In Greed we trust

In greed we trust, all others are expected to die! That is the basic setting which is now ruling the internet and it all started when the CEO of Turing Pharmaceuticals AG bought the rights to generic drug Daraprim and he subsequently raised the price by 5500%. This now creates two parts. They are:

  1. How is this legal?
  2. How to prevent such dangerous situations?

The initial part is not found. You see, when we look at the definition of Financial Exploitation, we get: “Financial exploitation occurs when a person misuses or takes the assets of a vulnerable adult for his/her own personal benefit. This frequently occurs without the explicit knowledge or consent of a senior or disabled adult, depriving him/her of vital financial resources for his/her personal needs” (source:  National Adult Protective Services Association (NAPSA)). Most forms of protection against exploitation is against what people own. One of the most famous cases in Australia is Commercial Bank of Australia v Amadio (1983) 151 CLR 447; [1983] HCA 14. Yet, the law regarding exploitation of something that is not owned is not clear, in certain places we see that in the Generics and Biosimilars Initiative Journal (GaBI Journal). 2012;1(3-4):146-9. The title of the PPRI conference reports gives us this with ‘The potential of generics policies: more room for exploitation’. The tactic is quite sound, if the price of normal medication cannot be lowered, than raising the price of generics is a sound strategy from the view of the greedy. The paper also gives us “Mr Richard Bergstrom, President of the European Federation of Pharmaceutical Industries and Associations stated that ‘once patents expire, prices should fall to a low, but sustainable, level’. In this panel discussion but also throughout the conference there appeared to be a common understanding that generics competition works well”. This was a view stated almost 3 years ago, which is true. However, the solutions that are addressed to a 2% or even 1% market does not seem to have too many alternatives, this is where the solutions like Daraprim and Cycloserine seem to come into play. The older small solutions that have no equal because the need is too small, now a massive option for larger profits.

When we look at Bloomberg on August 6th, we get: “Allergan Plc’s Actavis unit got a subpoena from the U.S. Justice Department seeking information on the marketing and prices of its generic drugs, becoming the biggest company yet to draw scrutiny in the government’s widening antitrust probe of the industry. The June 25 subpoena also sought information about communications with competitors regarding the products, Allergan said Thursday in a filing. While the company didn’t supply further information and didn’t specify the competitors, rivals including Lannett Co., Endo International Plc, Par Pharmaceutical Holdings Inc. and Impax Laboratories Inc. have made similar disclosures in the past several months“, as well as “Some 10 percent of generic drugs doubled in price between July 2013 and June 2014, and half of all generic drugs rose in price, according to an analysis earlier this year of Centres for Medicare and Medicaid data cited by Senator Bernie Sanders, an independent from Vermont who’s running for president, and Representative Elijah Cummings, a Democrat from Maryland

So as we see these events, why did Martin Shkreli make this move? An entrepreneur of his achievements does not play around. What is his game?

The ‘defence’ we see from the other side is “Shkreli said: “We need to turn a profit on the drug.” He defended the decision by telling Bloomberg News that newer versions of the drug needed to be developed and his was the first company “to really focus on this product” for decades and that such research was extremely expensive“. This goes against the statement he later makes, which was “He also promised that: “If you cannot afford the drug we will give it away for free.” Shkreli also said the drug was currently under priced” (source:

Now we have an issue with all this. Is this about the medication, or is this a first step to bleed dry health systems?

For this we must show one additional quote. It is “Shkreli’s start-up company, Turing Pharmaceuticals, acquired Daraprim in August. The drug was first developed in the 1940s and is used to treat toxoplasmosis, an infection that is not common but is particularly dangerous and can be fatal“. The question in my mind is how this existing drug is any form of treatment against the complications of AIDS? A drug that is over 60 years old, which is suddenly the foundation towards a cure? What are we not seeing? Well, that part is shown by CNBC (at Here we see that this is the second act. The first one was “Cycloserine was acquired last month by Rodelis Therapeutics, which promptly raised the price to $10,800 for 30 capsules, from $500. But the company agreed to return the drug to its former owner, a non-profit organization affiliated with Purdue University, the organization said on Monday“, after which the price ‘stabilised’ at twice the original price. So is this about a changing approach to the increase of generic medication by 100%-300% in the end? In addition, the other CNBC quote is “However, outrage over a gigantic price increase for another drug spread into the political sphere on Monday, causing biotechnology stocks to fall broadly as investors worried about possible government action to control pharmaceutical prices. The Nasdaq Biotechnology Index fell more than 4 percent“, now this is all starting to make sense. A hedge funds manager playing the market and playing the waves of market exploitation. This is not unheard of, more important, for the most, we could argue that no illegal acts were undertaken. The Guardian stated “It is not uncommon for companies to use inventive interpretations of government regulations and loopholes in the law to corner the market for certain drugs, especially ones that were developed a long time ago and have only a limited market“, which is true, but when we considered the additional event that the Guardian ignored, give us cause for concern. I am not stating that the Guardian is trying to misinform its readers, their conclusion on one case is sound. Yet, when we see the addition that came from CNBC regarding Rodelis Therapeutics, we see another side. Here we see a side of market exploitation and Market manipulation, as far as I can tell at present in a very legal way. That we see from “Mr. Hasler said the new price was needed to stem losses”. Really? So is this about feigned losses, or is this one of many steps where drugs that treat smaller populations to grow 100%-300% in price to assure a market niche that most NHS systems (US, EEC and Commonwealth nations) are unable to fight. In this way on an international level the respected NHS versions will be placed under additional pressure. As I see it, Martin Shkreli has started Turing Pharmaceuticals AG to dig into this very profitable branch. In addition, for something this expensive, how come those rights transferred for only 55 million?

It seems to me that parts in all this remains unstated. Why?

Now in this part I am not having a go at journalists as in the past. For one, this is an evolving story, in the second part there are a few sides to all this. For one, I am speculating in what the game is here (speculating is not now, nor should it ever be regarded as factual). In addition there are sides that have not played yet. One of these sides is the law. As I personally see it, certain entrepreneurs, wealthy or not are now trying to corner the 2% treatment solutions, perhaps even the one percent group. Consider how this affects the UK. Let’s use the UK statistics. When we consider 240 million patients a year. If 2.4 million people require a drug and if that price suddenly goes up from $500 to $1000 (the Cycloserine example). This is only in the UK. Which gives them an additional 1.2 billion and this is only ONE nation, now consider the effect on the EEC as well as the US and the other Commonwealth nations, now the money becomes really handsome. Even at 0.1% it is a massive influx of money and for now all very legal. I have full faith that the law will be adjusted, yet we will see that it will be adjusted too late and some of these fast moving rascals will have made a massive additional amount of money, which is not an illegal act by the way.

This whilst I am still slaving over my issues of Infringement. That and a massive student loan will not propel me whilst some dubious hedge funds individual walks away with billions. A clever mind is half the battle!

So as this event escalates, the UK will have a new problem, because as is, the prospect stated ‘Planned NHS expenditure for 2015/16 is £116.574bn‘ is possible off by no less than 10%, the generic pharma side is only one side. I wonder what happens when these ‘entrepreneurs’ acquire the service contracts of hospitals at large, what happens when the MRI contracts are sold off to third parties? What happens when those prices go up? This is a path that Stadium Group CEO Charlie Peppiatt seems to be walking towards in a very successful way. As one third of the planet goes into ‘one foot in the grave mode’ that population will require a massive amount of support in medical terms (until they move towards their respective casket or urn). There is one side that is an issue for the other players. As I see it Martin Shkreli might be the most visible one but as I see it not the brightest (massively richer than me though), in one bash he has given visibility to a move that many wanted to keep under wraps, because out of sight, out of mind and that would have resulted in profits (loads of it). The visibility forced on the eyes of many might now result in NHS safety valves that could stop the forced squandering of funds. I wonder if my view is correct and more important will proper steps be taken sooner rather than later.

I’ll let you decide.



1 Comment

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One response to “In Greed we trust

  1. Pingback: How to cure economic sickness | Lawrence van Rijn - Law Lord to be

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