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The Biotech Pricing Scandal Explained By Taiwanese Animators

Martin Shkreli's decision to disturb the fragile equilibrium in the biotech industry by hiking the price of Daraprim, a drug which had been on the market for decades, from $13.50 to $750, has caused massive ripple effects, and forced none other than Democratic presidential hopeful Hillary Clinton to chime in that drug prices will be the next area of government intervention with a likely monthly cap set to be implemented if she becomes president, also leading to the biggest plunge in the biotech stock index in 2015.

To be sure drug treatment costs, already astronomical by many standards, would quietly keep rising months after month, without much public attention as the price hikes were gradual and did not attract much public attention as they were blanketed by various insurance schemes and "distributed" costs... until over the weekend the NYT decided to profile the decision of Turing Pharmaceuticals to boost the price of Daraprim - a drug used to treat toxoplasmosis - by over 5500%.

To be sure, the headline shock and the resultant populist rhetoric that was unleashed by Hillary Clinton among others, has been offset by market purists claiming there is nothing wrong with the price surge itself, if there is enough demand to meet the exorbitant price (an argument used to justify Uber "surge" pricing among others). And yet, a key question is how much of the price surge is "internalized" by everone else through such socialized welfare cost absorption mechanisms as Obamacare and Medicare.

With soaring healthcare costs, and with Americans on edge about healthcare inflation, expect this topic to be at the forefront of the 2016 presidential election cycle.

For now, however, if anyone is still confused by the trigger that caused the biggest selloff in biotech stocks in 2015, here are the infamous Taiwanese animators with "all you need to know."