Another Reason Health Care Costs So Much

Because it’s the moral thing to do.

Or so insists Nirmal Mulye, CEO of Nostrum Laboratories, which sells generic nitrofurantoin, an antibiotic used to treat bladder infections.  Nitrofurantoin isn’t a new drug on which Nostrum spent hundreds of millions of dollars on research and development:  it’s been around since 1953 and is now what is known as “off-patent,” which means no drug company sells it exclusively and any company that can figure out how to make it can sell it.  That’s how it works with generic drugs.

Nirmal Mulye, CEO of Nostrum Laboratories

So imagine the surprise of many people when Mulye raised the price of nitrofurantoin from $474.75 a bottle to $2392 a bottle.

So, Mulye, why did you nearly quintuple the price of a drug that had already been on the market for 14 years before your birth in 1967? He told the publication Financial Times that

I think it is a moral requirement to make money when you can . . . to sell the product for the highest price.

That’s what he said: it’s a “moral requirement.”

The Financial Times also reported that

Mr Mulye compared his decision to increase the price to an art dealer that sells “a painting for half a billion dollars” and said he was in “this business to make money”.

Also,

We have to make money when we can. The price of iPhones goes up, the price of cars goes up, hotel rooms are very expensive.

And that’s that:  a pharmaceutical company executive believes it’s a moral requirement to impose stratospheric increases on the price of a drug that’s been around for longer than most of us have been alive.  He’s direct:  no rationale that the company invested millions to develop the drug, no justification that he’s saving lives, no explanation that it’s the only way his company can avoid going under.  For him, it’s simple: if there’s an opportunity to gouge consumers, it’s his moral responsibility to gouge consumers.

Yet another reason health care costs so damn much these days.

 

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