It is very fashionable these days to blame the financial industry for all bad things in the world. It now seems that price gouging drug companies are not the real villains, the real villains are the hedge funds and private equity companies that invest in them and expect high returns. Jokes apart, healthcare drug development needs to be financed in more creative ways to match the needs of the market and not be overly dependent on high cost of capital. It is already changing…let’s hope it continues….
That has specifically been the case for pharmaceutical prices. Among the 25 drugs with the fastest-rising prices over the past two years, 20 “are owned or have been acquired by firms with significant activity from hedge fund, private equity or venture capital firms,” according to Hedge Clippers.