City Sues Drug Manufacturer Mallinckrodt Over 97,500% Price Increase (wsbtv.com) 206
McGruber quotes Atlanta TV station WSB: The city of Marietta, Georgia is suing drug manufacturer Mallinckrodt after Mallinckrodt increased the price of the drug Acthar by 97,500%.
The lawsuit, filed in federal court, claims one city employee needs the drug Acthar, which is used to treat seizures in small children.
"Acthar used to cost $40, but Mallinckrodt has raised the price of the drug to over $39,000 per vial," the city claims in the lawsuit. "This eye-popping 97,500% price increase is the result of unlawful and unfair conduct by Mallinckrondt. The city has expended over $2 million for just one patient covered by the city's self-funded health plan...."
Atlanta pharmacist Ira Katz said Acthar is what's called a "biologic" and they can be classified as specialty drugs. "They put them into the specialty class, and the prices are outrageous, just outrageous," Katz said.
The lawsuit, filed in federal court, claims one city employee needs the drug Acthar, which is used to treat seizures in small children.
"Acthar used to cost $40, but Mallinckrodt has raised the price of the drug to over $39,000 per vial," the city claims in the lawsuit. "This eye-popping 97,500% price increase is the result of unlawful and unfair conduct by Mallinckrondt. The city has expended over $2 million for just one patient covered by the city's self-funded health plan...."
Atlanta pharmacist Ira Katz said Acthar is what's called a "biologic" and they can be classified as specialty drugs. "They put them into the specialty class, and the prices are outrageous, just outrageous," Katz said.
Self-funded Municipal Insurance? (Score:2, Interesting)
I know this is beside the point, but it just seemed like a huge mistake waiting to happen. Too small for any negotiating power and too small of a group to afford rare but expensive events. Who in their right mind would try to self-fund something so variable with a group so small?
Re:Self-funded Municipal Insurance? (Score:5, Insightful)
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It wouldn't change the price, but it would manage the cost by spreading it out over a bigger random distribution of people. That's why I admitted it was off topic at the start of my post.
Still, a larger insurance company can negotiate better prices than retail because refusing to cover it at all would be a big loss to the drug company.
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It wouldn't change the price, but it would manage the cost by spreading it out over a bigger random distribution of people.
Actually, that would change the price. If the price could be spread out enough that no single individual cares enough to protest, the price can be jacked up even more.
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Individuals don't (typically) pay more or less for any covered drug. (Sometimes there's a copay discount for generics, but that's from the insurer, not the manufacturer.) So if the insurer has 1000 patients that need drug X, they can tell the manufacturer "we won't pay more than $40," and the vendor can either lose $40x1000 per month in sales (or week, or perhaps even day), or else they can sell it at whatever price they end up negotiating on.
Note that these negotiated prices applies ONLY that ONE insurer
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Remove patent protection, and Drug companies will stop risking hundreds of millions of dollars to develop a new drug. Why innovate, when you can just take someone else's formula and undercut their price since you don't have to recover your investment?
I would have liked to know how many other people suffer with this ailment and are on this medication.
I'd also like to know why this town self-insures, yet apparently doesn't have catastrophic coverage for just such an event.
I suspect the right price for the dru
Re:Self-funded Municipal Insurance? (Score:5, Interesting)
Last I heard, Martin Shkreli [nytimes.com] continued to operate his drug mafia from prison.
History as a lesson, some things never change. You try to regulate something, and you make it worse because the mob sidesteps the regulations or they're the ones writing them.
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Last I heard, Martin Shkreli [nytimes.com] continued to operate his drug mafia from prison.
If there's any justice, he'll get a parasite or HIV but the prison won't provide him with is drug Daraprim because it's too expensive. Just kidding, I wouldn't wish illness on anyone, hopefully he'll just get shanked -- wait, dammit!
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He's more likely to get HepC or TB.
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Note, I'm not saying that's the case here. I don't know enough about it. I'm only saying that it is conceivable that a small populat
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Given its previous price, and supposing that demand for the drug hasn't changed significantly for reasons other than price, I think we can assume that a: the previous price was fine or close to it on the scale it was being manufactured, and b: there were enough patients to justify it being manufactured, and c: it made a profit, if a modest one, at that price.
There's no way that one can justify a 100,000% price increase.
Re:Self-funded Municipal Insurance? (Score:5, Insightful)
The drug in question has been in use since 1952. There is no monopoly with state funds.
The problem is that any competitor that might enter the market will only be able to sell at about $40/vial while the current price is $40,000/vial due to the monopoly. The manufacturer already bought the rights to a low cost synthetic analog and shelved it. The invisible hand is pinned to a desk with a dagger through it's palm.
This case screams for government intervention. Sitting in the pumpkin patch sure that our sincerity will surely bring the Great Pumpkin^W^W Invisible Hand THIS time simply isn't working.
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Don't be quite so fast to think that. There's something (I believe it's the Orphan Drug Act) that allows the government to grant monopolies for generics, too. I believe this was how Shkreli managed to fuck over so many people with his price increases.
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Not so fast with your not so fast! See page 5 [iqvia.com]
The exclusivity granted to orphan drugs provides seven years without generic competition for the approved orphan designation but does not prevent generic competition for other approved uses of the medicine. Orphan exclusivity continues longer than patent protection in only 60 of the 503 orphan-designated medicines.
In this case, the status is for ALS and should be running out any time now. There are other indications that have no protection at all. No competition there either.
It's also worth noting that the entire orphan drug program was the result of a desire to keep drug manufacture privatized in the first place.
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The free market has shown time and time again that it is corrupt. When the only incentive is greed, no government will be allowed stand in the way of profits. The amazing things is that these companies manage to get politicians and voters to go against their own self interests by supporting such a destructive system. It's true that this is no more than a religion, where the worshipers keep sacrificing humans out of an irrational fear the socialism that lurks under the bed.
Re:Self-funded Municipal Insurance? (Score:4, Insightful)
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There isn't. The current manufacturer will just drop the price long enough to make sure the new venture fails if it comes to that. Or, like the last time, buy it up and shelve it.
Your argument is akin to "God must have created the world, it's here, isn't it?"
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So in other words, our problem is that regulators are too slow to act. Actually, the company inm question has thus far paid a billion in fines and was ordered by the courts to license that synthetic they shelved. Perhaps Marietta's suit will be the last straw for the judge and more than a slap on the wrist will be issued this time.
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Until politicians, paid by the big companies, start saying that we need to cut regulations and "let the free market decide." Then, monopolistic mergers and acquisitions are allowed and competition is squelched.
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The free market also ensures that those in power will seek to prevent opportunities for competition. Of course, you could argue that we're just not waiting long enough, and that in many decades these modern monopolies will be gone and replaced with different monopolies. But why wait, allowing the system to attempt to sort itself out over a very long period is destructive in the short term; if there's a disease then fight it today instead of hoping to outlast it.
Governments are a good tool to rein in the ma
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Generally, "politicians" and "free market" are mutually exclusive.
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But this is no excuse to allow free market to run unfettered, wailing that no regulations are free from corruptions. Governments are instruments of the people, whereas the free markets are only instruments of the most wealthy, so the people should use their power to create governments as a means of keeping the free market working and in check. The government at least is accountable to the public, the free market is not.
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An unregulated market will not remain free for very long. It will quickly become dominated by a small family of monopolies that erect impenetrable barriers-to-entry, and control everything.
In my prior post I wasn't arguing for a completely unregulated market. Really I was just pointing out that corruption is everywhere and there is no perfect system, and public accountability is our only means of limiting the harm that corruption does.
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An unregulated market will not remain free for very long. It will quickly become dominated by a small family of monopolies that erect impenetrable barriers-to-entry, and control everything.
In my prior post I wasn't arguing for a completely unregulated market. Really I was just pointing out that corruption is everywhere and there is no perfect system, and public accountability is our only means of limiting the harm that corruption does.
Public accountability won't, and can't, help. If it could help, it would have already prevented the very situation we're in now. If you want proof that public accountability, as it is now, isn't working, just look at the current state of each and every one of our institutions. Clearly they are dominated by self-serving financial interests. Every single public institution is controlled by a small group of "well-connected" affluent individuals wielding all the real power. There are people of every race, gende
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Maxine has a few words to say to you.
Are you perhaps referring to Rep. Maxine Waters? "Maxine Waters earns a decent amount of money as the U.S. Representative for California's 43rd congressional district. As of 2017, Maxine Waters earns a salary of $170,000 annually and her net worth is more than $2 million at present as per Celebrity Net Worth." ~ http://articlebio.com/maxine-w... [articlebio.com]
case in point
Re:Self-funded Municipal Insurance? (Score:5, Insightful)
On Slashdot? Roughly 50 times per day.
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I'd have to agree. I'm hoping slashdot is just a magnet for these type of people and that it's really not proportional to the population at large.
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I didn't advocate for any socialism there. Just that it's being used as the bugbear to frighten the children. I'm asking to mend the shirt, and then people cry that they can't mend it because socialism!
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This case screams for government intervention. Sitting in the pumpkin patch sure that our sincerity will surely bring the Great Pumpkin^W^W Invisible Hand THIS time simply isn't working.
Here's what happens when the government intervenes on the behalf of a well-heeled monopolist:
https://endpts.com/fda-rebuffs... [endpts.com]
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So you're saying drugs that aren't reliably effective are kept off of the market? Why is that a bad thing, do you want your prescriptions to be placebos 50% of the time?
Cannot afford a Free Market (Score:2)
this is why we need a free market
No, this is one area where a free market makes no sense whatsoever and is something we cannot afford to have. In the past the system of private drug development relied on a certain level of altruism from companies and since that largely no longer seems to exist the system has failed.
If there were a truly free market no company would invest enough money to develop the drugs that we need because once developed, they would be easily copied. Hence the current patent monopoly system which motivates the devel
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Perhaps more Southerners would consider voting for Democrats if liberals would learn to treat them with less disdain.
Let's just ignore the bogeyman of Democrats taking away people's guns, or how they'll raise the minimum wage which will kill businesses, or that they'll make sure corporations pay their fair share of taxes or, horror of horrors, will teach kids all about our nation's history, the good, the bad, and the ugly.
Instead, they'll concentrate on how giving corporations will magically give them a rai
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Let's just ignore the bogeyman of Democrats taking away people's guns,
Y That's a pretty big thing to ignore. Most of the politicians that are pro gun control know about as much about guns as a tree knows about heart surgery.
or how they'll raise the minimum wage which will kill businesses,
Small businesses will certainly be affected in a big way. Minimum wage jobs are not meant to be careers. Or if they are entry level then employees should be getting promoted if they are any good at their job.
or that they'll make sure corporations pay their fair share of taxes
The problem is that the only companies that will be affected are ones that will pass that cost on to the consumer. The real tax cheats like Apple, Goo
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Is that any dumber than continuing to let homeless junkies sleep, shit and shoot up in the streets?
If the alternative is criminalizing homelessness and adding more to our already excessive prison population....yes.
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Can't we just criminalize drug use and public deification? WHy is your counter-argument to argue against "criminalizing homelessness"?
If I go a piss too close to a public school playground at 2:00 AM after drinking too much, I'll be branded a sex offender and will suffer the consequences for the rest of my life.
If I was homeless, I could drop a duce on a school playground during school hours and never suffer any consequences.
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Those that are pro gun control includes all the Founders of our country, and the authors of the 2nd Amendment, and all those statesmen that ratified it, and we know this by reading the first 3 words of the Amendment, those placed first almost as if they were the most important that 2nd Amendment-nutters tend to ignore or reinterpret with a false and revisionist history.
The Second Amendment:
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
"A Well Regulated"?
Which part of "shall not be infringed" confuses you?
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drug price rises $97,500%
What?
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Re-insurance covers much of that and is probably a lot cheaper than outsourcing insurance.
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Lots of organizations self fund and depending on the size of the org it can be a cost benefit. In many cases, self funding is somewhat hidden from the employee, the company in question uses a typical medical insurance company to handle the books and other management tasks.
That is a fairly standard practice for organizations and this is clearly an abuse of obtaining a special category. Long term, similar cases have yielded negative results for companies which practice these outrageous pricing schemes.
Not sure about (Score:4, Interesting)
The local chamber of commerce members can not join together and bargain for healthcare. It is the Government involvement and the regulations purchased from the government by the healthcare industry that make our system so expensive.
Just my 2 cents
I don't think it would matter much (Score:4, Insightful)
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Medicare has virtually no red tape, it's got much, much lower overhead than private health insurance.
It's got a fair bit of "waste, fraud, and abuse" - 10% of medicare budget is wasted [slashdot.org].
Medicare off-loads a lot of it's overhead onto the social security system, which gives you an unrealistically-low overhead ratio. Yes, Medicare costs less to administer, unless you include the 10% waste that is the result of it's minimal oversight.
Somewhat unusually (Score:2)
Somewhat unusually, the drug is only available in the US, so the usual cost comparison with e.g. UK NHS is not possible.
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http://www.epilepsyaustralia.n... [epilepsyaustralia.net]
Adrenocorticotropic Hormone Acthar, Synacthen
Its available in Australia
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Couldn't find the cost.
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Probably because it will be covered by our pharmaceutical benefits scheme, and have a standard cost, but generally I doubt anybody could get away with charging 40k per bottle for a drug, unless they needed a fission reactor to make it or something.
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You'd be surprised. The price differential is never in US's favor, but some drugs for rare diseases also cost NHS 10K UK pounds per month or more. "Only" 2-3 times cheaper than in the US. For some of the drugs it all comes down to fundamentally answering the question: would you like the drug for this rare disease that actually works, or would you like no drug to be available for it at all.
https://www.pharmaceutical-tec... [pharmaceut...nology.com]
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Found this:
https://en.wikipedia.org/wiki/... [wikipedia.org]
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If this is the same drug, AUD41 per dose (so that's about USD30). Reference [pbs.gov.au].
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Yeah, I've considered just finding a few clinics abroad and withdrawing from the US health insurance scam entirely. If I get cancer (god forbid), there's no way I'm getting it treated here, in the land of $13 paper cups for pills and $10K/night hospital stays.
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And that one time you are suddenly in need of an ambulance ride to the hospital and a few days of hospital stay may bankrupt you, unless you actually live abroad.
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Not true: some newer ultra-expensive monoclonal antibody drugs are available in the UK as well. Those weren't available even just a decade ago.
The medical system in the U.S. needs improvement. (Score:5, Interesting)
I agree with that. One of the many, many problems: Drugs in the U.S. are allowed to have more than one name!!! See Overview of Generic Drugs and Drug Naming. [merckmanuals.com]
Another article: Multiple Brand Names for the Same Generic Drug Can Cause Confusion. [nih.gov]
Comment removed (Score:5, Insightful)
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Nothing will change until - AND I DON'T ADVOCATE THIS! - big rapacious pharma corporations start seeing their execs being wacked. It's bound to happen sooner or later. Some guy knows there's a medicine that will save his daughter's life, but now it's tens of thousands of dollars a month. It was $40 last month. He snaps. It's gonna happen, sooner or later.
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I advocate it. Executives responsible for things like this should be dragged from their homes and offices and executed publicly.
The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
At one point we had laws specifically prohibiting price gouging, and we required corporations to operate for the public benefit. Note that "for the public benefit" is not the same as "not-for-profit".
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Just vote Bernie in your primary (Score:3, Insightful)
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And you still get choice, you get more choice since you can pick any doctor instead of the ones in network.
I'll let you in on a little secret - the only reason doctors, hospitals accept Medicare reimbursements which are frequently below the cost of providing the care/service, is because of the existence of private insurance which generally reimburses at levels above the cost of providing the care/service.
More than two-thirds (67%) of medical practices report that 2019 Medicare payments will not cover the cost of delivering care to beneficiaries according to a new MGMA Stat poll. Practices often rely on commercial contracts covering non-Medicare patients to offset the shortfall.
Source: Medicare reimbursement falls short of care delivery costs [mgma.com]
Question, what happens when non-medicare providers exit the market and we have "medicare for all"? How long will your local hospital stay open whe
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I wasn't talking about a revolt, or some organized movement. I was talking about a distraught parent snapping out. And I don't think it's impossible.
Re:A dangerous trend if you favour patents. (Score:5, Informative)
Didn't they give them patent protection (Score:2)
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Lot of these drugs as off patent. A patent has a duration of 17 years, hence, such "simple drugs from 1933" are off patent. Same with Epipen, Acthar, etc.
So what is the issue then? I'm tired of explaining it to people, so go to Walmart and see what the drugs off the shelf cost. Go to your pharmacy and see what prescription drugs cost. Keep in mind there are many new drugs at Walmart that are patented, and many prescription drugs at the pharmacy that are off patent (Epipen, Acthar, etc).
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One of the issues is that there are many, many drugs that have been in common use for decades, but haven't been subjected to the exhaustive FDA testing/approval process. One such drug was colchicine, which had been in use for literally hundreds of years for treating acute symptoms of gout. The FDA started a program several years ago to offer a monopoly (but not a patent) on these older drugs to companies that would undertake the desired testing. The result in the case of colchicine was that a company cal
Sure they can (Score:3)
Mallinckrodt (Score:4, Insightful)
Has a great reputation. From 2006-1012 their subsidy SpecGx supplied 28.9 billion oxycodone pills to the market. Worst than any drug dealer. Not to mention their tax avoidance history.
https://en.wikipedia.org/wiki/... [wikipedia.org]
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On the subject of drug dealers, I believe they're the only company allowed to process cocaine. Incidentally, Coca Cola gets the cocaine-free remnants from their mutual supplier.
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'only company allowed to process cocaine.'
I think Merk does also.
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My source is over 30 years old, but as of 1988 there was only one coolant licensed. https://www.nytimes.com/1988/0... [nytimes.com]
Pharma-medical industry should be NOT FOR PROFIT (Score:2)
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I don't think the pharma industry was ever "not for profit" - I'd appreciate a citation for your assertion.
Why? (Score:2)
I understand that drug manufacturers want to make money. They are private companies, and making money is their duty.
However, these ridiculous price hikes are not the right way to do it.
Martin Shkreli did that, and he ended up in jail as one of the most hated men on the planet, and his company lost money. You can be aggressive, but being a complete asshole almost never pays in the end. You may see short term profits but after that, no one will want to do business with you.
BTW, aren't some labs able to produc
This is another old generic (Score:2)
Acthar is a brand of adenocorticotropic hormone (ACTH), a compound which has been researched since WW II. Since ACTH has been on the market since 1952, it is now long since off patent. For more reasonable world prices, shop here:
https://www.mybiosource.com/ac... [mybiosource.com]
I'm assuming it's probably Chinese, but so be it. I hope China steals all our pharma patents, cranks up production to 11 and sends our domestic monopoly straight to the perdition it deserves. Then we can shop the world market and be treated at open-m
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I hope China steals all our pharma patents, cranks up production to 11 and sends our domestic monopoly straight to the perdition it deserves. Then we can shop the world market and be treated at open-market prices once more.
And we'll never see a new drug or treatment again.
Reminds me of the time the Russians killed all the farmers and took their land, only to watch millions of Russians die of starvation.
Or when Venezuela nationalized the oil fields and took over oil production, only to kill their main source of revenue and casting the nation into abject poverty and mass starvation.
Sure, sounds like a great idea, kill of any possibility of new treatments ever again in exchange for cheaper (if unsafe) chinese prescriptions - wha
need to change patent laws (Score:2)
And if it is a cure (i.e. single treatment as opposed to recurring treatments), then give it 10 years.
Finally, we need to stop ads for medicines that require a doctor's treatments. The idea of targeting ppl with drugs that only a doctor can prescribe is just wrong. Far too much money is spent on pushing these. In fact, most drugs companies spend many times more money on Ads than
Re:The story seems more complex than that (Score:5, Insightful)
Speciality drugs are expensive to develop. Moreover it seems like this price is the retail price, not what they actually charge to insurances and the insurance company seems to refuse to engage in any sort of negotiation.
I highly doubt they'll be able to successfully sue because it is not like there aren't any generics.
Well, If you are correct, I guess that if the price was originally 40 dollars, and they had to raise it to 39,000 dollars in order to eke out a profit, they have really shitty accountants, wouldn't you agree?
As well, the incredibly whacked out games played with prices - is this another example of the best health care system in the world? Some folks think it's used car dealership ethics messed up.
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I don't think any used car salesman has ever managed to increase the price of a car by 97,500% AND forced someone to buy it or go without a car at all.
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I don't think any used car salesman has ever managed to increase the price of a car by 97,500% AND forced someone to buy it or go without a car at all.
True. The problem of course is that we have a choice with the car. Life sustaining meds? Well, I have already said that I will kill myself before bankrupting my family.
I guess perhaps once you include that, there are choices we can make.
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I don't think any used car salesman has ever managed to increase the price of a car by 97,500% AND forced someone to buy it or go without a car at all.
Indeed. This is why private medicine should be illegal: the buyer often does not have a choice but to buy, at any price.
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Best health care system, ever! If you are independently wealthy that is. And we've sold the myth that anyone can rise up from their bootstraps and become a billionaire that the voters defend the interests of those who are billionaires to their own detriment.
Re:The story seems more complex than that (Score:5, Informative)
From the wikipedia article:
"Mallinckrodt acquired the US rights to the animal-derived form via its acquisition of Questcor Pharmaceuticals in 2014.[32] When Questcor acquired the drug in 2001 it sold for $40 a vial; within a year of the acquisition Questcor raised the price of the drug to $1,500 per vial and to $28,000 by 2013.[33][34]"
"The Federal Trade Commission and attorneys general from five states sued Mallinckrodt for anti-competitive behavior with regard to the acquisition of Synacthen Depot and the monopolistic pricing of Acthar, and in January 2017 the company settled, agreeing to pay $100 million and to license Synacthen Depot to a competitor.[32] According to Kaiser Health News, Mallinckrodt responded by increasing its Congressional lobbying to $610,000, and its contributions to Congress members to $44,000, in the first quarter of 2017.[37]"
That's all we need to know.
It's fucking unbelievable how FDA and FTC allow one company acquire the rights for a drug manufacture, or buy off other companies, thus becoming a monopolist on the market. This is at the same time when we can't just import drugs from other countries.
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No, that's not all we need to know.
Read the full wikipedia article to find out that an equivalent medicine is available in Europe for $8 a dose. The patient or the city insurance fund should look into the possibility of foreign sources.
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It's fucking unbelievable how FDA and FTC allow one company acquire the rights for a drug manufacture, or buy off other companies, thus becoming a monopolist on the market.
FDA and FTC are now run by Trump appointees. Why is it surprising?
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FDA and FTC are now run by Trump appointees. Why is it surprising?
Are trying to imply that this never happened under the previous administration
2015: https://www.nytimes.com/2015/0... [nytimes.com]
2015: https://www.cbsnews.com/news/5... [cbsnews.com]
Was Trump President in 2015?
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Are trying to imply that this never happened under the previous administration
THIS particular scenario (a company buying out the only competitor and jacking up the price) indeed had never happened during Obama's presidency. There was nothing FDA or FTC could do to prevent the acquisition of Daraprim by Turing Pharmaceuticals.
Re:The story seems more complex than that (Score:5, Interesting)
Speciality drugs are expensive to develop. Moreover it seems like this price is the retail price, not what they actually charge to insurances and the insurance company seems to refuse to engage in any sort of negotiation.
It used to cost $40 a vial and they raised to $39,000. Your argument doesn't make sense in light of the original price and subsequent increase. This is price gouging pure and simple, like that dick Martin Shkreli did with Daraprim -- raising the price 5,400 percent (originally cost $13.50 a pill, now it costs $750 a pill).
"Acthar used to cost $40, but Mallinckrodt has raised the price of the drug to over $39,000 per vial,"
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Re:The story seems more complex than that (Score:5, Informative)
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"Developing" is not the same thing as "bringing to market". Clinical studies and FDA approvals take years and cost a fortune.
But, there you go: their luck is running out, so they're milking it for all they can. I wonder if it's even worth suing them at all then. The lawsuit will almost certainly take longer.
Re: The story seems more complex than that (Score:3)
Re:The story seems more complex than that (Score:5, Insightful)
The insurance pays the full cost who then passes that on to everyone else. So we all pay more just for greed.
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Insurance companies most certainly do not pay "list prices" for any treatment.
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> it is not like there aren't any generics
Are you sure? The FDA allows generic manufacturers to pay all the others to NOT produce a drug. This is when they go up thousands of percents.
They also make it illegal to import 5c pills to protect the $320 profits on pills of the companies they plan to work for in the future. It's corrupt as hell and people are dying so bureaucrats can get sweet jobs.
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Actually, it IS like there aren't any generics. It's EXACTLY like that.
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Speciality drugs are expensive to develop.
ACTH was "developed" as a medication literally two generations ago. Today's price increase is purely an artifact of the US consumers' legal inability to shop outside the local monopoly zone for the generic.
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Speciality drugs are expensive to develop.
Acthar was first approved in 1950. I think it's safe to say that the development costs have been amortized.