The CEO of Missouri-based pharmaceutical company recently suggested that his decision to jack up the price of one of his company’s products was moral one.
On Tuesday, the Financial Times reported that Nirmal Mulye, the CEO of Nostrum Laboratories, defended his company’s controversial decision to drastically increase the price of nitrofurantoin, an antibiotic to treat bladder infections, on moral grounds. Before the price increase, a bottle of nitrofurantoin cost $474.75. Now, it costs $2,392 — a price increase of 404 percent.
“I think it is a moral requirement to make money when you can… to sell the product for the highest price,” Mulye told the Times.
The embattled CEO said he raised the price of his product after one of his competitors, Casper Pharma, which makes a branded version of the product (Furadantin) that costs roughly $2,800 for one bottle. Casper’s product went up by 182 percent in cost between the end of 2015 and March of this year.
“The point here is the only other choice is the brand at the higher price. It is still a saving regardless of whether it is a big one or not,” Mulye told the Financial Times.
Mulye’s decision to increase the price of nitrofurantoin by 404 percent is not unlike when “Pharma Bro” Martin Shkreli raised the price of AIDS treatment drug Daraprim by 5,000 percent, from $13.50 per pill to $750 per pill. Even though Shkreli’s price increase was widely panned, Mulye bizarrely defended Shkreli (who is now serving a seven-year jail sentence for defrauding investors), saying that because Shkreli’s company had a monopoly on the patent for the drug, he was allowed to sell it for as much as he wished.
“I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders,” Mulye said. “If he’s the only one selling it then he can make as much money as he can. This is a capitalist economy and if you can’t make money you can’t stay in business.”
In a tweet, Food and Drug Administration commissioner Scott Gottlieb said that price gouging was not a “moral imperative,” and that patients shouldn’t have to go without necessary medication due to high costs.
1/2 Regarding @FT story today @bydavidcrow; there’s no moral imperative to price gouge and take advantage of patients. FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine
— Scott Gottlieb, M.D. (@SGottliebFDA) September 11, 2018
President Trump rolled out a plan to lower drug prices earlier this year. However, as former U.S. Labor Secretary Robert Reich wrote on his blog, the plan does little else but ask other countries to allow drug companies to charge higher prices.
By this tortured logic, if other nations allow drug companies to charge whatever they want, U.S. drug companies will then lower prices in the United States.
This is nonsensical. It would just mean more profits for U.S. drug companies. (Revealingly, the stock prices of U.S. pharmaceutical companies rose after Trump announced his plan.)
As of this writing, neither Trump nor Health Secretary Alex Azar have commented on Nostrum Laboratories price increase.
Scott Alden is a freelance contributor covering national politics, education, and environmental issues. He is a proud Toledo University graduate, and lives in the suburbs of Detroit.