Here’s an interesting piece from LA Times business columnist David Lazarus. The headline says it all: “For Drug Companies, Making Investors Happy is More Important Than Treating the Sick.”
I thought we knew this. You mean people are still being surprised?
Lazarus mentions the recent investment made by Eli Lilly that involved paying a markedly inflated price of $8 billion for a company that happens to make a cancer drug they sell for $33,000 a month (just under $400,000 a year). Call me crazy, but I’m guessing Lilly is not planning to dramatically reduce that price. That is emphatically not why they bought the company.
To Lazarus, a Type 1 diabetic, this suggests that the $8 billion price may have played a role in yet another increase in the price of his daily insulin, also a Lilly product. I don’t have the answer, but I can see why he’s suspicious.
Free markets are supposed to work this way: Competition between companies results in superior quality products available to the consumer at affordable prices. But that’s not what’s happening here, is it? Instead, price continues to rise, sometimes insanely, even for older medicines that have changed little. Insulin is still insulin, after all. It’s just a lot more expensive than it once was.
I interpret this as another example of the running conflict between competing agendas, investor self-interest and consumer need. Investors naturally seek to increase the value of their investment, while patients are focused on accessing needed medicines to remain healthy without going broke. That’s especially true for those with chronic conditions for which there’s no cure.
Who’s winning? I’m afraid I must agree with David Lazarus– right now, it’s a “bigly” win for the investors. But since that’s who CEOs of Big Pharma really work for, should we be surprised? They’re just doing their job well. It’s the consumers who need help.
We all get sick at some point and require treatment. Might be the one thing we all have in common, regardless of our other differences. For me, the question is how we want to be treated when that happens.