A Greedy Capitalist Gets His Comeuppance

by on November 12, 2015 · 0 comments

in American Empire, Culture, Economy, Health, History, Media

Price-Gouger Martin Shkreli Becomes Known as ‘Most Hated Man in America’

asshole capitalistBy John Lawrence

Turing Pharmaceuticals chief Martin Shkreli will face new competition for Daraprim, the drug he recently hiked 5,000 percent in price, after competitor Imprimis Pharmaceuticals said it would market a similar drug for just $1 a tablet. Daraprim is used mainly to treat toxoplasmosis, a parasitic infection that’s common in AIDS and HIV patients, as well as cancer sufferers.

Greedy buttwipe Martin Shkreli, the hedge fund guy that bought the drug Dariprim and then raised the price from $13.50 to $750. a pill will actually lose his ass on this venture. At these prices the estimated annual cost of treatment for toxoplasmosis, for the pyrimethamine component alone, would be $336,000 for patients who weigh less than 132 pounds, and $634,500 for those who weigh more than that. Daraprim is given for at least six weeks to knock out the infection, and then often for a year or even indefinitely to help the immune-compromised patient keep the parasite at bay.

The problem for Shkreli, that he didn’t take account of in his lust for speedy profits, is that Dariprim is actually a generic. It’s been around for 62 years. That means that anybody can manufacture it. That’s exactly what one San Diego drug company did. Moreover, Imprimis intends to come up with cheap versions of other drugs that some businesses sell for far above their manufacturing costs. The trick for Imprimis was to combine pyrimethamine with another generic drug, leucovorin, thus giving it the right to operate as a compounding pharmacy and to avoid a lengthy approval process by the US Food and Drug Administration.

imprisThere goes Shkreli’s profits right out the window. Adios you greedy bastard. You and your company Turing Pharmaceuticals are going to lose your shirts. In particular you’re going to lose all the money you paid for Dariprim. Turing Pharmaceuticals acquired the drug from Impax Laboratories in August 2015 for $55 million. Shkreli can kiss that $55 million good-bye.

Imprimis CEO Mark Baum said he hopes his company’s action provides a market based answer to exorbitant drug pricing. Yeah, go get him Mark! I love it when the market slays another marketer in the interests of the shell shocked public of whom the weak and vulnerable are being price gouged out of existence. Who but the rich could afford $750. a pill for a life saving drug?

Shkreli: ‘I Believe Drugs Should Be Priced Relative to the Value They Confer’

From Alternet:

Shkreli expressed regret that he had been a “flippant jackass” instead of carefully explaining the price increase, although he told another Reddit user he didn’t understand how raising the price to $20, for example, might have been more reasonable than a 5,500 percent hike.

“I believe drugs should be priced relative to the value they confer,” he said.

Of course, if somebody sticks a gun to your head and says “Your money or your life,” you’re going to give him all your money because the value that that confers is sparing your life. Shkreli operates in accordance with the same principal: if you want to go on living and you have a terrible disease for which you need a drug that only Shkreli can supply you with, you’re going to give him all your money. There’s no difference from the situation in which a gun is put to your head. And that, my friends, is the ethics of capitalism.

But there was one flaw in Shkreli’s plan to bilk sick people out of their money. And that is that the drug is a generic. Shkreli has no patent rights over it. But he probably figured that any other company that wanted to market the drug would have to undergo a lengthy approval process with the FDA. The decision to sharply increase the price for an old, generic drug — in other words, a drug that any other pharmaceutical company could also manufacture — is based on a gamble that no other company will be nimble enough to immediately get FDA approval for a generic competitor for Daraprim. That would give Shkreli time enough to make a killing before the other drug came on the market.

generic drugThere is one other angle that Shkreli is fully prepared to use. He was gearing up to bilk not only individual customers but Medicare itself. The 2003 Medicare Prescription Drug, Improvement, and Modernization Act contains legislation that forbids Medicare from negotiating drug prices. That legislation, signed into law by George W Bush, introduced a market opportunity for scumbags like Shkreli. Medicare is forced to pay whatever Shkreli decides the price should be for Dariprim since Medicare Part D is required to cover approved cancer drugs. So even though Shkreli has graciously (no, not really) offered to give the drug away free to certain individuals, he intended to have Medicare pay the full freight thus ultimately putting taxpayers on the hook.

Pharmaceutical costs are a top reason that health insurance companies justify raising their policy rates, and society at large ends up paying for it with more expensive insurance plans, or by contributing a bigger percentage of their paychecks to cover health care costs. And I guess his plan now is to have doctors prescribe his pill, Dariprim, instead of the generic version that Imprimis is making. I hope no doctor falls for this. And Medicare should be on full alert not to pay for Dariprim at $750. when a generic from Imprimis is available for $1.

The best laid plans of mice and men often go awry. Shkreli didn’t figure on Imprimis being able to avoid the lengthy FDA process by setting up a branch that could be a compounding pharmacy and start marketing the drug immediately. Both Hillary Clinton and Bernie Sanders have spoken out on the ridiculousness of a market system that lets some whippersnapper like Martin Shkreli price gouge needy and vulnerable people. He’s become known as “the most hated man in America.” Hillary tweeted: “Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”

greedy capitalist eating moneyOther vulture pharmaceutical companies have pulled the same scam as Shkreli. Daraprim is not the only fairly old drugthat’s seen astronomical price increases recently. The price for cycloserine, a medicine used to treat drug-resistant tuberculosis, increased to $10,800 for 30 pills from $500 in August. Two heart drugs owned by Valeant Pharmaceuticals, Isuprel and Nitropress, saw their prices increase by 525% and 212% respectively this year.Even everyday drugs like antibiotic doxycycline have been affected, with its price rising to $1,849 a bottle in April 2014 from $20 a bottle in October 2013, according to a Congressional report.

A new cholesterol drug on the market from Regeneron, for those for whom statins don’t suffice, costs more than $14,000 a year. The drug’s name is Praluent. Regeneron CEO Dr Leonard Schleifer, another scumbag, gives the same old “they need the money to do research” crap. It’s BS. They sell the same drugs in foreign countries for half what they sell them to Americans for. They’re just banking on the Republican 2003 legislation that requires Medicare to cover drugs but forbids Medicare from negotiating a lower price. I wonder whose lobbyists got that legislation passed. Not the lobbyists for We the People. That’s for sure.

Wall Street Loves Greedy Profit Maximizing Bastards

Wall Street loves Valeant with its shares hitting an all time high last August. Valeant is something of a role model for Shkreli. They created a network of “phantom pharmacies” to steer potential customers toward their more expensive drugs instead of lower priced alternatives. Valeant bought smaller drug developers and then hiked prices on the medicines developed by those companies. It’s profits skyrocketed as it slashed research into new drugs. They and Shkreli justify their price hikes by saying that they need the money to “do research.” The truth is they have no intention of doing research. The only approval they are looking for is from Wall Street which will facilitate their stock prices soaring. Money is the only criterion here even if it means price gouging the sick and vulnerable.

The name Turing Pharmaceuticals was no doubt taken from the name of the great mathematician and cryptologist Alan Turing who most famously broke the Nazi codes during the Second World War. Turing’s name has been unfortunately besmirched by being taken for the company name of a scam artist and profiteer. He’s probably rolling over in his grave.

I hope jackass Shkreli loses his shirt on these machinations. And I hope the stupid idiots in Congress will allow Medicare to negotiate drug prices with the companies that provide them. Otherwise, the Shkrelis, Valeants and Schleifers of the world will seek to profit by raising prices for life saving drugs. Either we as individuals, if we are unfortunate enough as to have one of these life threatening diseases, will pay their outrageous prices or we will pay through increased health insurance costs and increased taxes to cover Medicare’s skyrocketing costs which pay for these price gougers’ arbitrarily set prices. But they will be laughing all the way to the Wall Street banks. They and Wall Street could care less about people’s misfortunes. They only care about money. Greedy bastards!

But a shout out to Imprimis Pharmaceuticals, the company that’s going to eat Shkreli’s lunch by supplying the equivalent of Dariprim for $1. a pill. I like to give credit where credit is due. See, I’m not totally anti-corporation; just those who are Wall Street toadies who only care about money and not a whit about alleviating the suffering of the unfortunate. Good guys like Imprimis CEO Mark Baum deserve a pat on the back. Hats off to ya, Mark.

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