Price of pharmaceuticals
About a month ago, Martin Shkreli was decried for the price hike on the drug Daraprim, a drug used to treat Toxoplasma gondii, which often arises as an opportunistic infection in HIV positive patients. However, this price change is not unique to Daraprim – other companies routinely raise prices, albeit at a less noticeable rate. How are drug manufacturers able to do this?
Researchers have established that many drugs’ true prices should be fractions of their current list prices. The problem here is that nobody knows exactly why this has happened. It is easy to say that manufacturers are cruel and knowingly set their prices high because they know how much their clients value their product, but this isn’t the case – prices have risen steadily over the years, even among cheaper generic drugs.
While the problem’s cause is unclear, its solution is less complex. Because the cost of production for many drugs is low, it would be a simple matter for the government to produce for all who suffer from this affliction and others whose treatments are effectively monopolized. While in the free market this problem would eventually cause the price to match supply and demand, the cost in human lives would be too great before these drugs became naturally available to all. Evidently, large reforms instead of the free market are necessary for the drug industry to become more humane for patients.
https://www.washingtonpost.com/news/wonkblog/wp/2015/09/25/the-drug-industry-wants-us-to-think-martin-shkreli-is-a-rogue-ceo-he-isnt/