That Guy Who Price-Gouged AIDS Patients Did It to Kids with Kidney Disease

[Razgovory]

I can't help fee that you are unhappy about the idea of Free Riders.  Posting history indicate you are deeply concerned about the "free rider problem".

I thought I was supposed to be obsessed and outraged.

Okay, how do you feel about free riders?

[Admiral Yi]

Okay, how do you feel about free riders?

Enough of that, let's talk about me for a while.

[garbon]

I think that, for free riding to occur, you'd have to show that the phrma companies were willing to sell to Canadians (and others) at near-marginal-cost, and that the Canadians and others knew those costs well enough to free-ride.  I don't think either case is proven.  It is entirely possible that the different costs of drugs is driven by different willingness to pay, and that occurs in any market.

To be honest, I think it'll be very difficult to ever get to the bottom of this - given many factors, including that no one ever seems to agree on what companies even spend on R&D.  While that article I linked about the Tufts study cites the cost to develop drugs (which I believe also includes costs for all the failures and then various things needed to be done to get approvals in each market) - on the other hand there is Donald W. Light who says development cost is only in the millions once you take off all the padding put on figures.

http://www.drugwatch.com/2014/10/15/americans-pay-higher-prices-prescription-drugs/

(Here's a link to his journal article - http://www.bmj.com/content/331/7522/958.extract)

Mother Jones summarises that as showing:

http://www.motherjones.com/mojo/2005/11/truth-about-free-riders

1) We can find no convincing evidence to support the view that the lower prices in affluent countries outside the United States do not pay for research and development costs. The latest report from the UK Pharmaceutical Price Regulation Scheme documents that drug companies in the United Kingdom invest proportionately more of their revenues from domestic sales in research and development than do companies in the US.

2) Prices in the UK are much lower than those in the US yet profits remain robust.

3) Companies in other countries also fully recover their research and development costs, maintain high profits, and sell drugs at substantially lower prices than in the US.

4) But that report doesn't provide any evidence for its claim that "innovative drugs" are somehow less available in Europe as a result of overly-low prices.

5) Perhaps American pharmaceutical companies aren't marketing their absolute latest and flashiest patented drugs in Europe, true. But considering how many of these are "me-too" drugs with little to no significant medical benefit, perhaps it's no surprise that Europeans aren't suffering much for the loss.

Back on the free-rider side we do have:

http://www.economist.com/node/2388708 (Economist seeming to tepidly support findings from Bain regarding free ridership)

http://www.bain.com/bainweb/PDFs/cms/Marketing/InVivo_Imbalanced%20Innovation_030104.pdf (Bain's findings)

http://www.forbes.com/sites/paulroderickgregory/2012/07/01/obama-care-will-end-drug-advances-and-europes-free-ride-unless-china-steps-in/ (op-ed)

https://books.google.co.uk/books?id=RKeJ9kZM7uwC&pg=PA188&dq=pharma+costs+free+riders&hl=en&sa=X&ved=0CB8Q6AEwAGoVChMI_Zjv7dzkyAIVQ0YUCh0DpQE_#v=onepage&q=pharma%20costs%20free%20riders&f=false (book that notes that their might be negatives on being country that pays less)

Also, I just found this book that looks like it could be interesting from Oxford. It does note that this is something that should be investigated/considered, particularly if countries that make up a large fraction of global demand were to move to stricter price controls.
https://books.google.co.uk/books?id=U6UheNp8IgoC&pg=PA267&dq=pharma+costs+free+riders&hl=en&sa=X&ved=0CCoQ6AEwAmoVChMI_Zjv7dzkyAIVQ0YUCh0DpQE_#v=onepage&q=pharma%20costs%20free%20riders&f=false

So highly debated, but yeah, no clear answers.

For myself though, I don't see how we wouldn't expect a slowing of drugs coming to market if the US adopted stronger price controls given that costs to create drugs wouldn't be shrinking.

[garbon]

I can't help fee that you are unhappy about the idea of Free Riders.  Posting history indicate you are deeply concerned about the "free rider problem".

I thought I was supposed to be obsessed and outraged.

Okay, how do you feel about free riders?

I think I was the one to bring free ridership up here, and it wasn't because I was outraged but rather always find it a bit odd that it is rejected that the US is funding a lot of R&D costs and that everything would actually be better off if the US adopted some strong price controls along some mix of Canadian/European models.

[Syt]

http://arstechnica.co.uk/science/2015/12/turings-martin-shkreli-regrets-5000-price-hike-says-it-wasnt-high-enough/

Turing's Martin Shkreli regrets 5,000% price hike—says it wasn't high enough

CEO of Turing says he was forced to raise price, appease shareholders.

In a Healthcare summit hosted by Forbes on Thursday, Martin Shkreli, the founder and CEO of Turing Pharmaceuticals, admitted he made a mistake by raising the price of a decades-old drug by more than 5,000 percent. But it's not the mistake you might expect.

In response to an audience member who asked him if he would have done anything differently in regard to raising the price of the drug, Daraprim, Shkreli replied, "I probably would have raised the price higher."

That price hike, which brought a pill of Daraprim from about £9 to £500 earlier this year, has drawn fiery scorn from the public, media, and lawmakers. Daraprim is a 62-year old drug used to treat toxoplasmosis, a disease caused by a parasitic infection. Toxoplasmosis often strikes people with compromised immune systems, such as AIDS patients.

During the 25-minute interview, Shkreli explained the price hike regret. "I could have raised it higher and made more profits for our shareholders, which is my primary duty," he said.

According to Forbes, Shkreli went on to explain why he recently decided to go back on a plan to lower Daraprim's price, saying that companies were still "begging" for business despite the higher drug cost. He also blamed complicated distribution models and a lack of alternatives for forcing the price hike.

Earlier this week, a pharmaceutical drug manager announced that it would promote the distribution of a 60p-per-pill alternative to Daraprim.

[garbon]

Whatever. His 15 minutes are way over.

[mongers]

Whatever. His 15 minutes are way over.

Do you think some businessmen, who've been brought up in an on-line world, now can't separate out on-line behaviour from who to behave in the market, because to my mind he now just seems to be trolling/attention seeking.

[garbon]

Scratch out businessmen and insert people and sure.

[mongers]

Scratch out businessmen and insert people and sure.

Well that's for you to say Gaby, as I don't have a broad knowledge of young people and your generation.

To me it would seem common sense to both keep one's online life separate from work and also to not allow online ways to bleed into professional/business behaviour. Or am I missing something.

[grumbler]

To me it would seem common sense to both keep one's online life separate from work and also to not allow online ways to bleed into professional/business behaviour. Or am I missing something.

That seems a good idea.  I have no idea why you are bringing that up in this thread, but if you are asking for advice, i'd say follow the rule you have outlined here.

[garbon]

To me it would seem common sense to both keep one's online life separate from work and also to not allow online ways to bleed into professional/business behaviour. Or am I missing something.

That seems a good idea.  I have no idea why you are bringing that up in this thread, but if you are asking for advice, i'd say follow the rule you have outlined here.

[dps]

Some people have never met a good idea that they didn't ignore.

[Syt]

Apparently Shkreli is also the guy who bought the Wu-Tang-Clan album of which only a single copy was published

http://www.geek.com/news/ceo-who-raised-prices-on-cancer-drugs-also-bought-the-one-of-a-kind-wu-tang-album-1641765/

[...]

It all looks a lot worse for Shkreli considering Bloomberg Business has outed him as the person who bought Wu Tangs 31 track double LP that the rap group only produced a single copy of. The album is called Once Upon a Time in Shaolin and according to Wu Tang member RZA, it's a piece of art. "We're about to put out a piece of art like nobody else has done in the history of music," RZA said before the album was finished. "We're making a single-sale collector's item. This is like someone having the scepter of an Egyptian king."

The Clan hired an auction group called Paddle8 to handle the sale and put a copyright on the album forbidding anyone besides the Wu-Tang clan from releasing the album for profit in the next 88 years. At first, the rap group considered making a legal agreement with the eventual buyer to not let anyone else listen to it, but eventually the group decided that the buyer would have complete control over the album, like a work of art. The buyer could destroy it or release it free on the internet, the Wu-Tang Clan didn't care.
Buyers that Paddle8 deemed legitimate were able to listen to 13-minute samples from the album before bidding. They played a short clip for a few writers and potential buyers in March in New York and one of the attendees noticed that not only was the entire Wu-Tang Clan on the album, but some of the female vocals had been performed by Cher. The small part of Once Upon a Time in Shaolin that was heard was deemed excellent.

Enter Shkreli, who is a collector of music memorabilia and owns things like Katy Perry's old guitar and Kurt Cobain's old Visa card. One of the Paddle8 auctioneers told him that a bunch of real Wu-Tang fans, even the famous ones, would want to hear the already mythic Wu Tang album and he should buy it to get some face time with them. Shkreli thought it was a good idea and sent a staff member to listen to another few snippets of the album before putting in a bid.

The final amount Shkreli won the auction with is still unknown (rumor is it was about $2 million), but the whole deal went down before his company's price increase on Daraprim put his name in the news. Now that his identity has been revealed, RZA has commented to clarify: "The sale of Once Upon a Time in Shaolin was agreed upon in May, well before Martin Skhreli's [sic] business practices came to light. We decided to give a significant portion of the proceeds to charity."

Shkreli, though, really doesn't seem to care about either controversy. He hasn't even listened to the album yet. The quote Bloomberg got from him on the subject was: "I could be convinced to listen to it earlier if Taylor Swift wants to hear it or something like that," Shkreli says. "But for now, I think I'm going to kind of save it for a rainy day."
Which means he is not even close to releasing the full album for free on the internet, which is within his legal rights. What a douchebag.

[Syt]

Oh noes!

http://www.nbcnewyork.com/news/national-international/362770911.html?_osource=SocialFlowFB_NYBrand

FBI Arrests Notorious Pharma CEO Martin Shkreli

Martin Shkreli, the pharmaceutical company CEO who sparked outrage after raising the price of an anti-infective drug from $13.50 to $750, has been arrested by the FBI in an investigation related to a hedge fund and drug company he once ran, Reuters and CNBC reported Thursday.

Shkreli, 32, who is now the boss of Turing Pharmaceutical in New York, was previously the manager of hedge fund MSMB Capital Management and chief executive of biopharmaceutical company Retrophin Inc.

Reuters said it witnessed Shkreli's arrest. Details of the charges were not immediately available.

In September, Shkreli announced that he was jacking up the price of Daraprim, prompting backlash, which led the company to say last month it was cutting the cost of the drug.

Shkreli recently made headlines after it was revealed that he was the mystery buyer of the new single-copy Wu-Tang Clan album "Once Upon a Time in Shaolin." He reportedly paid $2 million as the highest bidder for the exclusive album and told Bloomberg Business he was waiting to listen to it "for a rainy day."

[Malthus]

Apparently Shkreli is also the guy who bought the Wu-Tang-Clan album of which only a single copy was published

http://www.geek.com/news/ceo-who-raised-prices-on-cancer-drugs-also-bought-the-one-of-a-kind-wu-tang-album-1641765/

[...]

It all looks a lot worse for Shkreli considering Bloomberg Business has outed him as the person who bought Wu Tangs 31 track double LP that the rap group only produced a single copy of. The album is called Once Upon a Time in Shaolin and according to Wu Tang member RZA, it's a piece of art. "We're about to put out a piece of art like nobody else has done in the history of music," RZA said before the album was finished. "We're making a single-sale collector's item. This is like someone having the scepter of an Egyptian king."

The Clan hired an auction group called Paddle8 to handle the sale and put a copyright on the album forbidding anyone besides the Wu-Tang clan from releasing the album for profit in the next 88 years. At first, the rap group considered making a legal agreement with the eventual buyer to not let anyone else listen to it, but eventually the group decided that the buyer would have complete control over the album, like a work of art. The buyer could destroy it or release it free on the internet, the Wu-Tang Clan didn't care.
Buyers that Paddle8 deemed legitimate were able to listen to 13-minute samples from the album before bidding. They played a short clip for a few writers and potential buyers in March in New York and one of the attendees noticed that not only was the entire Wu-Tang Clan on the album, but some of the female vocals had been performed by Cher. The small part of Once Upon a Time in Shaolin that was heard was deemed excellent.

Enter Shkreli, who is a collector of music memorabilia and owns things like Katy Perry's old guitar and Kurt Cobain's old Visa card. One of the Paddle8 auctioneers told him that a bunch of real Wu-Tang fans, even the famous ones, would want to hear the already mythic Wu Tang album and he should buy it to get some face time with them. Shkreli thought it was a good idea and sent a staff member to listen to another few snippets of the album before putting in a bid.

The final amount Shkreli won the auction with is still unknown (rumor is it was about $2 million), but the whole deal went down before his company's price increase on Daraprim put his name in the news. Now that his identity has been revealed, RZA has commented to clarify: "The sale of Once Upon a Time in Shaolin was agreed upon in May, well before Martin Skhreli's [sic] business practices came to light. We decided to give a significant portion of the proceeds to charity."

Shkreli, though, really doesn't seem to care about either controversy. He hasn't even listened to the album yet. The quote Bloomberg got from him on the subject was: "I could be convinced to listen to it earlier if Taylor Swift wants to hear it or something like that," Shkreli says. "But for now, I think I'm going to kind of save it for a rainy day."
Which means he is not even close to releasing the full album for free on the internet, which is within his legal rights. What a douchebag.

It's nice to know he needs the money for a good cause.