Friday, 25 September 2015

Evil drug CEO raises prices, incurs internet rage

Some obscure CEO of a peripheral drug company decides to arbitrarily raise the price of a product by 5000% and everybody on the internet flips out. Normal day on the world wide web? Not really.

Martin Shkreli is currently the chief executive of Turing Pharmaceuticals, a company internationally condemned for its use of the only US-approved treatment for parasitic disease toxoplasmosis, Daraprim. After obtaining the rights to sell the drug in August, Turing increased the price from $US13.50 ($21.49) per pill to $US750 ($1193) overnight in a move that presidential candidate Hillary Clinton called “outrageous”.

Now, Mr Shkreli appears to be changing his mind. Maybe he received terrible PR advice – or none at all – but really, what kind of inexperienced CEO talks back to detractors? It was a losing battle the moment he responded on social media because no one was angry at him for rational reasons. Of course any rational or irrational response achieved the same effect: nothing.

I haven't been closely following this controversy but here’s a few initial thoughts. Mr Shkreli explained in an interview he was raising prices because (a) the drug was not profitable and (b) charging more would fund the research and manufacture of other drugs.

Thing is, this is actually a very sound economic argument. In fact, that’s exactly how most things work in a modern economy, not just in the pharma industry. It strikes me this whole debacle is just another example of people getting outraged at something they're just finding out about now, but which they should know about already.

Am I surprised? Well, not at the lack of general knowledge. This is exactly how the internet/millennial generation operates: they get angry at trivial things while all the really hard problems remain unaddressed because “someone in charge” will probably deal with those… eventually.

In all likelihood, the reason the medication was priced so low in the first place was because a previous over-priced drug earned enough profit to fund Daraprim’s creation. Besides, getting angry at the price of things is a bit weird in 2015. Is basic economics not taught in school anymore?

I think people have this case "exactly backwards", as they say. Plenty of CEOs are absolute douchebags, but they aren't plastered over the media. Believe me (or don't), CEOs say crazy things on a daily basis. Some of them are probably sociopaths, but not all of them. Many have to make decisions that go against their personal ethics for the good of the corporation. Yet barely any get on the front pages for acting like a “douchebag”. Why not?

This precise example nevertheless hit a chord with a certain demography, and that makes it different. I’m not sure on this, but suggest it has something to do with a mix of the politics of Obamacare, fear of Big Pharma and a healthy dollop of the shrill “1%” insanity that’s been an undercurrent since the 2008 crisis. The Daraprim price was pretty much a perfect storm.

In other words, it is incredibly important to the story that this antagonist happens to tick the boxes of being a young, white, rich male trying to hike medicine prices. Think about how normal most of that sentence reads. This kind of thing happens all the time, across the world, in every industry. And yet this specific set of ingredients twisted a simple business price decision into a media maelstrom that might yet destroy the company.

Step back to consider that changing just one of those variables makes this whole mess disappear. But the particular ingredients turn Mr Shkreli into the archetypal villain according to millennials. He’s the bad guy they’ve been told to leverage their hate towards ever since the 2009 financial crash: the not-quite-rich enough CEO, devoid of any real power, who desperately wishes to be considered powerful. He’s not a member of the nefarious “1%”, he’s part of the aspirational 14% who above all else desire to be considered powerful and important.

His central fault was to act as an anti-system force against the essence of a progressive medical bill. It was a sin the state religion (progressivism) making him the perfect symbol of hate for the current narcissistic generation.

Consider for a moment what would have happened if this CEO looked like a normal pharma CEO (60 years old with one liver spot for every SME he’s engulfed in a leveraged buyout). Since this person fits most people’s expectation of a CEO, there’d be no news and no hate. But Mr Shkreli embodies exactly what digital millennials believe is responsible for their failing careers and wasted university fees: the white, rich, pseudo-powerful ex-hedge fund manager.

But something else is going on. What truly makes him so easy to hate is that he’s the repressed dark side of every young progressive millennial who’s saturated in internet “news” and bereft of independent thinking unless it can be copied and pasted from another website.

He’s the guy they proclaim they would never be, even while they suspect – in their fundamental psyche – they probably would be him if they were placed in the same situation. He is a symbol of the worst parts of ourselves – the parts we try to ignore and sublimate before it gets the better of us. The rage comes from a place where every millennial believes if they were in Mr Shkreli’s shoes, there’s no chance they would act like this.

Yet here we see how repression permanently leaves behind a sign of what’s been repressed – how else do you explain the need to add the qualifier “evil” before “CEO” if not for the deeply buried suspicion that, in fact, you too would make a similar decision in favour of profit if the roles were reversed.

I don't really care about what Mr Shkreli did or didn't do. What concerns me is everyone's rage. Because, as I’ve pointed out multiple times, rage is always often response to a threat to a person's identity.

That's what makes this event so damn interesting – and frightening. The collective reaction of the Internet suggests a serious case of post-modern narcissism in its users. This is reaching a point where it is no longer a pathology, but an ideology driving our society’s decisions.

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