Page 390 - The Case Lab Book

“Mr. Shkreli spent no funds on developing Daraprim, which has
been on the market for decades, he purchased it for the purpose

of increasing the price dramatically and making hundreds of
millions of dollars by exploiting its existing monopoly before any
competitors could enter the market, which Mr. Shkreli expected

would not occur for a number of years.” (3)

Shkreli said that Daraprim had been priced too low and that his company

needed to generate profits that it would spend on new research and
development. PhRMA (the pharmaceutical industry’s main lobbying group)

member companies have made similar arguments on the need to price new
drugs high enough to ensure that they have enough to cover their R&D
investments.

Although the pill costs about $1 to produce, Shkreli said that this price did

not include other costs like marketing and distribution.

He further said "We're simply charging the right price that the markets [and]
prior owners missed" and that:

- "We needed to turn a profit on this drug,"

- "The companies before us were just giving it away almost."

- “At this price it’s a reasonable profit,”

- “Not excessive at all.”

Cost is unjustifiable