Despite building successful drug companies while yet in his early 30s, Shkreli’s exploitation of the drug market outraged the public and some members of Congress. In 2015, his company, Turing Pharmaceuticals, bought the rights to a 50-year-old, life-saving parasitic infection medication, Daraprim, which can be produced for pennies per pill. Patients typically need two to three pills daily for weeks or months. Shkreli soon raised the Daraprim price from $13.50 to $750 per pill. Shkreli then called a journalist a “moron” for asking why the price was inflated so dramatically. Rejecting charges of greed, Shkreli has said he cares deeply about others, and the price increase was necessary to provide funds for research. Shkreli, age 37 in 2020, is serving a seven-year sentence in federal prison for securities fraud unrelated to Daraprim. He also must pay $7.36 million of his $27 million net worth in penalties to the government. Reportedly he spent some time in solitary confinement when authorities discovered that he was using a contraband cell phone in prison to continue running his drug company, Phoenixus AG (formerly Turing). The price of Daraprim, which benefits only about 2,000 Americans annually, reportedly remains in the $750 per pill range with no generic equivalent in the United States. 

Questions 

1. Mark Zuckerberg and his wife Priscilla Chan announced in 2015 they would donate 99 percent of their worth, about $45 billion, to charitable purposes. Similarly, the Bill Gates/Warren Buffett Giving Pledge asks wealthy people worldwide to give half or more of their money to philanthropy while they are alive. German billionaire Peter Kramer objected to the private gifts, encouraged by charitable deductions in computing donors’ taxes, because the donors and their preferences take the place of the collective judgment of the state, which could capture at least a portion of that money through taxes. Thus, wealthy, private Americans, rather than the government, determine what is good for the people. Should that donated money be in the hands of the government rather than the donors and their charitable foundations? Explain. See Jeff Guo, “Why a German Billionaire Says That Pledges Like Mark Zuckerberg’s Are Really Bad,” The Washington Post, December 2, 2015 [www.washingtonpost.com]. 

2. Sandy Banks, wrote in the Los Angeles Times: The boys’ faces brightened when they got to the front of the line. We’re next! They’d been waiting to say it. But their smiles faded when another family was ushered in from the sidelines and slid into “their” Legoland ride. We’d been waylaid by the Premium Play Pass, Legoland’s wristband version of the front-of-the-line pass. Banks asked her readers what they thought of the fairness of paying to jump to the front of the line. Some said it was no different than flying first class or choosing to drive on a toll road. One thought the kids received a good lesson in the competitiveness of capitalism. Legoland, in Carlsbad, California, said they sell only about 65 of the Premium Play wristbands daily, but those who buy them value the time saved. 

a. What do you think of the fairness of paying to jump to the head of the line at amusement parks? 

b. Do you think that drivers who pay more should be entitled to drive in a faster lane? Explain.

3. Elementary schools sometimes ban tag, dodge ball, touch football, kickball, and other vigorous games from the playgrounds. One school banned touching altogether. Administrators fear physical injuries, students’ reduced self-esteem, and lawsuits. As the Los Angeles Times editorialized, “It’s hard sometimes to tell whether schools are graduating students or growing orchids.” Ayn Rand argued for reduced rules in life, thus relying on the market to address virtually all problems. 

a. From Rand’s free-market point of view, explain why we should reduce playground rules as much as possible, even at the risk of children being hurt. 

b. Would you follow the rules approach or Rand’s free-market approach in managing a playground? Explain.