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PHARMA/POLICY: In this game of monopoly drugs the market is working, oh yes

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.

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TROUBLED AMERICANHarveyTom Leith Recent comment authors
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TROUBLED AMERICAN
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TROUBLED AMERICAN

Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE… Read more »

Tom Leith
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Tom Leith

Yes. No. Yes. What we mean by “professional” seems to be in flux, and I do not know how it will turn out. The obligation of a professional will depend on the answer to your previous question, and also upon on his role.
t

Harvey
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Tom:
Would you also defend the business sense of the markets that profiteered on batteries and water after the LA earthquake?
Or the fisherman, smuggling Jews out of Germany, saying “give me all your money and jewels, or I turn the lights on”?
When life itself is at risk, is any amount excessive?
Are professionals nothing but businessmen? Have they no obligation but to maximize profit?
Harvey

Tom Leith
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Tom Leith

> 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 Naaaah. Those in today’s C-suites now will take their sunny-day performance bonuses and run when the weather turns stormy, and the new tenants will work under a set of stormy weather expectations, and they’ll probably have different skill-sets. Either way, the stockholders get the best performance they can under the current conditions, and if they think they can do better elsewhere they’ll… Read more »