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Posted by / 21-Aug-2015 14:04

Deeper than dating

As far as I’m concerned, the interesting aspect of this case isn’t just that the CEO of Turing is an asshole who is lining his own pockets with zillions of dollars by gouging AIDS patients.

I assume most pharmaceutical company CEOs are assholes who would line their own pockets with zillions of dollars by gouging AIDS patients if the opportunity presented itself.

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Vox and Marginal Revolution have already done some good work addressing this particular case, but have only touched upon the broader issue: that everything about generic medications is approximately this terrible.

And this is, more generally, a problem with the markets for drugs that only a small number of patients use.

They often aren’t big enough to support two competitors.

After twenty years, the drug becomes public domain and anybody who wants can compete to produce it, usually leading to a precipitous fall in costs.

But Daraprim is fifty years old; its patent is long-since expired.

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The interesting aspect of this case is that the CEO of Turing got the opportunity. In the United States, pharmaceutical companies that discover a new drug are granted a 20-year term of exclusivity to reward them for the public service of drug research.