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Old 12-21-2015, 02:01 PM   #61
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For critical (life saving, e.g) drugs, should there be a regulation on how much mark up, or increase a company can do? When I first heard about the price hike story, it struck me as an illegal thing to do.
If the drug isn't under patent protection (as in the case here), then all that is required is to assure there is an opportunity for competition (something that was not done here). If another US company could have started production rapidly or if Indian , Canadian, or other supplies could have been available here for $10 per pill, then Shkreli wouldn't have bought the company to commence his pillaging. The answer isn't a cap or price controls, it is reducing barriers to competition. The FDA (slow approvals for new producers of existing drugs) and US laws against drug importation create the environment for this abuse, and generally keep drug prices higher than they would otherwise be. We should fix the problem, not the symptom.
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Old 12-21-2015, 02:21 PM   #62
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If the drug isn't under patent protection (as in the case here), then all that is required is to assure there is an opportunity for competition (something that was not done here). If another US company could have started production rapidly or if Indian , Canadian, or other supplies could have been available here for $10 per pill, then Shkreli wouldn't have bought the company to commence his pillaging. The answer isn't a cap or price controls, it is reducing barriers to competition. The FDA (slow approvals fordrew producers of existing drugs) and US laws against drug importation create the environment for this abuse, and generally keep drug prices higher than they would otherwise be. We should fix the problem, not the symptom.
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Remember that the drug he sold for $750/pill is 62 years old and is no longer under patent. In India, it costs 10 cents a pill. There aren't a lot of people in the U.S. who will need the drug: those with toxoplasmosis, usually AIDS, pregnant women, and congenitally infected newborns, who can be treated even in the womb by treating the mother, which is most desirable for improved outcome.

This isn't about research dollars for new meds, it's about price gouging AIDS patients and pregnant women to treat a life and brain threatening infection.

Wrong is wrong. May the man rot in hell, or at least in prison.
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He's a scummy guy and his arrest is good news. But let's not lose sight of the circumstances that made his previous "price gouging" possible: He was largely immune to the threat of competition because he was able to purchase an FDA-guaranteed monopoly.

And we can't freely import the drug from India because--well, because of other laws/regulations.
+1 +1 +1 +1

This guy was able to create a monopoly on Daraprim because of bad FDA regulations. Free-market principles would have worked here, if it were not for bad laws.

We cannot regulate greed, but we should be able to keep greed from causing harm to society if we have the right laws.
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Old 12-21-2015, 02:35 PM   #63
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I remember hearing that there's a problem with anti-venom serums because few companies are still making the serums, which is still a very manual intensive process.

This isn't a problem with the FDA because the shortage is occurring in the sub tropic countries where the venomous snakes are found.

So the few producers who make it charge a lot and they have a monopoly not because of regulations but because the drug companies have abandoned the market.

You leave it to the free market and the only drugs they'll make are for ED and other afflictions that they could advertise the hell out of.

Private companies have a responsibility to shareholders to maximize profits so they won't pursue drug treatments for some types of conditions unless there's a huge profit potential.

Govts. can't force private companies to make certain drugs but maybe they should consider producing some where there's a need. Then, like Internet providers responding to municipal broadband, the private companies will probably rush in.

As for Daraprim, I thought some other company said they would be producing in the US after this story became big?
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Old 12-21-2015, 02:38 PM   #64
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Skureli or whatever his name is saying the govt. pursued him because of his notoriety and so the hedge fund and ponzi scheme charges are fabricated.

It's probably that some prosecutor decided to look into this despicable figure's life, to see if there was something to prosecute him for.

Now the question is whether they found a case which has merit or they are making a leap, railroading him in effect, because of his notoriety with Daraprim.
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Old 12-21-2015, 02:41 PM   #65
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...Now the question is whether they found a case which has merit or they are making a leap, railroading him in effect, because of his notoriety with Daraprim.
I'm not sure if I care... either one would be fine with me for that low life, POS.
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Old 12-21-2015, 02:46 PM   #66
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I remember hearing that there's a problem with anti-venom serums because few companies are still making the serums, which is still a very manual intensive process.

This isn't a problem with the FDA because the shortage is occurring in the sub tropic countries where the venomous snakes are found.

So the few producers who make it charge a lot and they have a monopoly not because of regulations but because the drug companies have abandoned the market.
I've seen articles about that and suspect part of the issue is that while badly needed, how much of a market is there for anti-venom drugs? In my whole life I've only known one person who was bitten by a venomous snake. And I've seen the videos of how they get the venom - not a job I would take!

Still, it has to be a second shock to the system to get bills like these. In the first article the woman didn't have any medical insurance and got a bill for $55k. Yikes!

Snake Bite Victim Gets $55K Hospital Bill | NBC4 Washington

$143K Hospital Bill Shocks Snake Bite Victim - 10News.com KGTV ABC10 San Diego

‘Sticker Shock’: Snake Bite Victim Charged More Than $80K for 18-Hour Hospital Treatment | TheBlaze.com
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Old 12-21-2015, 02:48 PM   #67
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Now the question is whether they found a case which has merit or they are making a leap, railroading him in effect, because of his notoriety with Daraprim.
Not likely. Securities fraud is not easy to prosecute, and a case takes a long time to build. His notoriety might have motivated them to dig a little deeper and move a little faster.
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Old 12-21-2015, 02:55 PM   #68
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....Still, it has to be a second shock to the system to get bills like these. In the first article the woman didn't have any medical insurance and got a bill for $55k. Yikes!

Snake Bite Victim Gets $55K Hospital Bill | NBC4 Washington

$143K Hospital Bill Shocks Snake Bite Victim - 10News.com KGTV ABC10 San Diego

‘Sticker Shock’: Snake Bite Victim Charged More Than $80K for 18-Hour Hospital Treatment | TheBlaze.com
Good reason to maintain health insurance. You never know what might happen.
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Old 12-21-2015, 02:59 PM   #69
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The occupational hazards of being an opportunistic shark-- the need to be entirely "clean" and to be sure you'll never, ever need a break or the goodwill of anyone.

An interesting question: "Would you take $5 million in legal gain if it meant you would also become widely reviled by the public?"
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Old 12-21-2015, 04:36 PM   #70
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Anti-venom is just one example.

Remember after 9/11 there was an anthrax scare and it turned out there weren't enough vaccines so they had to start cranking them out. Presumably there would have been plenty of profit with the govt. being a big payer.
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Old 12-21-2015, 05:04 PM   #71
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Anti-venom is just one example.

Remember after 9/11 there was an anthrax scare and it turned out there weren't enough vaccines so they had to start cranking them out. Presumably there would have been plenty of profit with the govt. being a big payer.
What point are you trying to make? What actually happened was the sole US manufacturer didn't seek to take advantage of the situation. They cranked up production, costs stayed at about $20-$28 per dose. The government poured almost $1 billion into efforts to develop another vaccine or a second supplier--that effort never produced any vaccine at all.

If the original manufacturer had tried to charge an outrageous amount, I hope the government would have streamlined approvals for other manufacturers.

In situations like these, the best approach is for the government (or whoever might need the stuff) to stockpile a limited "starter" amount and to pay a company to maintain the ability to surge production. Negotiate prices in advance of need so you pay the " non panic" rate.
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Old 12-21-2015, 05:09 PM   #72
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...An interesting question: "Would you take $5 million in legal gain if it meant you would also become widely reviled by the public?"
You mean I could have asked for $5 million?!!!
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Old 12-21-2015, 05:43 PM   #73
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You mean I could have asked for $5 million?!!!
No, you could not have.

Whatever bad thing you personally did was not notorious enough to warrant such a loot.
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Old 12-21-2015, 06:36 PM   #74
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If the drug isn't under patent protection (as in the case here), then all that is required is to assure there is an opportunity for competition (something that was not done here). If another US company could have started production rapidly or if Indian , Canadian, or other supplies could have been available here for $10 per pill, then Shkreli wouldn't have bought the company to commence his pillaging. The answer isn't a cap or price controls, it is reducing barriers to competition. The FDA (slow approvals for new producers of existing drugs) and US laws against drug importation create the environment for this abuse, and generally keep drug prices higher than they would otherwise be. We should fix the problem, not the symptom.
Any company qualified could undertake making this drug, problem is there was only 8,000 prescriptions per year. It is not profitable to compete against a drug with 8,000 prescriptions from $13.50 per pill to $750 yet a competitor did make a generic version available for $1.00 per pill yet that is not well advertised, instead it is held up as an example for the need for more laws/regulations. If the new competitor were to gain the entire market for this they will have $240,000 in revenue. If they were to go to the 1 cent India pricing model there would be $2,400 of sales. Nobody is looking to get into a market like that other than for positive public relations.

Competitor Offers $1 Drug After Turing's Controversial $750 Price Hike

The larger issue with Shkreli is that he violated existing laws for about a decade and even with complaints filed against him the government did not prevent him from getting in charge of a pharmaceutical company via fraud until years after he did it. Instead of issuing new laws consistently enforcing existing laws would be a nice change, good to see he is going to be prosecuted although it seems he loves the attention more than being worried about looking bad. I suppose he is hoping to be portrayed by Leonardo DiCaprio in a movie about his lifelong goals on how to improve the shameful pharma industry and make a suitable comeback as his redemption as out for the good of humanity. It is what makes a long con so profitable in the long run.
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Old 12-21-2015, 07:10 PM   #75
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I agreed in principle, I just objected to your assertion that it was a legal requirement... that's all. Done.
Put a bit more cynically the goal of a ceo is to keep his job which means keeping the board happy, which means keeping the shareholders happy. After all there is a huge market in corporate control (see the takeover artists etc). and if as CEO your company does not perform well, then a takeover artist will come in and the CEO will be thrown out the door, by the new board (who also want to keep their extremely cushy jobs of making 1-5k plus per hour of work on large company boards.
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Old 12-21-2015, 07:51 PM   #76
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No, you could not have.

Whatever bad thing you personally did was not notorious enough to warrant such a loot.
But, I never actively bothered with asset allocation and rebalancing. I bought dividend stocks. I didn't live below my means and I didn't retire early and I never thought anyone was jealous of me and I'm not a DIY type-guy. Doesn't that warrant $5M?
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Old 12-21-2015, 08:21 PM   #77
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I am sorry to disappoint you, but I am afraid that the above qualifications are not enough. Not even if you added that you never run FIRECalc, have done some market timing, and might have even entertained some thoughts about buying some annuities, and hiring a financial advisor.

But I could be wrong. You may want some other opinions by running a poll here on the forum.
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Old 12-21-2015, 10:41 PM   #78
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The above said, if I were good at market timing and could get $5M by shorting stocks, I would do it.

Heck, I would do it for a lot less money, which I actually did by occasionally buying leveraged bear ETFs. But I took risk in doing it. And I have posted about it in the "Market Timing" thread. But I got much less than even 1/1000 of the $5M. I think readers of my posts were utterly unimpressed by the bitty gains, so perhaps that was the reason I did not get vilified for it.
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Old 12-21-2015, 10:47 PM   #79
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Going bankrupt and contracting HIV. Now that's Karma.
Apparently he has been fond of claiming to be "the world's most eligible bachelor" in his self-promoting live streams on Youtube (before his arrest, in any event.)

Little Marty should be careful what he wishes(ed) for. With his pretty looks, I think he will be extremely popular in prison.
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Old 12-21-2015, 11:30 PM   #80
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I've seen articles about that and suspect part of the issue is that while badly needed, how much of a market is there for anti-venom drugs? In my whole life I've only known one person who was bitten by a venomous snake. And I've seen the videos of how they get the venom - not a job I would take!

Still, it has to be a second shock to the system to get bills like these. In the first article the woman didn't have any medical insurance and got a bill for $55k. Yikes!

Snake Bite Victim Gets $55K Hospital Bill | NBC4 Washington

$143K Hospital Bill Shocks Snake Bite Victim - 10News.com KGTV ABC10 San Diego

‘Sticker Shock’: Snake Bite Victim Charged More Than $80K for 18-Hour Hospital Treatment | TheBlaze.com
A neighbor was bit, and he told us the rattlesnake anti-venom was $42K. I couldn't believe it!
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