Recently, a hedge funder bought the rights for to drugs used by AIDS patients and raised the price from $13.50 to $750. Now, this price hike was later retracted by Martin Shkreli, the CEO of the company, who vowed to lower the price from $750 to a more manageable price. Daraprim, the drug that Shkreli purchased the rights of, is a drug that helps prevent malaria and fight toxoplasmosis, a parasitic infection. Daraprim is important to HIV positive and immunocompromised individuals who are more likely to encounter toxoplasmosis. The whole country was in an uproar in response; Shkreli did a perfect job portraying himself as the corporate, money-grabbing swine.
This also raises the question of, since Daraprim is a generic drug (a drug that many companies can produce since its patent has expired), why don't other companies create a generic copy of the drug? By introducing competition to the monopoly, you can drive the price down. Upon competition, Shkreli has no choice but to drop the outrageous price. Unfortunately, it is not as simple as that.
In order for drugs to be used for treatment in the US, they must be approved by the US Food and Drug Administration (FDA). This approval process is very difficult. And by difficult, I mean that it's extremely expensive and time consuming. The US healthcare system is riddled with hoops on hoops to jump through before any real action can be taken. Thankfully, a drug called Bactrim can be used in lieu of Daraprim in some cases and Bactrim is very cheap compared to Daraprim, but this doesn't justify the price hike initiated by Shkreli.
The privatization of pharmaceuticals can lead to instances like this where companies skyrocket their prices for monetary gains. This incident might suggest that pharmaceutical companies are unethical and detrimental to society overall. To play devil's advocate, many of the innovations come from private sectors that are motivated by the huge profit. Innovations, although motivated by money, is the driving force for scientific and medical advancement.
So what is the solution to pharmaceutical companies' tyrannical control of drug prices? I believe government involvement is necessary to maintain a healthy pharmaceutical industry. The private sector could continue with their R&D of novel drugs; after all, profit seems to be a very good motivator for advancement. As for generic drugs, the government could allocate some chump change (5-10 million dollars at most) for production of generic drugs that could save lives. Compare 5-10 million dollars to the budget of the F-35 Fighter program. The program is now 3 years behind schedule and 200 billion dollars over the original budget. 5 million dollars in a country like the US is just a drop in the bucket.
This might all be wishful daydreaming from me, but I believe that changes must be made to the current pharmaceutical industry. The current system benefits the private sectors for the cost of patients who actually need the drugs. Being a patient is hard enough financially; they don't need the forced prostate check from the pharmaceutical companies.
