The $750 Pill: Corporate Greed, Excessive Regulation—or Both?

Photo credit: TaxRebate.org.uk; used under Creative Commons Attribution 2.0 license ; Photo has been modified for use here.

Photo credit: TaxRebate.org.uk; used under Creative Commons Attribution 2.0 license ; Photo has been modified for use here.

Dr. Mary Ruwart

Why, you might ask, can Shkreli price his drug so high and not fear that a generic competitor will undercut him? After all, the daraprim no longer has patent protection. The answer: Turing Pharmaceuticals has a de facto monopoly, courtesy of the ever-increasing costs of gaining FDA approval, both for new drugs (over $1 billion and 11 years) and generics. Any generic company could make daraprim; its patent expired decades ago.

The $750 pill might be considered an example of “corporate greed.” However, Turing probably wouldn’t have even attempted such a price hike without high cost of FDA-mandated drug development, both new and generic, which virtually eliminated his competition.

Hat tip to Independent Political Report