Holden Advisors Blog

A recent article on pricing power referenced the example of Martin Shkreli’s Turing Pharmaceutical decision to raise the price of Daraprim by 5000%. Shkreli famously purchased the rights to an older off-patent drug used to treat infection in AIDS patients and dramatically raised the price – a demonstration of pricing power. The following controversy caught up with Shkreli, who gloated that he didn’t raise the price enough. Investigators couldn’t jail him for the Daraprim price, but digging found other dirt and he was sentenced to seven years for fraud related to his former hedge fund.

The following article is my reaction to a blog from a friend, Steve Haggett at Iron Mountain.  He responded to an article from our Patrick McCullough about some of the pricing abuses in the pharmaceutical industry. 

The other day I was talking to the CEO of a small medical devices firm.  During the conversation, she let slip that she hadn’t raised her prices in 15 years! I almost had to pick my jaw up off the floor. After I got over my initial shock, I asked some questions…chiefly three:

Here's the question: Is it harder to set prices or control them once they are set? Next, think about where you spend most of your time? Sorry, that was two, but each is equally important. Why?  Because if you struggle with one, you’ll be too busy with the other to fix it.