Martin Shkreli: Controversial 'pharma bro' refuses to testify over HIV drug
abc.net.au
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Second, I don't understand how raising the price can be illegal. If the company owns the product, then they should be able to set its price. Even if it makes people mad, or even if people die, his company has been granted ownership of this drug, and therefore should be able to set the price as they see fit. (I'm not arguing that this is a good thing. I think he is a horrible person. I'm just trying to objectively consider the legal side as I understand it.)
Third, this is not an example of the failure of capitalism. Pure capitalism would allow other companies to provide the same product, and competition and the free market would determine the price. If anything, this is an exacerbated example of government-sanctioned monopolies of specific products, as provided under patent law. (I'm trying to determine a better word to describe it... perhaps fascism?)
These regulations mean pharmaceutical development is far from being a free market.
Some drugs, like colchicine and progesterone, were developed decades ago. The FDA would like them to be analyzed under the latest regulations, and is willing to grant market exclusivity as a way to entice companies to do this.
A generic producer must also prove that their formulation is identical to the formulation which was granted FDA approval. Turing used a closed distribution model, where only patients could get access to the drugs, not potential competitors.
As such, the companies did not "own the product", as you suggest. Not even the pseudo-ownership of controlling a limited patent monopoly.
You can interpret this a lousy decisions by the FDA that have nothing to do with capitalism. Which is correct. But the FDA itself was put in place for two reasons: 1) pure capitalism has a track record of failing in this area, and 2) traditionally the companies in this field knew to be greedy but not too greedy, so the rules weren't set up for 'horrible' rule-lawyers. Because if they were too greedy, the lawmakers could and will change the laws again.
So no, it's not illegal. But since the profits are made inside a highly regulated marketplace, it's best to not piss off the people who decide the regulations.
The real problem is all of the regulations you need to go through with the FDA to get a drug approved. If it didn't take millions of thousands of dollars and a team of lawyers to get drugs approved in 10 years, the free market would force the hand of these companies and everyone's costs would decrease.
The government is equally greedy and more greed will not fix the problem.
In fact, most countries have cheaper drug costs because of the R&D that is done in the US. Preventing profit (like what Sanders will inevitably do with his health care plans) will be pretty bad for important drugs worldwide.
There were no R&D costs in this case.
Instead, Turing was the sole provider of Daraprim. It switched to a closed distribution model so other generic manufacturers couldn't show equivalence, which is needed for FDA approval, then jacked up the price.
At least, that's my understanding. In any case, it's far from what you suggest is the case.
Maybe you should look instead at how the US is effectively the only country in the world which allows companies to market prescription drugs to consumers (the other being NZ). This inherently undermines best medical practise and morality.
Some mega pharma companies spend up to twice as much on marketing as R&D, literally tens of billions. I for one know where I'd rather have them save a bit of cash.
Imagine if they actually competed on making the most effective medicine instead of the best commercials.
Laws which declare a particular person a criminal and/or impose criminal penalties like fines or imprisonment on them, OTOH, are unconstitutional, and that's not just theory that is neglected in practice.
I've read some of the laws protecting billionaires. And they can be very specific, applying only to people who live in a particular town and who have entered specific agreements. So, if we can use these laws to absolve the rich, we should be able to use them to define criminals against our society.