One Bad Apple! Not Really. Price Gauging Puts Practice on Front Page

Lots of times, we don’t know what right or wrong is, and lots of times we do. No one takes responsibility for anything anymore. We foster, we obfuscate, and we rationalize. “Everybody does it”, that’s what we say. So we come to occupy a moral safe house, where everyone’s to blame so no one’s guilty. By now, you must have heard about one Martin Shkreli, the CEO of Turin Pharma that raised the price of a life-saving drugs used mostly by AIDS patients from $13.50 to $750 per pill. This 5000% price hike was not justified by any additional clinical or non-clinical work, manufacturing change, or marketing expenses, but by the fact that Turin obtained monopoly on this drug by acquisition and cashed in on the monopoly. What Mr. Shkreli did is legal and, unfortunately, an increasingly common practice of companies charging exorbitant prices for life-saving drugs without providing reasonable justification for the same. The mistake Mr. Shkreli made was to be rude to a journalist asking about the price hike. In less than three days, the news of his brashness and unapologetic greed went viral, and lead him to be labeled the “most hated man” in America, the fodder of political posturing, and backlash from his peers. But this anger and response to it misplaced. Price gouging has become more common in the last few years. In 2011, the US Congressional investigation found “gray market” drug companies that would trade in drugs on shortage and charge an average 650% markup on the normal price. Last year, another congressional inquiry found consolidation of drug companies by acquisitions and merger, lead to market monopoly for more than 1200 generic drugs leading to a price hike of up to several thousand percent in a few months. Numerous studies have shown that it is common practice. Pharma and biotech industries have inadvertently come to the rescue to companies like Turing Pharma by trying to rationalize and disguise price gouging as necessary to protect the innovation process. Rising and seemingly unfair drug prices control is a hot topic in this year’s campaign for Presidential election
. It’s about time the industry acknowledge clear incidences of price gouging, and create code of conduct to avoid such events. “Everybody does it” is a poor excuse, and passing the blame will only create a political environment to force the government to make rules that may be harsher than self-imposed code-of-conduct. We should stump this is wrong, unethical and immoral practice before somebody does it for us.