by Jen Jenkins
Martin Shkreli dominated headlines last year as the villain of the pharmaceutical industry. We blogged on MCNTalk about the drug Daraprim, which his company, Turing Pharmaceuticals, purchased, subsequently raising the price per pill from $13.50 to $750. The Internet immediately labeled him the “Most Hated Man in America,” but despite all the criticism, Mr. Shkreli forged ahead and even defended his actions by saying, “I could have raised it higher and made more profits for our shareholders. Which is my primary duty. Again, no one wants to say it. No one’s proud of it. But this is a capitalist society, capitalist system and capitalist rules. My investors expect me to maximize profits.” Comments such as these are a very small glimpse into the reason why big pharma’s problem with price hikes can be called “the Shkreli problem.”
It has become commonplace for drug companies to raise the prices of old drugs by any percentage that they please. Although the percentage of these price bumps may not be as exaggerated as what Shkreli did with Daraprim, it still raises the question: why should they be able to raise prices of old drugs with no justification? This Forbes article shares some of Martin Shkreli’s background and discusses how he went from simply talking about inventing new drugs to dramatically raising the prices of existing ones, as well as some of his other disreputable deeds in between. One of the biggest differences between Shkreli’s acts and those of other pharmaceutical companies is the publicity. Everyone else avoids the press when exercising price hikes while Shkreli unabashedly promotes and defends what he is doing. Respectable drug companies have, for the most part, distanced themselves from this ludicrous display of behavior. Although they essentially all follow the same practices, they want it to be clear that their reasoning surely does not align with that of Shkreli.
The fact is, 80% of drugs in the United States are generic, thus our current system highly encourages drug companies to either focus on making money off of drugs that serve a smaller population of people or raise the prices on existing drugs. Another problematic side effect of this is that new drugs, research, and innovation are falling by the wayside. Martin Shkreli’s behavior is an exaggerated, albeit disturbing outlook on big pharma and decisions that are being made largely out of the public eye.