Something good is now actually associated with the name Martin Shkreli: the Food and Drug Administration (FDA) has narrowed a loophole that allowed CEOs of companies from jacking up the prices of older “orphan” drugs to usurious and unethical heights. In case you’ve been binging Netflix for the last year and missed the outrageous news, Mr. Shkreli’s former company, Turing Pharmaceuticals, purchased the rights to Daraprim, a decades-old anti-parasitic, and then spiked the price nearly 5600% because, according to Shkreli, he could.
And he was right…until yesterday, when Bloomberg news reported that the FDA will now fast-track “applications for generic drugs that would compete with treatments made by only one company,” thereby severely curbing the practice of opportunistic price gouging by enabling free-market competition. In a past blog, I argued that Mr. Shkreli was not “one of us.” Meaning he was not a pharmaceutical executive or member of the healthcare marketing fraternity but rather a former hedge fund manager who saw regulated drugs as a way of minting money rather than as a legitimate business operation dedicated to serving the healthcare industry and reducing the power that illnesses have over our lives.
While routine price increases is the legal purview of our system of capitalism for any type of company, the pharmaceutical industry has been largely and unfairly targeted for taking advantage of free market competition. I say unfairly because Americans hypocritically demand that drug companies are taking advantage of their position but refuse change that position by voting for universal healthcare (which would drive down prices) because it would add to the size of “big government.” It seems the People want to have their cake and eat it, too, and then heckle the cake-maker for their own bad habits. (They also ignore the indigent patient programs most top drug companies have for making life-saving therapies affordable to the poor.) Mr. Shkreli suddenly was offered up by cynics as living proof that all healthcare companies are corrupt in pricing practices. This is like saying that Coke and Pepsi are corrupt because one of their class of vendors–multiplex movie theaters–elects to charge 400% mark-ups on their brands to literally captive audiences (movie goers).
But the FDA’s ruling didn’t just legislate to make the Martin Shkrelis of this world irrelevant. They changed the landscape of how the masses can benefit from lower prices across the board. According to sources quoted in the Bloomberg article “the FDA’s goal is to review 75 percent of generic drug applications in 15 months,” which means that over 1,000 cheaper, generic versions of former drug brands would rush to market sooner than previously scheduled.
Sometimes people like Martin Shkreli pollute the environment so foully that it riles up indignation and industry action to institute better practices on the whole. Bravo to the FDA for taking charge and making it safe for everybody to get back into the pool again. The water’s much cleaner going forward.