The tinder was there, is Martin Shkreli the spark? (, FT Weekend, September 26.) The recent hike of Daraprim from $13.50 to $750 a pill after the supplier was purchased by a former hedge fund manager has highlighted the issue of pricing across the entire pharmaceutical industry.
Whether it is from someone running for the , an enraged academic or an aggrieved activist — each in their own way now call for government intervention in the pricing of pharmaceuticals. It makes no difference that this product does not even register an asterisk on global sales. Daraprim now serves as the harbinger of an industry that profits too greatly from irrational drug pricing. Yet, there is nothing in their grievances to suggest how high prices in the US subsidise low prices for patients in the EU; nothing to suggest that France directly regulates prices at launch and the subsequent rate of price increases; nothing to suggest that Germany, the Netherlands and Denmark operate reference pricing systems of reimbursement and thereby exert strong pressure on prices charged by manufacturers; nothing to suggest that the UK operates a system of profit regulation that constrains prices to yield no more than a target overall rate of return on capital; nothing to suggest that many governments — Denmark, the UK, and France, subsidise the R&D components of their pharmaceutical and vaccine industries; and there is nothing to suggest that the industry catapulted India into a rarefied environment as the pharmacy to the developing world by allowing it unfettered and free use of its intellectual property without legal challenge, wherein it provides Aids therapies to 80 per cent of the 15m people now under treatment.
Still, with all this regulation in the EU, their governments expend 20 per cent of their health budget on drugs; while it consistently remains under 10% in the US. Facts often do not temper greed. There is everything to suggest that this one previously unknown hedge fund manager can provide the spark that activists have so long sought to ignite a pyre of price regulation by the US government.