Why Daraprim will cost whatever we let it

Last week, public outrage over Daraprim’s price hike from $13.50 to $750 was loud and clear – so loud that its CEO Martin Shkreli had to rescind it. In the business world, he might be praised as a savvy investor. He saw a product that was drastically undervalued and priced it at a level that the market was willing to bear, reaping huge profits. This type of mentality is a trait many Fortune 500 companies seek – someone who can see opportunity and grab it. Yet the amount of backlash from this economically-driven decision was shocking.

Daraprim (or pyrimethamine as known by many physicians)‎ is a rarely prescribed medication, with somewhere between 8,000-13,000 prescriptions annually per IMS Health, used for some cases of malaria, pneumocystitis, and toxoplasmosis. The bulk of this supply goes to Medicaid patients or hospitals that service Medicaid patients, both of which are shielded from Shkreli’s price hike by Section 340B of the 1992 Health Service Act. An additional number of patients can qualify for reduced pricing directly through Turing Pharmaceuticals. Most patients will only need the medication for a short, finite amount of time. In the grand scheme of health care’s trillion dollar price tag, this is a blip. Then why all the uproar? Are we upset by how this will affect a minority of Medicare and privately-insured patients who cannot demonstrate enough need to qualify for the drug’s discount programs?

No doubt Shkreli was confused by the ridicule, protests, and even death threats he received. As politicians weigh in, he watched biotech stocks fall. NASDAQ’s Biotechnology Index dropped 18.5% since Monday’s tweet by Hillary ClintonScreen Shot 2015-10-01 at 12.15.51 AMLeft and right, citizens are voicing their concerns over the brazenness of unapologetic Big Pharma. Yet can we blame Shkreli for succeeding in a system that we created and continue perpetuate?

We live in a country that has fought tooth and nail to keep health care commoditized. We fear what “big government” would do to our free market health care – worsen the quality, create long queues, limit our choices. There are some who still think that the Affordable Care Act is socialized medicine. What we forget is how our obsession with keeping health care market-based encourages investors to capitalize on it. Competition fuels American innovation, but it can also drive prices to exorbitant levels – especially when the product is life-saving, the seller has high bargaining power and multiple payers are competing with opaque offers. Is this not American capitalism at its best?

Doctors have long realized the challenges of making decisions that straddle life and death. In how many professions can you find employees who would work for free rather than turn their customer away? Medicine is unique in that we feel wrong when someone stays sick because they cannot pay. Deep down, Americans know why we are so disturbed by Shkreli, but we are not ready to face the hard facts: medicine is not one of those things we can leave up to the free market. We cannot believe in health care as a right, but continue to treat it as a commodity. We encourage companies to provide the best treatments they can, the best technologies they can, the best doctors they can, and charge the best prices they can – because the free market will pay what customers demand. But when the bill comes, what then?

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