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Capitalism at its Finest

September 5, 2016

In 2014, Mylan, the maker of the EpiPen, created a one time stock grant for the top executives of the company. The executives would be rewarded handsomely if the company’s stock met certain goals by 2018.

The company was growing an average of 22% per year (which is tremendous, but evidently not good enough) but Mylan wanted to increase that to 32% growth. Seeing as the EdiPen accounted for $1 billion of the $9.4 billion of company sales, raising the price of the EpiPen would certainly contribute to the bottom line. So in order to hit the goal of 32% growth, Mylan raised the price of the EpiPen from $265 to $609 in less than three years (a 230% increase).  

What we have here is not a glitch in the capitalistic system, it’s exactly how capitalism is supposed to work. Capitalism is described as an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. The key phrase here is, “for profit”. Now combine that with the mantra of all corporations, which is to maximize value for its shareholders.  

Grow or die. It’s a simple concept really.  

Mylan wanted to grow at a faster rate than it had previously. So it incentivized it’s executives to achieve that growth. And the executives responded by raising prices of a drug that it purchased, regardless of the consequences to the people that used the medicine.

The funny thing in this whole episode is the extent that people are becoming upset. Yet this happens every day, in every industry. Every corporation would raise their prices tomorrow if they could get away with it. Pharmaceutical corporations are different in that they hold patents which allows them to raise their prices any time they see fit.

Regardless of the consequences.

Regardless of the pain and suffering and deaths that their actions incur. Regardless of the financial hardship that this places thousands of families. Regardless.

Maximize profits at the expense of people.

Capitalism.  

And this has only worked because we have been fed propaganda for generations claiming that this is the best system for humans. But when a few people amass immense wealth at the expense of the rest, it is not a belief system. It is a Ponzi scheme.

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