthcare is that it would be funded from taxpayer dollars, meaning as per usual -- central government lacks motivation to keep the costs down. Since they don't have to show a profit on THEIR books, they simply find other avenues to extract the required revenue to pay whatever they're asked to pay.
The real problem here is that this Nirmal Mulye character fails to understand that the pharmaceutical industry isn't truly a "free market" business. It already receives special favors by way of the FDA protecting exclusive rights to a new drug for years after it's brought to market, and rules preventing overseas competitors from selling their offerings here as cheaper alternatives. They're very much a protected monopoly on a given drug, holding customers (whether they be end users paying out of pocket, or insurers paying on their customer's behalf) hostage to either pay any price they dream up, or to simply do without the cure.
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.
There are dozens of other manufacturers of this same medication (see https://www.pharmacompass.com/...), and four newer alternatives to this medication that are more widely prescribed (https://healthplans.providence.org/providers/news-and-events/provider-enews-archives/older-articles/uti-drug/).
Basically, this CEO wants to get out of this highly-competitive marketplace, but is too stupid to just shutdown it's manufacture and sell all remaining stock of the product.
I love it when incompetent people try to boost their personal wealth, but slit their own throats in the bargain.
Somebody else created this possibility, can't blame the CEO for taking advantage of the situation.
Somebody else created these guns and liquor stores, can't blame the robbers for taking advantage of the situation.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
It's just as moral to shoot the CEO in the head. After all, saving millions of people money is the moral thing to do, right?
internationally is that you're buying from countries that have single payer healthcare and therefore can negotiate much, much better drug prices than private insurance companies can/do.
The free market doesn't solve drug prices. There really is only one solution and it's single payer. Healthcare doesn't work like traditional goods because a) unless you have an 8 year degree you lack the necessary information to make informed purchase, b) it's a matter of life or death, meaning you can't really shop around and c) you need it infrequently enough that you can't rely on repeat purchases to weed out low quality (I buy a new video card every 2 years or so but I'll probably only have 1 set of heart stints).
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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
That's one of the reasons there is so much joint animosity against the current President, he's actually trying is damnedest to keep his campaign promises and that is a threat to the permanent politician class.
Indeed, when I think of Donald Trump I think of a man who keeps his promises. A paragon of virtue right there. Quite a catch.
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...
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
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.
We have a moral imperative to identify and remove sociopaths from our society - be they CEOs or entire corporations.
imagine a soft, buttery paw gently pressing down onto a sleeping soldier's face. forever.
+1.
The US' system may not be qualitatively better or worse, but it definitely is more expensive per unit of healthcare services than other systems. Learned that when in Sweden a few years ago - public healthcare is not inexpensive, but it is far less expensive than free-market systems.
"Truth is what works" -- William James "It works!!" -- o-dark-AM comment
It's a legal requirement to make money, not a moral requirement.
Jesus said to help the poor and become fishers of men, not banksters.
-- Tigger warning: This post may contain tiggers! --
Who waits for an MRI for that long?
My co-worker had his MRI done within 2 hrs.
I have had MRIs scheduled within 2 days.
A fractured arm isn't an Emergency situation, people can go days without it being treated and be fine.
If the Triage at the ER receives people that are going to -die- without treatment, they will be bumped ahead of you. just like in the US.
People die in the US from preventable diseases. Chronic disease. From stuffing twinkies in thier neck and loading up on a pound of beef when they are in the mood for a "healthy" meal.
I object to power without constructive purpose. --Spock
Almost all major world powers limit the amount drug companies are allowed to charge. This is exactly why! I don"t give a shit about freedom or capitalism when it comes to life-saving procedures and medicines. This should be illegal and no one should make a profit on suffering. People that think this is acceptable are garbage people, in my opinion.
WTF?
The US does most of the medical research for the world, and pays for it. Those are the "better results" from the US system - advances in medicine. "Covered" isn't saying much: at what standard of care?
Socialism: a lie told by totalitarians and believed by fools.