The fact that people think a particular unpopular thing shouldn’t be legal doesn’t change that. There are a lot of things people believe should be illegal that aren’t illegal, because that would conflict with higher principles of law. People are easily swayed by emotion; the law at least attempts to be rational.
If it was billed to insurance, they would pass those costs over to the people paying the premiums.
Some insurance policies are self-funded: Meaning they have plans, but the insurance company is really just the administrator. The actual costs are paid by the company employing the people buying the insurance. They can both pass the costs onto the employees paying health insurance premiums plus add in that cost to the goods they sell.
A great deal of insurance plans have a co-payment for drugs. If you had to pay 20% of the cost of this drug, that is still quite an increase for the patient.
Not everyone needing these drugs has insurance. Luckily, some charities exist to try to pay the bills for these folks and sometimes there are other discounts available for the uninsured.
Some people are on government insurance plans, both in the US and in places with state health care. In these cases, the costs are passed onto tax payers.
Sorry, but pretty much everyone pays for this sort of thing.
The whole idea of employer-paid insurance in the U.S. is an artifact of some tax law jiggery pokery back in (if I'm remembering right) the Depression/WWII era. Before that people paid for their own health insurance.
Who takes them out of the total amount they are willing to pay for labor, so it still comes from the insured.
See also: the way that most people view a tax refund as "free money" that the government is "giving" them, rather than them having given the government an interest-free loan of that money (which is the actual case).
When they get a (partial) refund of the taxes withheld, they're happy, rather than being disappointed that they've had too much withheld (as homo economicus would).
If, instead, no taxes were withheld and they were forced to come up with the (non-refunded) portion in a lump sum payment once a year they'd be outraged.
Human psychology and math don't really overlap that much.
In one sense, yes, the money the employer pays would be available for wages, but the problem is that any savings would come out of a pool of potential wages for all employees. There is no direct incentive for an individual employee to save money on health care, because those savings will make zero impact on his paycheck.
One way of trying to get around this is, of course, the "copay". If the employee saves money, he does, in most cases, have a somewhat smaller copay. But the incentive isn't nearly as high as it would be if all the savings accrued directly to the employee.
It's the difference between a $10 co-pay for a generic drug, a $25 or $50 co-pay for a non-generic drug, and a 30-percent co-pay for a specialty drug.
This is the fallacy. He didn't get rich from increasing the amount of misery in the world. He didn't give people toxoplasmosis. He got rich from not doing something he could do (i.e. sell drugs more cheaply) to decrease the amount of misery. Which is the exact same thing you do when you buy a Macbook Pro instead of donating the money to save a life from malaria: you forgo the opportunity to decrease the amount of misery in the world in return for your own personal benefit.
That seems to be a stretch to me...
In both scenarios there is a tradeoff between personal gain and someone else's wellbeing.
If I never existed to give charitable donations, those people in Africa are not in a worse situation because I am not here. My existence, and my possible charity can only improve this situation.
If Martin never existed, those poor people would possibly be much better off, getting a more fair price for their medication instead of paying the theoretical maximum.
The difference is One Thing is pushing a ball up a hill, and the Second Thing is pushing a ball down a hill. You can say, they are the same... both have balls and hills... but you have simplified out the most important distinction.
You are not obligated to make someone else's life better. But you ARE obligated not to make it worse.
Well maybe. One of the reasons that drugs get invented is because people are willing to buy the rights to manufacture and distribute them. If Shkreli, and other people like him, didn't exist the drug might not be there in the first place.
But you ARE obligated not to make it worse.
I can think of lots of places that people make my life worse[1] and that's fine. People raise prices on things I want to buy. I've been fired before. I've been dumped by romantic partners. I've been spurned in various personal or business dealings.
I honestly think that people have a very unusual set of rules that they think should apply to medicine and health care services. They don't see these goods as typical products but as moral totems worthy of special rules.
1. This is not to say that my life is unusually bad. I think these things are pretty typical for most people.
Right, and the law grants a limited term monopoly for novel pharmaceutical compounds to encourage innovation. In this case, the patent for Daraprim had long since expired.
What Martin Shkreli did was acquire the marketing and distribution rights for Daraprim, raise the price to $75,000/month, and then withdraw all pharmacy distribution, instead relying on a direct distribution model specifically to prevent other generic drug manufacturers from obtaining the drug for comparison purposes in FDA-required bioequivalence studies.
Is it legal? Sure. But he basically weaponized FDA regulations to reap a substantial profit.
And, exactly as you’d expect the market to work, after the price hikes a company did release a generic alternative.
Harm is purposely spilling nails and glass on the public road so that you can sell people more tires.
If you are trying to take the pure libertarian stance, that whatever the free market dictates is ok, I am actually fine with that. But you can't grant Patents to companies in that situation and give them special legal protection.
When the public grants you a legal monopoly and special protection, whether it is through a patent, or your local power company, they are only required to act responsibly and not take advantage of that protection.
I actually think the most just punishment for Shkreli's actions would have been to open source all the medications he abused. So any person or business with the tools to combine the chemicals would be allowed to do so, and sell them for whatever price they wanted.
In many ways Shkreli showed us the flaws and hypocrisy in our system, and helped show us what we need to do to create a better one. But I don't think that was his intended purpose.
And it doesn't change my original argument.... Not giving to charity, is not the same thing as profiting from the exploration of vulnerable people, even if both things are technically legal.
Edit: Rayiner, I can't reply to your comment but your analogy is completely wrong.
It's like a Fire Department used to put out house fires for $50. And Martin identified one street on the outskirts of town that vulnerable, and he purchased the contract to protect that street from the Fire Department... and now charges them $10,000 for putting out fires.
It's not 'the same' as the guy who does nothing. He didn't INVENT helping them, like every one of these crazy analogies suggest. They were being helped much better before he got there and he made the situation a lot worse for them. You can't ignore that context and set it up as a choice between "Not being helped" or "Being helped for an exorbitant price".
You’re begging the question: what is “exploitation?” Is it “exploitation” to make money from helping someone? If so, why is that worse than not helping someone at all?
It’s like saying the guy who charges $10,000 to put the fire out on your house is worse than the guy who doesn’t do anything.
* I mug you, compared to being a bystander while you are mugged.
* I hit you with my car, compared to being a passenger in the car ahead of the one that hit you.
* I price-gouge you on a medication you need to live, compared to buying a laptop for my job instead of sending that money to buy food for someone half a world away.
Do you really not see the difference?
The relevant inquiry isn't "positive action" versus "inaction" but causation. The bystander doesn't cause you to get mugged; he simply declines to prevent it. Likewise, raising the price on Daraprim doesn't cause you to get toxoplasmosis, it simply changes the terms on which the third party is willing to prevent the harm.
So the proper analogy is standing by while someone gets mugged, charging him $10 to stop the mugging, and charging him $1,000 to stop the mugging. The guy who does nothing is still the worst.
And there's no particular "higher purpose" of the law here that prevents us from making Shkreli's behavior illegal. Price gouging is illegal under other circumstances [1]; as far as I can tell his actions were legal just because nobody thought someone would be this awful.
If you'd like to defend this sociopath, please at least try to make your argument relate to the actual situation.
Malaria person: please wpietri, help me.
wpietri: No
Sick person: please shkreli, help me.
shkreli: Sure, for $500
Sick person: please moderately profitable pharma company, help me.
moderately profitable pharma company: Sure, for $50
Sick person: please insanely profitable pharma company post shrekli, help me.
insanely profitable pharma company post shrekli: Sure, for $5000I know a lot of people see this differently but I don't think they have an ethical leg to stand on. When it gets down to it they have no particular rule for fair pricing other than "that feels too high to me."
1. https://en.wikipedia.org/wiki/Reasonable_and_non-discriminat...
Well, nobody was forcing him to sell goods or services for any particular price. He set the price and now he has to face the consequences.
Do you have some special definition of "force" that you are using which doesn't involve you deciding for someone else which course of action they will take and then making them take it at risk of "consequences"?
Fair pricing can be tricky to determine. However, in Shkreli's case, his entire strategy was to take drugs where a fair price had already been determined by the market and then take advantage of supply constraints to raise the price drastically, by 20-50x.
If you really can't tell the ethical difference between his behavior and normal business, I think you aren't trying hard enough.
In the case of Shkreli and Daraprim the price change induced Imprimis to bring a new drug online which added strength and diversity to the marketplace which is what we expect to happen in a well functioning marketplace when parties work to maximize their own self interest.
Sure, one of Shkreli's attempts to gouge was partially thwarted by a competitor. Were all of them? Is there any guarantee that all future gouging attempts would be equally pointless? Of course not. Because, your free-market fundamentalism aside, markets fail all the time. That's why to get well-functioning marketplaces we outlaw a great variety of market-harming behaviors. Including things like price gouging for things people need to survive.
Markets are not ends in themselves. They exist, with extensive societal support, because they're a useful mechanism to provide a reasonable distribution of goods and services to humans in those societies. When parasitic actors use those mechanisms to cause societal harm, it's entirely reasonable to tinker with the mechanism.
dwild: no
2017 - Malaria person: please dwild, help me.
dwild: no
2012 - Sick person: please Daraprim, help me.
Daraprim: Sure, for US$13.5
2017 - Sick person: please Daraprim, help me.
shkreli: Sure, for US$750
You see the difference? With me, they stayed at the same level of help, none. In the second, he purposefully profited from the help they were getting from Daraprim. He removed something they had beforehand.
Shkreli is charging more. What still better than dwild though.
So maybe dwild should go to jail
>Imprimis Pharmaceuticals, a specialty pharmaceutical company that creates compounded drugs, released a $1 a pill alternative to , a toxoplasmosis treatment whose price skyrocketed by over 5,000% in recent months.
>While the new pill is a boon for patients in need of treatment for the food-borne illness, especially those with weak immune systems like HIV/AIDS and cancer patients, the alternative drug is not an exact copy of Daraprim.
>Imprimis’ pill is a combination of pyrimethamine—the sole ingredient in Daraprim—and leucovorin, a medicine that helps reverse the negative effects on bone marrow caused by the way pyrimethamine works in the body. The two medicines work synergistically and are recommended to be taken in tandem by the Centers for Disease Control. Leucovorin is often prescribed alongside Daraprim.
Not only was the replacement cheaper, it was daraprim coupled with another drug to fight side effects of daraprim.
The judge in this case has a history of using her bench as a bully pulpit. She claims that outside factors had 0 influence on her decision. I find that pretty hard to believe especially with her history.
As for the cost increase I believe they were funding a non side effect version of the drug, which would probably be nice for alot of people. Bone marrow is something thats hard to live without.
This will be overturned. So what if he's a trolling douchebag.
[1] Actually, slightly more than 6 years because Congress is completely incompetent: http://famm.org/wp-content/uploads/2013/08/FAQ-Federal-Good-....
There's very little chance of the case being overturned, but I'm guessing he'll go for a sentence reduction by trying to emphasize that his sentence is based on a hypothetical loss number.
The law is whatever society decides it should be. There is nothing inherently rational about it. You'd have to accept some pretty messed up things as rational if you actually believed that.
1) The law is what a very small group of people decides it should be, and
2) Slippery slopes in law are a very real thing. Just listen to Supreme Court oral arguments. That's (supposedly) why it takes so much forethought and time to enact them.
American law for example reflects views and interests of small group of oligarchy, and not general public. It's been like that for quite a long time, to quote [1]: "The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy"
[1] https://www.theatlantic.com/magazine/archive/2018/03/america...
My favorite in my current industry is how codified insurance costs are built into the system. You can't charge below X, because that would undercut the big players. So you have price floors, for no reason other than regulatory capture and payoffs.
well, everything that's undesirable shouldn't be illegal.
but the system isn't working very well if Shkreli's desire to make millions trumps someone's desire to live.
democracy and markets only work if people are decent. you don't have an efficient outcome if one guy has a monopoly, or if one guy has to buy or die.
and the purpose of property rights is a system that works and has good outcomes, if property rights as construed mean everyone dies or is immiserated, the nature of those rights is going to be renegotiated.
Whether that's how we would like the system to function is, of course, up for debate.
And as the parent commenter said, he was charging insurance companies alone, and claimed the drug was only used by a few hundred people.
He was made an example of by Insurance companies and politicians. You have to remember Shkreli is very connected on Wall St and can call Soros et al friends.
I am of the opinion that the Judge was also biased in this case. She had a disdain for him from the beginning.
Junk away ...LOL....
I'm glad that Shkreli felt obligated to help the people who could directly attribute their suffering to him, but he's still a jerk who extorts sick people.
Also, the drug he raised the price on was a horrible 50-year-old drug. Shkreli raised the price with the explicit aim of getting funds to research a new drug, with less terrible side-effects.
If you make it not a crime to deceive investors and misuse their money, then rich people won't invest their money, they will keep it in vaults.
I consider "a world in which people who don't want to risk prison are still able to make drugs" and "a world in which capital is invested instead of hoarded" to be noble goals.
That's not true. First because price gouging laws already exist, so it's not entirely unknowable - especially if this rule became a law. Second, because once it's known, it's like any other existing limit. If you pay people lower than minimal legal wage, you're liable - that hasn't stopped everyone from hiring.