Why Prescription Drugs Cost So Much More in America (ft.com) 348
The US spends more per capita on medication than anywhere else in the world. It's a key electoral issue. From a report on Financial Times (paywalled): All over the world, drugmakers are granted time-limited monopolies -- in the form of patents -- to encourage innovation. But America is one of the only countries that does not combine this carrot with the stick of price controls. The US government's refusal to negotiate prices has contributed to spiralling healthcare costs which, said billionaire investor Warren Buffett last year, act "as a hungry tapeworm on the American economy." Medical bills are the primary reason why Americans go bankrupt. Employers foot much of the bill for the majority of health-insurance plans for working-age adults, creating a huge cost for business.
In February, Congress called in executives from seven of the world's largest pharmaceutical companies and asked them: why do drugs here cost so much? The drugmakers' answer is that America is carrying the cost of research and development for the rest of the world. They argue that if Americans stopped paying such high prices for drugs, investment in innovative treatments would fall. President Trump agrees with this argument, in line with his "America first" narrative, which sees other countries as guilty of freeloading. For the patients on the trip, the notion is galling: insulin was discovered 100 years ago, by scientists in Canada who sold the patent to the University of Toronto for just $1. The medication has been improved since then but there seems to have been no major innovation to justify tripling the list price for insulin, as happened in the US between 2002 and 2013.
In February, Congress called in executives from seven of the world's largest pharmaceutical companies and asked them: why do drugs here cost so much? The drugmakers' answer is that America is carrying the cost of research and development for the rest of the world. They argue that if Americans stopped paying such high prices for drugs, investment in innovative treatments would fall. President Trump agrees with this argument, in line with his "America first" narrative, which sees other countries as guilty of freeloading. For the patients on the trip, the notion is galling: insulin was discovered 100 years ago, by scientists in Canada who sold the patent to the University of Toronto for just $1. The medication has been improved since then but there seems to have been no major innovation to justify tripling the list price for insulin, as happened in the US between 2002 and 2013.
Because we can (Score:5, Informative)
In February, Congress called in executives from seven of the world's largest pharmaceutical companies and asked them: why do drugs here cost so much? The drugmakers' answer is because we can, and those bonuses aren't going to pay themselves.
Went ahead and fixed that for ya.
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And the linked article is paywalled as well.
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Yup and a report from the Financial Times (Score:2)
And back in 2001, FT said less than 1 million jobs had been offshored from the USA, quite the lowball figure and wrong again, as it has been on many an occasion --- the FT, not a trustworthy source . . .
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Why aren't the members of Congress questioning themselves. Legislators are protected from their choice due to their generous lifetime health care. This model is allowed to exist because the wealthy are highly invested in pharmaceuticals. They make money on these outrageous costs. It basically becomes a tax on the poor and elderly.
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Nope. Competition doesn't solve this. There are more than enough problems and diseases to go around that companies happily carve out a niche for everything other than over the counter medication, and the desperate people will then receive whatever the doctor prescribes, often not even getting a choice in the matter.
In many countries medication is price controlled. In many countries pharmacies are required to offer generics if they exist. In many countries doctors are banned from writing brand name on prescr
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In many countries pharmacies are required to offer generics if they exist. In many countries doctors are banned from writing brand name on prescription forms and it's up to the pharmacist to find what options for drugs are available to fill the prescription.
I just ask my doctor for the generic equivalent. Never had a problem.
Ask your sick and dying if socialism is right for you!
Except when it isn't [forbes.com]. If you want socialist-style health care, expect to be happy with VA-style service [military.com].
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Re:VA medical services are good? Quite the contrar (Score:5, Insightful)
Re:VA medical services are good? Quite the contrar (Score:4, Informative)
My Dad passed away about a year and a half ago after a year long fight downhill health slide due to diabetes and heart disease. VA supported us a lot through this process and they were very good to us. I was very happy to have them as a crutch to lean on.
I suspect the problems the VA does have are regional.
Re:We need more competition (Score:4, Informative)
I just ask my doctor for the generic equivalent. Never had a problem.
Check out the book "Bottle of lies" about fraud in the generic drug business. It's pretty scary.
https://www.amazon.com/Bottle-... [amazon.com]
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Re:We need more competition (Score:5, Interesting)
Ask your sick and dying if socialism is right for you!
Except when it isn't [forbes.com]. If you want socialist-style health care, expect to be happy with VA-style service [military.com].
Or even better, ask the rest of the world about their health outcomes versus cost. We can call those other health systems socialists, communist, or any other pejorative, but the elephant in the room of better health outcomes for lower cost remains.
Of course, the real elephant in the room is what has already been alluded to in the original article. The big problem is that in reducing cost, someone is going to lose. High costs aren't just money evaporating into the ether. Some people are benefiting financially in a big way. These people include drug companies, doctors, and politicians. For these people, drug and medical cost reform is the same as asking these people to take a huge salary cut, and for some of them, to be fired. However, for the overall economy, the benefits these people receive are a leach on the economy because their jobs are propped up by protective laws and are not needed (as evidenced by the medical systems in the rest of the world).
Re: We need more competition (Score:5, Informative)
Or even better, ask the rest of the world about their health outcomes versus cost.
The best health outcome is in the US, the problem is whether you can afford it.
Yes, if you cherry pick the best outcomes in the US, they are comparable but not better than the rest of the world.
However, among the industrialized countries, the US has some of the worst indicators of health outcomes, including overall mortality (#104 out of 236 [wikipedia.org]), infant mortality (#32 out of 35 OECD countries [wikipedia.org]), maternal mortality (worst rate of all developed countries [wikipedia.org]), etc. This is not an arguable point. With almost any metric of health for the entire country, the US system is clearly among the worst in the developed world, even before considering that these poor outcomes are achieved at much higher cost.
No sane country would support such bad results at such high costs, unless the people who benefit financially from the system have sufficient influence on the government.
My favorite Cherry Pick is MRI machines (Score:3, Insightful)
It's right up there with "You can keep your private health insurance if you like it". I've never met anyone below C level that liked their private health insurance except for people who a) never use it and b) haven't realized t
Re: We need more competition (Score:4, Informative)
Infant mortality is constantly mentioned to attack the quality of US health care, and it's a great example of cherry picking stats to produce a bullshit result.
Did you know that an infant born in the US is less likely to die than the same infant born in any other country on Earth? But if that's true (and it is) how can the US have higher infant mortality rates?
Well, it all comes down to the details. First, the definition. The US uses a stricter definition of live birth than other countries.
Depending on which source you believe, this may be somewhat true but unlikely to change the conclusion that infant mortality is higher in the US compared to other developed countries. This NCHS publication [hathitrust.org] says that "[among the developed nations in the study] There are some differences among countries in the reporting of very small infants who may die soon after birth. However, it appears unlikely that differences in reporting are the primary explanation for the United States' relatively low international ranking. In 2005, 22 countries had infant mortality rates of 5.0 or below [compared to 6.9 for the US]. One would have to assume that these countries did not report more than one-third of their infant deaths for their infant mortality rates to equal or exceed the U.S. rate. This level of underreporting appears unlikely for most developed countries."
Furthermore, the NCHS publication also says, "In the United States and in 14 of 19 European countries, all live births at any birthweight or gestinational age are required to be reported."
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I just ask my doctor for the generic equivalent. Never had a problem.
Drug companies are getting around this to. They change the formula slightly, or in my case form of the medication, to get a new patent and exclusivity to it for a few more years.
My kid needed a medication and the doctor prescribed it in liquid form as its easier for kids to take. When I asked for the generic they couldn't find one because it was a new liquid medication. Now I could get the pill form of the medication in generic, with the exact same active ingredients in the same quantities, but no gen
Re: We need more competition (Score:5, Informative)
> So what's stopping the other companies from using the old formula and making generics?
When the last patent on a name-brand medication falls, it becomes legal for others to make it. That has always been true, but prior to passage of the law that explicitly enabled them, someone who wanted to get approval to sell a generic drug had to go through the same pre-approval studies the original drugmaker did. Thanks to the present law, as long as your drug satisfies the FDA's definition of 'bioequivalent', it can skip all of those tests and just point to the tests that enabled the original drugmaker to get it approved in the first place.
Here's the catch: suppose you develop a blockbuster antiviral drug that can cure just about every meaningful respiratory virus that average people are likely to catch in a normal year. Let's give it the generic name 'omnivirin' and market it as 'Cuuritaal'. The drug instantly becomes popular, and earns billions of dollars per year.
OK, the patent is about to expire, and the entire pharmaceutical industry is salivating at the opportunity to get a piece of the pie... then you pull a fast one. As luck would have it, 'omnivirin' is a stereoisomeric molecule... the version you got approved originally, and have sold for the past ~15 years, is its racemic isomer (half are right-isomer, half are left-isomer). It turns out, the left-isomer doesn't help much, and metabolizes into a secondary metabolite that causes 2% of people taking the drug to fart excessively for a few hours. So... you do some followup studies to document that right-isomer ominvirin is at least as effective as racemic omnivirin & doesn't cause flatulence, and get the FDA to approve a formulation change for "Cuuritaal" that uses only d-isomeric omnivirin. You also covered your bases and quietly patented right-isomeric omnivirin (along with a process for manufacturing it) a few years after patenting the racemic form.
If the FDA approves the formulation change -- and it almost certainly will, since the new form is arguably "better" -- you've effectively shut down the ability of competitors to market generic Cuuritaal for a few more years. Sure, they COULD file the paperwork to get the original racemic omnivirin approved... but they won't bother, because unless the new version's patent has more than 3-5 years left, it would be a waste of money, because it'll take them at least that long just to GET the original formulation approved from scratch as a brand new drug.
This is called "evergreening" -- waiting until a year or two before your brand-name drug's patents expire, and amending your FDA paperwork to request a small formulation change that would require anyone wanting to use it to get that old formulation approved as though it were a brand new drug. In many cases, they'd face an additional barrier to getting the original formula approved... historically, the FDA has been loath to approve new drugs that aren't at least slightly better than existing drugs like it. Arguments that your drug, though slightly inferior to the best-available present treatment, would be enormously cheaper for consumers to buy have traditionally fallen upon deaf ears at the FDA (the one notable exception is with 'statin' drugs, which represented a regulatory experiment by the FDA that ultimately turned into a 3-ring circus whose main outcome is that nobody is interested in researching statin drugs anymore, because it would be almost impossible to make money in that segment from an improved drug because the existing ones are practically free and presently regarded as 'good enough').
That said... I can't actually think of a specific example of a drug that has been 'evergreened' in this manner.
I believe there's another strategy US pharmaceutical companies use. Suppose a company has two drugs... one is a still-popular (former blockbuster) drug that's about to become available as a generic, and one is an expensive blockbuster drug that currently dominates the market in its category. The manufacturer will offer re
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Anyone remember AT&T? long distance rates dropped incredibly fast after their split up.
Nope. Don't remember that at all. I remember that every regional BOC just picked up charging, and then the flood of predatory independent LD companies started fleecing the public. The term "slammed" came from that era, when an LD company got your LD service changed to them and they started charging exorbitant rates.
Denying the T-mobile AT&T merger worked incredibly well. I am paying $10/month for my data plan.
Your plan would not have changed had the merger taken place.
Re:We need more competition (Score:5, Informative)
Nope. Don't remember that at all.
Let me refresh your memory. Back in the age of dinosaurs, the '70s, you paid for phone calls by the minute. Calls within your town and the few neighboring towns were generally free. Calls a few towns away had a fee. Calls over state boundaries cost even more money, enough so that I almost never actually talked to my Grandmother (I was in Massachusetts, she lived in Florida). International calls were nosebleed expensive. I don't think my mother ever talked to her parents in Germany.
Competition came around from companies like MCI. They charged a ton less for long distance calls. It was a hassle to use but totally worth it.
Cell phones started deploying. You still paid by the minute and by the text (remember 25 cents per text sent and received? Didn't think so.) Metered in-state phone charges vanished because competing cell plans didn't charge for them.
More competition ensued. Apple introduced a product you might have heard of, the iPhone, which came with honest-to-God unlimited service through AT&T (and only AT&T). Customers loved it. Cell companies pricing structures collapsed like a house of cards as the new 800-pound gorilla started calling the shots. It got steamrollered when Google and Microsoft showed up and decided to buy customers by subsidizing phones, software, and services.
Today I pay $40 for my main line, $25 for other family members. I get unlimited phone calls everywhere in the US (and probably Canada). I get unlimited texting. I get virtually unlimited data so I can Skype anywhere outside the US. All for less than the $50 metered base landline plan I bought in the '90s.
Competition is wonderful. It's difficult to know how things might have worked out differently if we'd had a different business or legal environment. I don't think you can deny that telecommunication costs have plummeted while service has dramatically improved.
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Let me refresh your memory.
I don't need my memory refreshed, thank you very much.
remember 25 cents per text sent and received? Didn't think so.
Like I said, I don't need you to "refresh my memory." Try 50 cents.
I don't think you can deny that telecommunication costs have plummeted while service has dramatically improved.
I didn't say it hasn't. I said that the breakup of Ma Bell didn't cause the LD rates to plummet. The loss of the national monopoly simply moved the problem to the RBOCs.
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I grew up in Los Angeles. Back then, you were charged by the minute for calls to the other side of the city. (toll calls) Not only that, but how much a long distance call cost depended on how far it was to where you were calling. Even after they started routing calls through satellites, so that all long distance calls went the same distance, they still charged by the mile. Now, all calls except
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> Now... are you absolutely sure you aren't confusing words like competition and progress?
No, he's definitely describing the regulatory regime that used to exist in the US (and most of the world).
After the Bell breakup, there were multiple classes of "toll" calls:
Intra-LATA -- basically, "Local Long-Distance". Calls that weren't far away... and might not have even been in a different area code or handled by a different company, but were nevertheless not part of your local calling area. Generally speaking
Re:Because of free riding, US consumer pay all R&a (Score:4, Informative)
The drug companies don't spend as much on R&D as they'd like you to think. Pfizer spends less than 15% on research. They spend 33% on "sales, general, and administrative expenses." (https://blogs.sciencemag.org/pipeline/archives/2013/05/23/another_look_at_marketing_vs_rd_in_pharma)
In Canada, pharma advertising is so restricted that hardly anyone bothers.
Also, drugs are absolutely priced with development costs considered. On-patent specialty drugs can be very expensive in Canada, just not as outrageously expensive as in the US, and the run-of-the-mill penis and heart attack pills are much, much cheaper, reflecting their actual costs.
Re:Because of free riding, US consumer pay all R&a (Score:3)
Yes, the SG&A includes a bunch of things. Unfortunately pharma doesn't really want to tell you how much they spend on advertising.
The industry as a whole appears to spend about 30 billion on advertising. It spends about twice that on R&D. But that's still half the R&D budget. Also, 28 billion of that advertising is marketing to physicians. That marketing to physicians, along with direct to consumer advertising, is very severely curtailed in places that are not the USA. Even in the US, that 28 bi
In Switzerland... (Score:5, Insightful)
...they're telling us exactly the same thing. Fact is they're just skimming the market potential. They set the price at a level that brings them the most profit.
If they didn't have monopolies, that wouldn't be much of an issue.... but reality is what it is: Innovation for big pharma often means buying a small, new company and then raising the price of that product as far as it will go. I have doubts that the big companies really innovate. Innovation is just so much harder than buying out small "competition" and cornering markets.
Re: In Switzerland... (Score:3)
All the easy to produce drugs have been found, new treatments are ungodly expensive to develop, test and produce at commercial scale.
What About Generics (Score:5, Insightful)
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This only discusses patented drugs. However, generic drugs are extremely expensive in the US as well. How do you explain that?
Easy: Use the old well-worn free market mantra: "charge what the market will bear." (The consequences be damned.)
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This only discusses patented drugs. However, generic drugs are extremely expensive in the US as well. How do you explain that?
Easy: Use the old well-worn free market mantra: "charge what the market will bear."
That doesn't explain why the market will bear a high price for a name brand drug when there's an identical lower price generic on the same shelf.
I've got a two explanation. First part is that the patient likely isn't paying the cost difference and so doesn't really care about price. The second part is that we seem to be trained or wired to believe a name brand product is better than a generic. I don't know about you but when I'm buying pain medicine, I still have to pause between Motrin and generic Ibuprofi
Re: What About Generics (Score:2)
As I understand it sometimes the FDA hands out monopolies on drugs long out of patent. On theory because otherwise it wouldn't be made, in reality due to rampant corruption on all levels.
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This only discusses patented drugs. However, generic drugs are extremely expensive in the US as well. How do you explain that?
The materials for both are exactly the same and cost exactly the same, so the generic can charge less and still make an ass ton of profit while the name-brand is making a metric ass ton of profit.
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For an example I got vitamin b prescribed to me for 45 days. The pharmacy wanted after a little over $5 after my rather poor prescription insurance paid the majority. Or I could just walk down the near-by aisle and get a bottle of 100 for under
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There is a missunderstanding about generics, that most dont understand (I don't fully grasp and or remember it all either)
but basically, After $X years company is requested to make their own generics, after $Y more years the market is open to all companies.
Considering it takes years to discover drug, then ~8-10 years to go through FDA testing/approval., they have 10-12 years to sell product. No big deal?
But then drug makers have done shifty things my patenting something else about the drug or making a minor
I can answer that in one word (Score:3)
Re: I can answer that in one word (Score:2)
How much would you pay to live? (Score:5, Insightful)
Now understand this: Somewhere out there is a Venture Capitalist working to answer that very question. They're buying up all the companies that make life saving drugs. Heart medication, insulin, Chemotherapy. They can pay insane amounts for the companies.
They can also make it difficult if not impossible for competitors to make it to market. It's cheap to manufacture insulin, it's not cheap to _start_ manufacturing insulin. They can freeze out any competitor from the investor cash they'd need to get started by threatening to drop their prices below what the new competitor needs to be viable. Meanwhile if I'm an investor I can just invest in the insulin monopoly and see just as big a return without the risk.
When you have control the supply of something people need to live you can do almost anything. Healthcare and Pharmaceuticals are not a free market by their very nature. It's time we stop pretending they are.
For the record we don't leave our food supply (Score:2)
Becuase it is the money or your life (Score:2)
R&D costs only part of it. (Score:5, Informative)
There's some truth to the R&D cost angle but it's over stated.
The pharmaceutical industry gross profit for 2017 was around $900B.
The global pharmaceutical industry R&D budget was around $160B. A a percentage of prescription sales (some gross profit comes from other sources like licensing) R&D expenses were 20%.
So yes R&D is a notable contributor but it does not fully explain recent rises in prescription costs. Research costs have been increasing at 3%/year, much less than the rate of increase in prescription costs.
https://www.prescouter.com/201... [prescouter.com]
So it's likely true that the US is bearing the brunt of R&D costs but it's also true that the US is bearing the brunt of the industry's 20+% profit margin, which is on top of skyrocketing salaries.
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So it's likely true that the US is bearing the brunt of R&D costs but it's also true that the US is bearing the brunt of the industry's 20+% profit margin, which is on top of skyrocketing salaries.
I'd agree, and just note that all those things are actually what drives innovation. Without decent profit people will invest time and capital elsewhere I bet.
Why do we pay more... (Score:2)
Because we can... Seriously, we pay more for stuff because we have more to spend and the market can charge more.
The question you should ask yourself is if this is how it should be or not?
I think of it this way. Because we pay more, we fund the R&D work that goes into development of new drugs and treatments, which ends up, eventually, improving the available treatments for the whole world. So, we pay because we are prosperous and the world benefits from this, with better care.
So, I'm not sure that c
Patent protection is way too broad: EpiPens (Score:4, Interesting)
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If there was a competitive market, there would be a dozen companies selling epinephrine emergency injectors for $5 each and making a ton of profit.
Until that one cent spring they are using doesn't work properly for a few people who die because of it, and the heirs go after the company for a few millions of dollars.
There are generic EpiPens, by the way.
Economist: mandate price/term matching (Score:5, Insightful)
As a sometimes Economics professor, I have a somewhat different approach.
The problem is not the simplistic "they charge $100 for a pill that costs less than a dollar to make", as that ignores the billions that go into figuring out *how* to do so.
The problem is bargaining asymmetries. It makes *sense* to sell to the foreign country at price lower than the US price, but higher than the marginal cost of production, if the alternative is not selling there.
The result, though, is the US bearing the entire development cost.
If the rules are changed, not to mandate specific pricing, but to require the same wholesale pricing at the same volume (and larger) be available in the US as in any deal with any foreign country, the Economics change. The foreign market no longer has the manufacturer over the "take it or leave it" barrel, as the "sweetheart" deal now reduces US prices.
Simply mandating prices doesn't work; the only price control I can name that ever worked was WWII in the US--and even the, as it was part of the war effort in a popular control. Aside from that, we have evidence of price control failures for millennia, going back to Rome, and some evidence it was tried and failed by the Sumerians before that.
Drug Dealers... (Score:2)
Resources are not infinite (Score:5, Insightful)
"America is carrying the cost of research and development for the rest of the world"
So they want to give y'all that good old martyr complex. That's nice. But pharma companies aren't hurting. Just to take a single example, in 2018 Bayer made a profit of EUR 1.7 billion on a turnover of EUR 39.6 billion. That's the profit after deducting everything they could think of - including all of that research. This result led to earnings per share of EUR 5.94, and a record share dividend of EUR 2.80. Other pharma companies are faring similarly well. What governments forget, both for copyrights and for patents, is that these are artificial, government granted monopolies. As such, the government has every right to expect tit-for-tat. We give you this monopoly. Abuse it too far, and we'll declare your drug to be generic. This is particularly true for widely used items like insulin or epi-pens.
The other half of the coin is cold-blooded accountancy. A human life has a value that is not infinite . No, saving your sick baby is not worth $1 trillion. Not $1 billion. Possibly not even $10 million. Considered in cold blood, a human life has a price, a maximum amount that society should expend to save it. This should be fine-tuned by actuarial tables, and even considerations of the person's individual situation. Saving a 1-year-old is worth more than saving a 90-year-old. Saving a productive member of society is worth more than saving a druggie. Cold-blooded fact, because resources are not infinite.
Consider drugs for rare diseases, and - fairly new - personalized drugs (i.e., treatments tailored to you as an individual). On a per-case basis, these drugs are horrendously expensive. Many of them should not be funded by the public or by insurance, because the cost is disproportionately high. If the person can pay privately, or if charity will bear the costs - that's fine. But society (either as a single-payer system, or in the form of insurance) must sensibly limit expenditures. This would also help to limit profiteering by the drug companies.
not just drugs (Score:2)
other wealthy countries spend half or less than what US does.
Simpsons did it (Score:2)
"Negotiation" means some drugs will not be covered (Score:2)
People pushing Medicare drug negotiation need to realize that the only leverage the government has against the manufacturer during negotiation is to not cover drugs that don't offer a lower price at the bargaining table. So if it happens, don't be surprised when your favorite pricey highly-advertised brand-name drug is no longer covered by Medicare.
I would be interested in seeing Medicare refuse to cover any drug that is advertised on TV. It avoids the free-speech problem of banning ads, avoids the stupid
Health insurance is at fault (Score:2)
Because of lawyers? And no competition? (Score:2)
Consider those insulin prices. Why doesn't someone start an insulin manufacturing plant, making dirt-cheap insulin and undercut big pharma? It's not patents on insulin stopping them.
Consider the EpiPen prices. Epinephrine is cheap, syringes are cheap. But EpiPens cost a fortune. The manufacturer has a patent on the autoinjector, not on Epinephrine or syringes. People pay so that they don't have to mess with loading a syringe or dosages. Someone could create a non-infringing autoinjector and undercut them.
T
Another crockfest of an article!!! (Score:2)
Recommended study: The Myth of Capitalism by Jonathan Tepp
for-profit medicine == predation (Score:2)
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Re:Someone has to pay R&D (Score:4, Informative)
"According to Tufts University, the average(for a new drug) is $2.6bn per drug, up 145 per cent in the past 10 years. Most drug candidates fail; those that do make it to later stages must go through expensive clinical trials. In support of the drug companies’ argument, one 2015 study found that for every extra $2.5bn a company made in sales, it produced one extra drug."
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It really feels like the only progress being made lately is repackaging existing drugs to increase their prices. The industry slowed down decades ago.
Then you haven't been paying attention to the progress being made. In just diabetes management, there are many new drugs based on a more complete understanding of the metabolic processes involved. You're not limited to just insulin anymore.
I remember a few years ago I joked with my doctor about wouldn't it be great if someone made a drug that got you to pee out all your excess glucose. He told me that it was in the works. We've now got several SGLT2-based drugs. If you want to know the names, watch the ad
Re:Someone has to pay R&D (Score:5, Insightful)
A lot of that R&D is not to find new cures for disease, but to *copy* cures for existing diseases where the existing cure is making a lot of money.
The ideal medication for a pharma company is not a drug that *cures* a disease, but one that *manages* it.
There's a lot of good reasons that research should be driven by public investments. Let the pharma companies do additional research if they want, but relying on them is a terrible idea.
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The US spends about 50% of all worldwide medical R&D. On top of that, most European drug companies make a large portion of their profits in the US - so their spending on R&D is funded by income from the US.
All those new cancer drugs? The new HIV drugs? Replacement organ research, prosthetic limbs? All that is thanks to the US consumer paying market prices.
If other countries paid what it cost to develop drugs, tools, or techniques, then the US consumer wouldn't need to pay so much. But it'll be
Re: Someone has to pay R&D (Score:3, Insightful)
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If they paid what it cost, pharma bros wouldn't be billionaires.
And where do you think the next round of investment comes from?
Re:Someone has to pay R&D (Score:5, Informative)
US Pharmaceutical companies spend more on marketing and advertising than on R&D. They in no way are lacking in funds. The R&D line is a lie.
Big pharmaceutical companies are spending far more on marketing than research [washingtonpost.com]
Big Pharma shells out $20B each year to schmooze docs, $6B on drug ads [arstechnica.com]
Re:Someone has to pay R&D (Score:5, Interesting)
As close to zero as possible.
There is no reasonable justification for drug ads to be on television in the first place. Doctors should be reading the journals and keeping apprised of new developments (hell even going to conferences?)
But a patient should never walk into the doctor's office and say "I saw this commercial with a happy lady who was no longer worried about her moderate to severe psoriasis, I want what she's having."
Re:Someone has to pay R&D (Score:4, Informative)
A crapton less than they spend now. The United States and New Zealand are the only two countries where direct-to-consumer (DTC) advertising of prescription drugs is legal.
Prohibit DRC advertising of prescription drugs. Patients have no business telling their doctors which prescription they should get, much less basing that off of a drug company commercial.
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Someone has to pay R&D
They could do that by reinvesting profits. There's plenty of dollars to go around, and at the end of the day the CEO can still happily drive his new Ferrari.
Yeah, and it's the Taxpayer (Score:5, Interesting)
After something worthwhile is discovered the drug makers come in, do some research to figure out what can be monetized, run some tests to make sure it's safe to sell and *blamo*, new drug.
It's basically billions and billions in indirect subsidies they like to pretend don't exist.
Moreover here's a crazy idea: We don't need Big Pharma to do research. Researchers are some of the most poorly paid individuals in the world relative to the dollar value they produce. They're not doing it for money, they're doing it because it interests them. The government could just increase the subsidies to Public Universities, make college education and healthcare free at the point of sale (so that smart people wouldn't have to fear massive debt and lack of healthcare to do what they want) and let Big Pharma just be the guys that run the factories. Everybody wins. Well, except a handful of stockbrokers and CEOs.
Oh, and for the record, the medicine that kept a close family member of mine alive was invented in Europe because there's no market for it here.
Re: Yeah, and it's the Taxpayer (Score:2)
Big Pharma depends on the Government, in the form of subsidized Public Universities, to fund what's called "Basic Research", which is research without immediate short term profit potential. That's the expensive part because most of it isn't profitable and what is won't be for decades.
That's not the whole story, and it's also not the most expensive part. Yes, the universities typically discover some biological process that contributes to some health issue. They also often discover chemicals that can alter these processes in some way. But that's not where the biggest expense lies.
Most of the time, the chemicals discovered are totally useless. For example, they might treat kidney disease, but also cause heart failure. And even once we filter out those failures, the ones that show promise a
Yes, most of what Universities discover is useless (Score:2)
We don't need or want Big Pharma to be anything more than factory hands. They're a relic of a bygone era.
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Oh, horse shit.
The US Government pays for the important research, then lets the company keep the patent.
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The US Government pays for the important research, then lets the company keep the patent.
Both clinical trials that I have been almost part of (didn't qualify for one, turned the other one down when I realized the chances of being put on insulin were too high) were funded by the drug manufacturer. The "important research" is in figuring out what the side-effects are and if the drug actually works, which isn't done in a college chemistry lab, it's done in hospitals and clinics all around the world.
In addition, not all the university research is government funded. Those pharma companies, and gro
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Also much of the "research" they are doing is not finding new cures or more efficient ways of manuf
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That's sounds great when said from a 50,000 foot view. But when you look at it case by case, you see it's not really happening. For example, the patent on Lipitor expired in 2013, but atorvastatin is still more expensive in the US than most other countries. Atorvastatin is easy and inexpensive to make and has a "real cost" of about $4 for a month supply. It still costs a lot here because Pfizer has used the $100b income from the patent period to do everything possible to make sure the price stays high.
You'l
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Lipitor lawsuits abound and will likely cost Pfizer hundreds of millions of dollars. Lawsuits abound for pretty much every drug made, every device sold, every procedure performed.
Where does the money to cover those suits come from? From either up-front planning or from the next drug profits.
E.g., https://www.classaction.com/li... [classaction.com]
Re:has to weigh down someone, etc (Score:5, Insightful)
Penicillin was invented in 1928 by a Scottish scientist. Insulin was researched by more than one country (be them teams or individuals), none of US citizenship. The rabies vaccine was invented by a Romanian (Victor Babes). Procaine was discovered by Ana Aslan (Romanian scientist).
There is one single reason USA medicine costs so much: greed.
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Re:has to weigh down someone, etc (Score:5, Interesting)
Yes there is, it is GREED
You forget to mention whose greed that is. It's the lawyers who are constantly advertising for anyone who has mesothelioma or used talcum powder or any of a number of things that are being litigated for millions or billions of dollars. It is the people who think that every bad thing that happens to them needs to be paid for by someone, and since they think the drug companies promised that their drugs would solve all their problems the drug companies have to pay.
We pay a lot more for drugs in the US because we sue the drug manufacturers for a lot of money. Right now there's massive lawsuits against some drug companies because doctors improperly prescribed or people illegally obtained and used opiods.
Every dollar going out the door to solve those lawsuits has to come from somewhere, and that somewhere is the customer.
The comment about insulin is pretty funny. The last time I bought a bottle of insulin it was $25. No insurance necessary. In fact, no prescription either. Considering I could have sued the manufacturer for millions of dollars had I had a negative reaction, that's pretty cheap.
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Makes me think of the Addams Family for some strange reason.
Re: has to weigh down someone, etc (Score:5, Informative)
It's not entirely greed. Researching this stuff is expensive. Very expensive. I've worked in a lab before, and I've seen just how expensive stuff gets.
Imagine, for a second, the cost of a gene sequencer. Gene sequencing used to take days just to build a small profile of somebody's genome, and it involves multiple very pricey chemicals. It still needs all of the same chemistry, only now this machine does it in hours, and it had to be used a LOT in drug development. if you so much as move the thing to the next room over, it has to be recalibrated using a very expensive process, and then revalidated with about $20,000 worth of chemicals.
Oh and this particular sequencer is made by a company that isn't even American, it's made by Roche, a company in Switzerland. They also sell the chemicals used for it.
And then of course, there's the people who have to make sense of it all. We're talking Phds in fields like Bioinformatics, organic chemistry, and a whole lot of other fields you probably haven't even heard of. These people are hard to find and won't work for cheap.
And that's just one aspect. Do execs get paid a lot? Yeah, but even if you took that out, it still costs a lot. As much as we're paying? Nope, but it does cost a hell of a lot more than what other countries pay. True to the statements in TFS, Americans are heavily subsidizing the cost of health care R&D for the rest of the world.
Although, TFS is way oversimplifying the history of insulin. Yes, it was discovered 100 years ago, but the insulin we use today is far removed from back then. Insulin back then was obtained by grinding up a pancreas of a pig or a core and purifying the insulin contained in it. This presented a major problem because many people were allergic to it, or they developed allergies after using it for a while. So, we had to create insulin that is indistinguishable from human insulin. Back in 1982, an American company was able to accomplish this by genetically modifying e. coli to shit insulin exactly identical to human insulin. This is a hell of a lot more expensive to do, but it worked so well that it replaced conventionally sourced insulin practically overnight, and was sold under the brand name humulin.
Oh, by the way, don't let Greenpeace know that or they'll try to have it banned.
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Rabbies Vaccine was Pasteur and Roux (Score:5, Informative)
Re:has to weigh down someone, etc (Score:4, Informative)
And everything since has been invented in the US
1879: First vaccine for cholera.
1881: First vaccine for anthrax.
1882: First vaccine for rabies.
1896: First vaccine for typhoid fever.
1897: First vaccine for plague.
1923: First vaccine for diphtheria.
1926: First vaccine for pertussis (whooping cough).
1927: First vaccine for tuberculosis.
1927: First vaccine for tetanus.
1935: First vaccine for yellow fever.
1964: First vaccine for measles.
1967: First vaccine for mumps.
1970: First vaccine for rubella.
1974: First vaccine for chicken pox.
1977: First vaccine for pneumonia.
1978: First vaccine for meningitis
1981: First vaccine for hepatitis B.
1998: First vaccine for Lyme disease.
The US still does something like 50-60% of the global medical research, down from 70% in the 1970's yet foreign revenue into the industry account for less than 30%, however the amount of investments that decreased has followed increased price controls in the EU and Asia
Re:has to weigh down someone, etc (Score:4, Informative)
I'm curious - where is this "yay, yay America" list coming from? Picking one example - literally at random - I find that the first vaccine for tetanus was created by a Frenchman, Gaston Ramon, and perfected as tetanus toxoid by his student Pierre Descombey in 1924. (https://en.wikipedia.org/wiki/Gaston_Ramon)
The second on your list that I looked up (honestly, at random) Dyptheria: the first vaccine was invented by Emil von Behring, a German, in Germany, in 1907.
I learned this a while ago: the simple version of history has it that one person 'invents' something at a moment of time: 'Eureka!' That's vanishingly rare, especially in science and medicine. In fact, an international community chips away at a problem for years. The problems get knocked off one by one: a theory, an effective antitoxin, production, delivery, etc, etc. You can pick and choose anyone in the list of Diptheria breakthroughs, but Germans, Brits, French and, yes, American scientists contributed.
Re:has to weigh down someone, etc (Score:5, Interesting)
You seem to be operating under the premise that the money going into pharma is used only for research. That, I can assure you, is not a correct premise.
If pharma made a lot less money, there would still be just as much research going on. Case in point, companies such as Astra Zeneca closed down their research centers in the Nordic countries while they were making more money than ever. Why? Because research was expensive, and it was cheaper to just buy potential leads from academia.
This history is not unique to Astra Zeneca either. Pharmacia-Upjohn (now Pfizer) did the same as well, and I'm sure others did too.
The 25 years you mentioned do not result in 3 years of sales, more like 10-15, and another 25 after that. The added 25 years comes from a legal loophole, where a continuous development of the drug into a new functional molecule will reset the patent duration. That means that if you make a functional drug A, and then modify drug A and claim that it improves the function, you get another 25 years of monopoly on that drug. This has happened a lot.
As for the money, it follows the same pattern as all other businesses built on a top level disregard for human health and well-being. Oil companies sure don't put their money into improving society, nor do cigarette companies or diamond companies. The research comes from academia and external scientists that fervently want to help others, not from the investor-directed pharma companies. The only thing pharma will do is pay for a study or three in the hopes of uncovering a good lead.
Your view of the matter is profoundly uneducated.
Re:has to weigh down someone, etc (Score:5, Insightful)
he added 25 years comes from a legal loophole, where a continuous development of the drug into a new functional molecule will reset the patent duration.
Delivery system modifications are another huge one. EG: The epi-pen. You don't generally get prescribed "epinephrine", you get a prescription for "epi-pen". The drug has been off patent forever, but the delivery system is "new" and the design is updated often enough that an "epi-pen" will always be under patent. And therefore 1$ worth of epinephrine will always cost you $600.
Re:has to weigh down someone, etc (Score:5, Interesting)
new functional molecule will reset the patent duration. That means that if you make a functional drug A, and then modify drug A and claim that it improves the function, you get another 25 years of monopoly on that drug.
Hold on a sec. You get 25 years of monopoly on the *modified* drug right? The company gets a new patent on a new improved version of the drug. But the old patent still expires. So manufacturers should be free to manufacture the old version of the drug just fine. If patients want the latest and greatest version, then yeah they would have to buy from a manufacturer who paid the license. This is no different from any other area of technology. The patents on the Intel 4004 have probably expired, so an Intel 4004 will be very cheap to buy since there is no patent license.
Am I missing something here?
Re:has to weigh down someone, etc (Score:5, Insightful)
If patients want the latest and greatest version, then yeah they would have to buy from a manufacturer who paid the license. This is no different from any other area of technology.
Am I missing something here?
I don't think so. Thing is, you'd imagine doctors, pharmacists, and especially patients would have the incentive to trade off the cost of the latest and greatest drug versus the incremental benefit. Except, of course, they don't. We've shielded all the decision makers from that cost/benefit tradeoff so of course they always pick the latest and most expensive.
Think about it. A doctor prescribes a drug. You might pick the generic but only out of the goodness of your heart. You really have no reason to pick the generic vs. brand name and it's human nature to assume the brand name is slightly better even we know it's the exact same molecule.
So my prescription, as it were, is to restore that incentive system. Stop having third parties (government, employers, health insurance plans) pay for drugs. Make doctors and patients have the important conversation about "this drug is a bit better but not worth 5x the price."
Re:has to weigh down someone, etc (Score:4, Insightful)
Generally it works out to be about the same. Businesses taking on extra costs usually means consumers just pay more. So we pay for it either way. Given that fact I favor public funding and in general, public research.
There's no doubt medical research is expensive. But let's be clear. Research that makes its way into a treatment or product happens in other countries too besides the US. And even publicly-funded too. Scientists tend to be very self-motivated people (although they get greedy as much as the next person). The argument that innovation would stop under any other funding model is fallacious. Recouping cost is one thing. It's the return on investment that's often the problem. How much return is ethical?
Re:has to weigh down someone, etc (Score:5, Insightful)
So how do you explain the huge price hikes on drugs that have been known for longer than the FDA has even existed? How much research did we really need on a drug that was prescribed to George Washington? Epinephrine has been in use since 1905. How do you explain the huge price hike on EpiPens (the delivery mechanism has been in use since the '70s).
If the cost of medication isn'tr weighing down business OR the tax payer, it just means the pharmaceuticle companies and their investors will have to cut their hookers and blow budget.
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Re: We've all been cyber-crippled. (Score:2)
I really don't care about any of your problems. But maybe discuss them with someone who cares because he is paid for it: your psychiatrist.
And get your copy pasta off my lawn.
Re: We've all been cyber-crippled. (Score:2)
All true and have happened to me too, but rather off topic don't you think?
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The regulation you cite is not the reason why it is so expensive. It is there to prevent quacks from selling you cures like cocaine/heroine infused alcohol or radioactive condoms. Insulin was approved long time ago yet prices keep going up without any new regulations.
What's stopping someone from showing up and making it cheaper? What's stopping you from doing it? What's stopping you from making it in Bangladesh for pennies and importing it?
Government is stopping you. You could jump a hundred hurdles to prove you're not a quack and do it anyway. So why don't you? Why doesn't someone else?
Because there's really not much money to be made. Anyone who could jump all those hurdles could do something else that pays more, with less risk.
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That's a part of it, but there's no need to exaggerate. Ultimately, the answer is the sum of all the costs and risks versus the profit to be made.
Profits are low because costs and risks are high. Why take big risks for small profits? There are easier ways to make a little money and more money to be made if you do something else.
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"Profits are low because costs and risks are high."
How do you explain this:
"Big Pharma's Big Profits"
https://www.thefiscaltimes.com... [thefiscaltimes.com]
"Drug companies generated 23 percent of the industry’s $636 billion in revenue — and 63 percent of the total profits"
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Big existing companies already covered their fixed costs a long time ago.