7 ms·

Pharma exec says he had 'moral requirement' to raise drug price 400%

42 points by SQL2219 7y ago

deleted 7y ago
[deleted]
Proven 7y ago
Not impossible. If you were so sell it at cost, that would be morally wrong.
sanxiyn 7y ago
I mean, "moral requirement" is ridiculous, but the price was raised from $500 to $2300. In this context, I think his retort makes sense: > Mulye noted his drug is the generic version and less expensive than the branded version, listed at $2800. "I'm being vilified for no good reason," he said.
- rolltiide 7y ago
  If its shareholder capital or debt for the generic purchase it does amplify his duty to make a return for those shareholders Otherwise disincentivize companies limited by shares from being a part of these transactions
  - anigbrowl 7y ago
    Nah, this guy is just a psychopath. "I think it is a moral requirement to make money when you can," Mulye told the Financial Times, "to sell the product for the highest price." He's practically trolling people with the memtion of Shkreli.
    - rolltiide 7y ago
      Shkreli also was not an outlier, the mention of his actions are not inaccurate The only thing happening here is that 2 people per decade actually talk about what they’re doing and receive flak for that when it is clear it is the only practice in this market. If the reaction reflects how people feel then disincentivize companies limited by shares from being a part of these transactions
    - TeMPOraL 7y ago
      Sounds like a true believer in the free market; 'if everyone is as greedy as they can be, the market will self-balance into ethical system'.
      - 34679 7y ago
        If it was a free market, this man would have competition.
        amdavidson 7y ago
        He does have competition, in fact he is the competition. He produces the generic version of the patented drug.
    - yohannparis 7y ago
      He is not wrong, as the CEO of a company it is his duty to maximize profit and returns to shareholders. Unless the company has different goals (like ethical, or helping the ill, etc.) by default it is to make money.
      - anoncake 7y ago
        As a human being, it is his duty to be ethical.
        yohannparis 7y ago
        Nope, it is moral to be ethical. We have Laws and Justice system to enforce ethic.
        anoncake 7y ago
        Laws are merely what the state thinks (or claims) is ethical.
      - lonelappde 7y ago
        That's a myth that has been thoroughly debunked in this forum's archives.
        yohannparis 7y ago
        Do you mind sharing an example?
      - QuesnayJr 7y ago
        Duty according to who? If he didn't raise the price by a factor of 4, you think shareholders could successfully sue?
        ilikehurdles 7y ago
        According to the very person the article is about: > "I think it is a moral requirement to make money when you can," Mulye told the Financial Times, "to sell the product for the highest price." For bonus points, it's coupled with > "I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders," Mulye was quoted as saying. and > "I said I have to raise prices when I can -- how to get the best prices for my products, so that I can survive," Mulye told CNN. "It is about the survival of the business. It has nothing to do with morality." Frankly, every quote of the guy confirms further that he is a troll trying to emulate Trump's arrogance and stir shit up.
barrkel 7y ago
There's an interesting mini-thread (3 tweets) from Dean Baker reframing patents as public debt: https://twitter.com/DeanBaker13/status/1212394251872399361 https://twitter.com/DeanBaker13/status/1212394251872399361 The core idea is that government monopolies are an incentive from the government to get something done. Instead of paying companies directly, a monopoly is granted; the monopoly rents, i.e. the higher prices from reduced competition, are then foisted on the public to pay off over the duration of the patent. Structurally, this is like a debt with repayments over time.
- lonelappde 7y ago
  That's... what the Constitution says.
  - barrkel 7y ago
    The constitution of the US doesn't say that patents are public debt.
- michaelt 7y ago
  There are several differences: Firstly, the government doesn't choose what it pays to have done. Cancer cure? Patentable. Slide-to-unlock? Patentable. Dildo harness? Also patentable. Second, with patents if development fails the government pays nothing. Whereas if they funded development directly, failed projects would be paid for by the taxpayer. Third, patents are a flat tax on people who use a development, whereas direct development is a progressive tax on people whether they use the development or not. Fourth, patents can pull money from foreign countries into your country.
  - barrkel 7y ago
    There are other mechanisms, e.g. prizes, that don't have the same downsides as patents that could work better for medical innovations in particular.
kryogen1c 7y ago
I feel like people who find headlines like this repulsive have never dealt with complex moral issues or taken a moral philosophy class. As i mention frequently, i was in US nuclear navy. Its self-regulated. The DOE and NRC dont come and inspect the nuclear warships being run by 22 year old kids. This is possible almost entirely due to cultural reasons. A huge portion of initial and periodic training is devoted to integrity and aligning morality. "Moral" is a subtly toxic word because it has some vague equivalence with being nice, but in reality they are totally orthogonal. If your friend is doing bad things as a nuclear sailor and you know his family is living paycheck to paycheck, sometimes the moral thing is to get him in trouble so he loses half months pay X 2 months. For a more direct comparison, when natural disasters happen, most groceries are prohibited from raising prices for moral reasons - how could it be right to charge people more for water when they dont have any? The answer, that requires you to turn away people seeking clean water, is that if you dont raise prices the water will likely run out because people who didnt really need it were buying it just because.
- deleted 7y ago
  [deleted]
- magicalist 7y ago
  > For a more direct comparison.... The answer, that requires you to turn away people seeking clean water, is that if you dont raise prices the water will likely run out because people who didnt really need it were buying it just because. I mean the guy literally says why they're doing it (there's available needy-people margin to cash in on), and it's not to ensure they don't run out of a limited supply. But keep carrying that water for them for free if you want, I guess.
  - kryogen1c 7y ago
    >there's available needy-people margin to cash in on he does not say this, and i dont think thats a reasonable interpretation. >But keep carrying that water for them for free if you want, I guess. i dont know what this means.
    - deleted 7y ago
chrisbennet 7y ago
I'm all for hating the pharma insustry but reading the article, it seems a bit clickbaity: "In comments to CNN on Wednesday, Mulye said he was not quoted accurately. "The word morality was used in the conversation, but not in the context of price increases," he said."
- amdavidson 7y ago
  But the original source[0], stands by its quotation: "The Financial Times said Wednesday it sticks by its story." 0: https://www.ft.com/content/48b0ce2c-b544-11e8-bbc3-ccd7de085ffe https://www.ft.com/content/48b0ce2c-b544-11e8-bbc3-ccd7de085...
- awinder 7y ago
  "Honestly, Gottlieb should stay away from tweet, and he needs to stay in his office and listen to people like me and reform the agency," Mulye said. That's amongst other choice quotes like "who's going to create these jobs" (as he employs 100 people, supposedly, I'm not even convinced that number is legitimate but it's definitely a ceiling). Guy sounds like a real piece of work living in a mess he's creating.
stopads 7y ago
The one thing about getting old that I really enjoy is telling people about how things used to be and having them not believe me. Like how I browsed the web for years before it had any advertising on it. This week it's the story about how insulin was $20 a month when I was in high school, I remember it well because I had two friends who needed insulin and they complained about this $20 constantly. Americans under a certain age just flat out refuse to believe that it was ever possible to get important medicine that cheaply. I've had people call me a liar and been branded with various political slurs for making this $20 claim. It's hilarious.
- lonelappde 7y ago
  Where you in high school in the 1970s, when insulin was $20/month? That's $120/month in modern dollars https://www.healthline.com/diabetesmine/history-of-insulin-costs#17 https://www.healthline.com/diabetesmine/history-of-insulin-c...
darkerside 7y ago
The drug price was raised from $500 to $2300 (compared to $2800 for the brand name). This is certainly not a morality-driven decision, but it does seem like a reasonable business decision. It's capitalism at work. What's missing is, where are the other competitors to provide the same drug for $2100, resulting in a price war that eventually drops them back down to the $500 range, which was clearly profitable for them in the first place? EDIT: Hmm, apparently I've waded into a political minefield here. I was posting a theoretical question because I was curious... The price change is so large. What is stopping another company from coming in and eating lunch? Obviously there's a bit of a regulatory moat, but for that kind of margin, it seems surmountable.
- metalliqaz 7y ago
  "Capitalism" here assumes a free market, but the health care business isn't a free market. It's loaded with regulation and all kinds of other issues (you can't comparison shop when you're bleeding profusely, for example). And it's not like the regulation isn't there for good reason. Bad drugs, snake oil, and all kinds of quackery have hurt and/or killed many people in the past. We need to have a new social contract that prohibits profiting from suffering.
  - darkerside 7y ago
    No market is truly free. Of course all markets exist on a continuum, and healthcare needs more regulation than many. That doesn't mean less free markets don't exhibit similar behaviors and reward competition.
- zentiggr 7y ago
  If the other players in the pharmaceutical supply weren't pushing regulatory capture, blind deals, collusion, and every other trick to keep ricing under their own control instead of by actual market forces, maybe this would work.
  - darkerside 7y ago
    What are blind deals? Collusion seems unlikely between two parties. It's simply unnecessary. Adding a third competitor seems like it would resolve things.
ikeboy 7y ago
The fact that the FDA head criticized him when this problem was caused by the FDA in the first place might be peak irony. See https://www.cnbc.com/2018/09/12/nostrum-ceo-says-he-wasnt-defending-shkreli-he-was-condemning-fda.html https://www.cnbc.com/2018/09/12/nostrum-ceo-says-he-wasnt-de... >But Mulye disagrees. He said new FDA guidance on elemental impurities in medicines required a reformulation of nitrofurantoin, so Nostrum pulled the product out of the market while it implemented the necessary changes. It plans to re-introduce it "shortly," Mulye said. >"After the regulation came into effect, I don't think anybody manufactured the product," Mulye said. "That's going to create exclusivity in the market. Then the price goes up."
squarefoot 7y ago
This guy did much worse than simply having a distorted sense of morality. If company X sells a product at 2800 and company Y raises the price of the (almost) same product from 500 to 2300, I call it a cartel where the "almost" difference is there to balance the negative press generics receive sometimes.
fallingfrog 7y ago
The solution to this problem is pretty simple: throw all these guys in prison for price fixing and set price caps on the drugs. Look: if the power company was allowed to set the price of electricity to whatever they wanted, how much would your electric bill be? Some industries require regulation. You might not like that but it’s a fact. If the government was to set up its own insulin manufacturing plant and sell the insulin at 20 dollars a vial, every private manufacturer would drop their prices to match by nightfall the next day. Let’s not act like this is a confusing or unsolvable problem. This is a trivially simple problem with several perfectly obvious solutions.
- fallingfrog 7y ago
  And I just want to point out also that the reason the problem goes unsolved is not because it’s difficult, Congress doesn’t have the power, or anything like that. The reason they don’t solve the problem is because, and I cannot emphasize this enough, they don’t care.
aktuel 7y ago
Maybe there is indeed an argument to be made to raise antibiotics prices in general to limit it's massive overuse.

42 points by SQL2219 7y ago

deleted 7y ago

[deleted]

Proven 7y ago

Not impossible. If you were so sell it at cost, that would be morally wrong.

sanxiyn 7y ago

I mean, "moral requirement" is ridiculous, but the price was raised from $500 to $2300. In this context, I think his retort makes sense: > Mulye noted his drug is the generic version and less expensive than the branded version, listed at $2800. "I'm being vilified for no good reason," he said.

rolltiide 7y ago
If its shareholder capital or debt for the generic purchase it does amplify his duty to make a return for those shareholders Otherwise disincentivize companies limited by shares from being a part of these transactions
- anigbrowl 7y ago
  Nah, this guy is just a psychopath. "I think it is a moral requirement to make money when you can," Mulye told the Financial Times, "to sell the product for the highest price." He's practically trolling people with the memtion of Shkreli.
  - rolltiide 7y ago
    Shkreli also was not an outlier, the mention of his actions are not inaccurate The only thing happening here is that 2 people per decade actually talk about what they’re doing and receive flak for that when it is clear it is the only practice in this market. If the reaction reflects how people feel then disincentivize companies limited by shares from being a part of these transactions
  - TeMPOraL 7y ago
    Sounds like a true believer in the free market; 'if everyone is as greedy as they can be, the market will self-balance into ethical system'.
    - 34679 7y ago
      If it was a free market, this man would have competition.
      - amdavidson 7y ago
        He does have competition, in fact he is the competition. He produces the generic version of the patented drug.
  - yohannparis 7y ago
    He is not wrong, as the CEO of a company it is his duty to maximize profit and returns to shareholders. Unless the company has different goals (like ethical, or helping the ill, etc.) by default it is to make money.
    - anoncake 7y ago
      As a human being, it is his duty to be ethical.
      - yohannparis 7y ago
        Nope, it is moral to be ethical. We have Laws and Justice system to enforce ethic.
        anoncake 7y ago
        Laws are merely what the state thinks (or claims) is ethical.
    - lonelappde 7y ago
      That's a myth that has been thoroughly debunked in this forum's archives.
      - yohannparis 7y ago
        Do you mind sharing an example?
    - QuesnayJr 7y ago
      Duty according to who? If he didn't raise the price by a factor of 4, you think shareholders could successfully sue?
      - ilikehurdles 7y ago
        According to the very person the article is about: > "I think it is a moral requirement to make money when you can," Mulye told the Financial Times, "to sell the product for the highest price." For bonus points, it's coupled with > "I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders," Mulye was quoted as saying. and > "I said I have to raise prices when I can -- how to get the best prices for my products, so that I can survive," Mulye told CNN. "It is about the survival of the business. It has nothing to do with morality." Frankly, every quote of the guy confirms further that he is a troll trying to emulate Trump's arrogance and stir shit up.

barrkel 7y ago

There's an interesting mini-thread (3 tweets) from Dean Baker reframing patents as public debt: https://twitter.com/DeanBaker13/status/1212394251872399361 https://twitter.com/DeanBaker13/status/1212394251872399361 The core idea is that government monopolies are an incentive from the government to get something done. Instead of paying companies directly, a monopoly is granted; the monopoly rents, i.e. the higher prices from reduced competition, are then foisted on the public to pay off over the duration of the patent. Structurally, this is like a debt with repayments over time.

lonelappde 7y ago
That's... what the Constitution says.
- barrkel 7y ago
  The constitution of the US doesn't say that patents are public debt.
michaelt 7y ago
There are several differences: Firstly, the government doesn't choose what it pays to have done. Cancer cure? Patentable. Slide-to-unlock? Patentable. Dildo harness? Also patentable. Second, with patents if development fails the government pays nothing. Whereas if they funded development directly, failed projects would be paid for by the taxpayer. Third, patents are a flat tax on people who use a development, whereas direct development is a progressive tax on people whether they use the development or not. Fourth, patents can pull money from foreign countries into your country.
- barrkel 7y ago
  There are other mechanisms, e.g. prizes, that don't have the same downsides as patents that could work better for medical innovations in particular.

kryogen1c 7y ago

I feel like people who find headlines like this repulsive have never dealt with complex moral issues or taken a moral philosophy class. As i mention frequently, i was in US nuclear navy. Its self-regulated. The DOE and NRC dont come and inspect the nuclear warships being run by 22 year old kids. This is possible almost entirely due to cultural reasons. A huge portion of initial and periodic training is devoted to integrity and aligning morality. "Moral" is a subtly toxic word because it has some vague equivalence with being nice, but in reality they are totally orthogonal. If your friend is doing bad things as a nuclear sailor and you know his family is living paycheck to paycheck, sometimes the moral thing is to get him in trouble so he loses half months pay X 2 months. For a more direct comparison, when natural disasters happen, most groceries are prohibited from raising prices for moral reasons - how could it be right to charge people more for water when they dont have any? The answer, that requires you to turn away people seeking clean water, is that if you dont raise prices the water will likely run out because people who didnt really need it were buying it just because.

deleted 7y ago
[deleted]
magicalist 7y ago
> For a more direct comparison.... The answer, that requires you to turn away people seeking clean water, is that if you dont raise prices the water will likely run out because people who didnt really need it were buying it just because. I mean the guy literally says why they're doing it (there's available needy-people margin to cash in on), and it's not to ensure they don't run out of a limited supply. But keep carrying that water for them for free if you want, I guess.
- kryogen1c 7y ago
  >there's available needy-people margin to cash in on he does not say this, and i dont think thats a reasonable interpretation. >But keep carrying that water for them for free if you want, I guess. i dont know what this means.
  - deleted 7y ago

chrisbennet 7y ago

I'm all for hating the pharma insustry but reading the article, it seems a bit clickbaity: "In comments to CNN on Wednesday, Mulye said he was not quoted accurately. "The word morality was used in the conversation, but not in the context of price increases," he said."

amdavidson 7y ago
But the original source[0], stands by its quotation: "The Financial Times said Wednesday it sticks by its story." 0: https://www.ft.com/content/48b0ce2c-b544-11e8-bbc3-ccd7de085ffe https://www.ft.com/content/48b0ce2c-b544-11e8-bbc3-ccd7de085...
awinder 7y ago
"Honestly, Gottlieb should stay away from tweet, and he needs to stay in his office and listen to people like me and reform the agency," Mulye said. That's amongst other choice quotes like "who's going to create these jobs" (as he employs 100 people, supposedly, I'm not even convinced that number is legitimate but it's definitely a ceiling). Guy sounds like a real piece of work living in a mess he's creating.

stopads 7y ago

The one thing about getting old that I really enjoy is telling people about how things used to be and having them not believe me. Like how I browsed the web for years before it had any advertising on it. This week it's the story about how insulin was $20 a month when I was in high school, I remember it well because I had two friends who needed insulin and they complained about this $20 constantly. Americans under a certain age just flat out refuse to believe that it was ever possible to get important medicine that cheaply. I've had people call me a liar and been branded with various political slurs for making this $20 claim. It's hilarious.

lonelappde 7y ago
Where you in high school in the 1970s, when insulin was $20/month? That's $120/month in modern dollars https://www.healthline.com/diabetesmine/history-of-insulin-costs#17 https://www.healthline.com/diabetesmine/history-of-insulin-c...

darkerside 7y ago

The drug price was raised from $500 to $2300 (compared to $2800 for the brand name). This is certainly not a morality-driven decision, but it does seem like a reasonable business decision. It's capitalism at work. What's missing is, where are the other competitors to provide the same drug for $2100, resulting in a price war that eventually drops them back down to the $500 range, which was clearly profitable for them in the first place? EDIT: Hmm, apparently I've waded into a political minefield here. I was posting a theoretical question because I was curious... The price change is so large. What is stopping another company from coming in and eating lunch? Obviously there's a bit of a regulatory moat, but for that kind of margin, it seems surmountable.

metalliqaz 7y ago
"Capitalism" here assumes a free market, but the health care business isn't a free market. It's loaded with regulation and all kinds of other issues (you can't comparison shop when you're bleeding profusely, for example). And it's not like the regulation isn't there for good reason. Bad drugs, snake oil, and all kinds of quackery have hurt and/or killed many people in the past. We need to have a new social contract that prohibits profiting from suffering.
- darkerside 7y ago
  No market is truly free. Of course all markets exist on a continuum, and healthcare needs more regulation than many. That doesn't mean less free markets don't exhibit similar behaviors and reward competition.
zentiggr 7y ago
If the other players in the pharmaceutical supply weren't pushing regulatory capture, blind deals, collusion, and every other trick to keep ricing under their own control instead of by actual market forces, maybe this would work.
- darkerside 7y ago
  What are blind deals? Collusion seems unlikely between two parties. It's simply unnecessary. Adding a third competitor seems like it would resolve things.

ikeboy 7y ago

The fact that the FDA head criticized him when this problem was caused by the FDA in the first place might be peak irony. See https://www.cnbc.com/2018/09/12/nostrum-ceo-says-he-wasnt-defending-shkreli-he-was-condemning-fda.html https://www.cnbc.com/2018/09/12/nostrum-ceo-says-he-wasnt-de... >But Mulye disagrees. He said new FDA guidance on elemental impurities in medicines required a reformulation of nitrofurantoin, so Nostrum pulled the product out of the market while it implemented the necessary changes. It plans to re-introduce it "shortly," Mulye said. >"After the regulation came into effect, I don't think anybody manufactured the product," Mulye said. "That's going to create exclusivity in the market. Then the price goes up."

squarefoot 7y ago

This guy did much worse than simply having a distorted sense of morality. If company X sells a product at 2800 and company Y raises the price of the (almost) same product from 500 to 2300, I call it a cartel where the "almost" difference is there to balance the negative press generics receive sometimes.

fallingfrog 7y ago

The solution to this problem is pretty simple: throw all these guys in prison for price fixing and set price caps on the drugs. Look: if the power company was allowed to set the price of electricity to whatever they wanted, how much would your electric bill be? Some industries require regulation. You might not like that but it’s a fact. If the government was to set up its own insulin manufacturing plant and sell the insulin at 20 dollars a vial, every private manufacturer would drop their prices to match by nightfall the next day. Let’s not act like this is a confusing or unsolvable problem. This is a trivially simple problem with several perfectly obvious solutions.

fallingfrog 7y ago
And I just want to point out also that the reason the problem goes unsolved is not because it’s difficult, Congress doesn’t have the power, or anything like that. The reason they don’t solve the problem is because, and I cannot emphasize this enough, they don’t care.

aktuel 7y ago

Maybe there is indeed an argument to be made to raise antibiotics prices in general to limit it's massive overuse.