Bernie Sanders, vulnerable patients, and their physicians are protesting an allegedly predatory strategy among drug marketers. Old drugs are bought up by aggressive pharmaceutical CEO’s, then rereleased as specialty items subject to explosive price increases.
Daraprim, for instance, a six decade-old work horse for some life-threatening infections, was acquired recently by Turing Pharmaceuticals. Turing, a startup ran until recently by former hedge fund manager Martin Shkreli, jacked up the price overnight, over 50 times, to $750 a tablet.
Then in December, Shkreli was arrested on unreleated charges. The 32-year old CEO allegedly funneled money from another of his companies, Retrophin, to pay off so-called investors from a money-losing hedge fund he previously operated.
But wait…there’s more. Other pharmaceutical houses including Canada’s Valeaent are pursuing similar strategies, allegedly, now with hedge funds circling, snacking on the carcasses of consumers being picked clean by the egregious self-interest of financiers.
At times, bets by hedgers—whether within or outside of the pharmaceutical industry—are staggering. Some strategies involve short-selling in which pseudo-capitalists borrow huge sums to buy up shares in expectation a company will fail. After its stock tanks, borrowed stock is repaid with depreciated shares purchased far more cheaply, and then the difference is pocketed.
In the stock market, you can make big money as a financier, regardless of which direction a company’s fortunes may be trending. This is casino-style capitalism.
Regular folks get left on the sidelines, of course; that is, until some become financially mangled by the need for life-saving drugs, too often linking them of necessity to companies with predatory strategies. It is a new world in which even a few bottles of medicine can jump in price—overnight—thousands—of dollars. For pseudo-investors—unlike consumers—definitely it is a take the money and run strategy.
When Pope Francis visited the United States in September, in a somewhat muffled way, this is among the kind of wheeling and dealing he spoke against, particularly regarding economically marginalized families who may be injured profoundly.
Francis’s message actually runs in a direction similar to moral philosopher Adam Smith. Things are different than in Smith’s time, of course. Whereas he saluted self-interest’s pursuit as synonymous with advancement of the common good, now he might see eye to eye with Francis, instead.
Crucial aspects of how contemporary capitalism works, have changed profoundly over the years. Now, greed-fueled self-interest, Francis cautions, undermines the common good and pummels the planet.
Among contributors to the pummeling, amid Twenty-first Century complexities, are technology, finance and corporate globalization. Needed, then, are significant tweaks to doctrinaire capitalism, capable of keeping it even with ever-occurring change.
Regarding Turing’s over 50-fold price increase for Daraprim, for instance, how could either a moral philosopher or a Pope justify tearing asunder family finances to line the pockets of financiers and other speculators?
More…much more to come on this topic.
From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis.