Man buys AIDS drug, increases price 5000%. "We need to turn a profit."

Rex Kramer wrote:

Oblomov Boblomov wrote:I don't understand how something like this can be legal. What does the regulator (I assume there is at least one involved?!) have to say about this?

Given it's a generic and therefore no-one owns the patent then at this point he must own the only manufacturer. At that point he has an automatic monopoly but I'd imagine if there was a reasonable enough sized market for this then the Chinese and Indian generic manufacturers would be all over it. Maybe doing this, he's raised the profile of the drug to such a level that someone else will begin production but I'd imagine the market is so small that they might think twice.

It's almost as if I don't exist.

Morally bankrupt but not very surprising.

Given it's a generic and therefore no-one owns the patent then at this point he must own the only manufacturer. At that point he has an automatic monopoly but I'd imagine if there was a reasonable enough sized market for this then the Chinese and Indian generic manufacturers would be all over it. Maybe doing this, he's raised the profile of the drug to such a level that someone else will begin production but I'd imagine the market is so small that they might think twice.

Who could have guessed that a hedge fund banker would be a banana split?

What a lad.

bear wrote:Seriously? It's taking advantage of some of the most vulnerable people in society so a millionaire can have an extra Ferrari or two. It's just evil.

Did you actually watch the interview before you said that or did you just regurgitate clickbait claptrap?

Just watched the interview.

So, actually hes a good guy?

Rightey wrote:If the original drug was made in the 1940's shouldn't any patents on it have expired and a generic be available?

Yes, and it is. Pyrimethanine can be bought in India for about 10 cents a pill, and GSK make it in the UK. My understanding is that this guy has bought the trademarked name and the FDA have granted his company exclusive rights to market it in the US but anyone else can make it. The problem is that there is little financial incentive for US manufacturers to start producing it themselves.

Altruism isn't popular among pharmaceutical companies.

Were I running one, I'd be putting out a rival product for pennies and screwing this guy royally, just for the good feels.

It should be noted that it's not like this guy's company has become the world's sole manufacturer of the drug and is taking the treatment out of the hands of poor, AIDS-ridden Africans. According to his Bloomberg interview, the uninsured or inadequately covered will receive it for free.

My understanding is that he's basically taken a pill that health insurers were paying $13.50 for and is now charging those same health insurers $750, with the intention that this money is then used to R&D up something better.

Find under priced thing, become sole distributor of thing, increase price of thing. It'd be like Autoglass charging car insurers £5 to fit a new Windscreen™, me buying the marketing rights to Windscreen™, and then hiking up the price of a new Windscreen™ by 5000%. The UK market for Windscreens™ is so small, no other British company wants to bother making generic windscreens so I use the ton of money insurers now have to pay me to develop a windscreen that I can legitimately charge a stack for because it doesn't break as often.

I can see some sort of twisted sense in this. Speaking generally, and not about this particular drug, if you have a reasonably rare illness, with an existing treatment that's subject to increasing resistance, and no financial incentive to develop an alternative, then what options exist other than to increase the price of the existing drug and use that money to develop that alternative?

How come this is still patented? As it was first made so long ago, I thought the patent would effectivel be open for use now.

Igor wrote:

Rightey wrote:If the original drug was made in the 1940's shouldn't any patents on it have expired and a generic be available?

Yes, and it is. Pyrimethanine can be bought in India for about 10 cents a pill, and GSK make it in the UK. My understanding is that this guy has bought the trademarked name and the FDA have granted his company exclusive rights to market it in the US but anyone else can make it. The problem is that there is little financial incentive for US manufacturers to start producing it themselves.

If the price has gone from $13 to $750, that's a pretty big window to financially exploit.

Poser wrote:How come this is still patented? As it was first made so long ago, I thought the patent would effectivel be open for use now.

It isn't but it treats such a rare condition no one else bothers to make it, or at least that's my understanding.

Igor wrote:...with an existing treatment that's subject to increasing resistance, and no financial incentive to develop an alternative, then what options exist other than to increase the price of the existing drug and use that money to develop that alternative?

This collection of words is baffling to me.

Rightey wrote:

Poser wrote:How come this is still patented? As it was first made so long ago, I thought the patent would effectivel be open for use now.

It isn't but it treats such a rare condition no one else bothers to make it, or at least that's my understanding.

I always feel guilty when someone takes one of my semi-trolling posts and answers them seriously.

Photek wrote:

Igor wrote:...with an existing treatment that's subject to increasing resistance, and no financial incentive to develop an alternative, then what options exist other than to increase the price of the existing drug and use that money to develop that alternative?

This collection of words is baffling to me.

Igor didn't articulate that particularly well, what I think he's getting at is that alternative drugs will have to be made as this one is becoming less effective at treating the disease - and funding from alternative sources to research such drugs won't be available as it's such a rare illness. Maybe.

So is it correct that this only applies to the US and not here? You would think that US insurance companies would just buy from an overseas producer. Or will the Fda not allow that?

Return_of_the_STAR wrote:So is it correct that this only applies to the US and not here? You would think that US insurance companies would just buy from an overseas producer. Or will the Fda not allow that?

That's illegal, the drugs would need to apply for approval for sale in the USA.

Rocsteady wrote:

Photek wrote:

Igor wrote:...with an existing treatment that's subject to increasing resistance, and no financial incentive to develop an alternative, then what options exist other than to increase the price of the existing drug and use that money to develop that alternative?

This collection of words is baffling to me.

Igor didn't articulate that particularly well, what I think he's getting at is that alternative drugs will have to be made as this one is becoming less effective at treating the disease - and funding from alternative sources to research such drugs won't be available as it's such a rare illness. Maybe.

Yes, and while not worded particularly eloquently, I don't see what's so hard to understand.

If we stop foaming at the mouth for a second, one way to view this is that health insurance companies will be indirectly funding development of a better treatment.

Rightey wrote:

Return_of_the_STAR wrote:So is it correct that this only applies to the US and not here? You would think that US insurance companies would just buy from an overseas producer. Or will the Fda not allow that?

That's illegal, the drugs would need to apply for approval for sale in the USA.

So there's nothing stopping GSK going for approval in the USA and undercutting him.