Bro
When news broke that the price of Daraprim, a 62-year-old life-saving drug often prescribed to AIDS patient, had been raised from $13.50 a tablet to $750, outrage ensued [..] Turing’s CEO, former hedge fund manger Martin Shkreli, publicly defended his decision to raise the drug price saying that the new profit would be invested in further research and the drug’s new cost was more in line with that of other life-saving drugs. But he eventually gave in and announced a price revision.
While insults of all kinds have been thrown at “Pharma Bro,” he is not the real villain but rather someone trying to do his job, which is to make a profit. The villain is the system.
A privately funded healthcare system, as the one at work in the US, sets all the conditions that allow Shkreli’s actions. What’s more, they seem perfectly justifiable if viewed from the perspective of entrepreneurship. Health is arguably the most valuable of goods, and if you let the market determine its price without regulation, well, suppliers will always try and get the highest price they can.
Americans pay far more than any other country for prescription drugs. In fact, Americans overpay for every aspect of healthcare: procedures and services are the most expensive in the world, because efficiency plays no role in rewarding the healthcare providers [..] The US is an outlier among industrialized nation: it’s the only rich country that does not offer a publicly funded health system, relying instead largely on private insurance. This affects the pricing of drugs in several ways that are independent from the actual regulations imposed on pharmaceutical companies.
First, and perhaps most importantly, the power in setting the price for drugs is skewed toward drug manufacturers. Unlike countries where universal health coverage is in place, the negotiating is left to individual care providers rather than being in the hand of a large, publicly funded buyer that’s able to negotiate since it purchases most (if not all) of the drugs.
For those with health insurance, high drug prices result in higher premiums, but it’s hard to notice the price increases directly. This means consumers lack awareness of the actual medication prices, and consequently, any pressure to keep them under control [..]
The US is one of only two countries (the other being New Zealand) that allows direct-to-consumer advertisement of prescription drugs, while elsewhere promotion is limited to medical professionals. This raises the already steep marketing bill of drugs manufacturers. As Robert Yates, former World Health Organization senior health economist told Quartz, “the amount [pharmaceutical companies] spend on marketing is massively more than they do on research and development.” [..]
The Daraprim case should make clear why 61 prominent US economists are among the 267 signatories of the Economists’ Declaration on Universal Health Care, a statement led by Larry Summers and subscribed to by economists Joseph Stiglitz and Thomas Piketty, presented in New York ahead of the United Nations General Assembly, on Sept. 18.[..] In the declaration, the economists “call on global policymakers to prioritize a pro-poor pathway to universal health coverage as an essential pillar of development.”
It is interesting to me how commonplace these bros have become. They prowl campuses making women feel bad, they are in Silicon Valley being mean to their coworkers making them cry at their desks, there are pharma-bros, Bernie bros, all kinds of bros.
I have another explanation: The old new left has failed, they are generating zero solutions, the easy way out for them is to point to scapegoats. You find the bro, punish the bro, you fixed the problem.
Except that you haven't. Unless the system / the incentives are fixed the problem will not go away.
US either fixes these systemic problems, otherwise, forget the bros, you get the wrecking ball.