Under fire for buying the rights to a 62-year-old drug and raising the price from less than $20 all the way to $750, former hedge fund manager Martin Shkreli is insisting that he did the right thing because before the drug's potentially lifesaving treatment for toxoplasmosis was just too cheap, as if somehow he's doing people a favor by charging more. Shkreli even suggested that the drug is not now overpriced:
“We know, these days, in modern pharmaceuticals, cancer drugs can cost $100,000 or more, whereas these drugs can cost a half of a million dollars,” he explained. “Daraprim is still under-priced relative to its peers.”
Many of the most expensive drugs, though, are ones that have recently been developed where the pharmaceutical company is recouping the costs of development and testing (while profiting handsomely, of course). A drug that's been around for more than half a century is usually a different story, at least until greedy hedge funders get involved.
“This drug was making $5 million in revenue,” he said with a smile. “And I don’t think you can find a drug company on this planet that can make money on $5 million in revenue.”
Not even when the pill costs $1 to manufacture and is being sold for $13.50 or $18, depending who you listen to? Yes, that's another of Shkreli's defenses, coming somewhat after the fact:
He said that media reports had all overstated the price increase, as from $13.50 to $750. The real original price, he said, was $18 per tablet making it merely a 4000% increase in price, not a 5500% increase.
That's not outrageous at all, then! Either way, the drug's price prior to Shkreli getting his hands on it was already a dramatic price increase after a previous time rights to it changed hands. But when Shkreli says "I don’t think you can find a drug company on this planet that can make money on $5 million in revenue," what he's really saying is that he wants to make more profit, not that the profit level on this particular drug was unsustainable for people who aren't
greedy leeches on society. Shkreli has also tried to defend himself by claiming that his company will use the profits to develop alternative treatments for toxoplasmosis ... except doctors say they weren't really looking
for an alternative. They'd just like to have this one at a reasonable price.
Check out Dartagnan's diary for more discussion.