The Difference Between Capitalism & Extortion
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”– Winston Churchill
I don’t usually write commentary type blogs on current events, but a viral story has caught my attention and I felt the need to at least write something.
Earlier this week, news broke that Martin Shkreli, a 31 year-old ex-hedge fund manager-turned-CEO of Turing Pharmaceuticals, had purchased the rights to the drug Daraprim and increased the cost from $13.50 per pill to $750 per pill.
For those for you counting, that’s more than 5,000%.
This drug is administered to critically ill AIDS patients, who need the drug to beat toxoplasmosis and survive. It literally saves their lives.
He can’t actually do this, right? Wrong. He can totally do that. Well, right now, at least.
Some might argue that we live in a capitalist society, and the free market will decide on the morality of this issue. Unfortunately, while the market is voting with its dollars, or lack thereof, AIDS patients in need could potentially go without treatment, and ultimately die. Needless to say, this Martin Shkreli character is a pretty awful person, bordering on sociopathic.
Shkreli argues that in comparison to other companies, this life-saving drug is still under priced. And you know what? He’s right about that. Gilead Sciences’s Hepatitis-C drug named Sovaldi costs $1,000 per pill.
$1,000 fucking dollars.
All told, for the full treatment, the total cost is $84,000
The reaction to this story has been understandably unanimous. Portraying Shkreli as a cruel monster; someone who is potentially sentencing thousands of people to their death, just so he can buy an extra Lamborghini. I’ll admit, I feel the same way about this wiener.
However, while it’s easy to get disgusted with one human being’s actions, we need to keep in mind that the reason he’s able to do this is due to the fact that pricing for drugs like this largely goes unregulated and companies can extort sick patients & insurance companies into paying ungodly sums of money just to stay alive.
And that’s where the problem lies. Extortion. Legally, this would probably be termed as “price gouging” but since my argument is a logical one, not a legal one, we’ll use the term extortion:
(block quote)
Extortion is commonly practiced by organized crime groups. The actual obtainment of money or property is not required to commit the offense. Making a threat of violence which refers to a requirement of a payment of money or property to halt future violence is sufficient to commit the offense. Exaction refers not only to extortion or the unlawful demanding and obtaining of something through force,but additionally, in its formal definition, means the infliction of something such as pain and suffering or making somebody endure something unpleasant)
– (Thanks Wikipedia)
Too often, our focus as a society is on the ‘free-loaders’, those not paying taxes or being able to medically insure themselves. And, while I agree that everyone should contribute what they can to society, including taxes, I would say that rather than focusing on those making less than $25,000 and asking them to pay more, we should focus on the folks like Martin Shkreli. As of right now, he’s not contributing much to society (until he actually improves on the production of the drug, as he claims he will try to do).
There is a real problem in the biotech industry. Don’t get me wrong, some of these drugs were created by benevolent people and organizations. Through ground breaking scientific discovery they’ll go on to increase the quality of thousands of peoples’ lives*. Yet, how can we expect those who are uninsured or under-insured to pay for this type of treatment? Short answer: We can’t.
This is why real reform needs to be made in this industry. I’m not suggesting that companies shouldn’t be compensated for making amazing advances in the biotechnical field, I’m merely suggesting that there be some sort of regulation to make sure disasters like Shkreli’s don’t become commonplace.
It doesn’t have to be this way. Government interferes with free enterprise all the time; whether it’s to break up monopolies like Microsoft, or to protect the environment from car companies who are lying about toxins they’re emitting into the air like VW.
Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6h
— Hillary Clinton (@HillaryClinton) September 21, 2015
Moral of the story: Don’t hate Shkreli**. Hate the broken system in place that incentivizes slugs like him to potentially sentence people to their death in the name of turning an easy profit.
*Except for the drug that Shkreli purchased the rights to. That one was found in the 40′s.
**Ok, you can still hate Shkreli, he’s a wiener.
