Got a rare disease? Step to the back of the line if you’re poor
Most of us understand a thread in the tapestry of how capitalism works: when folks demand something—such as cell phones—investors jump into the fray, markets open, and prices drop.
Competition encourages more competition, where entrepreneurs are deemed successful if they can compete for a share of the market.
The more competition, the lower the prices. At least, that’s the logic of the market place.
But what happens when you have a corner on the market?
You can charge any price you want.
Let’s say your favorite bottle of Pinot Gris costs $13 and change.
Would you still buy the wine if the price ramped up to $750 per bottle?
My guess is you would find another Pinot Gris because there are plenty on the market.
That’s what happened this week with a prescription drug—the only one of its kind—jumped from $13.50 to $750.
That’s not doubling or tripling the price. That’s a 55-fold increase.
The drug, Daraprim, treats the effects of a parasite that lounges around our environment.
And only few people get sick from the disease called toxoplasmosis.
It’s the same illness you may have read about warning pregnant women to avoid cleaning cat-litter boxes.
The parasite that causes toxoplasmosis is found in cat poop and can be passed from a pregnant woman to her child with ill effects.
People who have compromised immune systems—particularly folks with HIV—are most likely to get toxoplasmosis.
This week the company that produces the drug seized an opportunity to raise the price.
The treatment now costs $750.
The New York Times notes that the pharmaceutical company that produces Daraprim (Turing Pharmaceuticals) was bought by a hedge fund manager who seems to need a healthy dose of public relations and a course in ethics.
The CEO defended the price increase:
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” said Martin Shkreli.
If staying in business means increasing the price of a 62-year-old drug that’s the only market option, I suggest you examine your business model.
So I checked the website for Daraprim and it’s impressive.
Let us help you, it says.
Scroll down and you will find the company pledges “Support” and announces they are With you along the way.
Words like help and support invoke compassion. And there’s more:
From the moment you’re prescribed Daraprim, Turing Pharmaceuticals will be there to help educate and support you through every step.
But the words seem hollow against the backdrop of the real-life scenario of people suffering from an illness whose treatment costs skyrocketed after a hedge fund manager buys the company.
A hedge fund, according to the Oxford dictionaries, is a “limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.”
Sounds like Turing Pharmaceuticals is willing to risk your health for their capital gain.
Copyright free photo from Pixabay