they are purely driven by profit motive and obligated to act that way to promote shareholder value
Sure, that's true. But sometimes in seeking profits, a business can be shortsighted about the long term and actually decrease their own value over time. Turing Pharma execs were initially giddy over their profits after the price hike, but their own internal communiques reveal that they very quickly were feeling the pain over the negative PR and some medical providers' refusal to accept the new price. In short order, they went from
"Another $7.2 million, pow!"
to
"If a hospital like Mass General is having issues we are in trouble..."
and finally
"As early as next week, the Board should remove Martin as CEO. ... the price drop has to be significant and tied to something. ... This cannot be seen as something that appears to be as arbitrary as the price hike in the first place." | Source
Now Turing Pharmaceuticals is looking for a new, permanent CEO, cutting jobs, and expanding their board. Their last quarterly report revealed a $14 million dollar net loss. A compounding pharmacy announced that it would offer a similar (but not identical drug) for a much cheaper price. According to Shkreli's interviews, the entire goal of raising these prices exorbitantly was to fund R&D, and the next quarterly report may indicate that the action briefly stopped the hemorrhaging, but between negative publicity, potential competition, and the company's decision to start cutting jobs now, it seems unlikely that in the long run this price gouge will have had an overall positive effect on shareholder value. Because of this, I would argue that Turing Pharmaceuticals may have been responding to market incentives, but in a stupid, stupid way.
we should change the system to make life saving drugs subject less to capitalist forces and more to "socialist" ones
I'm not sure I see a reason to. In this case, capitalism worked. A competitor stepped in, Turing Pharma is being punished for sociopathic behavior, and a flood of other pharma CEOs took to the airwaves to proclaim that price gouging is irresponsible and intolerable. Turing's shareholders will soon recognize (if they haven't already) that their target market was poorly chosen--existing, relatively old drugs address those concerns quite readily, and gouging as fuel for questionable R&D is not a good long-term business strategy.
And, finally, there are ways we can incentivize competition to reduce the stranglehold of de facto monopolies, and that's to put in an FDA policy that fast tracks drug testing for drugs that compete in those small markets and makes it illegal for those monopolies to prevent competitors from obtaining those drugs for comparison.