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hughes

How to be praised for doubling the price of an essential drug:

1. Set the price to 55x the original

2. Wait for outrage

3. Set the price to 2x the original

4. Profit

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The drug was being produced at a loss. Raising the price so that the manufacturer is able to keep producing it is surely preferable to to no drug at all, right?

There's an ever so slight difference between "we need to double the price to cover costs and keep the drug available" (which has now been done) and "we need to raise the price by 22 times because fuck you we can".

In fairness it was:

1. "hey, this guy wants to buy this drug that we are producing as a public service but losing money on",

2. "oh shit - he raised the price to an astronomical figure and now we all look bad. oops",

3. "we're getting the rights back before this turns into a giant PR nightmare. while we're at it, let's raise the price to a sustainable level."

The article doesn't make it sound like there was any malice on Purdue's part.

I think you're basically right. If you read between the lines, this looks like a matter of Purdue thinking "let's pass this off to a true private sector entity that will allow the market to fix the pricing/profitability issues we have with this product", only to find out they sold it to a pack of fucking inhuman scum who think "let's see if we can exploit the shit out a vulnerable, sick population" is a business plan. Purdue was clearly naive, but they are clearly not malicious.

I doubt it was that much at a loss to warrant a 55x price increase, though. Even 2x is kind of a stretch, although I can see making up for past sales or something (or they were being really generous before).

The numbers you need are in the article: $10M loss over 8 years (2007-present), ~45 cases/year.

In order to break even, they need to increase the cost of a course of treatment by about ~$28k/patient.

The new price doubles the price to about ~$50k/patient, which is still short of this number (but bleeding $3k*45 patients = $135k/year is much more manageable than bleeding $1M dollars a year).

I applaud you sir! Rather than jumping on the hysteria bandwagon, you actually did the math.

So even if the drug was priced at $28K/patient, the company would be making zero profit. Huh...

28k is the delta needed. 53k/patient is break-even.

Maybe it was, maybe it wasn't. And maybe a 100% increase of price will cover the alleged loss, and then some. Regardless, anchoring at its finest.

Previously, Martin Shkreli shorted drug companies and tried to convince regulators to blocked their pending drugs. I wonder if he is shorting the drug stocks again but this time he is using a new technique to destabilize the market. So the steps would be:

1. Short stocks in a vital niche market

2. Buy an inexpensive producer of an important product, jack up prices to cause outrage and a strong government response

3. Wait for the market to sell off stocks in the niche market

4. Collect the profits from 1.

5. Dump the producer purchased in step 2.

Note that the 55x price and 2x price are done by different groups.

Do you go to 110x first for quadrupling?

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