The price of life – drugs and the free market
Andrew Checchia ’18
Earlier this year, Martin Shkreli, CEO of Turing Pharmaceuticals, raised the price of Daraprim, a life-saving medication used to treat toxoplasmosis, a parasitic infection, $13.50 a dose to $750. Although not necessarily unprecedented in the pharmaceutical industry, the 5000% increase in price directly affects the those who need the treatment, likened by many to chemotherapy treatment for cancer or HIV/AIDS. Daraprim was developed in the 1950’s and hasn’t undergone such a significant price increase throughout all of its commercial use because the relative cost of production stayed fairly constant. However, with the rash and seemingly unnecessary markup of late, many have described Mr. Shkreli as “the most hated man in America” (from a report by BBC World News US/Canada).
With what can only be described as unforgiving backlash, the general public has been vocally appalled at the actions of the now infamous CEO. While many called for immediate intervention, little could be done unless another company elected to undercut Turing Pharmaceuticals. And that’s exactly what happened – a San Francisco based company Imprimis Pharmaceuticals announced that it would begin production of a medication equivalent to Daraprim for $1 a pill. Although overseas manufacturers sell Daraprim for as few as ten cents, FDA regulation inflates the price a great deal, in proportion to the true cost of production at least. A roughly ninety cent increase – a problem indeed – but nowhere near the absurd price hike put in place by Shkreli. This only goes to show that the price jump was made targetedly for one reason and one reason only: profit.
However, this situation is not unique; Cycloserine and Doxycycline, historically similarly priced drugs, both underwent massive price increases recently. Cycloserine, used to treat dangerous multidrug-resistant tuberculosis, ballooned from $500 for thirty pills to $10,800 for thirty pills. And Doxycycline, an antibiotic, similarly rose from $20 a bottle to $1849 a bottle in October 2013 (numbers from New York Times). While the media headlines call Martin Shkreli a “rogue CEO” for blatantly valuing profits over patients’ access to lifesaving medication, he is by no means alone. In fact, the only reason he’s received so much flack for his despicable actions, while others pass by without much attention, is that he specifically defended the price increase in the news himself by appearing on various networks for interviews and comments. While the figure at the center of the story garners the most publicity, a more significant debate rages on in the background.
Should the free market be more heavily regulated to avoid obvious price gouging of individuals who cannot afford not to pay the increased label price? According to free market principles, unrestricted capitalism promises innovation, and competing entities fight to create the best product for the best market price. But what happens when there’s no competition and no reason to limit the price of Daraprim? Turing Pharmaceuticals could set whatever price executives believe would still draw sick and dying customers to the drug counter. But why stop at a 5000% increase? After all, this is a lifesaving medication – it’s not like people with severe chronic illnesses and opportunistic infections can refuse to pay the markup, because they will die.
This debate sparks many questions that must be answered in one way or another. Should the lives of thousands be ruled by the principles of supply and demand? Or rather, should human life be subjected to the whims of cartels or bullies like Martin Shkreli? Should hospitals be required to acquire lifesaving medications for uninsured patients? Is it ethically responsible for hospitals to bankrupt patients in need? How much would you pay on your deathbed? Each question provides enough tinder for many more articles, but the topics above still miss the most important question: Should you have to afford your life? I think the answer is clear, but maybe that’s just me.