Researchers are mostly a non-ideological lot. I sometimes wonder if we had been a little more ideological whether we would have kept our jobs but that’s for another post, someday down the road.
But some “capitalists” take greed to such an unbelievable level that even we are left almost completely speechless by the sheer audacity and (dare I say it?) evil.
Take the case of Martin Shkreli. I’ll let Derek Lowe at In the Pipeline tell this story:
He went on to form Turing Pharmaceuticals, whose business plan, by contrast, was (at least at first) to find some small-market drugs, buy them from their obscure producers, and raise their prices into geosynchronous orbit. As reported here by Adam Feuerstein, his first target was praziquantel (Biltricide), the antihelmenthic made by Bayer:
Shkreli is negotiating with the German drug giant Bayer to purchase marketing rights to Biltricide, a drug used to treat infections caused by worm-like parasites called liver flukes. A course of treatment with Biltricide typically involves taking six to nine pills in a single day and costs around $100.
If Shkreli acquires Biltricide from Bayer, he plans to raise the price of the drug to $100,000 for a single-day course of treatment, according to people briefed on Turing’s business plans. No other changes or improvements to the drug will be made by Turing. The extra revenue generated by Biltricide is expected to earn Turing a fast profit for its investors and help defray the cost of developing other, experimental drugs, sources said.
We shouldn’t be surprised by this. This is just plain supply and demand economics. The number of small molecule drugs has fallen precipitously since the salad days of the 90’s. That means there are fewer blockbuster drugs to make money on and fewer drugs overall getting approved. Lowe reported a few weeks ago that the number of FDA approvals had gone up in 2014 but that represents work that happened about a decade earlier and now that we’ve been furloughed for the sake of “shareholder value”, that might be a high tide mark. The shift is from small molecule drugs to biologicals. This is not necessarily a bad thing but it does turn a whole generation of researchers into the equivalent of steelworkers while vastly reducing the output of small molecule drugs.
The consequence of not discovering new small molecule drugs is that even though they are going off patent and should be cheaper, there are no “new and improved” drugs to replace most of them. So, when they become generic, that’s it. There is no higher end model to compete with. Therefore, the cost of generics has to increase. I mean, where else are you going to go?
Now, in comes someone like Shkreli who sees a vast landscape of obscure generic drugs that could get a new life through retesting or new indications. He scoops up what he can and, without any R&D, he can cash in hugely. He still has to account to the FDA on production and quality standards. This is not insignificant. Think about what happened to the Today Sponge. But in general, this is a pure profit business model on the backs of ordinary people who may need these previously cheap medications. He is the ultimate MBA.
Give that man a bonus.
Believe it or not, researchers are not heartless tools of the pharmaceutical industry. We’re also consumers, and some of us are rather poor now that we’ve been kicked out of the field. R&D is incredibly expensive. Don’t let lefties tell you differently. And companies do have a right to recoup those costs and make a profit- that they can plough back into R&D (note: this was the old business model). But Shkreli’s model is shocking. One of Derek’s commenters summed it up nicely:
I wish people would learn to distinguish two types of capitalism:
1. Social capitalism: Create long-term value for customers with innovation, and then distribute the value created among all contributing stakeholders, including customers, employees, suppliers, distributors, payers & providers, tax payers, and yes, also managers and shareholders.
2. Anti-social / psychopathic capitalism (aka greed): Screw everone and take value from others while destroying it, in order to make a quick profit for management and shareholders.
There is far too much of the latter, and its rapidly destroying society as we know it. And ironically, managers and shareholders will also pay the price, ultimately, as part of the same broken society and economy.
I swear I didn’t write that.
In another sign of the times, I am starting to see some slight indications that the industry is falling out of love with academic research. A couple of postings I’ve seen for drug design support are specifically requesting industrial experience and one went so far as to say that academic modelers are not preferred. (And oh my golly, what a difference industrial experience makes, It really is amazing.) Of course, a PhD is still maniacally important so the wait continues…