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
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?”