Samir’s Selection 02/06/2016 (p.m.)

  • The Daraprim saga has as much to do with the Food and Drug Administration as with Shkreli: although the drug’s patent expired in the nineteen-fifties, the F.D.A. certification process for generic drugs is gruelling enough that, for the moment, whoever owns Daraprim has a virtual monopoly in America. (Overseas, it is much cheaper.) One of the witnesses on Thursday was Janet Woodcock, an F.D.A. official in charge of drug evaluation. Mica asked her about reports that a number of drugs had doubled or quadrupled in price in recent years. Woodcock said, “Congress has not really vested any authority for the F.D.A. over pricing, so we do not follow that.” If Mica wants to lower drug prices by encouraging competition, then he should concentrate on changing the regulatory process. And he should be aware that his plan will require more medical entrepreneurs, not fewer.

    One of the strangest things about the anti-Shkreli argument is that it asks us to be shocked that a medical executive is motivated by profit. And one of the strangest things about Shkreli himself is that he doesn’t seem to be motivated by profit—at least, not entirely. Last fall, Derek Lowe, a chemist and blogger affiliated with Science, criticized Shkreli’s plan to raise prices as a “terrible idea,” not least because such an ostentatious plan posed “a serious risk of bringing the entire pricing structure of the industry under much heavier scrutiny and regulation.” He called on the pharmaceutical industry to denounce Shkreli as a means of protecting its own business model; from an economic point of view, Shkreli’s strategy seemed self-defeating. At least one person close to Shkreli seems to have agreed. One of the most revealing documents uncovered by the committee showed an unnamed executive imploring him not to raise the price of Daraprim again, saying that the risk of another media firestorm outweighed the benefit. “Investors just don’t like this stuff,” the e-mail said. Shkreli’s response was coolly noncommittal: “We can wait a few months for sure.”

    A truly greedy executive would keep a much lower profile than Shkreli: there would be no headline-grabbing exponential price hikes, just boring but reliable ticks upward; no interviews, no tweeting, and absolutely no hip-hop feuds. A truly greedy executive would stay more or less anonymous. (How many other pharmaceutical C.E.O.s can you name?) But Shkreli seems intent on proving a point about money and medicine, and you don’t have to agree with his assessment in order to appreciate the service he has done us all. By showing what is legal, he has helped us to think about what we might want to change, and what we might need to learn to live with.

    tags: MartinShkreli commentary profit capitalism medicine regulation price

Posted from Diigo. The rest of my favorite links are here.

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