Man Begs to be Exiled from Human Race

Man Begs to be Exiled from Human Race September 24, 2015

Ex Hedge funder buys up rights to AIDS drug, raises price from $13.50 to $750

Every once in a while somebody really stands out to remind you why it took nothing less than crucifixion to redeem our species.

We’re all like that guy without grace, which is why none of us can justly say, “I thank you, O Lord, that I am not like that ex-hedge funder”. Truth to tell, I am just like him–and maybe worse since I’ve been given a ton of grace and squandered most if not all of it while, for all I know, he’s never heard of the gospel.

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  • Heather

    It’s actually not even strictly an AIDS drug. It’s a drug for toxoplasmosis, a parasitic disease that is spread mainly by cats. It’s of particular concern to AIDS patients since it’s extremely common to have it in your system (somewhere around half of the human population globally has it) but most of us aren’t actually affected because a healthy immune system keeps it at bay. But anyone with a compromised immune system can be vulnerable to it. It can also be spread mother to child.

    The drug is also apparently an antimalarial. And according to Wikipedia, “on the World Health Organization’s List of Essential Medicines, the most important medications needed in a basic health system.” Another fun fact from Wikipedia: “In the UK, the same drug is available from GSK at a cost of U.S. $20 (£13) for 30 tablets (approx. $0.66 each).”

    In a follow up story, the CEO has apparently backed down and will lower the price. http://www.nbcnews.com/business/business-news/drug-ceo-will-lower-price-daraprim-after-outrage-n431926

    The CEO seems extremely unapologetic. It’s more of an “I’m sorry this looked bad and you guys don’t understand how this industry works” statement. My impression is “We bought the exclusive rights to this so we could use it as a cash cow to fund our other research. A guy’s gotta make a buck, right? How else are we going to keep our labs running unless we can gouge the immunocompromised on life saving medication?”

    • Joseph

      Would this be an example of *unbridled Capitalism*?

      • ManyMoreSpices

        No. The reason that there are “rights” to this drug that this guy was able to purchase and exploit, and the reason that there’s no generic competitor, and the reason that you can’t order a cheap version of it from a foreign pharmacy and have it shipped to you, is because of the FDA’s rules.

        He’s a bad man. But he’s not taking advantage of “unbridled capitalism.” He’s exploiting the existing bridle. He’s using the government to enrich himself. That’s corporatism, not unbridled capitalism.

        • The previous ownership was profiting from the FDA’s rules as well and sold the drug because the cash now price offered by this guy for the rights exceeded the NPV of the predicted future cash flows they were getting from milking the system.

          There’s a legitimate possibility that he’s not bad but actually crazy (kenofken’s theory above). I have no idea of the man’s mental state. It is particularly incompetent to make a price rise so steep that flying to London for a weekend every three months and legally getting a 90 day supply of the medicine becomes the low cost route to treatment. That level of incompetence in a hedge fund guy opens up the possibility that the guy’s actually nuts.

          Sociopathy, they say, is an occupational hazard for CEOs. It’s been fairly well documented that those with the condition are drawn to the job. High functioning sociopaths do pretty well as CEOs.

          The capitalist system, in any case, allows for protest and push back. The system worked as cooler heads no doubt did the same calculation I did and realized within a minute that the announced price was unsustainable.

          • Funnily enough, my husband used the words “crazy” and “sociopath” to describe him, so you may be on to something.

            • It’s not actually my line of thought. I’m just treating kenofken’s suggestion seriously and, if it’s true, trying to figure out what the proper Catholic response is to such a situation. Crazy people with power is not an unknown historical phenomenon but I confess that it’s never come up in my life to a degree sufficient that I ever consulted the Church about it. This isn’t a set piece battle for me but an exploration of logic and theology to actually learn something.

  • My husband knows him. He’s even worse in person, apparently.

  • The guy was an idiot, a brash one who misunderstood the nature of the market position the drug he just bought was in. Price increases, even massive price increases can sometimes be justified depending on circumstances. This wasn’t one of them and so he’s already backed down, new prices lower than $750 to be announced later.

    If prices are set too low, the number of manufacturers reduce, sometimes all the way down to zero and then we all suffer. There are plenty of manufacturers of the drug outside of the US apparently, where the market is larger and the market for the drug is quite small inside the US, and up to now, not very profitable. This is why the brand label for the drug was available for sale in the first place.

    The guy apparently has a theory that there are underpriced drugs on the market and he’s buying them up to restore things to a market clearing price. So far he hasn’t managed to do very well.

    • kenofken

      I don’t think his economic theory was as sophisticated as all that. He just a sociopathic opportunist who took advantage of our insane market system which legalizes and enables extortion of desperately ill people. It’s really no different than going into the nursing home room of a bed-bound emphysema patient, kinking his oxygen hose in your hand and telling him to call his family to turn their entire net worth over to you if they want grandpa to live another day. This guy had no serious plans to do new drug development or to benefit humanity in any way with his scheme. He was going to simply bleed this patient population and their insurers dry and pocket the money to bankroll some other rent-seeking leverage venture.

      • Is sociopathy mental illness? I generally think so. Without that underlying philosophical construct of correcting maladjusted prices, you’re right, all you have left is the mental illness of sociopathy. But what do you do then? I would suggest that Mark’s approach is cruel and inhumane if the man is seriously afflicted with that mental illness.

        But your systemic condemnation of a price rise that failed due to market mechanisms leads me to suspect that you aren’t seriously psychoanalyzing this man but instead are just using it as a prop for your political position. Political psychiatry is an ugly impulse with an ugly history and if that is what you are doing, I believe you will soon need a priest for reconciliation.

        If you want to seriously say that the system of emergent prices called the free market (which require the occasional person that tries to raise them) is insane, you have a very steep hill to climb and all that ugly history to live down. I do not think this system is insane and oppose such an effort because I think it’s factually wrong. Please, at least, avoid allying yourself with all those historical monsters who did political psychiatry before you.

        You do have a point about the man being a rent seeker. His spurious interventions with the FDA to disapprove drugs from manufacturers he was shorting are legitimately in that tradition. This particular action is not meaningfully rent seeking. No potential competitors are being kept out of the market except by the pill’s previous low price, a fact that is likely behind the relatively quick pull back on the massive price increase. Somebody with economics training likely got to the company’s board and pointed out the likely entry of a generic into the market if they went forward and with the bad feeling generated by increasing the price that steeply, the generic would likely reduce their sales of the substance to a number difficult to distinguish from zero.

        So the system worked, and worked within the space of a week, but is insane because it makes provision for the idea that sometimes prices do legitimately go too low. I would be interested in hearing what is the not insane way that an economic system should deal with the circumstance of a mistake being made and prices slipping too low.

        Update: I unpacked what I mean by meaningfully in a comment to MMS below. After writing that, I realized that I was using the word in a pretty non-standard way in this comment.

        • Joe Haram

          stop overthinking the obvious tm, he’s a slug of a human being that prizes his net worth over all other things. the “hedge fund” part didn’t make it conclusive but there were some bread crumbs there!

          • I was willing to go with that originally but kenofken’s post either was an ugly, false accusation of mental illness or maybe he’s got something there. Since there is a statistical correlation between CEOs and sociopathy, it’s not beyond the realm of possibility. So you’re recommending I should have bit kenofken’s head off without giving him the benefit of the doubt? Interesting. Why was my exercise of charity towards kenofken not the right way to go? I’m sincerely curious.

  • Jared B.

    For everyone into Catholic Memes and/or Guardians of the Galaxy references..

  • Marthe Lépine

    This might be even worse:

    From: http://www.cbc.ca/news/health/u-s-drug-company-sues-canada-for-trying-to-lower-cost-of-700k-a-year-drug-1.3242172

    U.S. drug
    company sues Canada
    for trying to lower cost of $700K-a-year drug

    Alexion Pharmaceuticals argues federal government
    cannot limit price of blood disease medication

    CBC News Posted: Sep 24, 2015 4:06 PM ET Last Updated:
    Sep 25, 2015 9:51 AM ET

    Soliris is the only
    drug Alexion produces, but it’s earned the firm revenues of more than $6
    billion over eight years.