A Huge Overnight Increase in a Drug’s Price Raises Protests(nytimes.com)
nytimes.com
A Huge Overnight Increase in a Drug’s Price Raises Protests
http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html
12 comments
Celgene are currently engaged in shenanigans in the UK.
There are currently two main chemotherapies used for pancreatic cancer in England. First line is folfirinox. But that can have nasty side effects, so the less effective gemcitabine is used because it has less side effects.
Celgene make abraxane. Abraxane (by Celgene's own data) isn't as good as current first treatment; and has many side effects so can't be used as second line treatment.
Celgene's data shows median life extension on abraxane as two months.
A charity - pancreaticcanceraction.org - has started a petition to get NICE to change the decision. The petition states abraxane gives two years extra life which is true for a few people. Equally true would be "abraxane gives two days extra life".
The shenanigans come from the amount of funding and campaigning material Celgene has provided to pancreaticcanceraction.org, while making it seem like they don't have any connection.
https://www.nice.org.uk/news/press-and-media/the-cost-of-nab...
https://pancreaticcanceraction.org/news/english-patients-nic...
There are currently two main chemotherapies used for pancreatic cancer in England. First line is folfirinox. But that can have nasty side effects, so the less effective gemcitabine is used because it has less side effects.
Celgene make abraxane. Abraxane (by Celgene's own data) isn't as good as current first treatment; and has many side effects so can't be used as second line treatment.
Celgene's data shows median life extension on abraxane as two months.
A charity - pancreaticcanceraction.org - has started a petition to get NICE to change the decision. The petition states abraxane gives two years extra life which is true for a few people. Equally true would be "abraxane gives two days extra life".
The shenanigans come from the amount of funding and campaigning material Celgene has provided to pancreaticcanceraction.org, while making it seem like they don't have any connection.
https://www.nice.org.uk/news/press-and-media/the-cost-of-nab...
https://pancreaticcanceraction.org/news/english-patients-nic...
My first thought was generics since it's so old, but this is simply amazing:
> With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
> The switch from drugstores to controlled distribution was made in June by Impax, not by Turing. Still, controlled distribution was a strategy Mr. Shkreli talked about at his previous company as a way to thwart generics.
How can this be true?
> With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
> The switch from drugstores to controlled distribution was made in June by Impax, not by Turing. Still, controlled distribution was a strategy Mr. Shkreli talked about at his previous company as a way to thwart generics.
How can this be true?
>“This is still one of the smallest pharmaceutical products in the world”
What Turing is doing is exploiting the natural monopoly that has formed for this drug. I was able to find only two global producers of this drug after a quick search (Turing and a generic Alibaba listing), which if true means Turing is the only game in town for a lot of supply channels. In addition, the medical market is relatively unable to adapt to these sorts of market fluctuations due to 1. supply chain being slow to respond (high regulation and insurance) 2. high need of patients themselves and 3. lack of knowledge about the drug and alternatives due to the infrequency of its prescription.
What this adds up to is that Turing can buy up the manufacturing of this drug, jack up the price, and pocket the gains for a year or two while the market adapts. Make no mistake, the market will adapt and undercut him and he will destroy his monopoly by doing this, but he will also achieve perhaps many hundreds of percent ROI on his purchase of the drug. Afterwards he can sell the drug to another company and move on to another vulnerable natural monopoly in the drug space.
>“It really doesn’t make sense to get any criticism for this.”
It absolutely does, though. If he's able to exploit a pricing inefficiency as a producer, then the press can exploit him by hanging him out to dry in the public eye. Companies can, and should, face public relations campaigns against them for unethical, if legal, behavior.
What Turing is doing is exploiting the natural monopoly that has formed for this drug. I was able to find only two global producers of this drug after a quick search (Turing and a generic Alibaba listing), which if true means Turing is the only game in town for a lot of supply channels. In addition, the medical market is relatively unable to adapt to these sorts of market fluctuations due to 1. supply chain being slow to respond (high regulation and insurance) 2. high need of patients themselves and 3. lack of knowledge about the drug and alternatives due to the infrequency of its prescription.
What this adds up to is that Turing can buy up the manufacturing of this drug, jack up the price, and pocket the gains for a year or two while the market adapts. Make no mistake, the market will adapt and undercut him and he will destroy his monopoly by doing this, but he will also achieve perhaps many hundreds of percent ROI on his purchase of the drug. Afterwards he can sell the drug to another company and move on to another vulnerable natural monopoly in the drug space.
>“It really doesn’t make sense to get any criticism for this.”
It absolutely does, though. If he's able to exploit a pricing inefficiency as a producer, then the press can exploit him by hanging him out to dry in the public eye. Companies can, and should, face public relations campaigns against them for unethical, if legal, behavior.
Another way to restrict competition is to stop competitors getting samples of your drug. Without samples of the original, it's impossible to prove a generic is equivalent.
Here's an example where patient safety rules were used to stop competitors getting samples: http://marginalrevolution.com/marginalrevolution/2014/09/co-...
Here's an example where patient safety rules were used to stop competitors getting samples: http://marginalrevolution.com/marginalrevolution/2014/09/co-...
> Without samples of the original, it's impossible to prove a generic is equivalent.
I know we're in FDA-land where logic doesn't rule, but this beggars belief. This is similar to the nonsense by which HFA inhalers knocking generic CFC inhalers off the market.
Any competent organic chemist can tell you if you've got pyrimethamine or not. This isn't some exotic chemical. There's published spectra (http://webbook.nist.gov/cgi/cbook.cgi?ID=C58140&Mask=80). Having a competitor's drug will simply tell you anything new. If it does, they've behaving deceptively.
I know we're in FDA-land where logic doesn't rule, but this beggars belief. This is similar to the nonsense by which HFA inhalers knocking generic CFC inhalers off the market.
Any competent organic chemist can tell you if you've got pyrimethamine or not. This isn't some exotic chemical. There's published spectra (http://webbook.nist.gov/cgi/cbook.cgi?ID=C58140&Mask=80). Having a competitor's drug will simply tell you anything new. If it does, they've behaving deceptively.
"One way scientists demonstrate bioequivalence is to measure the time it takes the generic drug to reach the bloodstream and its concentration in the bloodstream in 24 to 36 healthy, normal volunteers. This gives them the rate and extent of absorption-or bioavailability-of the generic drug, which they then compare to that of the pioneer drug. The generic version must deliver the same amount of active ingredients into a patient's bloodstream in the same amount of time as the pioneer drug."
http://www.fda.gov/Drugs/EmergencyPreparedness/Bioterrorisma...
http://www.fda.gov/Drugs/EmergencyPreparedness/Bioterrorisma...
It's not just having the right drug, it's having the right pharmacokinetics. You need original samples so you can see how the drug dissolves, enters the bloodstream and is metabolized.
The FDA has a requirement that generics are bioequivalent, not just the same drug.
The FDA has a requirement that generics are bioequivalent, not just the same drug.
I don't see what's illogical about it. Generics get approval without extensive testing under the idea that they're equivalent to an already tested drug. How do you do that without ensuring its actually equivalent in all respects?
If the FDA has approved certain pharmacodynamics, these should be characterized. With well characterized bioavailability curves, re-running the original experiment doesn't tell you anything.
If the FDA is instead approving other characteristics by happenstance, it leaves open the door to market abuses like the one we're seeing.
If the FDA is instead approving other characteristics by happenstance, it leaves open the door to market abuses like the one we're seeing.
>It absolutely does, though. If he's able to exploit a pricing inefficiency as a producer, then the press can exploit him by hanging him out to dry in the public eye. Companies can, and should, face public relations campaigns against them for unethical, if legal, behavior.
What does bad PR mean for them? Nobody's going to refuse treatment if they would otherwise afford it.
What does bad PR mean for them? Nobody's going to refuse treatment if they would otherwise afford it.
It impacts him at the margin. More eyeballs on articles like this one mean a faster market response and more patients doing a little extra digging to find fair treatment for their ailment. He also wouldn't want this article to come up as the top result for his name. A shady business reputation makes it harder to find investors, partners and employees.
Yes, in the short-term, being up written up in the NY times for what they are is the best way to deal with most egregious unethical behavior from scum like Turing Pharmaceuticals. It will be interesting to see if the prices goes back down as a result of this exposure.
Sadly, that can't prevent pharma companies from arbitrarily jacking up prices less dramatically on many other drugs and going "under the radar" as far as public outrage is concerned. For that, you need careful and assiduous regulation. But in an era where people run companies that do real things like a hedge fund, I am doubtful things will get better anytime soon.
Sadly, that can't prevent pharma companies from arbitrarily jacking up prices less dramatically on many other drugs and going "under the radar" as far as public outrage is concerned. For that, you need careful and assiduous regulation. But in an era where people run companies that do real things like a hedge fund, I am doubtful things will get better anytime soon.
For that, you need careful and assiduous regulation.
Do you have any particular proposal to solve the problem? Saying "regulate!" doesn't help unless you can provide specifics.
Do you have any particular proposal to solve the problem? Saying "regulate!" doesn't help unless you can provide specifics.
[deleted]
I don't know much about monopolies, but, didn't Microsoft get in trouble for creating one? Also, back in the days of trustbusting were there not penalties for such actions? Is it in anyway against the law to do what they did? I can't answer these questions... but what the eye of the press can do is look deep into all of his practices and if there is anything illegal going on it my get noticed far quicker.
>didn't Microsoft get in trouble for creating one?
Sort of. Their competitor-plaintiffs are no longer going concerns, and MS are still going relatively strong; so one might argue that the "trouble" was of little consequence. The length of time all of that took to wind its way through the courts means that patients will die waiting for the market/courts to sort itself out.
Sort of. Their competitor-plaintiffs are no longer going concerns, and MS are still going relatively strong; so one might argue that the "trouble" was of little consequence. The length of time all of that took to wind its way through the courts means that patients will die waiting for the market/courts to sort itself out.
Microsoft got in trouble for using a monopoly in a market (OS) to prop up a product in another market (Browsers), not just for having a monopoly.
Merely making a product that no other companies are interested in making isn't illegal.
Enough bad PR can mean things like congressional investigations and eventually even regulation.
So what specific regulation would fix this? The medical industry is too heavily regulated (see http://fdareview.org/harm.shtml).
Actually, this is perfect evidence that it isn't heavily regulated enough. No one should be allowed to come into an established market, buy up life-saving drugs, jack up the prices hugely for no good reason, and kill those who can't afford the increased prices in the process. This is one of the best arguments for more regulation I can think of. He's a multi-multi-millionaire literally killing people to make even more profit, and he's doing it in an entirely rent-seeking manner that adds no value to humanity whatsoever.
Actually, this is perfect evidence that it isn't heavily regulated enough.
Technically, both are possible, but you're describing the situation inaccurately:
and kill those who can't afford the increased prices in the process.
The article says that they're providing the drug for free for those who can't afford it. So no one is dying due to the price being raised.
Anyway, one poor outcome doesn't mean more regulation is needed. You need to weigh the costs against the benefits, and when that is done, the costs end out higher, even on the existing regulation regime.
Can you propose specific regulations that would fix this, and not cause more harm elsewhere?
Technically, both are possible, but you're describing the situation inaccurately:
and kill those who can't afford the increased prices in the process.
The article says that they're providing the drug for free for those who can't afford it. So no one is dying due to the price being raised.
Anyway, one poor outcome doesn't mean more regulation is needed. You need to weigh the costs against the benefits, and when that is done, the costs end out higher, even on the existing regulation regime.
Can you propose specific regulations that would fix this, and not cause more harm elsewhere?
This monopoly doesn't sound very natural.
When someone first dredged up the rights for this drug, it sold 667,000$ worth of pills every year for 1$ each.
GlaxoSmithKline produced it and it just wasn't worth the trouble to discontinue or to muck about with. No one would make a generic because it would be more expensive to enter the market than profits could be realized.
So the monopoly is natural because no one with any good sense would consider competing.
That GSK sold the rights to this drug (and quite possibly other similar drugs) to some other company in a rational bid to monetize inefficient assets and increase shareholder value has upset that monopoly but Turing just needs to exploit the market until the generics show up. That and the price they paid explain Turing's strategy.
GlaxoSmithKline produced it and it just wasn't worth the trouble to discontinue or to muck about with. No one would make a generic because it would be more expensive to enter the market than profits could be realized.
So the monopoly is natural because no one with any good sense would consider competing.
That GSK sold the rights to this drug (and quite possibly other similar drugs) to some other company in a rational bid to monetize inefficient assets and increase shareholder value has upset that monopoly but Turing just needs to exploit the market until the generics show up. That and the price they paid explain Turing's strategy.
Nor does the phrase "natural monopoly". If I didn't know better, I'd say it was a phrase that was post-created in order to be a "valid" argument against a free-markets ability to self-correct without the presence of a state.
If I remember correctly, when Provigil became generic, they bought the company producing the generic form. They also slightly changed the drug and patented a new form as Nuvigil.
Last year, I asked my physician's assistant (I have never actually met my personal doctor) for a prescription and he told me that he didn't believe Provigil/Modafinil was even made anymore and tried almost emphatically to get me to take Nuvigil instead. I said no and that I'd try anyway. It was available and my insurance covered the Provigil ($750/month).
Last year, I asked my physician's assistant (I have never actually met my personal doctor) for a prescription and he told me that he didn't believe Provigil/Modafinil was even made anymore and tried almost emphatically to get me to take Nuvigil instead. I said no and that I'd try anyway. It was available and my insurance covered the Provigil ($750/month).
Yes, but ...
> The Federal Trade Commission has reached a settlement resolving the Commission’s antitrust suit charging Cephalon, Inc. with illegally blocking generic competition to its blockbuster sleep-disorder drug Provigil. The settlement ensures that Teva Pharmaceutical Industries, Ltd., which acquired Cephalon in 2012, will make a total of $1.2 billion available to compensate purchasers, including drug wholesalers, pharmacies, and insurers, who overpaid because of Cephalon’s illegal conduct.
https://www.ftc.gov/news-events/press-releases/2015/05/ftc-s...
> The Federal Trade Commission has reached a settlement resolving the Commission’s antitrust suit charging Cephalon, Inc. with illegally blocking generic competition to its blockbuster sleep-disorder drug Provigil. The settlement ensures that Teva Pharmaceutical Industries, Ltd., which acquired Cephalon in 2012, will make a total of $1.2 billion available to compensate purchasers, including drug wholesalers, pharmacies, and insurers, who overpaid because of Cephalon’s illegal conduct.
https://www.ftc.gov/news-events/press-releases/2015/05/ftc-s...
Generic modafinil has a retail price of around $40/month. Your insurance is getting ripped off.
Looks like 90% of drug regulations are BS sold with the excuse of "protecting the public"
Importing a (tested) cheaper version would solve this price abuse pretty quickly but of course the government, AMA, etc loves to meddle (of course some control is necessary)
Importing a (tested) cheaper version would solve this price abuse pretty quickly but of course the government, AMA, etc loves to meddle (of course some control is necessary)
How can what be true? The price of the old out of patent drug was too cheap and the target market too small for generic manufacturers to bother making it while it was widely available. Now that the prices have gone up they're having trouble getting samples to make a competing generic.
> Now that the prices have gone up they're having trouble getting samples to make a competing generic.
It's not hard to get samples because the pricing went up, but because they moved it to a direct sales model and actively prevent the drugs from getting in the hands of a generic maker. It seems absurd.
It's not hard to get samples because the pricing went up, but because they moved it to a direct sales model and actively prevent the drugs from getting in the hands of a generic maker. It seems absurd.
There are people who are evil. I don't care what economic language in which they couch it. They deserve what they get -- and I hope it is coming to them, soon. (This is not a threat, just a strongly held sentiment.)
P.S. I hope that micro-laboratories and production diversification will soon put a final "paid" to such exploitative strategies and tactics. Yeah, the "risk" of a chemistry and biologics lab in every back yard and basement... I'm increasingly of the sentiment that it is less than the increasing risk of autocratic and monopolistic control of centralized production and distribution.
This is a somewhat surprising development in my own attitude, to me. As I recall observing all the bone-headed and sometimes downright risky and uncaring behavior of e.g. chemistry students, including potential majors -- and some of the instructors -- back in college. Part of me is strongly concerned about keeping them from poisoning others and whatever environment they find themselves in.
Nonetheless, as I observe an increasing momentum towards artificial scarcity and profiteering -- often by people with no credit for making or enabling the original discoveries and creations -- I see decentralization as the only effective response.
I, and many others, tried "playing by the rules." Turns out, they've been increasingly rigged, and us, screwed. I'm not the only one deciding, "you have to take care of yourself." Not just in general, but seemingly in every aspect.
P.S. I hope that micro-laboratories and production diversification will soon put a final "paid" to such exploitative strategies and tactics. Yeah, the "risk" of a chemistry and biologics lab in every back yard and basement... I'm increasingly of the sentiment that it is less than the increasing risk of autocratic and monopolistic control of centralized production and distribution.
This is a somewhat surprising development in my own attitude, to me. As I recall observing all the bone-headed and sometimes downright risky and uncaring behavior of e.g. chemistry students, including potential majors -- and some of the instructors -- back in college. Part of me is strongly concerned about keeping them from poisoning others and whatever environment they find themselves in.
Nonetheless, as I observe an increasing momentum towards artificial scarcity and profiteering -- often by people with no credit for making or enabling the original discoveries and creations -- I see decentralization as the only effective response.
I, and many others, tried "playing by the rules." Turns out, they've been increasingly rigged, and us, screwed. I'm not the only one deciding, "you have to take care of yourself." Not just in general, but seemingly in every aspect.
I think if we depend on people to Be Good when there are big financial incentives not to, we're already screwed. We have to look at why the incentives are bad.
> With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
This should've been the second paragraph of the article, not buried near the bottom. The author seems to be expecting a system to make legal monopolies behave nicely. Instead we should stop creating legal monopolies.
> With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing.
This should've been the second paragraph of the article, not buried near the bottom. The author seems to be expecting a system to make legal monopolies behave nicely. Instead we should stop creating legal monopolies.
Well, these people are playing by the rules--the rules of the free market as rigged with regulation.
If we as a society had said "You know, it's more important that we have a secure, available supply of this drug than to be friendly to corporate interests" and had acted accordingly, this would've gone a bit differently.
As it is, the "legacy support" for pharmaceuticals is probably not going to be that large as new and improved things come out.
If we as a society had said "You know, it's more important that we have a secure, available supply of this drug than to be friendly to corporate interests" and had acted accordingly, this would've gone a bit differently.
As it is, the "legacy support" for pharmaceuticals is probably not going to be that large as new and improved things come out.
>Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014, according to the two lawmakers
wft? I'm kind of confused. Wikipedia says "Doxycycline is available as a generic medicine and is not very expensive. The wholesale cost is between 0.01 and 0.04 USD per pill." Why on earth are they paying $1,849 a bottle? Maybe they are only allowed to buy of certain suppliers with FDA licences or some such rather than just buying it from India for a few cents?
edit: I see the " $750 a tablet" "Daraprim, known generically as pyrimethamine" is avilable on AliBaba for "US $1-10 / Kilogram " http://india.alibaba.com/country/products_india-pyrimethamin...
Some weird import restrictions going on I guess?
wft? I'm kind of confused. Wikipedia says "Doxycycline is available as a generic medicine and is not very expensive. The wholesale cost is between 0.01 and 0.04 USD per pill." Why on earth are they paying $1,849 a bottle? Maybe they are only allowed to buy of certain suppliers with FDA licences or some such rather than just buying it from India for a few cents?
edit: I see the " $750 a tablet" "Daraprim, known generically as pyrimethamine" is avilable on AliBaba for "US $1-10 / Kilogram " http://india.alibaba.com/country/products_india-pyrimethamin...
Some weird import restrictions going on I guess?
The rules for pharmaceutics manufacturing in the western world are very strict.
Any competent university lab could turn up a few Kg of pyrimethamine. You need a GMP compliant FDA-approved facility to make it for medical use.
Any competent university lab could turn up a few Kg of pyrimethamine. You need a GMP compliant FDA-approved facility to make it for medical use.
I'm fairly sure this guy has been discussed here before. A year ago or so: https://web.archive.org/web/20150420142850/http://pipeline.c...
Discussed at https://news.ycombinator.com/item?id=8302451.
Feature request: Along those lines, I was trying to find an article (using algolia) which discussed different names for AWS service names confusion and it was useless for that purpose (given search terms I tried). Since I always clear my browser history I couldn't see the links that I had visited.
A nice feature would be if there was a way to note which article links I clicked on or which comment threads I have visited. (If I comment then it's easy to find but I read more than I comment). That way I could just browse back that history and could have easily found that article that I was looking for.
A nice feature would be if there was a way to note which article links I clicked on or which comment threads I have visited. (If I comment then it's easy to find but I read more than I comment). That way I could just browse back that history and could have easily found that article that I was looking for.
We don't track what article links users click on. It might be nice data to have if it helped us measure story quality, but it would also cross a privacy line that doesn't feel right to us, either as HN users or community members or moderators.
I suppose we could save/serve which comment threads users have visited but that would be a lot of data, so I wonder if it wouldn't just replace one needle-in-haystack problem with another.
I suppose we could save/serve which comment threads users have visited but that would be a lot of data, so I wonder if it wouldn't just replace one needle-in-haystack problem with another.
You can see which ones you've upvoted at https://news.ycombinator.com/saved?id=larrys (only works for you).
Thanks for that. But for some reason both that and the save comments seems incomplete. Hard to believe those are all of the stories I upvoted I upvote everything I read typically and upvote (from memory) more comments then "saved comments" indicates. Also "saved" should be "upvoted".
This is scary. If the TPP passes, drug pricing will suddenly rise in every country, not just USA.
Ok,
I am somewhat ignorant about how the drug system works in america, but theoretically, can one buy the drug where it's cheaper (say, India) via the darknet markets like silkroad or whatever and have it shipped to the US?
I am somewhat ignorant about how the drug system works in america, but theoretically, can one buy the drug where it's cheaper (say, India) via the darknet markets like silkroad or whatever and have it shipped to the US?
Yes, but there are two problems:
1) You can't guarantee they are real. The upside of buying drugs in the US is that if you get fake pills, it is a huge deal and people get sued out of business for this. Rite Aid (A national drugstore chain) got caught shorting the pill count in prescriptions and they got into big trouble.
2) The Department of Homeland Security will open packages from companies that they suspect are selling medicines from abroad and shipping to the US and impound the pills. The odds are good that you won't get caught, but if you do, it can become a real hassle.
1) You can't guarantee they are real. The upside of buying drugs in the US is that if you get fake pills, it is a huge deal and people get sued out of business for this. Rite Aid (A national drugstore chain) got caught shorting the pill count in prescriptions and they got into big trouble.
2) The Department of Homeland Security will open packages from companies that they suspect are selling medicines from abroad and shipping to the US and impound the pills. The odds are good that you won't get caught, but if you do, it can become a real hassle.
Neither are a problem. Typically, you don't get repeat business if you're selling fake pills, so online sellers of prescription drugs almost always provide you with what you're buying. This applies to both prescription drugs as well as recreational drugs purchased through darknets.
Regarding DHS and CBP, both are overblown concerns. You'll receive a letter in the mail noting they've confiscated the material in question, which you usually send to the seller who will replace the shipment at no charge to you.
Regarding DHS and CBP, both are overblown concerns. You'll receive a letter in the mail noting they've confiscated the material in question, which you usually send to the seller who will replace the shipment at no charge to you.
(Heavy metal or other) contamination of the drugs you receive could be an issue. Who's testing the India-/China-produced drug?
You might receive an Official batch that may or may not be checked by their local governments, but it might also be from a more shady source.
You might receive an Official batch that may or may not be checked by their local governments, but it might also be from a more shady source.
[deleted]
>> “This seems to be all profit driven for somebody,” she said, “and I just think it’s a very dangerous process.”
Don't worry! It's just capitalism.
Don't worry! It's just capitalism.
On this topic, read http://www.forbes.com/sites/matthewherper/2012/09/05/how-a-4....
zo1(4)
The thing that I think many people are ignoring is the positive effect that high drug prices (& profits) leads to in the economy.
Economic resources such as entrepeneurs, capital, equipment and scientists follow the money. If there's money to be made on Wall street, resources go there. If there's money to be made in mobile apps, resources go there.
As mentioned elsewhere in this thread, the price being so high now shows that the people buying it at that price truly value it that much. When it comes down to it, many people are willing to spend almost anything to stay alive and healthy.
The extremely high prices (and therefore profits) for specific drugs simply leads more resources to go into the development of additional similar money-making and life saving drugs.
It would be a shame if we capped drug prices at some artificially low level, as that lowers the incentive for additional resources to develop additional drugs.
Economic resources such as entrepeneurs, capital, equipment and scientists follow the money. If there's money to be made on Wall street, resources go there. If there's money to be made in mobile apps, resources go there.
As mentioned elsewhere in this thread, the price being so high now shows that the people buying it at that price truly value it that much. When it comes down to it, many people are willing to spend almost anything to stay alive and healthy.
The extremely high prices (and therefore profits) for specific drugs simply leads more resources to go into the development of additional similar money-making and life saving drugs.
It would be a shame if we capped drug prices at some artificially low level, as that lowers the incentive for additional resources to develop additional drugs.
The thing that I think you may be ignoring is the negative effect that high drug prices (and lack of affordability) has on the economy.
Health insurance, mandated as it is now in the US, is really a secondary tax we all pay to ensure people get a minimum level of care in the case of required medical care. Increased costs in medical treatment affect everyone that has health insurance to a small degree.
This being a "life-threatening parasitic infection" means that normal rules of supply and demand don't quite fit (as well as the fact that health insurance already makes this an inefficient market). There isn't always a price at which people will be unwilling to pay, beyond their inability to pay.
More profits for companies that develop drugs are only good in their eventual outcome, which is new drugs that are either better or cheaper than the existing ones. Manipulating a market to keep prices high on a drug may result in a development of a new drug which is either better or cheaper, but we have to keep in the ind the actual effects on the market right now, which is a more expensive and less available drug.
It would be a shame if we allowed a company to manipulate a market in the hopes that the extra money led to a positive outcome and that resulted in real deaths and pain in the meantime. I would tend to think that if they need to manipulate the market in that way to get the money they need for research, perhaps their past research efforts have not been as beneficial as some other companies, and that money would be better going to the companies that provide real benefit.
Health insurance, mandated as it is now in the US, is really a secondary tax we all pay to ensure people get a minimum level of care in the case of required medical care. Increased costs in medical treatment affect everyone that has health insurance to a small degree.
This being a "life-threatening parasitic infection" means that normal rules of supply and demand don't quite fit (as well as the fact that health insurance already makes this an inefficient market). There isn't always a price at which people will be unwilling to pay, beyond their inability to pay.
More profits for companies that develop drugs are only good in their eventual outcome, which is new drugs that are either better or cheaper than the existing ones. Manipulating a market to keep prices high on a drug may result in a development of a new drug which is either better or cheaper, but we have to keep in the ind the actual effects on the market right now, which is a more expensive and less available drug.
It would be a shame if we allowed a company to manipulate a market in the hopes that the extra money led to a positive outcome and that resulted in real deaths and pain in the meantime. I would tend to think that if they need to manipulate the market in that way to get the money they need for research, perhaps their past research efforts have not been as beneficial as some other companies, and that money would be better going to the companies that provide real benefit.
I can't tell if your post is satire or not. Extorting people over their own deaths is not useful economic activity.
i'm sorry, i'm all for market incentives to drive product development, but this is people's lives you're incentivising here. previously affordable treatment will be out of reach for many. there is a human cost to this (i'm sure otherwise sound) decision. this must not be forgotten.
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The parent's getting downvoted to oblivion, but I dare say the argument makes sense. In the long run, more lives will be saved if there's a greater economic incentive for entrepreneurs to make new and better drugs.
Or to put it another way - the government can instantly save many lives in the short run by forcing all drug companies and hospitals to make all their products and services $1 each, but this would have disastrous consequences in the long run, as every single one of those companies would quickly exit the market.
Or to put it another way - the government can instantly save many lives in the short run by forcing all drug companies and hospitals to make all their products and services $1 each, but this would have disastrous consequences in the long run, as every single one of those companies would quickly exit the market.
There may be a better system, but I haven't seen it.
Look at some of the new cancer companies (CAR-T technology). These companies are raising hundreds of millions of dollars in Series A. Why? Because investors think they'll be a handsome return on the other end.
Look at some of the new cancer companies (CAR-T technology). These companies are raising hundreds of millions of dollars in Series A. Why? Because investors think they'll be a handsome return on the other end.
Yep, exactly.
When the entire economy is market-based, if you lower profit incentives in one industry, capital/talent/resources will simply flow into other industries.
Maybe we should cap doctors pay at $15 an hour too. But I suspect when you are on the operating table, you want to pay top dollar for the person about to cut you open.
When the entire economy is market-based, if you lower profit incentives in one industry, capital/talent/resources will simply flow into other industries.
Maybe we should cap doctors pay at $15 an hour too. But I suspect when you are on the operating table, you want to pay top dollar for the person about to cut you open.
No offence to you, but you're so capitalist it's to the detriment of human health and you should be ashamed.
I'm asthmatic, My life can cease in a pretty painful way if I'm denied access to drugs- my illness is an easily preventable one, so why should I die gasping? You're right I'll pay anything to keep living.. I'll literally starve before I stop paying for my medication. But why would you wish that upon me? Because drug companies can have an extra slice of pie?-- forgive me if I'm wrong but isn't private healthcare mostly about making shareholders rich and -not- about significant R&D on preventable diseases (which would then be a tax on the ill for their life).
I come from a country with social healthcare, I grew up the product of a bottle of whiskey and a bad decision, thus, poor.. I'm currently putting more money into my government through taxes than I ever could have possibly taken out- but given the draconian practises you seem to favour, I would have died as a child because there is no way my mother could have afforded to buy my medication -and- keep me fed.
I'm asthmatic, My life can cease in a pretty painful way if I'm denied access to drugs- my illness is an easily preventable one, so why should I die gasping? You're right I'll pay anything to keep living.. I'll literally starve before I stop paying for my medication. But why would you wish that upon me? Because drug companies can have an extra slice of pie?-- forgive me if I'm wrong but isn't private healthcare mostly about making shareholders rich and -not- about significant R&D on preventable diseases (which would then be a tax on the ill for their life).
I come from a country with social healthcare, I grew up the product of a bottle of whiskey and a bad decision, thus, poor.. I'm currently putting more money into my government through taxes than I ever could have possibly taken out- but given the draconian practises you seem to favour, I would have died as a child because there is no way my mother could have afforded to buy my medication -and- keep me fed.
I definitely understand where you're coming from. And to clarify, I definitely do not want a system where anyone dies from a disease that could be treated. The argument about pricing really is separate from any argument about how the high prices can be paid for (state vs personal). For example, state funded insurance could cover the cost of expensive treatments.
The question is really a macro one as much as a micro one. What percent of our resources should we spend on healthcare? That question is simply a sum of all the prices paid.
I actually think that it's possible that in much of the developed world, economies may not be spending enough on healthcare, due to state intervention. Like much of the developed world, I already have a car, a TV, a computer, enough food, leisure activities, and live a comfortable life. Why would I not spend any of my truly expendable income to live a long and healthy life?
The question is really a macro one as much as a micro one. What percent of our resources should we spend on healthcare? That question is simply a sum of all the prices paid.
I actually think that it's possible that in much of the developed world, economies may not be spending enough on healthcare, due to state intervention. Like much of the developed world, I already have a car, a TV, a computer, enough food, leisure activities, and live a comfortable life. Why would I not spend any of my truly expendable income to live a long and healthy life?
There's nothing capitalist about allowing market manipulation. Real capitalism is about allowing markets to find efficient and effective agents through the use of money. Manipulating a market to arbitrarily increase wealth by reducing choices and information is not a feature of capitalism itself, it's a byproduct of markets that aren't incentivized (including mitigating negative incentives, as in this case) correctly.
> you should be ashamed
I know this is an internet convention of sorts, but please don't do it here, even when someone advocates bad policy. HN comments should be free of personal swipes, especially otherwise decent comments like this one.
I know this is an internet convention of sorts, but please don't do it here, even when someone advocates bad policy. HN comments should be free of personal swipes, especially otherwise decent comments like this one.
While shocking people have to keep in mind that pricing relates to more than cost but more importantly value. The fact that a particular product or service was priced a certain way for years is not as relevant as it might seem on the surface. I pay a very low price for a generic drug (copay doesn't even matter) but the value to me of the drug is much higher. The non generic version is priced perhaps 10 times as much but still provides value at that price. Perhaps these prices in the article are super inflated but my point is the fact that a drug was priced at $5 per tablet and now is $50 per tablet is not a non-starter in itself. Who cares what the % increase is? The question is does the drug provide value at $50 per tablet? Also a particular person's ability to pay doesn't really factor into this. I am sure the drug companies would love to be able to charge some classes of people more (Larry Ellison) and some less (jobless). But they are not allowed to do this. I know people's automatically will think "ripoff" (and maybe it is a "ripoff" whatever that is) however a price increase in itself does not indicate a ripoff.
"Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 "
Right and I don't take any drugs that even cost $500 for 30 pills (let alone $10,800). So this article could have just easily compared the pills that I buy 30 for $10 to 30 for $500 and written a similar article.
"Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 "
Right and I don't take any drugs that even cost $500 for 30 pills (let alone $10,800). So this article could have just easily compared the pills that I buy 30 for $10 to 30 for $500 and written a similar article.
No, unless you feel that people who use medicine are nothing more than a resource to be exploited.
Were it not for a (probably illegal in this case) monopoly, other people would be able to make that same pill for $5 per tablet. And then nobody would pay $50 for the pill.
Supply and demand IS NOT the same as "charging everyone as much as they will pay for everything". It's inherently unfair to everyone who has to buy that thing, and that's why people think it's a rip-off, because it is.
[edited to remove some hyperbole]
Were it not for a (probably illegal in this case) monopoly, other people would be able to make that same pill for $5 per tablet. And then nobody would pay $50 for the pill.
Supply and demand IS NOT the same as "charging everyone as much as they will pay for everything". It's inherently unfair to everyone who has to buy that thing, and that's why people think it's a rip-off, because it is.
[edited to remove some hyperbole]
The question is, if it costs me X to make a product, and the value to you is 100X, who captures the 99X spread? I could charge 99X, you would pay it since the value is higher, and I'll capture most of it. I could charge 2X, it's still worth it to me to produce it, and you'll capture most of it. What value here is most fair? Why is one value fairer than another? The standard economic answer is "let the market decide", and that works, up to a point. If you reject that, you need a better way to decide. Let's say you have a government agency set prices: how do they choose?
You've just pushed the problem around. Saying "get rid of the free market" in only a solution if you have a concrete alternative.
You've just pushed the problem around. Saying "get rid of the free market" in only a solution if you have a concrete alternative.
I'm not saying "get rid of the free market". I'm saying that in a monopoly situation, there is no free market. And if there is no free market, claiming "the free market will work" is insanity, so we have no choice but to try something else.
What is that something else?
In a monopoly situation, the price tends towards 100X in my example, which is still less than the value provided. Even in a monopoly, nobody's paying more for a product than they receive value from it.
Yes, it may still seem unfair, but what else are you proposing? Nobody should sell the product? How is that making anyone better off?
In a monopoly situation, the price tends towards 100X in my example, which is still less than the value provided. Even in a monopoly, nobody's paying more for a product than they receive value from it.
Yes, it may still seem unfair, but what else are you proposing? Nobody should sell the product? How is that making anyone better off?
"Letting the market decide" requires you to actually have a market. If you have a market of manufacturers that all produce a product for around X, then it doesn't matter if I value the product at 100X or 1,000,000X. I'm still going to be paying around X + epsilon. That's the entire point of having a market.
You only see people asking questions about "well, who captures the extra value? what's fair?" etc when you don't have a market. When you actually have a market, then these questions cease to be relevant, because the price is already set.
The problem has nothing to do with free market concepts breaking down, or disagreements about what's fair. The problem is that we've artificially prevented this market from existing. Fix that and the problem goes away.
You only see people asking questions about "well, who captures the extra value? what's fair?" etc when you don't have a market. When you actually have a market, then these questions cease to be relevant, because the price is already set.
The problem has nothing to do with free market concepts breaking down, or disagreements about what's fair. The problem is that we've artificially prevented this market from existing. Fix that and the problem goes away.
The thing is, the value for these products is infinite. If people don't have them, they'll die.
The value of a human life is not infinite, at least not in health budgets. Insurance companies set a non-infinite value to decide what procedures to cover.
In theory, you could calculate the exact value provided by this drug (under the QALY model).
In theory, you could calculate the exact value provided by this drug (under the QALY model).
The value of a human life to the individual who's life it belongs cannot be calculated in economic terms (at least for most people) because it is unbounded, i.e., there is not a price that most people will accept for their life. The economic value of a human life to society can be calculated.
Under your theory a fair method to price life saving drugs doesn't exist. The person getting the drugs will effectively extract infinite value while the company will only extract a finite value.
Under your theory a fair method to price life saving drugs doesn't exist. The person getting the drugs will effectively extract infinite value while the company will only extract a finite value.
The value of a human life to the individual who's life it belongs cannot be calculated in economic terms (at least for most people) because it is unbounded, i.e., there is not a price that most people will accept for their life.
Not really true, I'm afraid. People killing themselves (or allowing others to kill them) to ensure a payout to their families happens with some regularity.
Not really true, I'm afraid. People killing themselves (or allowing others to kill them) to ensure a payout to their families happens with some regularity.
1. My qualifier "most people" covers that situation, because it is very very rare.
2. Usually this happens because they place a higher value on their children's life and well being than their own. So even in the case were someone does place a value on their own life, it's only in relation to someone else's life.
The case of 2 is interesting because it shows that of the people who would accept a finite sum for their own life, very few would accept a finite sum for their chidren's life.
Since paying for the child's healthcare is the responsibility of the parent in a free market, we are back to my previous point that their is no fair free market way to price life saving drugs.
2. Usually this happens because they place a higher value on their children's life and well being than their own. So even in the case were someone does place a value on their own life, it's only in relation to someone else's life.
The case of 2 is interesting because it shows that of the people who would accept a finite sum for their own life, very few would accept a finite sum for their chidren's life.
Since paying for the child's healthcare is the responsibility of the parent in a free market, we are back to my previous point that their is no fair free market way to price life saving drugs.
NOT TRUE! Sometime's it's the opposite. My grandfather routinely denies spending money on himself (medical or otherwise) since he won't be around much longer. He would rather have the money stay for his kids. He feels this way even about procedures that would save his life.
You're the guy who won't save the drowning child because your suit would get dirty, right? No, wait, you'd ask the kid if she would pay to have it dry-cleaned, then still refuse because you could probably get her to pay even more.
What does that have to do with anything?
Who is worse: the person who doesn't save the child, or the person who saves the child, and sends a bill later?
Who is worse: the person who doesn't save the child, or the person who saves the child, and sends a bill later?
Quite an opener, do you practice hyperbole often?
Fairness is whatever two people will agree to pay for a service.
Imagine how silly it would be if we all paid the same amount for seats on an airline - which is how it worked before deregulation. Many seats would go empty, the utility would not be maximized, and we'd be missing out on the great transfer of wealth from the rich to the poor.
Fairness is whatever two people will agree to pay for a service.
Imagine how silly it would be if we all paid the same amount for seats on an airline - which is how it worked before deregulation. Many seats would go empty, the utility would not be maximized, and we'd be missing out on the great transfer of wealth from the rich to the poor.
And everybody also generally hates the airlines and feels the pricing is unfair because of this.
You might say that without it airplanes would not fly at all, and you might be right. But it's incredulous to claim that without these profits the medicine would not exist at all; it has existed already for 5 decades. (And we have patents as a system specifically designed to allow for funding the creation of drugs)
You might say that without it airplanes would not fly at all, and you might be right. But it's incredulous to claim that without these profits the medicine would not exist at all; it has existed already for 5 decades. (And we have patents as a system specifically designed to allow for funding the creation of drugs)
What you're saying makes perfect sense on paper, but unfortunately reality is as always slightly more complex.
Such simple thinking is full of the holes for exploitation and there will always be someone who will exploit them. Medicine is especially sensitive, because medicine can be priceless in value for the human who needs it, but that same human might not be able to pay that much. You can introduce government help, but if such exploitation is allowed, it would simply end up in a waste of tax money.
One thing is to allow companies who invest into products creation to receive the profit from it by using monopoly and charging as much as they like, and completely another is buying the company and starting to charge many times higher for the medicine that was available for years.
This might not be a popular view, but I can see no reason to think that such an exploitation should be tolerated. I simply cannot see how such things benefit humans as a society. I might be missing here something and if I do, please let me know.
Such simple thinking is full of the holes for exploitation and there will always be someone who will exploit them. Medicine is especially sensitive, because medicine can be priceless in value for the human who needs it, but that same human might not be able to pay that much. You can introduce government help, but if such exploitation is allowed, it would simply end up in a waste of tax money.
One thing is to allow companies who invest into products creation to receive the profit from it by using monopoly and charging as much as they like, and completely another is buying the company and starting to charge many times higher for the medicine that was available for years.
This might not be a popular view, but I can see no reason to think that such an exploitation should be tolerated. I simply cannot see how such things benefit humans as a society. I might be missing here something and if I do, please let me know.
The question is how we can fix this systematically without making bigger problems. Should a government agency set prices? What if the company stops making the drug, then? The price is high because no other companies are willing to make it for lower, after all. Note that the drug in question is not under patent.
I don't think you'd advocate for literally forcing the company to make it and sell it for a specific price.
There's also the concerns I went over here: https://news.ycombinator.com/item?id=10248817
I don't think you'd advocate for literally forcing the company to make it and sell it for a specific price.
There's also the concerns I went over here: https://news.ycombinator.com/item?id=10248817
>What if the company stops making the drug, then? The price is high because no other companies are willing to make it for lower, after all.
Nope, don't force the company to make it. Force the company to give the formulation to another company that will. This article states the reason it is able to be priced so high, at least for a time, is that other companies will have to reverse engineer it and get a line running. Take out the time of getting the product formulated right and the original holder has to think about the ramifications of any shenanigans they will attempt to pull.
Nope, don't force the company to make it. Force the company to give the formulation to another company that will. This article states the reason it is able to be priced so high, at least for a time, is that other companies will have to reverse engineer it and get a line running. Take out the time of getting the product formulated right and the original holder has to think about the ramifications of any shenanigans they will attempt to pull.
The composition is public, and needs to be disclosed when patented. In order to get FDA approval for a generic drug, you need to show that it performs as well as the actual drug (not really, but that's a different issue [0]). In order to do that, you need to have samples of the actual drug.
[0] http://fortune.com/2013/01/10/are-generics-really-the-same-a...
[0] http://fortune.com/2013/01/10/are-generics-really-the-same-a...
Government setting prices works for the NHS in the UK. If a drug is too expensive it just doesn't get authorised as a treatment and we go with something else. The collective bargaining power of the nationalised system effectively forces the pharmaceutical companies to the table everytime. They'd rather sell for some profit than no profit.
It's only because the pharma companies can deal with consumers in the US on an individual basis that you guys get screwed over so much on your pricing.
It's only because the pharma companies can deal with consumers in the US on an individual basis that you guys get screwed over so much on your pricing.
It's only because the pharma companies can deal with consumers in the US on an individual basis that you guys get screwed over so much on your pricing.
That's not true at all. The biggest private insurance companies in the US are what? 30-40M lives? That's bigger than Canada. They routinely negotiate for lower drug prices.
That's not true at all. The biggest private insurance companies in the US are what? 30-40M lives? That's bigger than Canada. They routinely negotiate for lower drug prices.
If the proposal is "set up a single payer system in the US", this may be relevant.
Do you know where I could find out whether the NHS is covering Daraprim at the new prices?
Do you know where I could find out whether the NHS is covering Daraprim at the new prices?
I'm confused. The article is about a drug that was sold at price X (13.5) that is now offered at price Y (750).
Now, in my world every rational person has to see that this is insane. There's no way that the previous price was even remotely possible (even with a loss) that requires the new price.
I don't see any data that supports your 'no one would be willing to make it for less' argument. The only reasons that doesn't seem to happen are either technical (the monopoly on the drugs manufacturing process) or legal (can't do that or you have to pay for .. creating cheaper drugs). Can you back your unlikely scenario? Looking at the article in question, is 750 the 'right' price and no one's willing to create the drug for less? Were they losing about 700 a pop before they increased the price?
What. The. Hell?
Now, in my world every rational person has to see that this is insane. There's no way that the previous price was even remotely possible (even with a loss) that requires the new price.
I don't see any data that supports your 'no one would be willing to make it for less' argument. The only reasons that doesn't seem to happen are either technical (the monopoly on the drugs manufacturing process) or legal (can't do that or you have to pay for .. creating cheaper drugs). Can you back your unlikely scenario? Looking at the article in question, is 750 the 'right' price and no one's willing to create the drug for less? Were they losing about 700 a pop before they increased the price?
What. The. Hell?
I don't see any data that supports your 'no one would be willing to make it for less' argument.
There are currently no other companies that are willing to make and sell the drug.
* The only reasons that doesn't seem to happen are either technical (the monopoly on the drugs manufacturing process) or legal (can't do that or you have to pay for .. creating cheaper drugs).*
The patent is expired, and saying "monopoly" is describing an outcome, not an input. Yes, it's a monopoly, because no other company is willing to go into that market right now.
Looking at the article in question, is 750 the 'right' price and no one's willing to create the drug for less?
I would deny that any price is "right". If you want to refer to "right", define it and give a way to calculate what price can be right.
As I said in the other comment, there's no good system to determine who should capture the value from a product that costs less to make than it's worth to purchasers, other than a free market.
There are currently no other companies that are willing to make and sell the drug.
* The only reasons that doesn't seem to happen are either technical (the monopoly on the drugs manufacturing process) or legal (can't do that or you have to pay for .. creating cheaper drugs).*
The patent is expired, and saying "monopoly" is describing an outcome, not an input. Yes, it's a monopoly, because no other company is willing to go into that market right now.
Looking at the article in question, is 750 the 'right' price and no one's willing to create the drug for less?
I would deny that any price is "right". If you want to refer to "right", define it and give a way to calculate what price can be right.
As I said in the other comment, there's no good system to determine who should capture the value from a product that costs less to make than it's worth to purchasers, other than a free market.
Let's take this apart. I'm not an expert, not on drug creation nor on .. 'free market' theories.
1) I'm not convinced that no one is interested to create the drug. Numerous people in this very discussion list issues to create a 'replacement' drug, even if the patent is expired. If they are correct (see disclaimer above) that might be a reason why others haven't tried it - or why they haven't succeeded yet.
2) 'Right' price is ambiguous, I agree. In my world, drug prices are ethic problems and have no connection to the so-called free market. No, a working, helping, proven drug cannot cost hundreds of $currency. We can discuss about the need to offset the R&D costs and I'm fine with drugs that costs my health insurance a ~largish~ sum, as long as the end user can get instant and easy access to the drug.
Your comments about putting a price on a person's life and your opinions on drug prices - as far as I can follow! - are impossible to understand from this person's pov. The lack of empathy and the trust in random business/market theoretical stuff to find a reasonable solution for the access to drugs that might very well save lives - that just doesn't compute, doesn't make sense in my world.
I don't believe in free markets. I certainly don't believe in free markets when we're talking about the basic needs of each and every human (for the sake of the argument let's limit this to nutrition and health for now). Health care should be free. Drugs should be affordable. Changing the price of a drug that was obviously doing okay (it was on the 'free market', right?) and multiplying the price by 65, because .. why not? .. is immoral and should be illegal. There's no 'value' to 'capture'. We're talking about a product that the company obviously produced with some sort of margin for ~13.5~ and that benefits the population at large - or at least the subset of the population that requires the drug. There is _no_ reason to increase the price, especially by that ridiculous value, other than inhuman greed. But maybe (see disclaimer) that's what a 'free market' is about - I wouldn't know.
1) I'm not convinced that no one is interested to create the drug. Numerous people in this very discussion list issues to create a 'replacement' drug, even if the patent is expired. If they are correct (see disclaimer above) that might be a reason why others haven't tried it - or why they haven't succeeded yet.
2) 'Right' price is ambiguous, I agree. In my world, drug prices are ethic problems and have no connection to the so-called free market. No, a working, helping, proven drug cannot cost hundreds of $currency. We can discuss about the need to offset the R&D costs and I'm fine with drugs that costs my health insurance a ~largish~ sum, as long as the end user can get instant and easy access to the drug.
Your comments about putting a price on a person's life and your opinions on drug prices - as far as I can follow! - are impossible to understand from this person's pov. The lack of empathy and the trust in random business/market theoretical stuff to find a reasonable solution for the access to drugs that might very well save lives - that just doesn't compute, doesn't make sense in my world.
I don't believe in free markets. I certainly don't believe in free markets when we're talking about the basic needs of each and every human (for the sake of the argument let's limit this to nutrition and health for now). Health care should be free. Drugs should be affordable. Changing the price of a drug that was obviously doing okay (it was on the 'free market', right?) and multiplying the price by 65, because .. why not? .. is immoral and should be illegal. There's no 'value' to 'capture'. We're talking about a product that the company obviously produced with some sort of margin for ~13.5~ and that benefits the population at large - or at least the subset of the population that requires the drug. There is _no_ reason to increase the price, especially by that ridiculous value, other than inhuman greed. But maybe (see disclaimer) that's what a 'free market' is about - I wouldn't know.
Numerous people in this very discussion list issues to create a 'replacement' drug, even if the patent is expired. If they are correct (see disclaimer above) that might be a reason why others haven't tried it - or why they haven't succeeded yet.
Replace interested with "no one is interested and able". The reasons don't matter (insofar as they cannot be changed), the fact is that no one else is making them.
The lack of empathy and the trust in random business/market theoretical stuff to find a reasonable solution for the access to drugs that might very well save lives - that just doesn't compute, doesn't make sense in my world.
This doesn't come from a lack of empathy. I am (or try to emulate) a utilitarianist. To my mind, the question to ask is "which system will produce better outcomes overall"?
As I've said elsewhere in this thread, this particular example has them covering the cost of the drug for anyone who can't afford it; so the value of a life is irrelevant. The question is "is it better for a health insurance company or the drug manufacturer to have the money?" This doesn't seem obvious.
On the other hand, any claims of "fairness" fail to compute. If doing X improves the world, who cares if it makes things less fair?
Health care should be free.
The world should be perfect. I agree. Now, do you have any way of bringing the world to perfection? Saying "Health care should be free" while ignoring the fact that currently, health care needs to be rationed, does nobody any good.
Who pays for health care, if it's free? Who becomes a doctor, a researcher, if the prices are driven down by politicians with similar arguments to yours?
There's no 'value' to 'capture'.
That sounds to me like saying that every drug company should be selling at cost or close to cost. The problem with that is that there's then much less incentive for investors to fund pharmaceutical startups, which leads to less new drugs being developed, and so on.
You can't ignore economics when building your utopia.
Replace interested with "no one is interested and able". The reasons don't matter (insofar as they cannot be changed), the fact is that no one else is making them.
The lack of empathy and the trust in random business/market theoretical stuff to find a reasonable solution for the access to drugs that might very well save lives - that just doesn't compute, doesn't make sense in my world.
This doesn't come from a lack of empathy. I am (or try to emulate) a utilitarianist. To my mind, the question to ask is "which system will produce better outcomes overall"?
As I've said elsewhere in this thread, this particular example has them covering the cost of the drug for anyone who can't afford it; so the value of a life is irrelevant. The question is "is it better for a health insurance company or the drug manufacturer to have the money?" This doesn't seem obvious.
On the other hand, any claims of "fairness" fail to compute. If doing X improves the world, who cares if it makes things less fair?
Health care should be free.
The world should be perfect. I agree. Now, do you have any way of bringing the world to perfection? Saying "Health care should be free" while ignoring the fact that currently, health care needs to be rationed, does nobody any good.
Who pays for health care, if it's free? Who becomes a doctor, a researcher, if the prices are driven down by politicians with similar arguments to yours?
There's no 'value' to 'capture'.
That sounds to me like saying that every drug company should be selling at cost or close to cost. The problem with that is that there's then much less incentive for investors to fund pharmaceutical startups, which leads to less new drugs being developed, and so on.
You can't ignore economics when building your utopia.
> Should a government agency set prices?
Yes.
> What if the company stops making the drug, then?
A non-profit government sponsored entity manufactures the drug at cost.
Yes.
> What if the company stops making the drug, then?
A non-profit government sponsored entity manufactures the drug at cost.
The only way to properly do this would then be to have the government become the only R&D and pharma company.
Doable. But I think you put too much faith in the government. The government is a natural monopoly itself. If they're doing a shitty job you don't get any other options.
Doable. But I think you put too much faith in the government. The government is a natural monopoly itself. If they're doing a shitty job you don't get any other options.
> Doable. But I think you put too much faith in the government. The government is a natural monopoly itself. If they're doing a shitty job you don't get any other options.
Disagree. A government can be held accountable. Some asshole ex-hedge fund manager attempting to corner the market on a drug can't be.
Disagree. A government can be held accountable. Some asshole ex-hedge fund manager attempting to corner the market on a drug can't be.
> A government can be held accountable.
Accountability is not really the main measure we care about (though it's related to it). It's efficiency. We only really care about accountability because its supposed to increase efficiency. People are supposed to get punished when things are running poorly.
The problem is, no one really gets punished when large government organizations are running inefficiently. The business does not go out of business. There is no competition. There is no real incentive to innovate and beat your competitors.
I think we need to reevaluate pharma law. But I don't think replacing the current monopoly with a government one will do much good of anything.
I've long held the belief that whenever there is a supposed failing of private enterprise- it's almost always actually a failing of government. I've yet to be proved wrong. Government makes the barriers of entry too high in the drug market. It's way too easy to have a monopoly because the government basically grants you one.
Accountability is not really the main measure we care about (though it's related to it). It's efficiency. We only really care about accountability because its supposed to increase efficiency. People are supposed to get punished when things are running poorly.
The problem is, no one really gets punished when large government organizations are running inefficiently. The business does not go out of business. There is no competition. There is no real incentive to innovate and beat your competitors.
I think we need to reevaluate pharma law. But I don't think replacing the current monopoly with a government one will do much good of anything.
I've long held the belief that whenever there is a supposed failing of private enterprise- it's almost always actually a failing of government. I've yet to be proved wrong. Government makes the barriers of entry too high in the drug market. It's way too easy to have a monopoly because the government basically grants you one.
I am willing to trade some efficiency/cost effectiveness for price and availability stability.
In the longer term you'll get the worst of all worlds. Why not get the best of the short term and long term?
Fix pharma competition.
Fix pharma competition.
Why not skip step 1, then? Let the company sell it for however much it wants, and the non profit competes them out of business?
Supply chain stability. Availability is sometimes more important than cost, and if you have a government non-profit producing the drug, you're not wasting any money on the profit that a private company is extracting.
Drugs should be priced based on their cost to produce and whatever R&D needs to be amortized, not by how much value you can extract.
Drugs should be priced based on their cost to produce and whatever R&D needs to be amortized, not by how much value you can extract.
I still don't understand. Why do you need to set prices for private companies if you're competing with them yourself?
Because the free market doesn't work when there's inelastic demand, or when supply chain disruptions cost people their life.
If you think the government making the drug is a viable solution, there's no need to set prices. If you think the government making the drug is not a viable solution, then you shouldn't set prices for fear of the drug being cancelled.
Could you point out the flaw here?
Could you point out the flaw here?
The government (FDA in this case) doesn't make the medication. They just get someone else to make it. They tell company X "You F'ed Up. Give us all your documentation and we will take it to company Y to make."
I'm trying to remember the name of the company that this happened to. It was like 8 years ago and I think I remember them being a cardiac arrest medical. Anyhow, the company CEO flat out refused the FDA regulators demands that they get their manufacturing process up to standards. The FDA went to another manufacturer (I believe Johnson and Johnson) and asked if they would make the medication and they accepted. The FDA then shut down the prior company.
When lives are impacted, the FDA doesn't mess around. They put CEOs in prison for the crappy decisions they make.
I'm trying to remember the name of the company that this happened to. It was like 8 years ago and I think I remember them being a cardiac arrest medical. Anyhow, the company CEO flat out refused the FDA regulators demands that they get their manufacturing process up to standards. The FDA went to another manufacturer (I believe Johnson and Johnson) and asked if they would make the medication and they accepted. The FDA then shut down the prior company.
When lives are impacted, the FDA doesn't mess around. They put CEOs in prison for the crappy decisions they make.
There's a big difference between
"not having a manufacturing process up to standards" and "raising the price insurance companies have to pay".
"not having a manufacturing process up to standards" and "raising the price insurance companies have to pay".
First I will say that I'm not an expert in these questions, so my thoughts might be off, but that's probably the reason we are discussing it.
The closest to perfect solution in my mind would include all the details to make the medicine in the patent itself (I'm not sure how detailed patents has to be today). This would make it easy for other companies to create a competition once the patent expires and essentially would create a free market.
In the scenarios when it happens that there is only a single player in the market for one or another reason, things get a little trickier. I guess one of the solutions could be a commitment by government to buy/prescribe certain amount of medicine. The price of a unit should be predetermined in such cases to avoid exploitation.
Overall the actual knowledge of how to make a medicine and having a market for it, should make such situation pretty rare when only a single player is left in the market.
The closest to perfect solution in my mind would include all the details to make the medicine in the patent itself (I'm not sure how detailed patents has to be today). This would make it easy for other companies to create a competition once the patent expires and essentially would create a free market.
In the scenarios when it happens that there is only a single player in the market for one or another reason, things get a little trickier. I guess one of the solutions could be a commitment by government to buy/prescribe certain amount of medicine. The price of a unit should be predetermined in such cases to avoid exploitation.
Overall the actual knowledge of how to make a medicine and having a market for it, should make such situation pretty rare when only a single player is left in the market.
Should all trade secrets be outlawed, then? Or only in medicine?
I believe that if you want the protection of patent, you should disclose everything and it not suppose to be a secret. If you want to keep it as a secret, don't patent it. Isn't that is the reason behind the patent system? Inspire people to create things by providing certainty that no one will be allowed to reproduce their creations until patent expires. The only reasonable thing after that is to make the patented technology (including all the bits and pieces) a public knowledge.
You seem to believe that one could assign a value to a drug, and that rational actors in a market would choose to buy that drug at a cost at or under this value.
http://blogs.sciencemag.org/pipeline/archives/2015/02/20/mor...
In the past, he actually planned to limit access to the existing drug (ie. the one he increased the price on) to prevent a competitor from creating a new generic formulation and gaining FDA approval. It appears he modeled this heinous approach on a maneuver by Celgene to prevent production of generic thalidomide.
http://blogs.sciencemag.org/pipeline/archives/2014/09/11/the...
It seems to me that the FDA needs sharper teeth in this arena to ensure access to an existing drug is not a limiting factor in the approval of generics.