The Free Market Wins Again
If you know the name Martin Shkreli, it’s likely because news stories about his popped up on your Facebook or Twitter feed. I saw articles about him from folks who don’t usually post about current events, but what he did had many people in an uproar.
He was criticized last month after his Turing Pharmaceuticals company announced an increase in the price of Daraprim from $13.50 to $750 per capsule after buying the rights to sell the drug. Daraprim is the only approved treatment for a life-threatening parasitic infection. Many of my more liberal friends used this to “prove” that the free market has failed, and that government must step in to assure affordable medicine for all. The uproar caused Shkreli to reconsider the price hike.
I came somewhat to his defense, noting that the reason he was able to acquire the rights to the drug was because the previous company wasn’t making a profit. So instead of those needing the drug being left high and dry, someone with enough money to do so kept it from going away entirely. Clearly the previous company didn’t price it well enough to keep it around, so an increase was inevitable. But I, too, thought the price hike was rather over the top.
But in steps the free market. In a situation where one company is price gouging, the opportunity for another company to work it to their advantage is ripe. Which is exactly what happened.
A San Diego biomedical company on Thursday announced it’s selling an alternate medication to Daraprim for $1 a capsule, the San Diego Union-Tribune reported.
Mark L. Baum, CEO of Imprimis Pharmaceuticals, told the paper that one catch is that its formula isn’t FDA-approved and may be sold only through a doctor’s prescription to a specific person. He added that the process of getting FDA approval would take years and cost millions, while not filing keeps prices low and profits higher.
Some folks seem to think that making a profit is evil in and of itself, never mind drug manufacturers doing it, but without profit, there is no money to research new medicines. And part of the cost of that research is the government. Ironically, it’s the government that some folks believe can save us from these price hikes. Sorry, when government gets involved, that’s not what happens.
So somehow, without a new law being passed or a new rule being created by the FDA, the situation rectified itself, and those needing help now have a lower-price option than even before Shkreli bought the rights.
Hillary and Bernie seem to think that government is our savior in all things, and that the free market has failed. Well, it’s not, and it hasn’t. Without government’s help, the price of medication has gone down, rightly punishing a bad decision on the part of one company. You can thank the free market for a lower price, and the choices you have. When the government screws up, you can’t just switch governments, but you can switch corporations far, far more easily.
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