My daughter, like many kids, has an allergy that requires us to have epipens on hand. There was a good article the other day about how the owner of epipen have raised the price of epipen from $57/pen in 2007 to over $400/two-pack of pens today. I don't think you can get just one pen, btw.
I think the difference is they didn't raise the price in one fell swoop. Frogs in boiling water, etc, etc.
My wife had a great job at a family controlled, small drug company named King Pharmaceuticals. They were based in Bristol, TN, and had fewer than 1000 employees. King developed, owned the patents on, and sold the epipen.
Of course, what happened next is exactly what you'd expect. Pfizer made a bid for a hostile takeover and the shareholders approved it. What was the first order of business on day 0? Exactly what you'd expect: lay off 90% of the King employees and more than double the price of epipens. Why? Because they could.
I have deep appreciation for pharmaceutical research, but it's folly to imagine any of it's ultimately driven by anything but profits. The exception may be the fewer-every-year small pharmas.
Btw, after Pfizer laid her off, my wife went to work for Salix, another small-but-successful pharma based in Raleigh that specializes in GI drugs. Guess what happened after barely over a year? Valeant bought Salix and laid off 90% of the workforce. Valeant is far worse than Pfizer, too. Their entire business proposition is finding "under-performing" drugs, buying the companies, then cutting costs and doing a better job marketing them. It's working so far, but has cost a lot of good folks their jobs/careers.
I worked for big pharma and medium (sized) pharma, i discovered several new chemotypes to treat pathologies, all eventually patented. i never got a dime, because that was the terms of my employment. i watched the market price rise on many of the pharmaceuticals i had worked on each time they were sold, placed under new contracts, and re-sold. Our salaries didn't rise as a result, our equipment wasn't modernized. Where did that extra profit go? "It's all fungible", one suit told me at a company meeting; but you're correct, our normally fixed salaries did filter down through the growing salaries of "profiteering assholes".
"demanding"? this is an industry which fires us if we ask for a raise, or hint at collective bargaining, or even if the 'big hit' has just been discovered and research is foolishly seen as unnecessary for a while. this is an industry where foreign work visas are rife, with threats of the jobs being declared 'unnecessary' if extra hours aren't put in (with the poor folks having to return to their original countries). this is the industry which tries to offshore as many aspects of the process as possible. there is no "demanding" anything, unless you already have another situation lined-up; and even then they threaten you with NDAs and non-competition clauses.
In the states there really is no active regulatory agency to pursue this; the FDA having been all but gutted, (all the clinical 'safety' research is now done by the applying company itself). One only has examine who are among the largest political donors to both parties to understand why this might be.
How about funding this stuff publicly, where there is an actual democratic peer-review process? The only reason people end up working for pharma is because they can't get a grant. Just up the NIH & NSF budgets, and scientists will be free to work without profiteering assholes to worry about. It's not that fucking complicated.
I can hear the "Socialism" shouts from here, that goes against the god of free market, and how the hell the corporations are going to get the funds to buy politicians.Next you are going to ask is basic health care for the poor.
Another interesting thing I have noticed in online discussions. Whenever it comes to putting more money in hands of the few generally considered "rich", one of the standard explanations is that they will invest and create more jobs. However, things which will put extra money in the hands of "ordinary" people; like reduction in high prices or a higher wage always comes with a threat of reduction in jobs. Money in the hands of ordinary people is almost always spent or invested, thus providing a large boost to the economy (perhaps after a short term of 6-12 months of lower employment due to the rise in cost of doing business).
That line is on Page 1 of the Book of Political Lies that gets rolled out whenever there's a fight over resource allocation.
The reality is that "invest and create more jobs" actually means "fire as many people as you can, cut wages as far as they go, make all hires as at-will as possible, and offshore to save money if you possibly can, even if it hurts the company in the long term."
The rest of the reality is that our political system is an assholeocracy. The people responsible for this kind of idiocy should be nowhere near policy - not just because of some abstract sense of moral wrong, but because it's incredibly toxic to real economic and social development.
It is better for rich people to have power than politicians. At least their wealth might have something to do with skill (creating a successful drug in the past, etc.)
Eh? Rich people don't get rich because of skill, ever. No one gets rich because of skill, they get rich because they are in a position to exploit power. You simply cannot earn a billion dollars through wages. No one is that valuable or unique. The only way to do it is by appropriating the output of others, or having it handed to you. For example, the wealthiest family in America, the Waltons, owns more money than 40% of the country. All of them inherited their billions. Even if we do believe that Sam Walton deserved untold billions, how does this tell us anything about his children?
In addition, why should we empower rich people at all? Why is giving a single person a billion dollars, skillful or not, better than allowing a million people to democratically direct that wealth? Even if those million people simply redistribute that money into their pockets, the outcomes will likely be better for everyone, and it's mathematically far more likely that those people will direct it towards the common good than a single person would.
> Eh? Rich people don't get rich because of skill, ever.
That's silly, of course some do. There are any number of inventors, entertainers, etc, who've gotten rich largely from their own efforts (and luck).
> The only way to do it is by appropriating the output of others, or having it handed to you.
There would be no output to appropriate without the skill and direction of the rich person who had the idea and took the risk. As for the inheritance angle, who better deserves the money than the children of the original rich guy? They're the ones most likely genetically to share the same traits that enabled the original guy to get rich.
> In addition, why should we empower rich people at all? Why is giving a single person a billion dollars, skillful or not, better than allowing a million people to democratically direct that wealth? Even if those million people simply redistribute that money into their pockets.
Because they've proven to be able to direct capital in a beneficial way. Regular people haven't. Regular people would just buy the same old trinkets and necessities and innovation would halt. It would be a very boring existence with no hope of a better life to strive for.
> There would be no output to appropriate without the skill and direction of the rich person who had the idea and took the risk.
I think that it is a bit much to suppose that every rich person is benefiting exclusively, or even mainly, from his or her own skills and ideas.
> As for the inheritance angle, who better deserves the money than the children of the original rich guy? They're the ones most likely genetically to share the same traits that enabled the original guy to get rich.
You'd think so, but as I wrote in another comment, 70% of wealthy families lose their wealth by the second generation, and 90% by the third. Rich kids do a crappy job of holding on to wealth (although I'm sure they're still better than poor kids would be).
I meant by "this road" the idea that there is some sort of genetically inherited fitness to rule, not anything about wealth in particular. (Also, I daresay that rich people elevated to hereditary power would find that their resources would allow them to hold onto their wealth.)
Politicians (in a liberal democracy) can have their power removed without revolution. In a different system of government in which the rich are in charge, the only way to change government is to destroy it and kill them all. They won't sit still while you're trying to do this.
> In a different system of government in which the rich are in charge, the only way to change government is to destroy it and kill them all.
70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy [1]. So the power seems to naturally defuse without having to "kill them all".
Well I would say it's complicated: we're talking about an industry worth hundreds of billions of dollars, an army of researchers and a network of institutions with discoveries made all around. Also, simply increasing government budget frees scientists to do work (great!) but does nothing about the "profiteering assholes" that already exist, they can still play around with drug prices for profit simply because people are hostage to their drugs. Offloading all work to government may have perils too; markets are usually more quick at adapting with price signaling, and overall efficiency is usually higher in those organizations (less bureaucracy, more agility).
Drugs do not operate in a market. It is definitely not true with patented drugs (which operate under a government monopoly), and as we're seeing now that monopolies are taking over generics that's becoming less true there as well.
In addition, it's simply false that businesses are more efficient than the government. For example, compare overhead in public health care systems (e.g. Medicare) to private insurance systems and you'll find that the overhead is vastly lower in the public systems - something like 3% vs. 15%. Giant businesses are as burdened by bureaucracy as any other large institution, and they're only as efficient as they need to be, which in an industry with monopoly rents is not very efficient (pharma spends as much on research as the government for much less in research outcomes). Government at least has Republicans keeping it trim.
They do not operate in a market, but there are market-driven pressures for developing new drugs: efficient companies assign research priority according to their expected returns from drug development.
In any case, reform is definitively needed; and complaining without demanding reform is pointless. Discovering new drugs is a scientific endeavor and so it really should be as open as possible. I am a little skeptical of plain massive government research agencies, but maybe it's a good way to go. Maybe patent reform or something else is instead better. If you look at machine learning research the industry is not bad at sharing results because of two factors, apparently: 1) Companies know that progress will be much faster if everyone decides to share 2) To attract to researchers, they need to show they do high caliber research and share.
The market does not allow people like Roy Vagelos, Sigurd Varian or Bill Packard to thrive today, all we get instead is locusts like Valeant and Shkreli. That's the reality. The incentives are completely messed up, and there is no path to improvement.
In my anecdotal experience, the price of asthma inhalers (Albuterol) have gone up significantly, which sucks since they have a limited shelf-life & it's common to have multiple (car, office, bedroom, etc). Like epipen-countered allergies, asthma is a life & death situation.
From a quick web search, this site[1] shows:
> To go from inhalers that cost 5 dollars to 60 dollars especially for those who don’t have prescription drug coverage has been awful.
As a consumer, I can either forgo inhalers or use expired ones (instead of spending $$$ to keep them current).
From what I recall, there was a big price increase for asthma inhalers when they switched from CFCs to other propellants. That being said, I thought the new propellants were going to go generic after a few years.
Has that not happened yet? Or did people / insurance companies adapt to the higher prices so that the new generics can charge more than the old ones?
I don't think albuterol is available in that form. Here's a study where a company that makes generics is testing that, I think: https://clinicaltrials.gov/ct2/show/NCT01857323. It's from 2013.
The drugs in Diskus form are typically steroids. Steroids are to prevent attacks, albuterol is to stop attacks that have already started.
The sorry state of asthma medication is a tragedy that could have completely been avoided.
For a long time, asthma medication was not under patent protection. The FDA, however, outlawed all generic asthma medication because it contained CFCs [0] in the late 00's, and the replacement delivery system was newly eligible for patent protection simply due to using a different propellant. [1] This wasn't some amazing new advancement in the drug formula, they just changed how it got into your lungs - ostensibly due to environmental concerns.
This case is a damning indictment of patent law and in how we handle externalities generally. The environmental cost of CFCs was an externality that no drug manufacturer ever had to pay. What's the solution to that problem? Of course it's not to tax or fine manufacturers who continuing to pollute, no: it's to reward some pharma companies with a fresh monopoly for altering the medication such that it doesn't deplete the ozone layer.
Congratulations on the amazing new drug you developed! You're now doing the bare minimum that should be required to be a citizen of the planet by not actively destroying it with pollutants! Here's your reward, a monopoly, with which you can extract money from the (mostly poor) asthma sufferers who no longer have affordable medication.
I don't understand why this wasn't a bigger story.
Could you not buy them from another country? A quick trip across the border in either direction will save you a ton of money, and I'm sure you can mail order it too.
In EMS, there's been a big push to allow basic EMTs to draw Epi up from a vial to administer it, precisely to avoid the absurd costs associated with EpiPens. I don't know if that would be an option for individuals; perhaps it's something you can talk to your doctor about
Where I once worked we were obliged by law to keep a huge range of medications in a dedicated emergency kit.
In the years I was there none were ever used or needed.
The drugs ranged from salbutamol to adrenaline to glucagon, steroids, tablets for angina etc, etc.
In the mandatory refresher courses we were also quietly advised that with our level of emergency experience and thus diagnostic ability we were far more likely to do harm than good with these and so there were only a couple of items in the kit that we should ever even think of using.
Only one company was approved for the supply of these kits and they'd regularly contact us advising that such and such now needed replacing and invoice us.
Not only was it onerously expensive but what was really annoying was that they never supplied anything with a full shelf life.
Stuff that might have several years shelf life would commonly be supplied with a year or even less left to expiry.
The entire health sector is rotten to the core. The fate of two of my friends is a great example of where priories lay.
One is a registered nurse. She has seen her overall compensation shrink over the last 5 years as hospitals merge into regional cartels and medical practices consolidate. These cartel entities play rough, breaking unions and shipping in visiting nurses to keep wages low. Fortunately, her husband got a job with better insurance -- her family plan on his insurance costs less than her individual coverage.
The other person is a pharma sales rep. She makes about 2-3x the nurse, gets a car, and usually wins 1-2 vacations to beach resorts or Vegas every year. For awhile it was peddling a viagra competitor, now she has a stable of different drugs to push.
So when I hear about of the money needed for "research", from companies with huge sales forces pulling down $100-150k plus cars, etc... My first thought is "bullshit"
A sales force amplifies what you are already doing. If a research company can hire a salesman that brings in $1M in additional sales, it makes sense to pay that salesman $900k in salary and benefits, because that's an additional $100k the company can put towards it's research. If you agree with the research, you should be happy they hired that salesman. Saying you agree with the mission of a company as long as it pays it's salesman less than $x doesn't make any sense, unless you somehow know that the salesman is bringing in less than $x.
Why should the employment question for salesmen be, "How generous can we afford to be?", when for everyone else it's "How stingy can we afford to be?"? The whole reason a company hires any employee, at all, is because it's profitable. The question is why employees who don't contribute to the core mission of the firm should receive 90% of the revenue they generate, while those who do receive a fixed salary irrespective of revenue (and also have to work long hours and take few vacations).
The reason that top salespeople make so much money is that they're pretty much fungible across industry (they can sell basically anything to anyone), so there is a lot of competition for top salespeople. In industries where profit margins are very high (financial products, enterprise software, pharmaceuticals), these companies fiercely compete to get the best-performing reps, paying almost up to the marginal profit from each rep.
well I really don't believe this to be true. Even a salesman has to have something to sell- without good engineering they can't. imho the profits have to be split...
The impetus of this discussion is that pharma companies are buying rights to drugs. So it seems that, no, they don't need to research and create the drugs to market them.
Because to the CEO and the board and the shareholders the salesman contributes to the core mission of the firm (bringing in dollars) and the engineer just contributes to the costs.
By that logic, just fire all the engineers - costs go down and the dollars brought in remain constant or increases - hence the company makes more profits.
I'm certain that the optimal state of our entire economy is for every firm to make absolutely nothing at all -- except sales. Who needs a product with all that money coming in for free?
The drugs you get prescribed should be based on medical necessity, not which sales chick winks at the doctor, gets the doctor a vacation, or gets the coolest promo into the office.
Ask yourself... Crestor is a multi-billion dollar business. That little yellow pill sells for $5-6/unit. Why are any sold today when generic Lipitor (an identical drug for most uses) is available for 80% less?
Except if competitor A hires a salesperson who brings in $1M of sales from competitor B and competitor B hires a salesperson who brings in $1M of sales from competitor A, you now have the exact same revenues at both companies, $1.8M extra in salesperson compensation and an equivalent $1.8M drop in your budget for everything else, including research.
That's not how it works. There's no "stealing" sales, both salespeople are just closing in $1M in value of the available market.
And how would your budget drop if the salesperson is bringing in more than they cost? Not having salespeople doesn't mean the same money will still be coming in, rather it would be potential market left uncaptured.
What you describe is a classic example of the prisoner's dilemma. They will all be better of not hiring a salesperson, but if one does it all have to do it to keep status quo.
I knew a pharma rep once - she was a beautiful, intelligent woman, who spent her days going to doctors offices and trying to convince them to recommend her pharma-co's drugs to their customers. She explained to me, quite matter of fact, that she was literally not much more than a paid prostitute (Germany, where its legal) who slept with pretty much every client in order to close the deal - a fact she had no compunctions with sharing with me over wine, one evening .. actually, it broke her.
I'll never forget her telling me how she felt little more than a hooker, albeit with a much larger list of drugs to peddle, legally and with the backing and support of her company - which expected her to do what it took to get the doctors on their brand. It seems this is not uncommon, either - that pharma-co's hire the youngest, most attractive folks to rep their wares at the front lines of doctors offices.
I think that aspect of the industry has a lot, lot darker side than people are willing to admit. I knew her for a few years, until one day she committed suicide.
Yep. The medical industry is FUBAR'd and needs to be nuked from orbit and started over fresh. It's perverted at so many interdependent layers that it's impossible to unravel the whole thing piece-by-piece. We need to start over and regulate it tightly to keep it sane.
Source: I spend over $1k / mo on medical bills, and I have "really good insurance". In the past my plan had been simply to ignore exorbitant medical costs and my credit got pretty disfigured that way. I've been rehabilitating it the last few years, but if I can get to a place where I don't need credit, you can bet that the first thing I'll do is ignore any frivolous medical billing. We have to stop propping up this disgusting system.
Sales reps make so much because they bring in so much more than they cost. It makes perfect sense for the business to keep retaining them. This is the same in every sector and industry.
> Sales reps make so much because they bring in so much more than they cost.
Almost. Engineers also bring in so much more than they cost.
The real question is if the money they bring in scales with the amount you're paying them. The reason salesmen can make so much money is because you can just pay them mostly on commission and take on practically zero risk of overpaying them. You can't do that with engineers.
Why not? Salespeople must have rules for assigning proportional commissions from joint sales. Why not assign proportional commissions to the engineers responsible for the product sold?
Because for product development, the time from starting a project until scalable revenue is very long. Granted, even the sales part can sometimes takes months, even years. But the engineer's work starts much before the sales work begins.
Engineers who want a bigger piece of the eventual profits start companies.
How do you know which engineer(s) are responsible? Maybe Alice and Bob both worked on the product but Bob spent all day on HN and Alice did all the work. And what about Charlie who joined after feature completion but fixed a couple of major bugs and closed a security hole that would have bankrupted the company had it been left open?
It's just unwieldy compared to the salespeople case.
It's just as complex with salespeople. What about Alice and Bob visiting the customer together for two presentations and then Bob closes the deal on the third presentation he does alone. What if Alice lives in Kansas and meets Charlie the Customer in Europe on vacation, should the European sales guy Marco get a piece of the action?
imho this is not the key point. it is just so much easier to measure their performance. without good engineering a sales rep can't sell anything for long...
The key point is that this is nothing specific about health care nor that it's somehow broken/rotten.
And sales is usually more important unless it's a highly technical situation. There are plenty of terribly engineered but extremely popular products. The important part of staying in business is getting people to buy it.
(1) Medicine has a very inelastic demand function. If you need substance X to stay alive, you'll pay anything to get it.
(2) Costs are hidden from consumers. If insurance / Medicare is paying for it, it literally makes no difference to the end user if it's $5, $50, or $50,000.
(3) Free-market forces are distorted by patent monopolies and lack of diversity in the supply chain. With a patent, you can crank up the price as high as you want. Ditto if you're the only supplier and it'll take some time for competitors to bring production online, or you can deny them access to samples for the equivalence testing your competitors need to prove to regulators that their drug is the same as your drug.
(4) Broken incentives for developing new drugs. A patient's going to be taking a drug to treat their diabetes / ED / high blood pressure for the rest of their life, whereas something like an antibiotic is only taken for a couple weeks. Guess which one is more profitable, hence attracts more R&D money?
What's the solution? I don't know. Maybe market reforms to align the incentives; perhaps even bounding pharmaceutical companies' profit margin to some multiple of their costs (but of course you'd have to be careful about the wording of the regulation and auditing for compliance, to make sure it can't be gamed by e.g. deliberately inflating the costs). Or perhaps even some kind of socialism where the government tells people what to produce or how much to sell it for (agricultural subsidies might be regarded similarly -- the government is deliberately manipulating the market to push down the price and push up the supply of goods necessary to sustain life, so shocks don't result in lethal shortages).
Bernie Sanders at one point talked about replacing patents for new drugs with prizes, but I think he may have given up on that.
This is a symptom, not a problem. Drug prices are a good measure of how we are doing on healthcare policy and insurance regulation. It looks like poorly. It costs 2.5B dollars to develop a new drug. The regulatory hurdles are MASSIVE. We have a complicated and extremely compromised healthcare system
that is focused on providing insurance when it should have been providing better healthcare. There is no easy answer here, but companies are going to want to make profits and the system incentivizes them to spend money developing a few critical drugs, holding on to the patent and pricing it as high as possible, the dev costs are passed to the insurance companies which are passed on to you in premiums as well as inflation, as insurance companies operate much like a bank. This comes full circle into the role that banks play in lending and increasing the money supply.
Possible answers. Tighter fiscal policy, patent reform, smarter testing, looser regulations on known compounds, google x prize like gov't or private funding for cures, distributed computing using algorithms to evolve a cure (will be interesting to see what happens with that patent)
I dunno. I don't think that in Europe the development costs or regulatory hurdles are smaller than in the US (if I had to make an uneducated guess I would say bigger), and yet the prices are way lower.
I would add to that list "heavy government regulation on medicine prices", they are not a common commodity and should not be left to the markets free whims.
That may be because the US is leading the way on drug development. After the drug has been developed, the drug company will be able discriminate on price to maximize revenue. I imagine the cost of getting approval to sell a drug in European countries that has already been developed and tested for the US is much smaller than the actual development.
It could be that without the US system, these drugs would not be available in European countries as well.
Mandating lower prices for drugs is unlikely to work as it hasn't worked in the past (Venezuela everything, US gasoline, etc).
> Mandating lower prices for drugs is unlikely to work
Not sure if you are saying this generally, or you mean it as a response. I did not mean to indicate this, I believe lowering regulations and dev. costs would be beneficial but not mandating lower prices.
As an aside, I agree with you but would be interested to see if America can continue to compete in the drug market long term. Obviously, it is a big market, but with countries like China and India and their growing middle classes, if they have a more attractive development cycle with less regulation and tighter feedback I wonder if biotech would move overseas. America has really great biotech and science sectors because engineers move out of those countries here. If this stops, other markets become more attractive, and/or the patent system remains broken I would be pretty concerned.
It IS working, and has been for decades. States set with the drug companies the prices of the medicines, and if they want to make business in that country, they'd better get to an agreement. In the US that could "easily" be implemented at State level.
The majority of drug research spending is in the US, and the majority of drug consumption is in the US, both per-capita and in aggregate. Once a drug has been researched and FDA-approved and can be sold in an un-price controlled market to recoup fixed costs, it's cost-effective to go ahead with approval hurdles for marginal profits in controlled markets like EU countries.
In effect, high US drug prices subsidize lower prices elsewhere.
I see your article and raise it [1]. TLDR, This paper says that though is true that US expends more in drug development, it actually has the worst bang per buck in the discovery of new drugs. The authors suggest that there is little evidence that most of the new drugs (sold in the US at whatever the price the company wants to stick in it) are clinically better.
http://emoglen.law.columbia.edu/twiki/pub/LawNetSoc/BahradSo... seems to expound on a criticism of the first paper, which asserts that it muddles the data by classifying drug origin by company headquarters, rather than the market in which the research is done and the drug is first patented in. With that reclassification, their data seems to show that US-based research (though not necessarily US-headquartered companies) substantially outperforms EU-based research both in quantity of NMEs and sales.
> At first glance, the organizations with their headquarters based in European countries are characterized by a higher probability of market launch for compounds entering clinical development. However, when the composition of research portfolios is taken into account, the apparent comparative advantage of European organizations vanishes.
Your second link seems to reinforce this:
> The European Federation of Pharmaceutical Industries and Associations reported that, between 1990 and 2003, its members increased their research and development investments in Europe by 2.6-fold and in the US by fourfold
It's obviously silly to claim that all research has fled Europe (it clearly has not), but it does seem evident that European-based pharma countries are electing to research and bring to market first in the US. I think the question then is "why?" - is it the US's higher effective ceiling on drug prices? Higher per-capita drug spending? Higher probability of success through the FDA versus the EMA? What are the causes, and what are the effects?
Economic wisdom tells us that long-term price controls reliably cause shortages, either by underpricing demand and/or by disincentivizing supply; I don't think it's unreasonable to presume that the same effect would be in play to some degree here. The pharma industry is obviously extremely distorted by regulatory intervention, both in barriers to entry for a new product and barriers to entry for competition on existing products, so conventional wisdom can't be applied across the board, but I can't imagine that the effects of price controls are negligible.
Why was this voted down? cheald presents a reasonable argument. Certainly no ad-hominem attacks. Thimothy then presents a rebuttal with reasonable counter-claims.
I find both points of view interesting and contributing to the discussion. This is a valid dialectic between two parties. I thought HN did not downvote arguments merely because we disagreed with them, which is one of the reasons it has appeal to me.
The colchicine story reminds me of the Red Yeast / Lovastatin story. Red Yeast is a traditional Chinese medicine that can lower cholesterol due to several compounds it contains. Lovastatin was identified in it, put through trials and is now the standard for lowering cholesterol. Meanwhile, the gov has said you can't sell Red Yeast Rice with lovastatin in it, so they allegedly remove it.
As a single datum, I was told I needed to be on statins, and when I balked, my heath care professional said I could try RYR for 3 months and if it didn't work I'd need a prescription for statins. My cholesterol dropped 97 points in 3 months. I said "so I don't need statins?" She said shes never seen that kind of drop with statins, so no.
So yeah, take stuff from nature, patent it, then get the natural version banned, profit!
Red Yeast has not been banned, you just can't sell it as a treatment for high cholesterol. Why? It hasn't gone through clinical trials.
You might argue what's the difference between a tablet of lovastatin and Red Yeast? Well, I don't know and the FDA doesn't either that's why you can't make medical claims about it.
I'm glad it worked for you! Also, lovastatin went generic a long time ago and it now costs a few hundred dollars (if that) a year to treat a patient.
"Red Yeast has not been banned, you just can't sell it as a treatment for high cholesterol."
Wikipedia disagrees with you. It says, if a product has a measurable amount of monacolin K, i.e., lovastatin in it the FDA will stop it's sale even if there aren't any claims of cholesterol reduction.
> You might argue what's the difference between a tablet of lovastatin and Red Yeast?
The tablet of lovastatin has a precise amount of active ingredient. Red yeast rice has some random amount that may or may not be clinically significant.
Along those same lines, if you fill your prescriptions at WalMart, then for $40 per year you can take atorvastatin 80mg (Lipitor; one of the best studied high potency statins) every day.
This is about $10 per year (~3 cents per day) more expensive than cheap red yeast rice.
> So yeah, take stuff from nature, patent it, then get the natural version banned, profit!
That is a total mischaracterization of the situation. The patent on lovastatin was not on "stuff from nature"; it was on a way of reproducing "stuff from nature" in a controlled manner to guarantee purity and potency, and to put it in a form that can be made into pills.
Not to mention the supplements industry threw a giant tantrum to avoid regulation, and here's the fruits of their labors:
The authorities said they had conducted tests on top-selling store brands of
herbal supplements at four national retailers — GNC, Target, Walgreens and
Walmart — and found that four out of five of the products did not contain
any of the herbs on their labels. The tests showed that pills labeled
medicinal herbs often contained little more than cheap fillers like powdered
rice, asparagus and houseplants, and in some cases substances that could be
dangerous to those with allergies.
Apparently some doctors consider statins to be overprescribed and Pfizer has worked hard to drive that - in 2012, Lipitor (Atorvastatin) became the best selling drug ever.
I am not arguing for or against the drug industry, but naming a few drugs with price increases is meaningless.
Telling me some random generic has gone up in price means nothing to me . For all I know, that might be an old fashioned drug hardly any doctors prescribe and the price increases is required in order to keep it available for the few people who require it... or it could just as easily mean the company has a monopoly and is price gouging consumers.
There needs to be a weighted index, or multiple indexes, of drugs weighted by how important they are. Not sure how to define importance in this context, but quantity sold would be a good start, maybe another index weighted by average expenditure per patient per year and another weighted by lives saved.
Edit: Downvoters, I did read the article. An unweighted group of any product is not very useful from an economics perspective. That is why the CPI is weighted.
>> Telling me some random generic has gone up in price means nothing to me .
They state that the average price of a group of over 220 drugs has been increasing faster than inflation for some time. That's hardly "some random generic". In fact they say generics tend to drop in price, it's the name brands that are rising.
You raise a good point and percentage increases can be deceiving. If a drug cost $0.01/tablet and now it's $0.03/tablet, yes that's a 300% increase, but it still costs pennies per day to treat someone.
Unfortunately I can't find it right now, but the Us gov't did a study into generic drug price increases. There is no one reason why they went up. For some drugs it was because a company decided to stop making it and there were shortages. For other companies, they had manufacturing problems and shortages resulted.
Shortages don't seem like they should a valid reason. Choosing to no longer produce a needed drug shouldn't even be a legal option - free market shouldn't be allowed to trump health. I don't know how you write laws to require a corporation to produce a drug they own, and perhaps that isn't the right approach; but it doesn't seem morally acceptable to let this happen. Capitalism should be taking a back seat here compared to the common good. "Manufacturing problems" just seems ripe for abuse. "Oh, we fired 90% of our production line, and now we just can't seem to pump it out anymore". Manufacture should have safeties and redundancies in place to prevent the sudden inability to produce whatsoever. It's unfortunate that money trumps all, even for the health industry.
You're expecting the article to say something else, when the point of the article is clearly laid out in the headline itself. Which is that this particular case is not the 'odd one out', but common, or common enough in the drug industry. Obviously, the drug companies want to scapegoat this dude and avoid any negative press for the other times they bump up prices.
I agree with you that to make a distinction between legitimate and illegitimate price increases is needed. But then again, I'd say the fact that healthcare is a for-profit industry has already put the incentives in place necessary for anyone interested in dabbling on the dark side.
It's likely more nuanced than this, but at the end of the day, he's getting paid a lot of money to be the bad guy. He'll be "fired", and then he'll go on to do it again somewhere else. He even flat out admitted it (before deleting the tweet):
"@matthewherper great question, I guess we will find out. I take the pain for my investors"
-Martin Shkreli (@MartinShkreli) September 21, 2015
Looking over the anecdotes here, i find myself thinking that big pharma is just an example of the "profit uber alles" mentality that has been rampant in the corporate world since at least the 80s (if not before).
It recounts, from a British point of view, the rise of a type of finance capitalist that revolved around strip mining established companies.
I think part 3 touched on how by the time the people that started it got cold feet about it all, it had become institutionalized thanks to pension funds and similar.
I'm sorry, but I have to nitpick on the AARP graph showing the average annual rate of price increases for 227 drugs.
Anytime I see data that is a subset of the real data set, I have to wonder why they did that. Why not the average annual rate of price increases over all prescription drugs? Why only 227 of them?
Also, I disagree with this quote: "Only when a 46 percent discount was applied to a pricy Hepatitis C treatment, Harvoni, did it become a good health care value -- at about $40,000 per year."
That's patently untrue. Hell, CTAF (California technology assessment forum, which assessed drugs for MediCal) found that Harvoni, at it's full price of almost $90K was cost effective. The real problem is that it would cost too much to treat everyone.
The drugs were chosen simply as the most significant ones for the AARP's membership. The methodology is thoroughly discussed in Appendix A of the study:
That's the internet for you. Ask a question and nobody answers, state the wrong answer and you get the right answer instantly. It's not my fault, I'm a victim of an oppressive system!
To be fair, I really wish news organizations would do a better job of linking to their sources. In this case, you have to notice a link in the story, then dig up the link to the actual study from that. There really should be a direct link to the study from the chart's caption, made obvious for all to see.
Of course, one could click through the link to the study, and read the 3 pages that describe the methodology behind their "market basket" of drugs. You don't have to wonder, or at least the curious don't.
I've never heard any patent supporters say anything about "too much" competition. What they say is that anytime a competitor can freeride on your investment of resources, it is not fair competition.
Generally, when massive price oddities become commonplace, it's evidence of government distortions of free market operation. Trying to blame it on 'rogue' CEOs is an exercise in futility.
In fact Daraprim/Pyrimethamine shows some interesting features of markets:
* the market in the United States is so small, that there is a single manufacturer
* Generic drug manufacturers try to come in the market, the brand-name holder has made it extremely hard for them to do equivalence testing by making the drug available only through a restricted channel that excludes them.
* Even if them manage to get the drug to the market, the brand-name manufacturer can lower prices temporarily, ensuring they exit.
* The same manufacturer can have doctors prescribe the expensive brand-name versions of the drug by buying them off.
Instead of leaving patients in the hands of such natural or almost natural monopolies, the government can fix this situation in a variety of ways - price ceilings, subsidies, even government production of drugs for rare diseases.
You can argue that, some regulation somewhere has given these companies a monopoly, but without any regulation, there would be no market to speak of - the off-NDA drug market isn't one I and assume most patients trust.
The way around the trust issue is to make the "and effective" part of FDA regulation optional. Drug companies can only market "and effective" if they get the FDA approval of it. The rest can only market it as "safe". This can dramatically reduce the prices of drugs, and it is the user option whether they want to pay extra for the "and effective" certification or not.
It was optional until the 1960s. It was changed to be mandatory because the market was full of safe but useless drugs. Considering how mere differences in marketing requirements have not stopped a flood of useless homeopathic remedies, I expect that useless drugs would come back in force if that change were reversed.
Americans have paid a heavy price for this in terms of large reduction in the number of new pharmaceuticals coming to market, long delays for new cures, and, of course, huge price increases.
See "Regulation of Pharmaceutical Innovation" by Sam Peltzman.
the government can fix this situation in a variety of ways - price ceilings, subsidies, even government production of drugs for rare diseases.
I'd think they should require cooperation with the equivalence studies, and possibly foot (part of?) the bill for those studies. Try to minimize the downsides of their (overall important and helpful, if perhaps taken a bit too far) regulations that cause the problem.
Price ceilings for anything with a government-granted monopoly would also probably be good, but that's... not exactly the issue here, since the drugs in question have gone off-patent.
And they can only buy it from one place (which doesn't have to compete on price due to being the only one) because... guess what? Government interference.
Sure, but it wouldn't have seatbelts or airbags and the "non-polluting" would come with 2 pages of fine print redefining what pollution is (and it would probably give you cancer).
What if I don't want or can't afford seatbelts or airbags or accident insurance (not to be confused with liability insurance)?
Poor people end up taking that increase in life expectancy and just wasting it on walking and sitting on the bus because it's so expensive to operate a vehicle here in Canada.
It's your mother's place to tell you to wear your seatbelt, not the government's.
The choice might be "buy this or die" but it's the government that makes it "buy this [at exorbitant cost] or die".
In this case, not even due to a patent, but because you can't sell a generic without lengthy, costly FDA approval.
Essentially the government is telling sick people, "you can't take this generic daraprim from India because we haven't approved it, so pay Martin Shkreli $750 a pill or fuck off and die".
It's asinine and it's 100% the government's fault this is happening. If Martin Shkreli hadn't done it, someone else would have.
Shkreli is at fault whether someone else would've done it or not. Someone else didn't do it, Shkreli did. He's responsible for his actions, and the government is responsible for making them possible.
"Food" is not a single commodity, but rather about a million different items which largely substitute for one another when it comes to basic "or die" sustenance. If bananas suddenly cost $100/pound, my choice wouldn't be to pay $100/pound or die, I'd simply stop buying bananas, and buy more of other food instead.
Drugs are not comparable, because there's typically only a handful of drugs that are effective for a given condition, and often just one.
Given the famines that regularly happen in countries that don't have free market food supplies, I wouldn't take it as a given that food is implicitly plentiful.
The inexpensive prices for drugs cited in the article happened before the US government got heavily involved with running the health care industry. Maybe that's a coincidence, but I doubt it.
It is comparatively free. You don't have to go through many regulatory hoops to grow food and sell it. It's not remotely comparable to concocting a medicine and selling it.
The end of famine in America happened around 1800, as the free market and the industrial revolution fixed that problem. Famine persists in other areas that insist on collectivized farms or have other problems that prevent free market agriculture, such as warfare.
Even the Soviet Union had to import wheat from Kansas, and allowed farmers to farm their own plots and sell the results, because the collectivized farms could not produce enough.
On what basis could you judge Wheeler favorably? Because he backed down after a monumental backlash from the public combined with several very powerful and wealthy corporations?
Wheeler can't claim credit for net neutrality after attempting to destroy net neutrality and losing.
The colchicine case is an interesting one if you dig down into the details.
Colchicine has been used for hundreds (?) of years. It never went through phase 3 trials and it was never officially approved by the FDA. Instead it was grandfathered in.
This made the FDA pretty uncomfortable [1] and I can't blame them. How do you properly regulate a drug where there is little to no data outlining it's efficacy and safety? So, the FDA decide to dangle a carrot in front of drug developers. If you formally take a grandfathered drug through the approval process, you will be awarded with something call "data exclusivity" (it's not a patent). For a period of 3 or 5 years (it depends on the filing), the FDA will not approve another form of the drug. In addition, they will tell/force all the other grandfathered manufacturers to stop selling their versions.
Statement from the FDA: Colcrys is the only FDA-approved single-ingredient oral colchicine product available on the U.S. market. Approved by the FDA in 2009, Colcrys’ prescribing information contains important safety data and recommendations on drug interactions and dosing not available with unapproved products.[2]
Of course this is a pretty attractive carrot for a drug company. Spend $X now and you've got a captive market where you can recoup your R&D spend and make a profit over 5 years. Plus the heavy hand of the FDA will help you get rid of competitors!.
Due to the the FDA regulatory process, it shouldn't be surprising that the cost of colchicine went up, it's pretty much had to in order to pay for the FDA approval. Did it have to go up 5000%? No, probably not. But it did have to go up if the FDA wanted an approved version since producing a grandfathered, unapproved drug is pretty cheap compared to an FDA approved one. What made the colchicine case particularly unfair was that the company didn't actually run any trials. They just collected all the trial data that already existed (mostly published papers) and submitted that data.
Another great example is Mr. Mucus, the cold medicine, it was the exact same play. In fact, a VC firm backed the entire process. The got the active ingredient approved by the FDA (again, it had been grandfathered in) and the FDA forced all other competitors off the market. This blog post has all the details [3]. Suffice to say, Aisling Capital made a 15x return off that investment. And that's why you see Mr. Mucus ads all over the place.
Seems like it would be a lot better if the FDA simply had the money to commission such studies itself, rather than fucking up the market to get them funded privately. It's effectively a tax either way, just the way they actually did it here is a crazy and inefficient tax just on sick people.
I'm confused about this example since guifenesin has been approved by the FDA since the 1950s. But it was the time-release formulation of the molecule that was given data exclusivity to Reckitt in 2002 (after purchasing it from Adams). There was no "unknown efficacy" tag attached to this medicine.
I asked a similar question about Ambroxol a while back (Europeans know this as Mucosolvan). For some reason nobody will take up this one in the USA? I find ambxorol works way better than guifenesin on my kids.
No, you're correct, it was the time released version of guifenesin.
The problem was, all the current time-release products were not FDA approved. You can't just create a time-released version and keep your fingers crossed, you need a clinical trial to actually show how it is time released. You wouldn't want a time-released version to release 24 hours of drug in 5 minutes!
So, by induction, I can take any currently approved molecule and apply a new formulation to it (time-release, liquid vs tablet vs aerosol, etc) and get exclusivity this way?
I thought the point was to take old drugs with no clinical data and get them back into the mainstream - this exclusivity was the carrot on the stick. But this seems more like a twist on that idea.
To your first question, the answer is yes. You could take any approved molecule and apply a new formulation and get exclusivity on it. There are many companies that are trying to do just that.
Of course, your new formulation actually has to add some value (1 tablet per day instead of 1 table three times per day).
To your second point, the Mucinex example is "taking an old drug with no clinical data and getting them back into the mainstream". The difference is that instead of it just being the active ingredient, it's a time released version of the active ingredient. Prior to Mucinex being approved, there were unapproved versions of long-acting guifenesin out on the market.
You're right it's not exactly the same as "no one has tested this drug at all", but rather "no one has tested this formulation of this drug".
Wouldn't all these problems disappear if the entire drug industry was nationalized? Once you remove the profit angle, there is no more incentive to raise prices dramatically, make minute changes to a molecule to extend your patents, or only focus research on medicine which is the most likely to make money.
I suspect the opposite. The Scientific American estimates the cost of rbinging a new drug to market is 2.5B and that number has doubled over the past 10 years[1]. We need to find a way to allow tighter feedback loops, better data flow and less regulation without purpose. We have amazing technology that allows continual monitoring of vital signs and rapid blood tests etc. If our laws could evolve with our technology we would be in great shape. That would, of course, require elected officials to be qualified in various disciplines, act in the public's best interest and not accept money from lobbyists.
Everyone agrees with that; all regulation that actually exists or has been proposed has/had a purpose behind it.
Individuals may disagree with whether the purpose is desirable, whether the regulation effectively serves the purpose, and whether (assuming they agree that the purpose is beneficial and it is actually served in effect by the regulation) the beneficial effect of serving the purpose is worth any costs that the regulation creates, but those are different issues than "regulation without purpose".
> We need unbiased medical experts to propose a system that works which has the following charachteristics:
Unbiased medical experts are not particularly likely to be experts on three points you suggest are critical, since none of those are actually even remotely medical questions.
> I suspect the opposite. The Scientific American estimates the cost of rbinging a new drug to market is 2.5B and that number has doubled over the past 10 years[1].
So?
> We need to find a way to allow tighter feedback loops, better data flow and less regulation without purpose.
Everybody is all for that. Obviously, the question of what is "without purpose" may depend on whom you ask.
> That would, of course, require elected officials to be qualified in various disciplines, act in the public's best interest and not accept money from lobbyists.
You can't expect politicians to be qualified as everything, but you should expect their cabinets to have a number of specialists.
There is still incentive to have high prices, even if the organization is "non-profit" or governmental. At some point, that money reaches someone who has the authority to spend it, and that person is always going to want more money and be incentivized to get it. This happens whether the beneficiary is a government appointee or not.
A free market is generally considered superior because the element of competition keeps the vendor(s) honest. If it were illegal for others to make drugs, I would expect the result to be much like it is now for companies that hold patents on drugs; charge as much as possible for as long as possible, until you're forced to bring the price down by competitors.
Anywhere you find exorbitant prices you'll find high barriers to entry. These are specifically designed to keep competition minimal and make it so once competition does clear the hurdle and enter the market, they won't have much interest in shaking up the existing structure too much. The government saying "only we can make drugs now" is a pretty high barrier to entry.
> A free market is generally considered superior because the element of competition keeps the vendor(s) honest. If it were illegal for others to make drugs, I would expect the result to be much like it is now for companies that hold patents on drugs; charge as much as possible for as long as possible, until you're forced to bring the price down by competitors.
Why would you expect that? If you take, eg, the French railways, they have for a long time charged reasonable prices for a good service with very good territorial coverage. Similarly, state-owned energy monopolies generally don't gouge out their customers. As for the "honesty" of big pharma, are we talking about the same entities repeatedly caught hiding unfavorable studies or plainly bribing doctors?
Money going exclusively towards research that is focused on earning more money might not be ideal, sure.
But in a nationalized drug industry, money will instead go exclusively towards "research" conducted by those who are best at filling out forms and schmoozing with politicians. I think that would arguably be worse.
Are you under the impression that big pharma looks at lobbying with disgust?
As for "research" as you put it, I was under the impression that a number of countries already fund medical research. I'm not privy to how much "filling out forms" and "schmoozing with politicians" this involves, but I have a hard time imagining the methods and goals being worse than the "best practices" of the private sector.
> I'm not privy to how much "filling out forms" and "schmoozing with politicians" this involves
My friends reported that their (highly educated and intelligent) supervisors in their university labs spent almost all their time doing funding applications instead of research.
I imagine it's not the same in the private sector, you go to work and spend your day working not running around begging for funding because the company is already rich and has already decided to fund the project.
AFAICT in the private sector its very often the same (and not just in pharma, but in biotech more generally), because in order to pursue a project a principal scientist will need to sell a business plan around it to the business management of the company so that they will devote company resources to it, which may involve securing (or identifying and waiting for the business-side folks to secure) funding via grants, cooperative ventures, etc. to do it.
If the company has a big cash stockpile (e.g., because it is either a well-funded startup or a well-established big player) the likelihood of needing to secure outside funding may be less, but the scientist will still likely have to sell the idea to the business team.
Yes, but the business team is more likely to be competent in evaluating the business plans than the government. After all, they've done this sort of thing before and they're incentivized to be objective and develop a popular, effective drug so they can rake in the cash.
The government has other priorities (diversity, "fairness in procurement", getting some of the money back in political donations, etc.). That's why incompetents like CGI Federal get massive contracts like healthcare.gov. They're clearly bad at writing software and excellent at navigating procurement.
I don't want the pharmaceutical research industry, bad as it is, looking like that.
I worked for Johnson&Johnson in Belgium years ago. On each desk of the open space I was on, there was a small "manifesto". The title was : "we work for the good of our patients and investors". Yes, patients and investors put on the very same level.
Me and my siblings have a genetic mutation that requires us to take Colchicine 3 times/day for the rest of our lives so needless to say I am glad to see the drug industry being exposed.
It's refreshingly that we are losing our appeal for pure moneymaking. I'm not sure the attempted t was to portray him as a rogue so much as a jerk. And the article doesn't refute that.
I, for one, would like to see drugs increase very sharply similarly to what this guy did.
Reason is we need a consumer reform, and not a government reform which is a temporary solution.
The entirety of pharmaceutical R&D is $161 B globaly. If half of Americans were contributing $100 monthly to a pool, we could fund it entirely and make every drug available for free.I would love to see this done outside of the government.
We MUST stop depending on government for Health, and Education. While they intend well (I truly believe they do individually as people), as an aggregate they are not able to solve these issues at scale.
What sort of organization do you propose would obtain and manage those $100/month contributions, and how would that organization differ from "a government"?
Regardless of whether the government currently funds drug R&D, your idea sounds a lot like government-funded R&D, thus my question of how it would be different.
1) We can dictate price: $0.00. 2) We can decide what drugs to develop (i.e. do we need Ibuprofen, Advil, Tylenol, This, That, or do we need the best). 3) When the price is $0.00 we ensure no one dies because they can't afford a drug. 4) When the price is $0.00 well physician can focus on providing you with the best drug, and not the one they get kick back from.
Shall I continue?
This idea does not stop at Pharma. Wherever Gov fails, we can try this.
Well then the matter is even worst than I suspected. I am funding drug research just so the government can sell it to a private company that will charge me 100x. Clearly this is rapacious.
Which government social programs fund the $161B in pharmaceutical R&D? How do you and I have a direct say on how that money is spent?
What we need is a direct competitor to government. I am all for government regulating what is safe/unsafe to consume/use/inject in your body. However I would like for us to fund development and have/give free access to the discoveries.
people are jerks, they justify it by saying its business. Have I had an option for medicine provider I would go with the one thats not abusive to its employees.
If you really "grow all your medicine out of the ground" it's more than likely if you ever get truly ill or injured you yourself will be in the place you grow your medicine out of. Accept science. It works.
I think the difference is they didn't raise the price in one fell swoop. Frogs in boiling water, etc, etc.
http://www.bloomberg.com/news/articles/2015-09-23/how-market...