Drug Firm Offers $1 Version of $750 Daraprim Pill (chicagotribune.com) 168
An anonymous reader writes: We recently read about a U.S. company that bought the rights to a drug called Daraprim and then boosted the price over 5,000%. There was widespread outrage over this blatant price gouging, most of it focused on hedge fund manager Martin Shkreli. Now, a San Diego-based drug company called Imprimis has stepped in to fill the void. They announced that they'll be supplying capsules containing the same active ingredients in Daraprim for $1 per dose. Their CEO, Mark Baum, said they'll also start making alternative versions of other generic medicines that have skyrocketed in price lately. "Imprimis, which primarily makes compounded drugs to treat cataracts and urological conditions, will work with health insurers and prescription benefit managers in each state to make its new capsules and other compounded generic medicines widely available, Baum said."
Let me be the first to put this here (Score:5, Interesting)
This guy is a multiple-time asshole [reddit.com]
Re:Let me be the first to put this here (Score:4, Interesting)
So he's making cheap generics while shorting biotech stocks. Excuse me while I weep copious tears for the company that hiked its medicine price 100 times and expected to make a profit on it.
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People who try to increase the price of drugs out of the range of people who need it but can't afford it should also see an equivalent price increase.
If the little guy can't afford $100 pills, it should cost $10K for the millionaire. How do you like your "it will take all the money I own and yet I'll die in 100 days, fucking rich prick?
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No. He (Shkreli) is hiking prices AND shorting biotech.
Re:Let me be the first to put this here (Score:5, Informative)
No. He (Shkreli) is hiking prices AND shorting biotech.
And he made a fortune.
People don't get this: this 5x drug price hike thing was all theatre. He wasn't trying to make some trivial amount off the pill, he was trolling. And important politicians bit, making comments to the press that dropped biotech stocks by about 25% over fears of "political action". Fucker made a mint.
You'd think at least here on /. we'd be better at spotting trolls!
Re:Let me be the first to put this here (Score:5, Insightful)
And that's why he belongs in the slammer. He had not a single concern for people's lives as long as he could make big bux tap dancing on the line between shrewd investments and fraud.
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Just recognize it as yet another form of insider trading and pump and dump rolled into one.
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I wasn't aware of the biotech stock shorting. If he really did this to create an artificial price drop in biotech stocks, that could lead to a nasty SEC investigation. Normally when some rich prick commits a crime, they get a slap on the wrist or off completely. In this case, it sounds like his target was other rich pricks and the companies they represent. They will show him no mercy. Not that I'm going to shed any tears for him while he's "Bubba's" playmate in prison.
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I can only hope you're right. I'm not sure this kind of price manipulation is illegal - there'd have to be a law to cover something this indirect, which seems unlikely, unless he bragged about his intent in email or somesuch. But then, he might have.
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This isn't indirect. This is exactly what the law already covers.
These types of investigations are done slowly.
Re:Let me be the first to put this here (Score:5, Funny)
Oh shit he could possibly face MONTHS of incarceration in a minimum security jail and fined 10% of his profits.
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It really depends on what mood the judge or jury are in. If they decide his actions are malicious and coud have endangered lives, the guy might well end up growing old on the inside.
Though I'm sure his baby face will make him popular with "Bubba" the 200 pound polynesian sex offender.
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No, he pissed off politicians and their rich donors (the owners of other biotech stocks damaged by the fallout). He's the type of person they make an example out of, because he doesn't have powerful friends.
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Not that I'm going to shed any tears for him while he's "Bubba's" playmate in prison.
Nobody deserves to be raped.
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Ummm, on what grounds?
If he did everything in the open - public trades, public statements - then I can't think that he's actually done that is wrong. What stock exchange regulators generally object to is people making profit by using privileged access to information which the rest of the market doesn't have.
Granted the man is an arsehole of the first water. But that isn't actually illegal
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I don't know about you, but I proposed that his goal was to make money on a short bet. I spotted the trolling.
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And he raised the price 50x, not 5x. He still hasn't lowered it despite saying he'd do so.
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It's amazing that this isn't considered a blatant form of insider trading. It probably slips through the exact rules but this guy is the personification of what is wrong in the world.
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Well, it's not any kind of insider trading, as he did everything publicly. He didn't lie to the press or anything like that. I'd be surprised if there is a law to cover this specific kind of thing.
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False, he had access to non-public information, i.e. that a company will suddenly shake up the market and presumably cause major embarrassment to companies who's stock he shorted by increasing the price of a critical drug by a huge amount.
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On second thought, don't. He would probably enjoy it.
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Well, I, for one, certainly wouldn't mind reading the emails between these two characters.
Re:Let me be the first to put this here (Score:5, Insightful)
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You seem to be confusing people.
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And we need more like him. Pharma companies that outright RAPE people for maximum profits do not deserve to exist.
Re:Let me be the first to put this here (Score:5, Funny)
There is no room for ethics on capitalism. The market sets the rate, based on what people are to pay. Since people will die if they don't take the drug, they will pay every penny they have (or that their insurance is willing to give).
What are you, some kind of communist? Expecting companies to act in the interests of the general good, guided by morality...
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Which is why generics are typically pretty affordable, except where there are not enough manufacturers competing. The problem is that you want new drugs, that you previously couldn't buy for any price, to be priced similarly to generics once discovered, and drug companies want to segment the market to maximize profits. If they could, I suspect they would have a different price for each individual.
Insurance exacerbates this problem, because patients with it don't see the price where it counts, so they don't
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"Which is why generics are typically pretty affordable, except where there are not enough manufacturers competing"
And if a little-known generic becomes famous again, and in demand, guess what? People begin making it agin, and it becomes affordable.
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There is no room for ethics on capitalism. The market sets the rate, based on what people are to pay. Since people will die if they don't take the drug, they will pay every penny they have (or that their insurance is willing to give).
What are you, some kind of communist? Expecting companies to act in the interests of the general good, guided by morality...
I've heard rumors [chicagotribune.com] of companies doing that, but I'm sure they are only rumors. Yes, capitalism is rotten to the core, and only the use of force in order to get people to comply with your new world order will do!
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That's why I suggest we bring back the public good condition in corporate charters. If we would actually enforce that, things would improve.
Also more rainbows and unicorns would be awesome. (Score:2)
any other requests?
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There is no room for ethics on capitalism. The market sets the rate, based on what people are to pay. Since people will die if they don't take the drug, they will pay every penny they have (or that their insurance is willing to give).
That'd be all fine and well if that were the case, but that's the kicker: from what we know, he had no interest in selling the pills and knew full well that the rate he set was not based on what people are willing to pay. He did this to cause a scare and drop biotech stock prices so he could reap the benefits. This has very little to do with the basic offer and demand logic of capitalism and everything to do with crooks corrupting every system they find.
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Why do you not take your explanation to the obvious conclusion?
The guy willing to sell the drug at $1 a pill is just competition, which is also a capitalistic concept, yes?
Welcome to capitalism. The market is setting the rate.
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They got lucky. The assumption was that no-one else would be able to undercut their $750 price on this drug, but they were wrong. There are many others were that assumption held true though.
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^this
Wish I had mod points.
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Actually, that only happens when there's some "ethical" government regulation prohibiting a competing company from making the drug. Like a patent.
In an "unethical" capitalistic society, if someone buys up all of drug which costs 50 cents per pill to make and tries to sell
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In an "unethical" capitalistic society, if someone buys up all of drug which costs 50 cents per pill to make and tries to sell it for $750, someone else will just start making that drug for 50 cents and try to sell it at $700. Then someone else tries to sell it for $650, then $600, and so on. Until the price comes down to just above 50 cents and the competitor is afraid to undercut the price anymore because then the margin won't be enough to cover his marketing and distribution expenses.
No. Someone else shows up to make the drug for 50 cents and the person selling the drug for $750 just buys them outright, or immediately drops the price to below profitability to drive the competitor under, then jacks it up to $750 again to refill the warchest for the next silly competitor.
And it's not like you can just spin up a drug producing lab to export prescription medicine for human consumption.
The only outfit with the resources to do that is another drug company. So, at best "capitalism" devolves to
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What are you, some kind of communist? Expecting companies to act in the interests of the general good, guided by morality...
It happens in smaller countries where the capitalists might know someone they're trying to fuck over, hence still use their conscience in the decision making process.
It's the monkeysphere. The US is it too vast a country, so it's too easy for one individual to fuck over another with no consequences.
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And we need more like him. Pharma companies that outright RAPE people for maximum profits do not deserve to exist.
We are talking about the figurative "rapist" here, not the new guy undercutting him.
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Tagged: bigkarma
Yup
Shocked and amazed (Score:3, Interesting)
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Most drugs are dirt cheap to make, especially when its been around for a while and you don't have to do actual R&D to invent it in the first place. I'm sure they are making a good profit at $1 a pill.
Re:Shocked and amazed (Score:5, Informative)
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It's usually not the manufacturing that is so expensive but the research and testing needing to get the drug on the market. In this case neither company needs to do any research or additional testing with the FDA since the drug is well known and has been on the market for 60 years. That doesn't apply with a brand new drug which may have to go through years of testing even if the first version is perfect with no side effects.
According to a study done by Tufts University, Cost to Develop and Win Marketing Approval for a New Drug Is $2.6 Billion [tufts.edu] that "cost" includes (quoting these Washington Post [washingtonpost.com] and New York Times [nytimes.com] write-ups:
Its estimate includes another $1.2 billion in foregone returns investors would have otherwise seen while the drug was under development.
Basically, the money investors *could* have earned by simply putting the other money used for development into the market over the development period. So not actual cost, but lost earnings.
Re:Shocked and amazed (Score:4, Informative)
Loss of earnings on an investment are still a cost. Normally this figure is calculated on the zero risk rate of return of things like govt bonds or triple A rated stocks.
If you don't see this as a real cost I would like to borrow all your money from you a 0% interest please.
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Of course in that case, rational doctors should consider the new expensive drug (with no time in the market to prove itself) as second or third line options and start with the cheap well proven generics.
No, generics _do_ need to undergo testing (Score:5, Informative)
Part of the problem here is that the FDA requires generics do need to undergo testing similar to the original product (instead of merely proving that the ingredients in the generic are the same as in the original product), which can take years and millions of dollars. These FDA requirements make generics expensive to produce -- meaning that generic versions of many drugs do not exist. Without the FDA requirements, the market would take care of ridiculous price bumps by bringing in competitors.
Now, I just claimed that the FDA makes it hard to bring generics to the market, so how did a competitor spring up so quickly in this case? The answer is that the new manufacture seriously bent FDA rules: the product mentioned in the description is _not_ FDA approved. The company making the product is not a standard drug manufacturer; it is a "compounding pharmacy" -- meaning that it can skirt FDA rules by making batches of drugs for one individual at a time (not making huge batches and selling them to Wallgreen's, CVS, etc.) Since this drug is not widely used, this approach may work. However, the FDA regulations are still a burden in general (and the FDA still has some power to put the kibosh on compounding pharmacy).
See http://marginalrevolution.com/... [marginalrevolution.com] for more information
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And this, ladies and gents, is the most informative post of the whole story. Thank you good sir.
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the cost of research OR cost of manufacturing doesn't dictate the price at the counter.
what people can pay and how much they can ask for it dictates the price.
the 750$ for example had only the reasoning that "people need this and nobody else sells this" to make the price hike to 750 (it was a bit cheaper previously) - so yeah, r&d price for it having had a reason for it being expensive is pretty much baloney.
after the risky bit of research has been done they have it - it's after that they make the decis
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4 - 5 cent pill ... now "only $1" (Score:5, Informative)
$13.50 per tablet of 25 mg pyrimethamine was a joke and an utter ripoff. The $750 makes the French Revolution more understandable when they started shortening corrupt financiers and government royalists after a short trial...Sort of a closer shave with that super sized Gillete thing.
Economic terrorists! (Score:1)
European Anarchists! Trying to destroy a healthy American monopoly!
Wait, sorry, let me take of this top hat and monocle. I don't even know where they came from.
I hope that Imprimis Pharmaceuticals make a profit (Score:4, Interesting)
a good, healthy profit by helping those who are ill, but not an outrageous one on the back of gouging the sick.
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They've been losing money for four years, about 10M a year. It's a startup. All in all, this is pretty cheap advertising for them. But be aware that this is an advertisement. When Chevy says that they're truck will get 50MPG, get you to Colorado, and get you laid by the model onscreen you don't take them at their word.
Don't assume Imprimis is amazing because they put out an ad for their services.
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Re:I hope that Imprimis Pharmaceuticals make a pro (Score:5, Funny)
No he's not, LEARN TO READ ffs.
When Chevy says that they're truck
He's saying that you shouldn't believe someone who says they are a truck. They are LYING to you, they are actually just a person in a truck outfit.
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Call me a skeptic (Score:2, Interesting)
But this whole story just seems... odd. Just to rehash it - a billionaire deuce canoe "with much evil" buys a company and hikes a drug price, and goes on TV to brag about it. Anyone not mentally retarded knows what happens here, it generates such outcry against the canoe captain that he gets 24x7 news coverage for a few weeks. Nobody is naive enough to think they would be immune to backlash here. Before the price hike can have any real long-term impact, angel company #2 comes out and says they'll supply
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Re:Call me a skeptic (Score:5, Insightful)
He didn't go on TV to "brag" about it until the Internet got ahold of the story. And I wouldn't call it bragging -- he seemed (to me when I saw the story) to think in his own twisted mind that this was a greatest good argument -- that him making lots of money off of other people's lives would somehow help his business help other people. Bragging would be if he thought he was getting away with evil. He seemed to think he wasn't. He's still evil, but not inside his own head.
The angel company is a new startup that is trying to break into the market, and this is cheap advertising for them, even though they're going to lose money on the pills at that rate. It's a brilliant move, and an example of why you can only push a monopoly position so far before someone will find a way to undercut you.
Long and short of it: I don't think there's any conspiracy here.
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The guy is a grade a sociopath. I keel saying that when sociopaths out themselves they should be removed from society.
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The guy is a grade a sociopath. I keel saying that when sociopaths out themselves they should be removed from society.
If he caused real harm (someone has cropped up to stop that from happening) then there's a real chance that someone would take it upon themselves to go forth and remove him, in a spasm of grief and rage over the consequences. So while you're right, the only mechanism needed for that is our ongoing neglect of the mental health system in this nation.
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Arwe they going to lose money ? (Score:2)
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Re:Call me a skeptic (Score:5, Insightful)
No, I don't think it's odd, considering that the price of the pill was originally $13 each. If one person were pulling the strings at both companies, it would be absolutely idiotic to hike the price just so they can eventually *cut* the price to less than a 10th of the original cost.
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But this whole story just seems... odd. Just to rehash it - a billionaire deuce canoe "with much evil" buys a company and hikes a drug price, and goes on TV to brag about it. Anyone not mentally retarded knows what happens here, it generates such outcry against the canoe captain that he gets 24x7 news coverage for a few weeks. Nobody is naive enough to think they would be immune to backlash here. Before the price hike can have any real long-term impact, angel company #2 comes out and says they'll supply our little angels with this miracle for $1, because think of the children.
Does anyone not find this odd? I mean, I don't know what the world has done to me, but it sounds like a setup from the very beginning. Either a bid to kill off the original company, to drive up stock in angel company #2, or some other motive that I just can't fathom.
Apparently he shorted the stock and profitted off the dropping share price caused by the outrage, plus bonus for increasing revenue this quarter.
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That said, its possible that there exists a manufacturing source for compounded drugs that doesn't exist for the usual drug distribution model. If Imprimis has the capability to undercut Daraprim and still make a profit, it makes sense to do it as soon as possible. The greater the price disparity, the better Imprimis looks. If they knock Daraprim out of the market, they can establish themselves as the main supplier of the drug.
I guess that does little to assua
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I think he's saying there is the whiff of smoke, (hence 'odd' not 'criminal') but whether it's a cook stove or a forest fire hasn't yet been established.
Mark Baum: HERO. (Score:3)
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I'd want to contribute to his personal bodyguards...
THere's a catch (Score:4, Funny)
But you need 750 doses per day. Dammit Big Pharma, I think I'm out and you pull me back in.
Capitalism at work (Score:2)
Really. This is a (rare) sighting of Capitalism doing good. There is an inefficiency (high price), and somebody comes in to fill in the void to make money.
(I hope there are no ulterior motives, though).
That's silly, capitalism has done LOTS of good. (Score:2)
Capitalism is directly or indirectly responsible for most of the technical and medical advances that exist in the world. The alternative to capitalism is that there is no reward for innovation, and thus no innovation.
Where does the public funding come from? (Score:2)
the sky? How did those countries get to be wealthy?
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I don't have a lot of time to spare right now, so I'll get right to the point:
There is a huge difference between moral capitalism (what product/service can I provide to make someone's life better/more convenient) and amoral capitalism (how much money can I make and damn anyone else).
Countries do not fall because of their economic policy (there are excellent arguments for each system). They fall because of a lack of principles and morality. What we are seeing in America now (and for several decades) is a hug
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The cost increase to $750 was NOT an example of capitalism, but getting the drug for $1 now instead of $12 IS.
The price hike is absolutely capitalism. Someone thought that the market would bear that price for a good. Unfortunately for that person, it's a commodity item, and any other company could come along and charge much, much less. That happened.
Of course, we're ignoring the byzantine, highly regulated pharmaceutical distribution channels that can choke out competition.
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Bullshit. The price hike was classic MONOPOLY behavior.
This idiot thought he had a monopoly on a drug that was well out of patent. The whole thing was idiotic and just screaming for a competitive beat down. It didn't even make sense originally.
Again, if "single source generics" are even a problem then it's a lack of Sherman Anti-Trust act enforcement. Again, we know monopolies are bad. We have ancient laws against them. We just have too many blithering Ayn Rand cultists running round screeching about how co
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This guy probably is a hardcode Ayn Rand libertarian type. The fact he scooped up an FDA one-shot monopoly license makes him nothing but a Randian 'parasite' - like most Randroids. Like that fuck head Paul Ryan. Spent his life on the public tit, received welfare to help his family out, but now wants to implement the 'fuck you, got mine' philosophy.
Re: Capitalism at work (Score:5, Interesting)
I wonder though... at a dollar a pill... when you compare it to 750, it seems insanely tiny. But look at your bottle of ibuprofin [walmart.com], at $13 for 1,000 capsules, you see that even at a buck a pill they are still easily able to stay in the black.
I realize not every pill has the same manufacturing cost, but they are at least within an order of magnutude of each other for the most part. At a buck a pill, that bottle above would be $1,000. It's $13, and they're still making a margin off it. I'd be surprised if this $750 drug costs over 76 times as much to manufacture in quantity as another drug.
They're trying to recoup an R&D lost. I get that. That's OK. But they've had years to do that. That's precisely why we have patents. But when your time is up, that knowledge is transferred to the public. It's up to you as a developer to use your time wisely and recoup your investment and reap a reward for your innovation. But then you have to give it up. If you still don't feel you've managed to get enough back out of the system by that point, then you're doing something wrong, and have no one to blame but yourself.
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It isn't something they did R&D for, it is a standard known thing that nobody else was still making because there wasn't reason to compete on the cheap stuff with relatively few customers.
That is why another company can just make it for $1. They could make it for a few cents, but it won't sell as many bottles as ibuprofen. And it takes up a factory line to be making it. If they're only going to need to be making it a couple days per month, then it costs a lot more per bottle because of setup.
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You're assuming no other regulation that patent, It's rather expensive to bring a new generic online. The FDA is slow to do the paperwork their are increased costs etc etc etc. It's so bad that a basic drug like tetracycline the only generic was made by the brand name for a while and the price went from pennies to dollars per pill overnight. The 2012 Generic Drug User Fee Amendments was supposed to make generics come online faster but has ended up shrinking the number of providers and the price hikes to
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"I realize not every pill has the same manufacturing cost, but they are at least within an order of magnutude of each other for the most part."For some value of "most". Ibuprofen is a small molecule, separating stereoisomers is not necessary, and it has a huge economy of scale. Granted, daraprin doesn't look too difficult either (http://www.rxlist.com/script/main/mobileart-rx.asp?drug=daraprim&monotype=rx-desc&monopage=1 ).
But not all pharma compounds are like that. For example, taxol as an extreme
No political advantage = not news (Score:2)
How are we going to exploit this to divide people and get them to hate each other? And if problems get solved without government, how can we sell the idea that only government can solve problems?
I don't get it (Score:2)
OK, Shkreli "bought the rights" to Diaprim and raised the price...now Imprimis starts making a generic for it. So what the hell did Shkreli actually buy? It sounds as if he didn't get any kind of exclusive rights for his money. Did he just get the rights to the name? Is he just banking on doctors refusing to check "Generic OK" on the prescription form?
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He got the U.S. marketing rights to that formulation. To the best of my knowledge, before Imprimis started making their DIFFERENT formulation, there wasn't a generic.
The plan (or part of it) was that anyone who needed the drug in the U.S. would only be able to get it through specific vendors who got it from Shkreli's company. There were significant barriers in place to keep companies who might make generics of the same formulation from getting enough of that formulation to reverse engineer it.
However, the p
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Mr. Shkreli bought the only FDA-approved treatment for toxoplasmosis. There are many cheaper versions of the drug around the world, but they are not FDA-approved. As this [forbes.com] article explains, the FDA currently has a backlog of about 4,000 applications, and the median approval time for new generic drugs is 27 months. Thankfully, in this case, Imprimis was able to do an end run around the FDA's incompetence by making a compounded drug with the same ingredients as daraprim.
What is needed here is some more competi
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If a drug maker, who produces drugs that are widely available and considered safe in other developed countries, can not export those drugs to this country, then I consider that to be incompetence on the FDA's part. It is okay to say, "I don't have enough funding to personally review this drug facility, so therefore I had to trust a foreign agency's approval process"; it is NOT okay to say, "I don't have enough funding to personally review this drug facility, so therefore it is BANNED."
But anyway, who is to
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Instead of having a centrally planned monopoly and trying to determine a "sufficient" budget, I would much rather have competing companies that have to raise funds by convincing skeptical investors, and then have to generate profits by pleasing their customers.
How does that differ from the pre-FDA situation? It would seem problems with that model is exactly why the FDA was created in the first place.
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How does that differ from the pre-FDA situation? It would seem problems with that model is exactly why the FDA was created in the first place.
There have been plenty of withdrawn drugs and foodborne illness outbreaks under the reign of the FDA. If these are the types of "problems" that prove that the free market model does not work, then surely these problems also prove that the FDA model does not work?
The fact is, we don't know exactly what form the market would take if we allowed competition in the food and drug review business. For all we know, competition in that space may result in fewer withdrawn drugs and foodborne illness outbreaks. What w
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Those rating agencies have been given a special position by the government. For example, as this [wsj.com] article mentions, the Fed will only accept assets as collateral if they carry high ratings from S&P, Moody's and Fitch. Even an SEC Commissioner admits that the credit rating agencies have acted like Fannie Mae, Freddie Mac, and other companies that dominate the market because of government actions.
In a free market, poor credit rating agencies would go away, because if they lose the trust of investors, there
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He bought the FDA approval for a specific manufacturing process given in the past. The company that now steps in found a loophole, managed to acquire an older approval for a different process or managed to get approval for their way of making it.
The problem here is really that the FDA does not give generic approvals to generica. That allows this type of evil fuckery in the first place. But what can you expect from a bureaucracy...
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Compounding drugs isn't a loophole, it is a traditional medical service. They didn't have some right to a monopoly, so there is no "loophole." It is just such a simple drug that it turns out somebody else can offer it after all.
This isn't a patent situation, where there is supposed to be a monopoly. They thought they had one, but it wasn't natural and so it won't persist. No loophole, just poor understanding of their product and market by executives.
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Good. So this type of evil is actually not going to become widespread.
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The thing is, there are no rights on the drug, the patent expired, there just aren't any other makers for it because the market is so small. You can make this drug at home with a relatively basic chem set, you can get it from the UK or Canada, the only people paying the multi-thousand dollar fee are the insurance companies.