“I’m a capitalist,” said Martin Shkreli in an rare, insightful moment of self-diagnosis. Financier and pharmaceutical maker Shkreli was being interrogated about the hermeneutics of avarice: Having obtained the distribution rights to Daraprim (a life-saving drug used to treat toxoplasmosis), he had recently raised the price from $13 to $750 per dose.
The public outcry that ensued has been to little general avail. That is because, however unpleasant a personality Shkreli may be, he is hardly alone. As The New York Times reported recently, the cost of new medicines, particularly those for cancers or for rare diseases, is “whopping.” For all the public exuberance about precision medicine, individualized therapies—especially gene therapies—will not come cheap. Some already cost anywhere from hundreds of thousands of dollars to millions per patient. Yet these prices do not generally reflect the true costs of research and development, which are “small relative to the revenues,” according to Patricia Danzon, an economist at the Wharton School. In fact, a new study published in JAMA Internal Medicine on September 11, 2017, looked at 10 cancer drugs and found that there was a more than sevenfold return on investment.
Rather, pricing is profit-motivated; and, since many gene therapies can cure or regenerate with the administration of a single injection or dose, drug companies are arguing that “the prices ought to reflect the value of a curative treatment to the patient.” The maker of one drug to treat blindness argues that retaining one’s eyesight is worth a lot to the average person, therefore “[w]e should be compensated for generating that value.”
“That value,” however, is a purely econometric calculation, based on finance-industry metrics of what the market will bear. It is not a calculation well-suited for the distribution of medicine or other public goods. What, after all would any of us be willing to pay for water in order to survive if a monopoly had warehoused all the water in the world? Would it make sense to accord to one company global distribution rights to all water supplies, then allow that company to manipulate the price so whimsically that thirsty creatures would have to mortgage their homes or die? Yet that is exactly what drug manufacturers are legally permitted to do. It is exactly what Shkreli has done with Daraprim (a drug that was developed in the 1950s, so his company’s overnight price inflation reflects no research or development costs, just purest greed.)
Still, there are limits to capitalist exchange—the law generally places limits on sale of that which normative culture values as “inalienable” and necessary for bodily integrity. Just so, Martin Shkreli has been locked up not for pricing drugs but for pricing Hillary Clinton’s hair and DNA in a way that rendered the intimacies of her person subject to him and the highest bidder. “On HRC’s book tour,” he posted, “try and grab a hair from her. I must confirm the sequences I have. $5000 per hair obtained from Hillary Clinton.” All the elements of a good capitalist contract were there: offer, acceptance, value to be exchanged. The problem, of course, was that to execute the contract, delivery invited an unwanted touching otherwise known as assault.