Turing Pharmaceuticals CEO Martin Shkreli became the latest poster boy for Wall Street greed when he jacked up the price of an HIV drug more than 4,000 percent to $750 a pill.
But the former hedge fund manager’s behavior is far from unique. Dramatic price hikes on existing drugs, or astoundingly high rates for new ones, are common practice in the United States.
The pharmaceutical industry defends the price spikes as a means of funding research to develop new drugs. But a close look at the finances of more than a dozen public drug companies illustrates research and development expenses are routinely smaller than company overheads, including marketing costs. And often after-tax profits still greatly exceed those R&D expenses that the companies say are so high.
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Source Credits: Erik Sherman in Moneywatch of CBS News