
Pharma exec says he had 'moral requirement' to raise drug price 400% - SQL2219
https://edition.cnn.com/2018/09/11/health/drug-price-hike-moral-requirement-bn/index.html
======
kryogen1c
I feel like people who find headlines like this repulsive have never dealt
with complex moral issues or taken a moral philosophy class.

As i mention frequently, i was in US nuclear navy. Its self-regulated. The DOE
and NRC dont come and inspect the nuclear warships being run by 22 year old
kids. This is possible almost entirely due to cultural reasons. A huge portion
of initial and periodic training is devoted to integrity and aligning
morality.

"Moral" is a subtly toxic word because it has some vague equivalence with
being nice, but in reality they are totally orthogonal. If your friend is
doing bad things as a nuclear sailor and you know his family is living
paycheck to paycheck, sometimes the moral thing is to get him in trouble so he
loses half months pay X 2 months.

For a more direct comparison, when natural disasters happen, most groceries
are prohibited from raising prices for moral reasons - how could it be right
to charge people more for water when they dont have any? The answer, that
requires you to turn away people seeking clean water, is that if you dont
raise prices the water will likely run out because people who didnt really
need it were buying it just because.

~~~
clawedjird
> I feel like people who find headlines like this repulsive have never dealt
> with complex moral issues or taken a moral philosophy class.

As someone who’s taken a moral philosophy class, this sounded a bit like,
“people who disagree with my perspective are simple-minded.”

While I don’t think people should generally be forming strong opinions based
on headlines, the CEO in question failed to provide any real justification for
his bold claim. Given that the interests of pharma executives differ from
those of the general public, there’s no reason such a statement should escape
scrutiny.

~~~
turc1656
That's not how I took that sentence. I read that to mean that a lot of people
like to treat many things as black and white and have the approach of "if you
disagree with me you are not as virtuous as I am", which is what we see a
_lot_ of on Twitter and other social media. I think OP is trying to say that
complex issues aren't clear cut when it comes to morality.

~~~
clawedjird
I agree with what you're saying here, but the OP seemed to be going further
than you are. I may have misinterpreted their intentions, but it seemed like
they were holding the pharma exec to a different standard than his detractors.

The pharma exec in the article wasn't saying, "Please understand, this is a
complex issue that shouldn't be considered in black and white terms." He said,
using his own black-and-white thinking, (essentially) that he was virtuous for
raising the price of the drug in question, claiming the moral high ground for
himself. That's why his statement was so controversial.

The OP seemed to accept everything the pharma exec said at face value
(seemingly, by virtue of his position as a pharma exec), while implying that
the general public (at least those who were upset by the situation in
question, and presumably not also experienced pharma execs) was incapable of
complex thought regarding moral issues. To me, anyway, it sounded more like
they were saying, "this guy's right and all you angry folks shouldn't be so
simple-minded" than "hey, let's be reasonable here."

Of course, I could be completely misconstruing the OP's point. I'm not on any
social media, and I generally shy away from the 24-hour "news" cycle, so I'm
probably less sensitive to so-called outrage culture than most...

------
barrkel
There's an interesting mini-thread (3 tweets) from Dean Baker reframing
patents as public debt:

[https://twitter.com/DeanBaker13/status/1212394251872399361](https://twitter.com/DeanBaker13/status/1212394251872399361)

The core idea is that government monopolies are an incentive from the
government to get something done. Instead of paying companies directly, a
monopoly is granted; the monopoly rents, i.e. the higher prices from reduced
competition, are then foisted on the public to pay off over the duration of
the patent. Structurally, this is like a debt with repayments over time.

~~~
michaelt
There are several differences:

Firstly, the government doesn't choose what it pays to have done. Cancer cure?
Patentable. Slide-to-unlock? Patentable. Dildo harness? Also patentable.

Second, with patents if development fails the government pays nothing. Whereas
if they funded development directly, failed projects would be paid for by the
taxpayer.

Third, patents are a flat tax on people who use a development, whereas direct
development is a progressive tax on people whether they use the development or
not.

Fourth, patents can pull money from foreign countries into your country.

~~~
barrkel
There are other mechanisms, e.g. prizes, that don't have the same downsides as
patents that could work better for medical innovations in particular.

------
stopads
The one thing about getting old that I really enjoy is telling people about
how things used to be and having them not believe me. Like how I browsed the
web for years before it had any advertising on it.

This week it's the story about how insulin was $20 a month when I was in high
school, I remember it well because I had two friends who needed insulin and
they complained about this $20 constantly.

Americans under a certain age just flat out refuse to believe that it was ever
possible to get important medicine that cheaply. I've had people call me a
liar and been branded with various political slurs for making this $20 claim.
It's hilarious.

~~~
lonelappde
Where you in high school in the 1970s, when insulin was $20/month?

That's $120/month in modern dollars

[https://www.healthline.com/diabetesmine/history-of-
insulin-c...](https://www.healthline.com/diabetesmine/history-of-insulin-
costs#17)

------
chrisbennet
I'm all for hating the pharma insustry but reading the article, it seems a bit
clickbaity:

"In comments to CNN on Wednesday, Mulye said he was not quoted accurately.
"The word morality was used in the conversation, but not in the context of
price increases," he said."

~~~
awinder
"Honestly, Gottlieb should stay away from tweet, and he needs to stay in his
office and listen to people like me and reform the agency," Mulye said.

That's amongst other choice quotes like "who's going to create these jobs" (as
he employs 100 people, supposedly, I'm not even convinced that number is
legitimate but it's definitely a ceiling). Guy sounds like a real piece of
work living in a mess he's creating.

------
squarefoot
This guy did much worse than simply having a distorted sense of morality. If
company X sells a product at 2800 and company Y raises the price of the
(almost) same product from 500 to 2300, I call it a cartel where the "almost"
difference is there to balance the negative press generics receive sometimes.

------
sanxiyn
I mean, "moral requirement" is ridiculous, but the price was raised from $500
to $2300. In this context, I think his retort makes sense:

> Mulye noted his drug is the generic version and less expensive than the
> branded version, listed at $2800. "I'm being vilified for no good reason,"
> he said.

~~~
rolltiide
If its shareholder capital or debt for the generic purchase it does amplify
his duty to make a return for those shareholders

Otherwise disincentivize companies limited by shares from being a part of
these transactions

~~~
anigbrowl
Nah, this guy is just a psychopath.

 _" I think it is a moral requirement to make money when you can," Mulye told
the Financial Times, "to sell the product for the highest price."_

He's practically trolling people with the memtion of Shkreli.

~~~
yohannparis
He is not wrong, as the CEO of a company it is his duty to maximize profit and
returns to shareholders.

Unless the company has different goals (like ethical, or helping the ill,
etc.) by default it is to make money.

~~~
QuesnayJr
Duty according to who? If he didn't raise the price by a factor of 4, you
think shareholders could successfully sue?

~~~
ilikehurdles
According to the very person the article is about:

> "I think it is a moral requirement to make money when you can," Mulye told
> the Financial Times, "to sell the product for the highest price."

For bonus points, it's coupled with

> "I agree with Martin Shkreli that when he raised the price of his drug he
> was within his rights because he had to reward his shareholders," Mulye was
> quoted as saying.

and

> "I said I have to raise prices when I can -- how to get the best prices for
> my products, so that I can survive," Mulye told CNN. "It is about the
> survival of the business. It has nothing to do with morality."

Frankly, every quote of the guy confirms further that he is a troll trying to
emulate Trump's arrogance and stir shit up.

------
ikeboy
The fact that the FDA head criticized him when this problem was caused by the
FDA in the first place might be peak irony.

See [https://www.cnbc.com/2018/09/12/nostrum-ceo-says-he-wasnt-
de...](https://www.cnbc.com/2018/09/12/nostrum-ceo-says-he-wasnt-defending-
shkreli-he-was-condemning-fda.html)

>But Mulye disagrees. He said new FDA guidance on elemental impurities in
medicines required a reformulation of nitrofurantoin, so Nostrum pulled the
product out of the market while it implemented the necessary changes. It plans
to re-introduce it "shortly," Mulye said.

>"After the regulation came into effect, I don't think anybody manufactured
the product," Mulye said. "That's going to create exclusivity in the market.
Then the price goes up."

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fallingfrog
The solution to this problem is pretty simple: throw all these guys in prison
for price fixing and set price caps on the drugs. Look: if the power company
was allowed to set the price of electricity to whatever they wanted, how much
would your electric bill be? Some industries require regulation. You might not
like that but it’s a fact.

If the government was to set up its own insulin manufacturing plant and sell
the insulin at 20 dollars a vial, every private manufacturer would drop their
prices to match by nightfall the next day. Let’s not act like this is a
confusing or unsolvable problem. This is a trivially simple problem with
several perfectly obvious solutions.

~~~
fallingfrog
And I just want to point out also that the reason the problem goes unsolved is
not because it’s difficult, Congress doesn’t have the power, or anything like
that. The reason they don’t solve the problem is because, and I cannot
emphasize this enough, they _don’t care_.

------
aktuel
Maybe there is indeed an argument to be made to raise antibiotics prices in
general to limit it's massive overuse.

------
darkerside
The drug price was raised from $500 to $2300 (compared to $2800 for the brand
name). This is certainly not a morality-driven decision, but it does seem like
a reasonable business decision. It's capitalism at work. What's missing is,
where are the other competitors to provide the same drug for $2100, resulting
in a price war that eventually drops them back down to the $500 range, which
was clearly profitable for them in the first place?

EDIT: Hmm, apparently I've waded into a political minefield here. I was
posting a theoretical question because I was curious... The price change is so
large. What is stopping another company from coming in and eating lunch?
Obviously there's a bit of a regulatory moat, but for that kind of margin, it
seems surmountable.

~~~
zentiggr
If the other players in the pharmaceutical supply weren't pushing regulatory
capture, blind deals, collusion, and every other trick to keep ricing under
their own control instead of by actual market forces, maybe this would work.

~~~
darkerside
What are blind deals?

Collusion seems unlikely between two parties. It's simply unnecessary. Adding
a third competitor seems like it would resolve things.

~~~
zentiggr
Pharmacy benefit managers are middlemen who often dictate which drugs are
available to a plan, and have been implicated in pushing more expensive
alternative drugs in collusion with manufacturers desires to push certain
lines for profit.

They are also basically under the radar in the stream of third party companies
'providing benefits'.

