The Product of Life: What the “Pharma Bro” Exposes About U.S. Healthcare

The smug expression on Martin Shkreli’s face says it all:

The fact that Shkreli was arrested not for jacking up prices of a life-saving drug, but for securities fraud speaks volumes on the issues with the U.S. healthcare industry. And Shkeli knows it.

Obamacare received a visceral response since the program launched, with many critizing the “big government” intervention in the market. The argument holds that leaving corporations free to compete against each other in the market will lead to product innovation, enhancing the quality of healthcare. Government intervention would greatly hinder that process of innovation and lead to higher taxes.

But for a corporation to operate within the healthcare industry implies two things: 1. the corporation has the primary objective to maximize profits, the same primary objective of all for-profit corporations in any industry and 2. the product a corporation in healthcare offers is essentially life, or at least quality of life.

Combining those implications leads to a downright ruthless market. Who wouldn’t pay the last dollar they have to buy the product of life? Shkeli knows it. He knew it was perfectly legal for him to raise the price of Daraprim 5,556%, from $13.50 per pill to $750 per pill. And he laughed his way to bank as CEO of Turing.

That is not to say that government should micromanage the healthcare industry, nor does it mean that corporations cannot compete to develop innovation.

John Green explains it better than I can: