Once again, leftists are screaming foul because someone did something of which they don’t approve but the person was perfectly within his rights to do. And, as usual, they simply don’t know the facts and have no understanding of economics. And, to top it off, too much government contributed to the problem but the leftists think the solution is — you guessed it — more government.
A former hedge fund manager, Martin Shkreli, now heads a drug company, Turing Pharmaceuticals AG. Turing purchased a drug, Daraprim, from Impax Laboratories. Daraprim is the trade name for pyrimethamine. It is a 62-year-old drug used largely to combat malaria and toxoplasmosis.
There is no generic.
GlaxoSmithKline was selling the drug for about $1 a tablet. In 2010, GlaxoSmithKline sold Daraprim to CorePharma. CorePharma promptly raised the price to $13.5o a tablet for a pill that costs less than $1 to manufacture. In August, Turing purchased the drug and last week increased the price of the drug to at least $750 a pill.
And then it happened.
Leftists across the nation erupted in that sanctimonious shrill fury they unleash every time it some behaves in a fashion contrary to what their warped perceptions of what is proper.
These whiny leftists, just like a broken record, defamed capitalism and called for more government regulations.
After the outrage from the left, Turing agreed to lower the price.
However, once the facts are examined, a different picture emerges.
The drug, while on the World Health Organization’s List of Essential Medicines, is not in much demand in the United States. Last year, there were only 8,821 prescriptions for the drug. So right from the outset very few people were going to be affected by the price increase.
Additionally, the company is participating in the 340B Drug Pricing Program, which guarantees that Medicaid patients and hospitals who service those patients will get the drug at a greatly reduced price. The company has also agreed to provide the drug free or at discounted prices to those who can’t afford it.
In essence, the only people who will actually pay the full price for the drug are the ones who can afford it. Isn’t that what the leftists want, i.e., make the rich pay more?
Another fact leftists ignore is that this drug is not the only drug available. If one can’t afford this drug, there are cheaper alternatives.
Several antibiotics, including clindamycin, spiramycin, minocycline, and atovaquone, are available. Furthermore, most of these products are significantly less expensive than pyrimethamine. Clindamycin, for example, costs somewhere between 50 cents to slightly more than $3 per tablet.
The real tragedy, though, is how government interference has pretty much prevented the market from effectively dealing with the price increase.
Normally, in an unfettered free market, if a drug company raised its price more than 5,000 percent, another company would step in and offer a generic version of the drug. There is nothing legally stopping a company from manufacturing a generic version of pyrimethamine.
However, Food and Drug Administration regulations related to bringing a drug to market, even a generic copy, are onerous, costly and time consuming.
A generic might be profitable, but not if a company has to comply with the costly FDA regulations to bring a low-demand drug to market. In essence, government regulations shield Turing from competition and allow it to raise its prices with impunity.
Finally, leftists miss the basic economics involved. Drug companies must make a profit if they are to research new and better drugs. They can’t simply give them away. They need the money for research. The money also serves as an incentive to create more life-saving drugs.
If a cure for cancer is found, it will be because some drug company took a risk and spent a large amount of money researching the problem in hopes of a payout later.
That is how we all are. None of us want to, or should, work for free, even if what we do is essential.
Unfortunately your average leftist has an entitlement attitude: They want paid for their own work, but hope to benefit from the labor of others without paying for it.