So the new maker old off-patent drug that is needed badly but only by a few people, and for some reason isn’t in the Part D or most other private formularies “notices” that it has a monopoly. So what does it do? It puts the price up nearly ten fold . (The drug is called Mustargen and the company is called Ovation Pharmaceuticals). And of course this behavior is matched by other companies that have monopolies bestowed by patents.
Presumably if the market price is that high on the non-patented drug some smart Indian generic will start making it and bring the price down, but that’ll take a little while. And in the meantime 5,000 patients are getting screwed to the wall.
We should have a rational debate about whether there ought to be coverage for certain drugs (and in the UK for instance there is such a debate). But if there’s an egregious monopoly or market-distortion like this, then we know the solution, and it’s called monopsony — or, if you like, price-fixing. Of course this nation’s government doesn’t like to intervene in these types of cases even when it means a bunch of crooks steal blindly from a whole state and help push its economy (and by consequence that of the whole nation) into recession. And I suspect the people who need this drug view Ovation Pharma as Enron wearing lab coats.
But eventually if Pharma (both big and small) continues to abuse its monopoly power, there will be a predictable response. You can argue that making hay while the sun shines is Pharma’s best financial course (if not exactly its best ethical one), but I suspect that whoever sits in the C suites in New Jersey (and South San Francisco) and has to pick up the pieces under the next Democratic Administration may wish that a little restraint had been shown while that sun was shining.