The Face of High Drug Prices
Martin Shkreli, the founder of Turing Pharmaceutical who bought the right to Daraprim and greatly increased the price, is on trial for securities fraud. The trial begins today, and while it has nothing to do with his price gouging, his actions have made it difficult to find unbiased jurors to judge his case. Shkreli has become the almost universally loathed face of high drug prices, and there is sweeping consensus that his actions represent everything wrong with the current system.
A bit of background: in 2015, he bought the right to Daraprim, a then-obscure antiparasitic drug used to treat AIDS patients. He was able to do this because the drug's patent had expired decades ago, and only one company made it. The drug's market was and remains quite small--only about 2,000 Americans use it every year. To turn a profit, Shkreli did something legal but appalling: seeing no obstacles in his path, he raised the price of Daraprim from $13.50 a pill to $750 a pill, making it too expensive for all but the richest of patients.
The result was an explosion of outrage. Legislators, executive officials, consumer groups, patient groups, ordinary citizens, businesses, and even other pharmaceutical executives denounced his actions and called on him to lower the price. Shkreli paid no attention; he defended his price gouging as legal and said he had an obligation to make a profit and benefit his shareholders. As a result, no one sympathized with him, and when evidence was found that Shkreli had likely run a Ponzi-style scheme, the FBI arrested him.
Americans are uniquely angry at Shkreli because his actions are so indefensible and reveal the problems with out drug system. This executive was able to make a drug incredibly expensive and unaffordable even though it is used to treat sick patients and there are no effective substitutes. People disagree on the right prices for brand new drugs or how much companies should be able to profit from their work, but that is not the issue here. Shkreli took an old drug with no competitors that he had no part in developing and jacked up prices because he was greedy.
This should not happen. Drug companies should be able to make honest money from research and innovation, but consumers have a right to decently priced medicines. Shkreli either does not grasp this or does not care, and until that changes, he will continue to be the face of unaffordable drug prices.