Starting this thread, because based on a new public disclosure of an ongoing investigation it seems like Martin Shkreli was just playing by the rules.
What started as a small collection of states suing a handful of drug companies for price fixing has expanded into a massive industry wide investigation of over 300 generic drugs.
In just one instance of extraordinary cost spikes, the price of a decades-old drug to ease asthma symptoms, albuterol, sold by generic manufacturers Mylan and Sun, jumped more than 3,400 percent, from 13 cents a tablet to more than $4.70.
The alleged collusion transformed a cutthroat, highly competitive business into one where sudden, coordinated price spikes on identical generic drugs became almost routine. Competing executives were so chummy they had an alphabetical rotation for who picked up the tab at their regular dinners, according to a person familiar with the investigation who spoke on the condition of anonymity because the case remains under investigation.
Executives at more than a dozen generic-drug companies had a form of shorthand to describe how they conducted business, insider lingo worked out over steak dinners, cocktail receptions and rounds of golf.
The “sandbox,” according to investigators, was the market for generic prescription drugs, where everyone was expected to play nice.
“Fair share” described dividing up the sales pie to ensure that each company reaped continued profits. “Trashing the market” was used when a competitor ignored these unwritten rules and sold drugs for less than agreed-upon prices.
During the transatlantic phone call, Malik and the Heritage executive, Jeff Glazer, agreed to divide up the sandbox, the U.S. market for sales of Doxy DR, according to the lawsuit by states and similar complaints by independent pharmacies and grocery-store chains.
During subsequent conversations, according to the complaints, Mylan agreed not to sell Doxy DR to CVS and the wholesaler McKesson — sales volume worth about 30 percent of the U.S. market for the drug. As part of the alleged deal, Heritage agreed not to set a low price.
We can no longer blame just the Martin Shkreli’s of the world. He got in trouble because he was stupid about his handling of the company, and he said the quiet part loud.
There are some big names connected to this so far, and you can only imagine, based on what they have found, that the scope of this investigation will broaden further.
In previous threads about pharmaceutical costs, I think I have maybe been about 25% defensive, having had experience working in the research area. Creating drugs take upwards of a decade of work, time research etc.
But, it is clear, that beyond the actual costs of research and development and marketing, these companies are working to a level of greed that we previously thought only on the fringes of the industry. It is clear that this investigation is finding that price-fixing is more of an industry standard than an outlier.
There are some BIG names in this (Mylan … suprise!) as well as some smaller players. And this is so much more than just the 300% increases in cost we have seen, it is as simple as the industry agreeing to hike the price of an OTC acne cream up from .10$ an oz to .50$ an oz. Something that you might notice a little bit at the register, but not enough to be alarmed about.
This is some heinous shit, and is one more reason healthcare costs have ballooned in the last 10 years. While the conservatives like to blame Obamacare for everything (it isn’t perfect), the truth, in terms of prescription drugs, appears to be the industry itself is to blame.
Oh yeah. He was one of the obviously many getting away with the massive price fiddling in the industry. He just got in trouble because he was also an idiot. I am just saying, that we thought Shkreli was slimy because of the stuff he did, turns out a lot of companies are doing the same thing, just less loudly than he did.
Now take those insane drug prices and add yet another scalper who buys up ALL the meds, and holds them hostage from hospitals charging even more insane prices. Where hospital billing gets reamed at for drug costs, is actually a loss for them at times because they can’t pro-rate the costs based on the insane fluctuations of the drug market. I actually have to bring in my own medications at times because our hospital can’t acquire them for reasonable prices from “wholesalers”.
Unless I missed it, my guess is he did not have the budget to afford the insurance and didn’t want to burden his parents. I’ve been there, it’s crushing. ACA or insurance will not take debt into consideration when you’re figuring out a payment plan. So if he’s just barely getting by with massive student loan debt, car payment, rent, but has a semi-decent job - he just couldn’t afford the premiums. Some of the insurance policies are so awful you’re literally throwing your money down the drain as they don’t cover hardly anything but still get you into ACA.
Yeah, he didn’t want to pay the premiums, because they were a decent chunk of his income.
But the thing is… Paying out of pocket for the medicine he needed was WAY MORE. That’s what made his decision bad. He didn’t check into how much his insulin and supplies were going to cost, if he paid for it out of pocket.
Part of that isn’t all on him… Part of it is tied to a major problem with our system, which is that consumers with insurance generally have no idea what the “real” cost of the stuff they are taking costs. Because really, the cost out of pocket isn’t anywhere close to what insurance companies are paying either. It’s usually just an arbitrarily high, obscene number.
Again, the kid’s story is tragic, and illustrates tons of problems with our system. In this specific case, we need to start asking why the fuck insulin is so expensive. It costs nothing to produce. The only reason is because it has an inelastic demand, since you die without it. And you need it forever.
But still. Get insurance, folks. Even if you are young and healthy. Even if it costs a lot. Because without it, you cannot handle the costs of healthcare in our system.
This is a feature, not a bug - they don’t want you to know. I’m sure I’ve told this story before but I hurt my ankle a few years back and needed X-Rays, but my insurance at the time was terrible. I called around and the hospitals basically all gave me the same story: We can’t tell you, you have to talk to our billing department. The billing departments, when I finally caught them in the 4 hours a day (only minor exaggeration) they’re open and got through hold refused to tell me - I think I finally pressured one into giving me a number and it was nearly a grand. I ended up at an urgent care and paid less than $100 out the door. Urgent care centers are awesome.
I don’t disagree that having insurance is obvious, but even then… my mother’s diabetic. Last year, her provider decided that insulin wasn’t going to be covered at the same rates; I think it runs them a couple hundred a month now. Parents are now both in the waiting period for disability and Medic* coverage, hemorrhaging money between the COBRA payments for the drugs that are covered and the cost of insulin. Thankfully they have the savings to cover it… but not everyone does. And then the hard decisions about what drugs you really need happen. Sometimes a story like this is the result.