After news hit
the market weeks ago that the common drug Daraprim would increase in price to
over 5000% of what it used to be, many became outraged by this decision. The
commonly known drug is typically used by cancer and AIDS patients to help
rebuild their immune system and has been on the market for over 60 years now.
This announcement came after a statement from CEO Martin Shkreli that “copious
amounts of money are needed to fund further research and development on new
drugs” and so a price increase has to be implemented to sustain these on-going
operations. He also stated that if needed, people can receive the drug for
little to nothing and all they must do is petition for assistance. As one can
imagine, this sudden increase in price of a very common drug did not bode
well with the general public. That being said, after much opposition from
interest groups and people alike, Shkreli stated a little over two weeks ago
that the price of the drug would fall in the coming weeks so that those who
cannot afford it because of the new price hike could once again afford it.
While many
thought this scandal was over, the affect has yet to be felt and the
spotlight has now been placed back onto Shkreli and the pharmaceutical company.
In the latest news statement released defending the hike of the price of the
commonly known drug, Shkreli said that “our price increase is a good thing for
patients because until now no one has been interested in developing a new drug
for [the infection] toxoplasmosis” that has been left unchanged for over 60
years. That being said, how do you think Shkreli and the rest of the
company will fare in this on-going price war? Is $900.00 too much for this drug
or is it fairly priced for the operations that must be sustained from its
profit? Do you think that the company will allow the price to fall back down or
will they leave it where it is at now?
Link to the article: http://money.cnn.com/2015/10/09/investing/drug-ceo-daraprim-price/index.html
Link to the article: http://money.cnn.com/2015/10/09/investing/drug-ceo-daraprim-price/index.html
1 comment:
I think at some point the government is going to have to step in to regulate these medication prices. The United States is one of the few developed countries where medication prices are not regulated. While companies in a competitive market usually compete and keep the prices lower for their products, often for healthcare medications this is not easily done. In order for a company to be able to compete they must come up with a generic drug which comes with a high price due to the costs of research and development. This inevitably decreases the amount of competitors in the market and thus allows firms to charge higher prices. I think with a government regulation on price, it would help firms to become more competitive and lower prices for consumers, so that they are able to purchase the medications that they need.
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