Privately owned pharmaceutical companies often participate in the unfortunately common corporate practice of price gouging, in which the owners of large companies buy out the rights to a certain drug and raise the price tremendously.  Martin Shkreli is the most recent practitioner of this. Commonly referred to as the most hated person in the America, this CEO of Turing Pharmaceuticals bought Daraprim, a life-saving drug that helps fight off infection and is especially used by AIDS patients. He then proceeded to hike up the prices for Daraprim by over 5000%, from $13.50 to $750 a pill. This has caused outrage, especially on social media sites like Twitter.

   In light of the Shkreli’s recent scandal, this practice has caused an uproar among many concerned Americans. However, it turns out he isn’t alone. In fact, almost every drug company does this. It begins with the making of a drug, which can take up to three years and cost millions of dollars. The average cost for a successful drug is somewhere around 2.3 billion dollars (Tufts University Center for the Study of Drug Development). But none of that is taken into account when pricing the drug. The company looks instead at the perceived value, or the value that the consumer has in mind, of the product. A common drug that is available in many places has a low price because of its commonness and availability. However, a drug that isn’t used as often and is harder to find gives an opportunity for drug companies to buy out, monopolize, and price gouge that particular market.

   CEOs like Shkreli target rarely used drugs with high perceived values. After buying the rights to the drug, the companies limit its creation, effectively creating a monopoly. The companies limit the development of similar drugs by tightly controlling the distribution of the drug, which makes it harder for other companies to acquire the samples they need.

   With their opponent companies at bay and their consumers abundant, these monopolies reap enormous profit. If caught, the owners of these companies usually claim that they had to raise the price of the drug — that their company was going out of business.

   “I think it is unfair to the people who buy it [the drug],” said freshman Samveda Rukmangadhan, a member of the HOSA club. “They have no choice; they have to buy it.” The patients need the drug to survive, so they will have to continue to buy the drug, no matter the price. They are held hostage by their own needs.

   “I think there should be laws against doing this,” said Rukmangadhan. Surprisingly, though, there are no laws that forbid price gouging. This may change soon as New York Senator Charles Schumer is currently writing a bill to criminalize price gouging. But for now, companies are free to buy life-saving drugs and trap their customers in ever-rising prices.