1) Academic medical research is simply not well tooled, right now, to do the later stages of drug development. What pharma does well and academia does not, is basically optimization of candidates. They do it through high-throughput screens and medicinal chemistry. Those things are very expensive and not publishable, so...academics don't do them. And everyone with the expertise works in pharma.
2) Clinical trials are freaking expensive. My institute has developed several drug candidates and the same process necessarily applies every time. The public-funded researcher basically HAS to either sell the patent to pharma or start a company and raise the many millions required to do a trial. The amount of money required is way out of range of current grant funding. If they want to see their drug get to patients, and of course they do, there is literally no other way right now except partnering with pharma.
When I get a chance to talk to politicians about how to fix this, I always make the same pitch. Step #1 should be to give a huge wad of money to the FDA. Say $1B/yr. Then you tell the FDA: every year, pick the 50 most promising drug candidates. Publicly fund the clinical trials, and the public will own the patent. Give some cash to the inventor and the institute to incentivize them to do this scheme and not sell to pharma.
Politicians, both left and right, look at me like I'm from Mars when I propose this. Those on the left think high drug costs are all about greed and not our broken system, and those on the right have unwavering faith that "free" markets will always solve everything.
And with insulin specifically, there is another problem: diabetics won't take the generic insulin that has been off-patent for years now. They must have the fancy and more convenient version. Mark my words, the fact that Americans must always have the absolute best thing, cost be damned, will become a major issue if we ever get single-payer.
A huge reason I found is your doctor won't ever recommend it. Most diabetics may very well just be blissfully ignorant (I was until recently) that it's even an option, save for Wal-Mart very heavily marketing their "Reli-On" branded insulin produced by Novo Nordisk.
I wonder if PCPs (not endocrinologists) are even aware it exists. I've had many PCPs in the past few years, from one of the best health care centers in the US, never recommend it as an option, and seemed to forget it even existed. I guess when you recommend Eli Lilly's biologic-developed analogs for decades and decades, you damn near forget about the old school insulin out of habit.
I recently switched, WITHOUT a doctor's approval (none would recommend it). I have to be more careful, but my costs of using purely generic everything plummeted to below 1997-era insured levels Increasingly insurance co-pays have gotten far more expensive for the biologics, and increasingly plans don't even cover the biologic-process analogs anymore (where my costs would be $560/mo for just the insulins that aren't covered by my current plan, or $130/mo if I paid another +$230/mo for a better single-person insurance plan -- only a $170/mo net reduction).
My uninsured "no prescription required" OTC costs for all my diabetic supplies (two insulins, sharps container, lancets, test strips) are $69/mo, and $18/mo (prescription required) for generic syringes now. It required taking everything in my own hands and telling every PCP I had to #$%& their hat.
You might as well say "infected people won't have amputations like we've been doing forever. They must always have the fancy and more convenient antibiotics instead."
The fact is, because of intrinsic differences in the types of insulin, a regimen of NPH and/or R can not help but have a significant increase in diabetic complications (including amputations, as in my statement above) than a basal/bolus regimen of Lantus/Levemir and Novolog/Humalog -- all of which have been available for something like 20 years and all of which have seen predatory price increases.
The general point is: the reason drug costs are high because of two things working together:
1) Pharma continually refreshes patents by making modest, but real, improvements to things that are generically available.
2) Patients will not accept any level of increased health risk, no matter how much the cost increases in exchange for decreased risk.
The result of these two things is that even though we have generics available for almost every major disease, they are rarely used, and we are always using the patented versions which are orders of magnitude more expensive. And then we have people wondering why health care is so expensive.
It would be absolutely bizarre if it were any other area of the economy. Imagine if every person insisted on owning a sports car because they go 20% faster. But because we (the public in general) continue on insisting that no price can be placed on marginal increases human life or health -- despite the huge logical contradictions that result from this -- we cannot have rational discussions about how to actually keep health care affordable.
If you're right, do you know why no generic producers of the drug were able to enter the market by 2017?
[1] https://www.pbs.org/newshour/health/insulin-market-shakeup-p...
Insulins are biologic medicines, so once patents expire you might get biosimilar drugs which also require FDA approval, not generics as with other drugs. Admelog is the biosimilar for Humalog, approved by the FDA in early 2018.
As I understand it, Sanofi (Admelog's manufacturer) sets the price to be only slightly below that of Humalog.
Eli Lilly, Novo Nordisk, and Sanofi manufacture substantially all of the insulin, and they more or less follow each other price-wise. There's not the competition you would expect that would drive down prices.
EDIT: they compete by offering varying discounts to particular insurance companies to only cover their insulin at the exclusion of the other company's insulins. This often leads to a letter to patients near the end of the year telling them that the insurance company has decided that their treatment plan has now changed, decisions of their doctor be damned. (Yes, you can appeal and what-not, but it's still fundamentally the insurance company's decision, not your doctor.) This, of course, also screws anyone without insurance who is expected to pay list price.
TLDR:
1) Biologic / large molecule drugs (insulin) are much harder to produce than small molecule drugs like acetaminophen.
2) The FDA thus requires a lengthly, costly approval process to make generic large-molecule drugs. And since often these drugs are not atom-by-atom the same like small molecule drugs, they are referred to as "bio-similar"
3) Additionally- though least clear from the article, while the patent on a large molecule drug does expire after 20 years in the same way as small-molecule drugs, it appears that the larger-molecule gives a wider area to patents that can be applied to it. The article hints at, but does not make explicit, a mechanism for "evergreening" as I tried to clarify elsewhere in these comments.
Anyways, thought I'd write it up the TLDR because this background info would have been useful to know prior to engaging in this comment section.
Gracias again
[1] https://www.forbes.com/sites/theapothecary/2019/03/08/biolog...
Do you think they actually believe any of this nonsense? I would have assumed the rehearsed political phrasing is just the public veneer over something to the effect of "and if I endorse this, X lobby group(s) will steer Y amount of PAC funding to my primary opponent and eat me alive".
Many of those on the right are just ideologically opposed to government spending on anything (that isn't the military). It is often a win to get them to provisionally admit that, maybe, possibly, ANY government spending on research is useful. So "give more money to the FDA" is where they stop listening.
On the left, there is often a dogmatic refusal to even try to understand how markets and incentives work. They tend to inhabit a fantasy world where all humans are, or should be, pure altruists. If you think it is just pharma that responds to monetary incentives, you'd be dead wrong. Publicly-funded institutions LOVE this system as well because the typical endpoint is that when one of their researchers develops a candidate, the patent is sold to pharma...BUT the institute retains a right to, say, 5% of profits.
Why not just allow drug imports from Canada and India? It is because we -- meaning the American consumer and taxpayer -- are subsidizing drug development for the entire world. The current system in the USA, bad as it is for American consumers, develops the majority of new drugs for the whole world. I have no doubt that if you allow foreign drug imports without other reform in the system, you actually will see less drug development.
True competition is almost always a good thing.
This would be abused like any other slush fund. Plus there’s a natural adverse selection bias as all the “really good” patents will go the private route.
The real answer to all of this is to pass a law that drug prices in the USA have to be less than anywhere else on earth. Let that kick off a race to the bottom amongst the world’s countries. Let them eat the cost of constant marketing in the first world.
Some will argue that’s not fair to the millions in less affluent nations. I say who cares? A governments’s foremost job is to protect its own citizens.
The current pharma pricing system milks the American consumer so as to subsidize the rest of the planet. It’s long past time to end that.
That's a Fully Generic Argument against any pool of government money for any purpose. The law could be written in such a way that the money is allocated for this specific purpose.
> Plus there’s a natural adverse selection bias as all the “really good” patents will go the private route.
A valid critique. The long-term goal, of course, would be to expand the program and phase out pharma entirely. An intermediate step would be to increasingly offer grants to academics with the stipulation "if you take this grant money, you must go the public route". In much the same way that now, any research published with NIH funds must be open-access within 1 (2? I forget) years.
> The current pharma pricing system milks the American consumer so as to subsidize the rest of the planet.
Yes, but...
> The real answer to all of this is to pass a law that drug prices in the USA have to be less than anywhere else on earth.
And you don't think this would negatively impact the rate of drug development? I do. Price controls are also a very drastic step in terms of American law. They tend to have...undesirable side-effects.
If I were pondering general solutions in the area of what you are talking about, I'd prefer laws drastically limiting the amount and type of marketing pharma can do. And ideally supplement that with FDA-provided, more objective material for consumers and MDs about the actual, objective benefits and risks of various drugs.
I do think that will happen. Quite frankly I don’t care.
Access to today’s existing treatments at affordable prices would do much more for the masses then any new research will provide in their lifetimes. In short: its worth it
Longer term I think the prices will stabilize (higher for the world, lower for the USA) and research costs will align as well. Until that happens the common man would still be better off.
> If I were pondering general solutions in the area of what you are talking about, I'd prefer laws drastically limiting the amount and type of marketing pharma can do. And ideally supplement that with FDA-provided, more objective material for consumers and MDs about the actual, objective benefits and risks of various drugs.
I’m for eliminating all medical advertisement but still feel the lowest worldwide pricing is needed. Nobody advertises insulin but the average diabetic in the USA pays 5-6x more than in other countries.
What do you think the FDA knows about running clinical trials? They are obviously experts when it comes to regulatory aspects, but what about trial recruitment, monitoring, supply chain, etc? And what about the educational side? Doctors need someone to talk to, to explain the data, to answer a multitude of questions.
It would take FAR more than $1B per year to have the FDA so all that. The Pharma industry spends $70B plus on R&D each year and they already have all the infrastructure.
And don’t for one second believe that getting a drug to market is as simple as funding clinical trials. There is a ton of upkeep once approved - phase 4 trials, manufacturing tweaks, educating physicians and customers.
2019 FDA budget was $5.7B. I’d guess you’d need closer to 20x to replicate the work the pharma industry is doing, just on the R&D side, let alone everything else.
I think the FDA is whats making drugs prohibitively expensive. First by disallowing the importation of drugs, second by putting a very conservative standard on the commercialization of drugs.
You are right about something, the policy is unappealing for either side. The right doesn't want to give more money to the FDA, and the left doesn't care about giving a gov institution pocket money, they want to outright outlaw profits as a whole.
Call yourself Elon because you are on Mars :)
Elixir Sulfonamide, Profusion of Barbiturate use in the 50's, Thalidomide (which the US missed because of our more stringent rules), Phen-Fen - I can go on.
I mean I doubt they pay hundreds of dollars just to sport the Mylan brand like like a Gucci purse..
But in my understanding, in general, there are no major health risks from using plain insulin, and it is mostly about convenience. I do not know if that is true for all diabetics.
EDIT: kkreamer above says there are differences in long-term complication risks between insulin types. From my very brief literature review just now, that looks to be true. I guess I have become jaded because of the number of diabetics I have recently heard complaining that they are in danger of IMMINENT DEATH because they cannot afford their insulin. Long-term complication risks are important but it is not the same thing.
This is how pharma keeps the whole scheme going. They invent a drug that is marginally better in some way, refreshing the patent. Then, if the consumer cannot afford the product that is even 5% better, the consumer feels as if they might as well have been sent to a death panel.
My comment previously was referring to the best case, where you only lose some toes or a foot in a decade or two.
That's not even a lot of money, in the U.S. context.
i really believe pharma advertising should be banned
The TV ads you see for drugs add up to $6 billion, which is a small fraction compared to industry R&D.
Incidentally, I have had two occasions where I wanted to search for a product by its physical dimensions. One was for furniture and one was for a refrigerator. I haven’t seen a search engine that lets me start by searching by physical dimensions: length, width, height. On these occasions, I had a specific physical space that I needed to put something into.
The rest of the world manages to 'discover' that these drugs exist on the market just fine, yet pharma advertising is banned in most of it.
Just like the FDA reviews drugs for safety and efficacy, and just like your insurer reviews drugs for price, national health boards review drugs for safety, efficacy, and price.
Sometimes, the boards want to wait and see if the drug is actually effective in clinical use.
Sometimes the boards want to wait and see if the drug is actually safe in clinical use.
Sometimes, that equation does not swing in the drug's favour. If a drug is $10,000/year, compared to a $500/year, but provides someone taking it for 10 years, on average, with a month's extra life, it would be foolish to spend $100,000 on the better drug - if for that money, you can buy more than a month of life for other people, with another drug, or with surgeries, or better screenings, etc, etc.
Likewise, if a drug improves quality of life for someone, how do weigh that against saving someone's life? There's a limited medical budget, and there's some ethical calculus that you plug the numbers in, and determine which of those options is a better use of scarce resources. But in order to do that, you actually need to get the numbers. Clinical trials, in themselves, don't give all of those answers.
The FDA differs from the FAA, in that the world does not consider it the sole gatekeeper of medical efficacy, safety, and cost.
What will not solve this problem, is the drug manufacturer spending half a billion dollars on taking doctors, medical directors, and politicians on all-expense paid junkets to the Carribean. You're not going to get better awareness from this, you're going to get more corruption, and more expensive drugs. (The $500/year alternative can't compete with the $100,000/year alternative in this sense - as the manufacturer of the latter can trivially out-bribe the former.)
This drug costs more than $10,000 per year because it is an orphan drug. There's little to no money spent on marketing for this drug. None that I've ever seen and I'm the target market for it. The net margins for the pharmaceutical company that manufacturers the drug is now around 20-25%, but their net margin was very very deep in the red for the first ~6 years that I took the drug. Not sure if they have yet recouped the investment from the 7+ years that they were in the red.
> it would be foolish to spend $100,000 on the better drug - if for that money, you can buy more than a month of life for other people, with another drug, or with surgeries, or better screenings, etc, etc.
It's not foolish if you're the one whose life is bettered by the medicine in question. How my healthcare dollars are spent is my decision, not the government's decision. This is where the arguments for single payer healthcare break down because you're arguing to take away my choices that I've earned by being useful to society. You're not the one paying the price for putting the decision in the hands of a bureaucrat. I and people like me are paying that price.
If it's an orphan drug, treating a rare condition, the economics of it are by nature difficult, because of the high fixed costs, and the low maximum revenues.
Since international medicine does not follow the same model as international aviation, it's not surprising that the high fixed costs (In time, research, and money) of adopting a new medicine + low, variable returns (Most countries are much smaller, or much poorer than the US), it's not surprising that the world isn't jumping on this head-over-heels.
Do you need this drug to live? If not, is it a marginal or significant quality of life improvement? If one of the latter, its possible that the cost/benefit analysis for it isn't great, and its manufacturer hasn't even bothered to go through the approval processes for other countries.
> It's not foolish if you're the one whose life is bettered by the medicine in question. How my healthcare dollars are spent is my decision, not the government's decision.
I'd like to decide how my military, policing, and grade school education dollars get spent, too, but there turn out to be exceptionally good reasons for why they should be spent collectively.
> You're not the one paying the price for putting the decision in the hands of a bureaucrat. I and people like me are paying that price.
Everyone will at some point need healthcare, so yes, I do pay the price, and I'd like a system that does its best to get good results for money spent.
And if your insurance is paying for this drug, keep in mind that some unelected insurance-company bureaucrat has done a cost-benefit analysis on it, and decided that they were going to pay it. They could have gone the other way with it, and decided that it was not covered by insurance. As someone who buys into health insurance, but does not consume much healthcare, I can use your same argument to argue that my hard-earned insurance money should be spent on me, not you.
If I asked my GP for a specific medication they'd look at me like an alien.
Doctors are mortals too and can only have so much time to draw on info they crammed X years ago. Patients can quickly become more expert than GPs with regards to their own diseases, especially if they have months to research it.
Anecdotal example - my sister had a wierd skin condition in high school. My mom researched skin images and symptoms for hours and hours and concluded it was shingles. My Mom then brought her in and discussed her findings with the GP who scoffed and said she was far too young for it to be shingles. He then admonished my mom for doing her own research. Long story short and one embarrassed GP later, it was shingles.
Other highlights of the surveys include:
Most physicians agreed that because their patient saw a DTC ad, he or she asked thoughtful questions during the visit. About the same percentage of physicians thought the ad made their patients more aware of possible treatments.
Many physicians thought that DTC ads made their patients more involved in their health care.
https://www.fda.gov/drugs/drug-information-consumers/impact-...
Secondly, I see too many damn branded pens in my doctor’s office to be under the illusion that the marketing is only directed at the patients. I can’t count the number of times I’ve been prescribed medication just to have it swapped out at the pharmacy for a generic variety. Doctors are just as susceptible to advertising than the rest of us, except exclusively at harm to the patient.
The demonstrated “value” being provided seems to be mostly in the form of cash in the pockets of providers and pharmaceuticals, not in material benefit to the patients.
I can assure you that drug reps didn't bring in catered lunch to my ex-wife's GP office for the benefit of better informing patients about their choices. We got divorced 30 years ago, but I'd bet money I've still got a sticky note pad lying around the house somewhere with a pharma company's name on it.
There's plenty of drug marketing going on that will never come under the gaze of a patient.
They can be sued for making false claims. There's no value in doing so, especially in a high profile medication.
Why would you spend a couple billion dollars on research/marketing, years of research, to bring something to market only to shoot yourself in the foot by making false claims?
And a lot of us end up ordering our meds from gray-market online pharmacies anyway and paying for our own blood tests (usually via Private MD Labs).
One friend moved to become a patient of the #2 Lyme disease specialist.
Another moved to become enrolled in a clinical trial. He was proclaimed terminal and went doctor shopping. (Still alive today.)
I've stayed anchored in my house for decades because I won't risk leaving my care providers (SCCA, FHCRC). I've had terrible experiences with noob doctors. As in life threatening.
I now better understand how doctors think. Recurring rounds of 20 questions time boxed to 15 minutes. Hopefully they've seen your condition before. If not, oops, too bad, out of time, take two aspirin and call me in the morning. Next!
YMMV.
FWIW, it took a few years but I finally found a doctor I'm happy with. But I'm also lucky enough to live in a major US city.
Waking into a 15 minute appointment with months worth of research seems like a bad way to approach collaboration with healthcare professionals. Or do people still have personal relationships with doctors outside the appointment window?
It seems like GPs have become dispensers of medicine rather than care.
However, many people will at least do several hours of research before going into the doctor
So I have a friend with Hashimoto's. Before finally being diagnosed, she had a long history of being misdiagnosed, blown off, and having her symptoms dismissed as nothing. After being diagnosed, she connected with a number of other Hashimoto's patients and sufferers of chronic illness in general and found out that pretty much everyone she's talked to has the same stories. Constant invalidation, ignoring of symptoms, doctors just plain not listening, until they finally find someone who actually knows their stuff.
A couple of years ago my GI specialist put me on a medicine that had just been approved that was designed for my type of gut issues. We spent a lot of time talking about what we hoped to see, and he spent a lot of time listening to what my experience actually was. This has continued ever since, and he always spends a lot of time listening, because I am one of his few patients that takes that medicine. This patient / doctor feedback loop is incredibly important!
First, doctors are expected and generally pursue continuing education. As much as the "golfing at an exotic locale during a medical conference" is a meme, many of those conference also educate doctors on new therapies.
Second, let's not pretend that the drug conpany reps don't get as damn close to bribery as possible to get their medications in front of doctors and in hospitals
Those ads are a small portion of pharma marketing budgets for prescription products. The vast majority goes to direct-to-doctor marketing.
Given that experience, I'd not be surprised if pharma spend a ton of money on direct-to-doctor marketing.
Pharma TV and billboard ads are the last place I'd seek such information though.
edit: i'm getting downvoted. in case you weren't aware the subways in NY are plastered with HIMS and Roman health ads.
https://www.vice.com/en_us/article/ne5ndb/erectile-dysfuncti...
Not sure which one is better or worse.
Direct-to-doctor marketing is legal almost everywhere else, and it's by far what pharmaceutical companies spend more money on.
He shouldn't. They're not all knowing super genius specialists who keep up with all the drugs and research.
A Doctor writes a script, and then a pharmacist (not on their own, but at the direction of an insurance company) suggests a change typically to benefit the insurer (for example changing a name brand to a generic or changing 30 days to 90 days so the patient doesn't get seen by the doctor again for 90 days for additional testing/monitoring). In the US the pharmacy/pharmacist can not change the script so they send the recommendation to the doctor for approval (and get paid a bonus from the insurer for sending the request), if the doctor approves the pharmacy gets a 2nd bonus, if the doctor does not make the change, there is a very good chance the insurer will drop the doctor from their network for not doing what the insurer asks to lower their costs through the pharmacy proxy.
In most states, the law explicitly requires the pharmacist to fill a prescription with a generic (if available) unless the doctor specifically writes "dispense as written". Not allows - requires.
The purpose of these laws is to protect patients - in the overwhelming majority of cases, the generic and brand name drugs are equivalent for patients, so patients save money by purchasing the generic medication even if the physician prescribed the drug using its more well-known name (the brand name).
Its not the patients that lobbies for these laws...it is the insurers, and its to lower their costs.
Its also why the insurers pay the pharmacists a bonus for these changes, if it was about costs to the patient, the bonuses (money back) would go to the patient.
I mean, no, patients don't lobby for them because patients don't really lobby en masse for healthcare policy in general, but patients definitely are the ones who benefit from them.
There are some cases where the relationship between insurers and patients is adversarial. This is not one of them.
See Medicare for All.
Well imagine your doctor gives you a Rx, you go to fill and the insurer tells the pharmacist to ask doctor to change it. If the doctor disagrees (for whatever reason) the insurer may drop your doctor from their network, then you will be stuck going to a doctor who does whatever the insurer asks.
If you feel there is no conflict there or that isn't adversarial that is fine...in my experience both patients who lose their doctor and the doctors themselves disagree.
And there's nothing wrong with switching from brand name to generic, and most patients don't need to see their doctor every 30 days, and if they do, they can still make an appointment.
The length of the drug prescription does not control the appointment - and anyway you can just call and they'll extend the prescription on the phone.
For patients with chronic conditions if the doctor determines the patient should be seen to evaluate their condition in 30 days before a new script is written, insurers having pharmacists effect a change to 90, is a direct interference with the doctor's practice of medicine. The doctor should make the determination, because they have the relationship with the patient, they know if they are at risk or likely to adhere to the therapies better than an insurer making broad brush strokes based on the cost to insurers. You also skip over the part where doctors get dropped from the insurers network when they don't accept the insurers "recommendations."
>The length of the drug prescription does not control the appointment - and anyway you can just call and they'll extend the prescription on the phone.
Sure, but that is not how it works in practice, the patients won't set up another appointment until they need another script, which is cheaper for the insurer and worse for the patient outcomes. Nevermind the Doctor being in the best position to determine which patients should be seen every 30 or 90 days, the shorter duration and 30 day appointments lead to higher percentages of drug adherence...which is a major issue in the US leading to about 1 million hospitalizations per year.
I'm reasonably cynical about lots of things, but I would be absolutely shocked if a pharmacist can give you 90days of pills when handed a 30day (no refills) prescription.
If the Doctor(s) refuse to make the requested change that data is tracked and eventually the insurer will drop the doctors from their network.
I don't understand why you think the length of a prescription controls the appointments. It doesn't, it has nothing whatsoever to do with that.
Yes, the patient could pick up the phone and schedule another appointment, or the doctor could call to try to schedule another appointment in the meantime. You are missing the point...in practice those appointments don't get rescheduled.
The Doctors and insurers know this, which is why the Doctor tries to do 30 day scripts for at risk patients so they can be closely monitored, and its why the insurer attempts to change 30 day therapies to 90 day because they know the patient won't schedule an appointment in the meantime and that saves the insurer money.
Anyway its clear you see nothing wrong with an insurer interfering with a doctor's practice of medicine...or the other part you keep glossing over that is the insurer dropping doctors from their networks (i.e. patients losing their doctor) when the doctors don't follow the insurers requests for changes to therapies.
Such a patient isn't going to correctly take their medication either, 30 days or not.
> the other part you keep glossing over that is the insurer dropping doctors from their networks
Yah, because that's not actually true.
Insurance companies do a lot of bad stuff, but you seem to have invented a whole new class of things that they just don't do.
There is no bonus for 30 day to 90 conversion. There is only a lower co-pay for the member.
Exactly that is why the doctor specifically writes a 30 day so they come back in and can check their numbers.
>Insurance companies do a lot of bad stuff, but you seem to have invented a whole new class of things that they just don't do.
When you hear the term consolidation of the healthcare market this is what they are talking about. There are numerous lawsuits right now by doctors against insurers for dropping them, illegally, from their networks and sending their patients to new providers/practices that are owned by the insurers. You can find any number of those lawsuits, if you cared, but here is an article on the practice of insurers buying providers (to control all aspects of their costs), you have insurance A, odds are you are only able to go to a doctor practice/hospital owned by the insurer.
https://www.modernhealthcare.com/article/20180602/NEWS/18060...
>There is no bonus for 30 day to 90 conversion
You are wrong, and it is clear you have never even heard of Medication Therapy Management (MTM) or OutcomesMTM. Walk into any big pharmacy (walmart, cvs, walgreens) and ask the pharmacist about OutcomesMTM and MTM generally. Or use this link to a OutcomesMTM report and learn about it http://www.outcomesmtm.com/wp-content/uploads/2018/02/2016MT...
>"Today, more than half of U.S. pharmacies are active in OutcomesMTM programs, earning revenue for their clinical services while helping healthcare payors reach their goals."
>Each year, OutcomesMTM recognizes pharmacies and pharmacy chain organizations with exceptional performance in delivering MTM services. Top MTM Center and Top Chain awards are based on the organization’s overall effectiveness in delivering CMRs and resolving drug therapy problems through TIPs
If I go to my doctor and say "hey, for my condition XYZ I hear there's a new drug ABC, would that offer any benefits over what I'm on now?" that's one thing, but if I go in and say "hey give me that ABC" they'll correctly roll their eyes at me.
I get it, they're nearly always overworked and tired, and most of their clients are idiots.
But people should be free to try something new without all this gatekeeping that keeps getting worse.
At the same time, place the responsibility on the user if they request something out of the ordinary, of course.
I think it may be a win-win if the U.S. prohibited television medical advertising.
[1] https://economicdynamics.org/meetpapers/2011/paper_868.pdf
[1]https://truthinitiative.org/research-resources/tobacco-indus...
[1] https://www.drugs.com/sfx/orlistat-side-effects.html
[2] https://time.com/4317182/abilify-aristada-aripiprazole-sex-g...
[3] https://www.health.com/condition/depression/medications-depr...
You need to look at return on capital. Right now the return on capital in pharma is below the cost of capital and it's trending towards zero. The inevitable result is significantly lower funding for research. https://endpts.com/pharmas-broken-business-model-an-industry...
Perhaps the marketing and R&D departments compete internally for budget. They certainly do at every other company I've worked at.
And drug marketing is peculiar. One would expect demand to be largely inelastic, so it's odd to see marketing spend on par with that of soft drinks in the industry. Nor can we safely assume that whatever portion of demand is driven by marketing is beneficial from a public health perspective, given that overtreatment is known to be a serious problem in the USA, and that a significant motivator for overtreatment is patient pressure on health care providers.
Ultimately returns in every industry tend towards zero. If we made it cheaper to develop new drugs it would extend the lifespan of the industry somewhat but not indefinitely. At some point diminishing returns take over and investment must go down.
The current regime in the USA didn't happen for nothing. It's well-known now that pharma companies had long been exploiting the file drawer effect and p-hacking to inflate the apparent safety and efficacy of their drugs in their FDA filings. The decision a couple decades ago to cut that off did dramatically reduce the rate at which drugs win approval, and that's a very good thing.
This provides what to me is compelling evidence that the efficacy requirement by the FDA is wasteful.
Amount of homeotherapy currently on the shelves bring "penalties imposed by the marketplace on sellers of ineffective drugs" into a sharp contrast... People will take pure water if you tell them it works.
EDIT: But I suppose a complex measure of: removing efficacy requirements AND banning advertising to both consumers and doctors AND mandating pre-regisration of trials might lead to more drugs on the market with companies using efficacy trials to compete with each other and doctors selecting best drugs based on cost/benefit/harm analysis.
I'm sure there are loopholes that would be promptly exploited in this scheme given enough incentive though.
To be fair, if you tell them it works, people will take pure water and show noticable improvments over non-treatment. Personally I just take the placebo effect directly though.
I often see vague complaints about the regulations, but no one seems to have specific suggestions about how to lower drug development costs while still protecting patients.
Specific suggestion: get rid of efficacy requirement, keep safety requirement. Let doctors decide what works, as they currently do for off-label uses just fine.
Less extreme are antibiotics which can also have bad side effects, but are useful drugs because they actually kill bacteria. If they did not, the side effects would be unacceptable.
Or should the government make that decision for on-label uses and doctors make that decision for off-label uses? That's the status quo. Whatever argument you have for one half of that is an argument against the other half.
This is exactly how doctors determine what works, with or without the government. See the off-label discussion in the link above.
I'm not suggesting that current regulation by the FDA isn't flawed, or that it doesn't need an overhaul, but I think it's clear that there should be some proof that efficacy studies were done before a drug becomes widely available, especially when the potential damage done by a failed treatment is so high. The current opioid crisis has completely eroded any faith that the pharmaceutical industry is capable or willing to regulate itself.
Tons of drugs have been approved, only to be later pulled off the shelves. So despite the massive cost, delays, etc. the process has failed at least 35 (!) times:
https://prescriptiondrugs.procon.org/fda-approved-prescripti...
If nobody is marketing, that definitely might increase return on capital.
If you pass a law banning drug marketing, you may be able to get the same health outcomes with less overhead. Of course, this ignores all the hypothetical cases where marketing helps, like increasing awareness of a beneficial treatment that was not previously well known.
This does not explain the increase in cost of insulin, which was invented in 1923.
It's newer formulations that are expensive, and those are still protected by patents.
> In the United Kingdom 1,000 iu costs the NHS £7.48, while in the United States this amount is about $134.00.
Perhaps the market is not designed for this sort of endeavor (drug research). Let government stand in where the market has failed.
Meanwhile, what has the government done? The trip from DC to New York on Amtrak is slower today than it was in 1960. In 1980, DC’s Metro had self driving trains. They had to shut that down in 2009 due to lack of maintenance and the unions. Spending on public education, adjusted for inflation, per student since 1960. But achievement hasn’t budged one inch. If the drug industry has failed, what words are in the English language for what the government has done?
Meanwhile, what has the government done?
Exactly that: "NIH funded the majority of support for HIV/AIDS, infectious disease and oncology research." https://www.thebalance.com/who-funds-biomedical-research-266...
The market works great until it doesn't. The interstate system, and the military are 2 prime examples where the market is never going to provide a solution. Affordable medical care for everyone is another.
As to municipal internet—its great until it’s not. Maryland has municipal cable systems that were built a couple of decades ago, and they have struggled to keep up with the DOCSIS upgrade treadmill. Additionally, what problems exist with broadband in the US are largely government created. Comcast has no data caps almost everywhere in Maryland, because it’s in competition with Verizon. The only place that’s not true is Baltimore—where the city legally prevented Verizon from coming in and competing with Comcast. Verizon wanted to wire up Baltimore—the city wouldn’t allow it to do so.
Speaking more generally, DC Metro was snazzy at first too, but was unable to maintain the system long term. It’s interesting you focus on the price point: is $50 sustainable? Charging too little is actually a big problem. A subway ticket in London can cost 2-3x as much as one in New York, despite the two systems being very similar in age and size. Unsurprisingly, the London subway is doing fine and the New York subway is falling apart.
I would posit that the only thing that is a bigger failure than the public school system, is the private school system.
It's numbers look good, but that's largely because private schools are more expensive, and also opt out of educating problem students.
serious question - does a profitable private passenger railroad company that actually owns/maintains tracks, stations, etc exist without subsidies anywhere at all in the world? And Amtrak itself is nominally public-private and was formed in reaction to purely private railroads collapsing..
> In 1980, DC’s Metro had self driving trains. They had to shut that down in 2009 due to lack of maintenance and the unions.
even if the trains were self driving, for the 10y or so I lived there before this, there was still a conductor, so not sure if this is really a good argument..
Hong Kong, Japan. But my point is narrower than that. I’m not saying governments in general cannot run decent train service. I’m saying Americans cannot. We’re culturally defective in that respect.
> even if the trains were self driving, for the 10y or so I lived there before this, there was still a conductor, so not sure if this is really a good argument..
They had a conductor for safety. But the self driving trains made the ride very smooth and allowed tighter headways. Even after 10 years, Metro conductors cannot properly stop at stations. To avoid overshooting the platform, they stop way short, and then jerkily inch into position. When I was growing up, headways on the orange line were 6 minutes and the WMATA trip planner was accurate. Today, it’s 8 minutes, because they can’t sustain the 6 minute headways. And they had to revise the trip planner a few years ago to increase the predicted travel time between stations. If you look at Metro advertising from the 1980s, station to station trip times today are 30-50% longer.
That's not to say there's on place for the private sector there, but there is massive friction between a profit motive in drug research and you know, building a more healthy society. See the "new Adderalls" like Vyvanse that offer no benefits over Adderall, but Adderall's patent is up so it can be made by generics and isn't as profitable anymore.
But again, market-based solutions are just not appropriate for essential health care. You would pay ANYTHING to not die - there's no price elasticity of demand.
Every other developed country has figured out that this is simply immoral.
Cost goes down with increased productivity. Competition sometimes brings that, sometimes it doesn't.
Economics can be complex!
[1] https://blogs.sciencemag.org/pipeline/archives/2019/05/28/wh... [2] https://blogs.sciencemag.org/pipeline/archives/2014/11/11/ma...
Apparently, it's exceptionality comes from high levels of obesity, homicide, car accidents and drug abuse, of which only the last one has any link to businessy nature of healthcare.
https://randomcriticalanalysis.com/2019/11/07/a-tale-of-two-...
https://www.cdc.gov/cancer/dcpc/research/articles/concord-2....
https://hbr.org/2017/04/how-pharma-companies-game-the-system...
In an industry with high fixed costs, marketing may in fact reduce the cost per consumer. Using software as an example, you can't just take the marketing costs per customer and subtract that from the price. If 1,000,000 in marketing brings in 3,000,000 in extra revenue, that marketing didn't cost customers anything. It could even allow the software company to charge less per copy.
There are some real differences between software and medicine. And I'm not sure increasing users of a drug is a good thing in many cases. But I doubt prilosec commercials are increasing the price I pay.
I do not believe this is generally true.
In any case, it clearly doesn't apply to insulin provision for diabetes patients - a captive market.
The US is one of like 2 countries that even allow TV commercials for drugs, yet all those other countries (and their Not for Profit or universal healthcare systems) work better than the US.
If I'm told to ask my doctor if [DRUG] is right for me, shouldn't they already be aware of the option and if beneficial brought it up vs staying quiet and endangering my health? The marketing budget is way out of line.
Because it requires time and effort to educate providers on state-of-the-art medications and the marketing that goes to them is often educational.
I understand the frustration around the healthcare situation in the US, but the argument that marketing is bad, or that profits are bad, or that the private market cant service are frankly trying to reinvent the economic wheel.
But to jump on to your main point — people don’t realize just how much their tax dollars have already paid for the development of these drugs.
Having a healthy competitive market to take these things the last mile is good — but these companies are incredibly deceptive when it comes to how much they’ve benefited from public investment.
R&D money spent is cyclical, and GlobalData's report may just be a down cycle where pharma is just trying to recoup past R&D costs. There's also a large number of drugs that are not approved from past years. Pharma has to recoup those costs, too.
From purely a health econ standpoint, that recovery window offered by the patent system is the main reason we are where we are today.
Insulin replacement was developed a century ago, being first discovered by a government entity (U of Toronto). Private companies commercialized the treatments in the 1940s and 1950s, developing long acting forms that could be administered in a single injection per day. Since then, pharmaceutical companies have made continuous improvements with fewer side effects: https://www.hopkinsmedicine.org/news/media/releases/why_peop...
Note that nobody is proposing to give people the versions of the drugs developed by public entities, or even the long out-of-patent earlier versions of the drugs. That’s strong evidence of the fact that the improvements developed by private companies were really important.
Moreover, the only thing stopping companies from making cheap generic insulin is the government itself:
> Patents on the first synthetic insulin expired in 2014, but these newer forms are harder to copy, so the unpatented versions will go through a lengthy Food and Drug Administration approval process and cost more to make. When these insulins come on the market, they may cost just 20 to 40 percent less than the patented versions, Riggs and Greene write.
Instead of “scrapping” the industry, wouldn’t it make more sense to, as a first step, get rid of regulatory roadblocks that prevent competitors from producing out of patent drugs?
Moreover, as to your claim that “other countries” do things differently—your only example is India, which does essentially no pharmaceutical R&D. Western European countries also rely on for-profit pharmaceutical development. Pharmaceutical spending as a percentage of GDP is about 2% in the US and Japan, 1.8% in Canada, and 1.5-1.6% in Germany or France: https://data.oecd.org/healthres/pharmaceutical-spending.htm. European countries negotiate hard on drugs like insulin, but for the most part they pay a lot too.
As to your broader point of “why do we need private businesses to do this?” It’s a mistake to mix up the products being made with the process by which the products are developed. Just because people need drugs more than search engines doesn’t mean that the government is more qualified to develop drugs than search engines. It’s two completely different things. Drug development is high tech work. If the government could do it well, while squeezing out the profit margins, there would be no reason for the government not to run Google or Netflix.
After all, why do we need a “private business” like Apple to develop iPhones with 50% margins “when the tax payer could do it at nearly 0% margin?”
What's your solution for drugs that aren't out of patent?
Wait for them to get out of patent? The average remaining patent term for newly approved drugs is 10-12 years. So drugs approved in 2008 will mostly be coming out of patent this year.
All this stuff you here about “evergreening” is entirely the result of gaming the FDA approval practices. Patent law is categorical: once you make a thing publicly available, that thing is prior art not just for the patent you file to cover it, but every invention embodied in the thing. So once the first set of patents expires on the thing, that thing itself is in the public domain. You can’t bring that specific thing out of the public domain by making incremental improvements, etc.
Evergreening has absolutely nothing to do with the FDA and everything to do with the USPTO and the specific chemical makeup of insulin, which has unique characteristics that make it very easy to engage in effective "evergreening". This also allows drug companies to manipulate pricing lists in deceptive ways that fool both doctors and distributors into placing higher cost (but chemically identical) products onto "preferred" prescription lists of insurance companies. There are also current court cases where there are accusations of fraud and illegal kickbacks around those practices.
I’m very curious what you think these are.
> "New biologic drugs are orders of magnitude larger than small-molecule drugs, and it’s often impossible to know on an atom-by-atom basis whether one large-molecule drug is the same as another. Subsequent versions of off-patent biotech drugs are therefore called biosimilar rather than generic. Differences in the tissue systems that produce them can lead to differences in protein folding and glycosylation, which could theoretically result in efficacy or safety differences. But the FDA, the EMA, and the generic drug industry hope these issues can be addressed by new regulatory sciences of biosimilarity."
> "Although regulatory pathways for biosimilar insulin are being finalized in the United States and Europe, economists warn that the introduction of biosimilars may not lead to price reductions equivalent to those seen with typical generic medicines. Even an abbreviated approval process for biosimilars will require substantially more original data than the typical abbreviated new drug application required for small-molecule generics and will necessitate immunogenicity and other safety studies in humans."
FWIW, the full paper is available at https://sci-hub.tw/10.1056/nejmms1411398
I agree we don't need a state-run version of Google or Netflix, but how does their being "high-tech" in any way preclude that? NASA seems like a great counter-example.
Focusing on whether we “need” a state-run version of Google misses the point. It’s not the nature of the product that matters. If the government could run Google as efficiently, and we could squeeze out the profit margin in the process, why shouldn’t the government run Google? We have Google as a private company not because we believe certain products and services should be “given” to the private sector, but because we believe certain types of work are more efficiently handled by the private sector.
NASA is not a good counterexample. NASA (and DARPA) are managerial organizations. The Apollo lander was designed and built by Rockwell and the Saturn V rocket was designed and built by Boeing.
The original research for the synthesis of insulin was actually done in Europe by a private citizen (not a government entity). That research was followed up on by a surgeon with a private practice in Canada, and only after a time was it taken to the U of Toronto. The work leading to a manufacturable insulin process was done in collaboration with another private citizen (not affiliated with the U of Toronto). The trio only decided to patent the discovery upon literal threat by Eli Lilly to steal it for sale. They then sold it to the U of Toronto for a single dollar because of a strong belief that it would have been ethically bankrupt to profit from the manufacture and distribution of such an important drug. Funny you left that out!
But anyway, to your main point, it's interesting you neglect to mention that the main manufacturers of "generic" insulin (there's actually no such thing, but that's a topic for a different time) are the same companies who manufacture the name brands. They do this for pure price discrimination reasons; the new "generics" you reference (Admelog/Insulin Aspart) are exact chemical duplicates of their higher priced cousins. They prevent other companies from creating their own "generics" through a process called "evergreening" where they change patents in small, insignificant ways while still maintaining the patent on the core product. They then force other manufacturers into pricing and distributorship deals in order to license these patents to prevent cannibalization of their own products. Most of these deals include strict price controls. Have you ever wondered why those regulatory controls are so strict? Maybe it's because of regulatory capture as a part of this complex system to artificially inflate drug prices. That would require more than a skin deep analysis relying on middle school free market ideology though.
This isn't even getting into the "manufacturer rebate" programs most drug companies have for, again, pure price discrimination and marketing reasons. Or the fact that for the same exact chemical formula insulin costs have increased over 10x in the past 20 years. This also doesn't address the fact that we're seeing 20% year over year increases in insulin prices while drug manufacturers post profit increases almost in lock step. Feel free to read their quarterly earnings reports, they state in plain black and white that they purposefully price insulin in accordance with how expensive it is to treat diabetes _without_ the drug. To quote John Lechleiter, the CEO of Eli Lilly, “Yes, they [referring to insulin] can be expensive, but disease is a lot more expensive”. I believe that's called "extortion", I wonder if getting rid of regulatory roadblocks can solve that problem.
There's also no such thing as insulin "side effects"... lower quality/old synthesis method insulin just doesn't work as efficiently which means you have to use more of it or can't use it in modern insulin pumps. Most insulin manufactured today is biologically identical to the insulin manufactured 10 years ago. Most of the quality of life improvements occurred long before the recent price surges.
But then again your post compares iPhones and Netflix with a drug that over a million Americans have to take in order to survive, so I doubt any of this will reach through your armor of specious and unserious speculation.
To be really clear:
1) A company receives patent X in 2000, which expires in 2020.
2) In 2018, that company gets a new patent Y that is really patent X but with "small, insignificant" changes.
Are you saying that after step 2, that original patent for X is now extended or will that still go generic in 2020?
Note- I understood this to be your position from your other comments. I asked the clarifying question to understand `pdeuchler`'s idea of the `evergreening` process.
You can't coherently and simultaneously believe that markets are inefficiently pricing insulin too high and that the government should be imputing gigantic costs on firms that want to introduce new, unencumbered insulin products. The two thoughts aren't compatible.
Surely it depends on the barriers and how much of a cut those actually are in practice.
Furthermore, private corps aren't the only way drugs can be invented.
> Give companies, who are additionally acting unethically, a guaranteed and direct profit increase...
No, lowering barriers to competition doesn't give anyone guaranteed profit. It reliably does the opposite, depriving incumbent companies of their monopolies.
> Furthermore, private corps aren't the only way drugs can be invented.
Nobody -- literally nobody -- would dispute that. The question is whether the government is able to do the various parts of drug development as efficiently as the private sector. This is not a simple analysis, but I think the answer is more often than not, No.
You're not doing your argument any favors with this "typical HN response" stuff. Have a discussion with people on the thread or don't; it is fine for you to simply disagree and walk away.
Don't tone police me please. I find it rude to assume ignorance and go on explaining. Did you miss the whole mansplaining wave?
"You can't coherently and simultaneously believe"
"You might as well call it "fascist" or "colonialist". It's jibberish."
"it is fine for you to simply disagree and walk away"
"Right, so it was a bullshit distraction that can safely be ignored."
"You're still not understanding."
"Now read this slowly and carefully"
"You are completely misunderstanding the argument."
"I think you're trying to construct a straw man"
"which discussion you opened with a snarky, dismissive one-liner."
"[if] you're able to use google for five minutes. At this point, though, I'm confident that you're interested only in polemics, rather than actually learning anything about the issue."
Kidding aside, your use of the phrase here indicates a fundamental misunderstanding. This isn't "similar" to trickle-down. This has nothing to do with it whatsoever. You might as well call it "fascist" or "colonialist". It's jibberish.
Try this: You can find the Hopkins paper that Rayiner cited at https://sci-hub.tw/10.1056/nejmms1411398. It's a consice description of the causes of the ongoing dearth of generic biologic (non-small-molecule) medicines.
Read that. It's only five pages. Then tell me how the various possible ways to limit the monopoly position of incumbent insulin makers -- patent reform, lowered regulatory barriers for new competitors, whatever -- would constitute a "trickle down type" giveaway to said incumbents. Tell me how that makes any sense at all.
> Profit-driven drug companies will obviously focus on things that make money, e.g. superficial/vanity related things, not what's necessarily aligned with public interests.
Just for fun, give me some examples of drugs that are merely "superficial/vanity related". I think you're trying to construct a straw man.
It's certainly true that the free-market does not guarantee alignment with the public interest. It's also true that over-regulation is one of things that causes such misalignments.
In this case, a strong regulatory framework around biosimilars may be unavoidable due to their extreme complexity (again, read the paper). But if there are regulatory hurdles that can safely be removed, and thus allow generic drug makers to enter the market with cheaper alternatives, how exactly would that be unfair or unjust for anybody?
> Just for fun, give me some examples of drugs that are merely "superficial/vanity related". I think you're trying to construct a straw man.
Once again, it was one example, I was mainly thinking about hair loss or other male things caused by men, historically and still, earning more.
My main point was that the profit motive causes this kind of skew:
"Scientific publications brought the evidence that there was a lack of news drugs for diseases that cause high mortality and morbidity among people living in poor areas. One showed that only 1.1% of new drugs were approved specifically for neglected diseases over a period of 25 years (1975 to 1999) despite the fact that these diseases represented 11.4% of the global burden"
> It's certainly true that the free-market does not guarantee alignment with the public interest. It's also true that over-regulation is one of things that causes such misalignments.
I would argue that "free-markets" is the exact reason for anti-competitive regulations, among others, in the form of regulatory capture, which is inherent with capitalism.
> Once again, it was one example, I was mainly thinking about hair loss or other male things caused by men, historically and still, earning more.
Right, so it was a bullshit distraction that can safely be ignored.
> My main point was that the profit motive causes this kind of skew...
Which has exactly nothing to do with insulin, or the larger problem of building a manufacturing base for complex biosimilar medicines that's big, efficient, and safe enough to not bankrupt us. Regulations are necessary and powerful tools that, if wielded clumsily, can easily kill that manufacturing base. Making sure those regulations are suited to the task is not "trickle down" in any way whatsoever.
Care to explain how it doesn't fit the template I described?
> this will REDUCE the monopoly power of the large incumbent drug companies
This is at best naive. The approval process isn't the problem. Government granted monopolies are.
> Which has exactly nothing to do with insulin
Uhm, yes, and that was in response to the free-market nonsense, not insulin.
You're still not understanding. Overly burdensome approval processes are part of what creates government granted monopolies. In other words, those two things go together.
For example, if you're familiar with the approval pipeline for generics in the U.S., you'll remember that the main component of an ANDA filing is proving equivalence. Regulations require the evaluation to be based not just on the chemical description of the brand name medicine, but on actual physical samples. A separate regulation subjects any medicine with serious side effects to the REMS program, which restricts its distribution to narrow channels of the drug maker's choosing. Furthermore, the regulation allows companies to voluntarily subject a drug to REMS-type treatment even in the absence of serious side effects.
The result of these twisted regulations is that a large incumbent drug maker can easily deprive smaller generic makers from getting the samples they need to pursue approval.
This is just one example. REMS and other regulations allow incumbent drug makers other ways to block prospective generic makers. These abuses are common, and according to one study cited by the FTC, if we removed or reformed some these regulations, it would save Americans billions of dollars a year. [1]
Now read this slowly and carefully: these government regulations help to preserve big pharma monopolies. Read the citation below. Read the paper cited earlier. Read anything.
If you have any evidence of your own to support your positions -- studies, papers, anything -- I'd be interested to hear it. Otherwise I'm done with this.
1 - https://accessiblemeds.org/sites/default/files/2018-09/REMS_...
"The Association for Accessible Medicines (AAM), which represents generic drugmakers, is appealing a December 31 decision by a federal judge that allows California’s new law barring pay-for-delay arrangements between brand-name and generic pharma firms to go forward."
"AAM had argued that the law violated the federal government’s right to regulate interstate commerce and the scope of US patents"
https://www.centerforbiosimilars.com/news/lobbying-group-app...
Lets say the current price for insulin is $200. I see this margin, and say "I can produce insulin for cheaper, and I'm happy with selling it for $50". The government is placing restrictions on new competitors, so I can't just come in and sell insulin for $50. There is a restriction on competition, which causes artificial prices
> Based on our analysis of prices in regulated markets, the United States paid on average more than 50% that other developed markets.
Of course, that figure is before discounts:
> Hence, while US pharmaceutical reference prices are typically higher than most counterparts, it does not mean that the US also ultimately pays higher prices than other countries – a fine but important distinction.
But even taking the 50% figure at face value, that suggests we could cut our drug spending to German levels (from $1,200 per person per year to $800). That’s not the kind of huge delta you see when it comes to things like inpatient services (surgeries that cost 5-10x as much). It’s also not that much compared to the $5,000-6,000 more we spend on healthcare overall per person compared to Germany.
"West, 30, has had type 1 diabetes since she was three years old. Back in Seattle, where she used to live, she typically paid $70 per month for insulin and another $130 for pump supplies. That was a relative steal in the U.S., made possible by her excellent health insurance, which she got through her employer. But still, it was a financial strain.
In Germany, she pays about €10, roughly $11. Every three months."
The extraordinary claim is that that vast price disparity is in proportion, so the burden of evidence rests on you.
https://accessiblemeds.org/sites/default/files/2018-09/REMS_...
It's a good summary of the costs of one type of overly burdensom regulation in the U.S. drug market, and was cited by the FTC in congressional testimony. There are other problems to be sure, but the anti-competitive effect of our over-wrought regulatory framework is widely recognized to be a problem by both liberal and conservative policy makers.
There's plenty more material out there you're able to use google for five minutes. At this point, though, I'm confident that you're interested only in polemics, rather than actually learning anything about the issue.
https://www.washingtonpost.com/business/economy/why-humiras-...
"Humira’s price has defied gravity — and been ensconced as a frequent rhetorical target on Capitol Hill — through AbbVie’s aggressive use of patents and deals with generic manufacturers to forestall competition."
"Humira was approved by the FDA in 2002 and its core patents expired in 2016, according to the Biosimilars Council, a division of the Association for Accessible Medicines, which represents generic manufacturers. But AbbVie won dozens of additional patents — what critics call a “patent thicket” — that extended the exclusive market for the drug to as late as 2034, the council said."
I'm not saying that there isn't high costs involved in the approval process, what I'm saying is that it is disproportionate to the price difference. What actually makes a difference is government regulations on another level, mainly price controls, like in Europe.
Just to make it clear, I'm very much in favour of generics, but the focus should be patents and price control, not small fish like REMS (from your link "consumers pay an extra $1.8 billion in out-of-pocket costs.", which furthermore is a number the authors have every interest to inflate) or removing burdensome, but appropriate, approval regulations, possibly threatening public safety.
Twenty years to hold monopoly production rights is an obscene amount of time.
Yes, reducing that twenty to say five will reduce capital investments in drug research, but it will also alter the structure of those investments.
Investing in improvements at the margin might make sense when you can collect 20 years of royalties, but if you can only collect 5 then it'll more often make sense to fund cures and use that 5 year monopoly to cure as many people as you can before the drug goes generic.
And this conspiracy that pharma is intentionally not funding cures to make more money is ridiculous. That would imply they know how to cure things, but just don't want to...
As to not investing in cures, I'm not saying they don't at all, but they allocate resources towards the best return on capital. And I'd ask you to apply your own reasoning, that "Its much easier to recover 1B investment over 20 years than 5" to which gives an easier return on capital.
Of course, implicit in that is that it's less risky to fund research in incremental improvements than on outright cures- but I'm open to being taught differently on that.
EDIT: fixing jumbled words
What is way more common is that scientists from around the world, mostly funded by public money produce research that might implicate a particular pathway or target for a particular disease. Scientists in companies see those publications and try to verify the result, then make a drug for it. The process of making the drug, testing tens of thousands of compounds, making sure efficacy and safety margin are maximized, running clinical trials, and producing the drug with good yields is almost always done by companies.
The government can do stuff like funding studies on new uses for off-patent drugs, fund various parts of that development, and reduce regulatory burden to tilt the economics for companies to make drugs for a disease, but that mostly happens to do stuff that wouldn't happen in the normal system in which companies have to make money making drugs.
Disclaimer: I work in pharma, but in biology, not anywhere near the budget-making
other countries haven't
Ummm... you do realize that most big pharma companies are European, right? Bayer is German, GSK is British, etc...
I see no reason that pharma manufacturing can’t be done just regular contract manufacturing. The Zika vaccine is a prime example. The US developed the ZIPV vaccine at public expense, and then, for some mind boggling reason, they offered an exclusive license to Sanofi. Imagine if Apple outsourced iPhone manufacturing by giving Foxconn and exclusive license! The US could have solicited bids to manufacture the vaccine and accepted more than one, thus resulting in multiple sources without any IP exclusivity.
What, never seen corruption at work? Somebody at Sanofi, or connected to them, was connected elsewhere, and hey, there's your license :) (No, no cash payment.... but my kid really wanted to get into Harvard, maybe a limited endowment/scholarship? You know somebody, right?)
We humans are predictable.
[1]Episode 105 of a podcast called the Accad and Koka Report.
When a company like Pfizer acquires said company, none of the R&D spending of the smaller company gets absorbed into Pfizer's balance sheet.
In 2006, the pharma entire industry spend 12 billion in marketing, but 58.8 billion on r&d. Simply looking at individual large companies' doesn't do this justice.
http://phrma-docs.phrma.org/sites/default/files/pdf/marketin...
Publicly funded research should be given away, royalty-free, to the public. Universities aren't in the business of...business.
However, the amount of money that goes into finding those promising drugs (collectively, including all the failures in those stages) is much greater than the work that drug companies do in testing and developing them (collectively, including failures).
Right or wrong, most of that research is government funded, and then the (monetary) rewards of all that spending generally flow entirely to the drug companies (often with some reward going to the University who hosted the research). So the drug companies wind up with Hughe effective subsidies, and little of the down-side of early drug development or basic research.
Why not apply this principle to everything else? Food, software, etc.
otherwise known as the lets-keep-the-status-quo-because-i-can-afford-it argument.
>It’s no coincidence that the US has the best pharma companies and develops some of the most effective drugs in the world
lol best pharma companies according to share values or according to how many people they help?
https://www.intelligencesquaredus.org/debates/blame-big-phar...
Good arguments from both sides.
> Pharma companies are profiting off of your tax dollars and then turning around and profiting off of you too.
> the taxpayer could do it at nearly 0% margin?
Adds lots of nuance to blanket/false statements.
I don't hate the idea of bounties, but someone has to decide what bounties to offer, and the current system for deciding that is whether money can be made in that area. It's not perfect, but at least broadly it means that there is an incentive for treatments for conditions that affect a lot of people and ones with a high cost of disease without treatment.
The thing I could see easily being missed by bounties (or maybe worse, being subject to being lobbied by pharma companies with a drug in the chamber) is drugs that start for one indication, but pivot or expand to another, and drugs that are second or third in class. There is undoubtedly some value to a second in class drug that is more efficacious and safer, and line extensions are also helpful for expanding the use of a drug in market.
But, as I led with, I'd be fine with just purely public research leading to generic drugs. Drug bounties are just the "post-capitalist" fallback plan if the old school state-bureaucratic approach isn't work.
Take a look some time at the large list of drugs Walmart pharmacy offers for just a few bucks a month. Our model should be to get more drugs in such a state that a Walmart can offer them for such a low price.
Having said that, there is a reasonable argument to be made that the FDA and the patent situation stifles innovation and that most definitely should be looked at.
We could further lower the barrier to entry for patients to get drugs by forcing the least dangerous varieties to be over the counter. For example, there's little reason an Albuterol inhaler requires a prescription. It's basically impossible to OD on and is not addictive.
Even if these specific ideas aren't the right solutions, I think we've been forced into a false dichotomy of basically the status quo or nationalization. I think we can be much more creative.
Pharma companies are profiting off of your tax dollars
Another way to do it would be to form a consortium like SEMATECH [1].
If the government didn't tax and regulate companies and people so highly they would have more left over to join voluntary associations and do the same thing.
My point is that SEMATECH shows you can have a voluntary consortium where different parties fund an organization and then collectively benefit from it.
Government does that, but on a more general level and it's not based on voluntary interaction (you must pay taxes, otherwise if you resist arrest you will be murdered).
I'm responding to people who complain how companies are ripping the public off, when in reality it's the government that takes almost half of GDP in developed nations.
If the government took less in taxes, then companies would have more left over to fund a voluntary consortium which would do similar things that NIH and NSF do.
Billions of people elsewhere in the world plus Americans in 20+ years when patents expire if far greater than ~40 million people in the US in the present
A large amount of research is currently publicly funded. Either via public academic research or directly. When that research bears fruit it is often given away almost at-cost (or below cost when you take into account the larger research landscape) to pharma companies who then privately profit off of it.
Pharma companies are profiting off of your tax dollars and then turning around and profiting off of you too. Sure, the benefit exists, but this whole model is broken as all heck.
We should just scarp for-profit pharma development as an industry, increase public funding of research, and drug production factories should be a modest profit venture (e.g. 20% of the wholesale cost). Looking more like the generics industry today, where they produce, they don't develop.
Why do we need a private business to develop drugs at a 40%-1000%+[1] margin when the taxpayer could do it at nearly 0% margin? We've chosen to make it this way, other countries haven't, and we see plenty of drugs developed via public institutions around the world.
[0] https://www.bbc.com/news/business-28212223
[1] https://economictimes.indiatimes.com/industry/healthcare/bio...