The Pill Whose Price Went Up 5000%? It Costs 5 Cents in India.

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Yeah the CEO guy who raised the prices of Daraprim comes off as a jerk and so makes an easy villain. But the real problem is with our drug regulatory system. The drug is a generic and so should be cheap but the FDA has only approved one producer in the USA and as such the company has an artificial “monopoly.” Jacking the price of the drug is only possible because the government makes even producing a generic drug very costly.

I figured there was more to the story than was being reported. Thanks to Alex Tabarrok at GMU for clarifying the issue.

(From FEE)

The drug Daraprim was increased in price from $13.60 to $750, creating social outrage. I’ve been busy, but a few points are worth mentioning.

The drug is a generic and not under patent so this isn’t a case of IP protectionism. The story as I read it is that Martin Shkreli, the controversial CEO of Turing pharmaceuticals, noticed that there was only one producer of Daraprim in the United States and, knowing that it’s costly to obtain even an abbreviated FDA approval to sell a generic drug, saw that he could greatly increase the price.

Click here for the article.