[AbrahamParangi]

It's a zero sum game though. Raising the price of the drug literally just pulls money out of the system and puts it in his pocket at the expense of everyone else.

It's easy to argue the action is parasitic and adds no value.

[BoorishBears]

To me it seems like a tragedy of the commons, the issue is who will be first to stop extracting value this way. Since no one can be expected to, we need to fix the system that allows it, rather than expecting some altruistic behavior from outfits built to generate profit

[inopinatus]

There is no tragedy of the commons here. This is not a shared resource being depleted. The proper descriptor here is rent-seeking[1] and the Turing/Daraprim case lines up with Shiller's "river chain" analogy.

[1] https://en.wikipedia.org/wiki/Rent-seeking

[BoorishBears]

Again, this isn't anywhere near my wheelhouse, but I think of money the insurance companies allocate from premiums for drugs as being a shared resource that's being depleted. When the margins that insurance companies have set as targets are brushed up upon, premiums go up and we repeat the process again, except the premiums can't go up forever (right? I wonder if an expert on the subject could confirm) and the system will collapse

[inopinatus]

What you've described is definitely not a commons but a simple pricing outcome for a financial product. In a competitive market you'd expect that price to find an equilibrium, not to rise without bound.

Notwithstanding which, this case exhibits none of those characteristics. It is rent-seeking, pure and simple.

[pyre]

At the same time, his justifications for how this "only hurts the insurers," and not the end-users aren't exactly right either.

[juliangoldsmith]

>Raising the price of the drug literally just pulls money out of the system and puts it in his pocket at the expense of everyone else.

That assumes that he is actually pocketing the money. Shkreli was a hedge fund manager and multimillionaire before starting his pharma companies, and claims he has a $0 salary at Turing.

In https://www.youtube.com/watch?v=HXVQOZDKlRE , he lays out his reasoning for raising the price of Daraprim to prices near those of similar drugs. He intends to use the money Turing makes from Daraprim to produce drugs that are not, in his words, "terrible".

[edblarney]

"It's a zero sum game though"

Not quite. Supply and Demand don't quite work that way.

Arguably - if someone 'needs it' then they 'must pay' ergo zero sum ... but in reality demands for most drugs is not quite so inelastic (Ambien, opiods etc.). That said, I'm not sure what the drug in question does.

[AbrahamParangi]

The drug in question treats a rare degenerative disease of the brain. Precisely the sort of uncompetitive market with inelastic demand that is ripe for exploitation by rent-seeking.