5 ms·

I used to work for a generics manufacturer, and indeed this was their MO. Seek out old drugs that sill have a very viable market but are under the radar of the

by tammer 11y ago

I used to work for a generics manufacturer, and indeed this was their MO. Seek out old drugs that sill have a very viable market but are under the radar of the big guys, undersell until they're the only supplier left, then jack up the price when patients have no choice. It's despicable and seems inevitable with the current regulation model.

jerf 11y ago
At least in the US, that actually sounds like it's already illegal from general business regulation. As in, no new laws needed, get the ones we have enforced. Wouldn't be surprised you can already pierce the corporate veil without new laws too. This is not specifically in reply to the parent, but the point fits here: I'd observe that calling for more regulation or even outright nationalization to fix this, when it's probably already illegal, is not thinking very clearly. Regulations are already failing to prevent this... how is enacting more things that make illegal things illegalier going to actually solve the problem? How is doing the same, but more, actually going to help?
- clavalle 11y ago
  Perhaps not more, but faster and perhaps more thoroughly in order to change the player's risk assessment. By the time these companies are called out they amass huge war chests and tie these things up in the courts for years while enriching their investors and management teams. Then, when the hammer falls, that company disintegrates on some level and, often, these management teams spread to similar companies and do it all over again. Obviously, something is not working. When something is not working the answer is almost never 'let's keep things the same and hope it turns out better.'
  - jerf 11y ago
    My point is "Let's write more regulations" is "let's keep things the same and hope it turns out better". It's easy to call for more regulations but it sounds a lot more to me like the core problem is a priority mismatch in enforcement. A lot harder to fix, but certainly step one seems to me to be to get people to stop calling for "more" regulation and start calling for the core problem of ineffective regulatory agencies to be addressed. Betcha if you took a look at what the relevant agencies were doing with their time instead of dealing with this, you'd be less than pleased.
    - clavalle 11y ago
      I've seen these kinds of things up close (investigations and eventual prosecutions of exploitative companies in the health care sector) and I can absolutely tell you I am not pleased. But I also don't see the alternative. I don't think a free market approach would work. The government has a huge standing war chest. It can afford to take the time and expense to go after these bad actors. Even insurance companies are rightfully reluctant to take on very expensive, risky litigation and/or investigation that could run into multiple years or even decades. The market is a wonderful tool, but it can't solve all problems. Some problems are so big that it takes the pooled resources of, essentially, everyone to fight against it.
      - jerf 11y ago
        I didn't say anything about a free market. I said, go fix the regulating agencies. Way harder. I'm a libertarian, but I'm not an "anarchist" because I still think it makes more sense to have an industry, and an independent, focused, effective regulatory apparatus. When you fall prey to the regulatory apparatus' ploy to gain more power with yet more "regulations" by responding to their failures to use existing regulations to fix problems, you A: play a part in letting these sorts of failures slip by B: reward the regulatory apparatus' failures, creating more incentives for them to fail later and C: give them another vector to "fail" and need "more power" to fix their failures in the future. You want regulations to work, stop falling for this obvious ploy and start holding your government servants responsible for the failures they are already abundantly equipped with the tools to solve, instead of playing the sap and joining in with the voices calling for more power, exactly as they want. They've got enough to handle this problem. Go take them to task, don't hand them more power even as they are demonstrating their manifold inadequacy to be given even what they have.
- sehugg 11y ago
  Looks like the DOJ is very probably looking into antitrust violations in the generic drug industry: http://www.troutmansanders.com/the-dojs-generic-drug-antitrust-investigation-may-be-just-beginning-04-20-2015/ http://www.troutmansanders.com/the-dojs-generic-drug-antitru... We'll see if any of this survives our current President's tenure, though.
  - nickff 11y ago
    It seems unlikely that the DOJ will continue this into the next administration, it has become increasingly politicized throughout this one (and arguably over the last 40 years or even longer). Perhaps every agency faces an unavoidable politicization if it survives long enough, and since they are never abolished or fundamentally restructured, they will all eventually fall victim to it.
- aianus 11y ago
  > undersell until they're the only supplier left I don't think this is illegal unless they're selling the drug below cost (dumping).
  - tammer 11y ago
    IANAL, but I do know 2/3rds of the company existed entirely to push the papers that kept the place running above the boards, along with yearly inspections by the FDA, etc. Whether this is a problem of regulation or enforcement can't be discerned by me, but my simplistic understanding of it was ( cost of entry to market + stringent packaging requirements for these particular drugs ) / market = nobody else bothers to get in the game
danmaz74 11y ago
But what is preventing a different generics manufacturer to enter the market at that point? How long can an exploit like that go on?
- ScottBev 11y ago
  The cost to setup a process and maintain it according to FDA requirements. The market size is likely just under the cost to establish the manufacturing capacity for the US market.
  - twoodfin 11y ago
    And yet the "bad guy" generic manufacturer was able to raise the capital to do this (and presumably make a profit). What's the difference?
    - ScottBev 11y ago
      Turing only acquired the US marketing rights. Someone else is making the drug. So that doesn't change the FDA licensing, but they get to increase the price in the US. http://www.prnewswire.com/news-releases/turing-pharmaceuticals-ag-acquires-us-marketing-rights-to-daraprim-pyrimethamine-300125853.html http://www.prnewswire.com/news-releases/turing-pharmaceutica...
  - danmaz74 11y ago
    I guess that maintaining the process isn't that expensive, considering the previous price (which, I'm pretty sure, wasn't kept at a loss). So, probably, it's setting the process up which is expensive.
werber 11y ago
Tammer : If you wrote an article about your experience, I'd love to read it.
BurningFrog 11y ago
Why don't the other suppliers jump back in when the price gets jacked up?

by tammer 11y ago

jerf 11y ago

At least in the US, that actually sounds like it's already illegal from general business regulation. As in, no new laws needed, get the ones we have enforced. Wouldn't be surprised you can already pierce the corporate veil without new laws too. This is not specifically in reply to the parent, but the point fits here: I'd observe that calling for more regulation or even outright nationalization to fix this, when it's probably already illegal, is not thinking very clearly. Regulations are already failing to prevent this... how is enacting more things that make illegal things illegalier going to actually solve the problem? How is doing the same, but more, actually going to help?

clavalle 11y ago
Perhaps not more, but faster and perhaps more thoroughly in order to change the player's risk assessment. By the time these companies are called out they amass huge war chests and tie these things up in the courts for years while enriching their investors and management teams. Then, when the hammer falls, that company disintegrates on some level and, often, these management teams spread to similar companies and do it all over again. Obviously, something is not working. When something is not working the answer is almost never 'let's keep things the same and hope it turns out better.'
- jerf 11y ago
  My point is "Let's write more regulations" is "let's keep things the same and hope it turns out better". It's easy to call for more regulations but it sounds a lot more to me like the core problem is a priority mismatch in enforcement. A lot harder to fix, but certainly step one seems to me to be to get people to stop calling for "more" regulation and start calling for the core problem of ineffective regulatory agencies to be addressed. Betcha if you took a look at what the relevant agencies were doing with their time instead of dealing with this, you'd be less than pleased.
  - clavalle 11y ago
    I've seen these kinds of things up close (investigations and eventual prosecutions of exploitative companies in the health care sector) and I can absolutely tell you I am not pleased. But I also don't see the alternative. I don't think a free market approach would work. The government has a huge standing war chest. It can afford to take the time and expense to go after these bad actors. Even insurance companies are rightfully reluctant to take on very expensive, risky litigation and/or investigation that could run into multiple years or even decades. The market is a wonderful tool, but it can't solve all problems. Some problems are so big that it takes the pooled resources of, essentially, everyone to fight against it.
    - jerf 11y ago
      I didn't say anything about a free market. I said, go fix the regulating agencies. Way harder. I'm a libertarian, but I'm not an "anarchist" because I still think it makes more sense to have an industry, and an independent, focused, effective regulatory apparatus. When you fall prey to the regulatory apparatus' ploy to gain more power with yet more "regulations" by responding to their failures to use existing regulations to fix problems, you A: play a part in letting these sorts of failures slip by B: reward the regulatory apparatus' failures, creating more incentives for them to fail later and C: give them another vector to "fail" and need "more power" to fix their failures in the future. You want regulations to work, stop falling for this obvious ploy and start holding your government servants responsible for the failures they are already abundantly equipped with the tools to solve, instead of playing the sap and joining in with the voices calling for more power, exactly as they want. They've got enough to handle this problem. Go take them to task, don't hand them more power even as they are demonstrating their manifold inadequacy to be given even what they have.
sehugg 11y ago
Looks like the DOJ is very probably looking into antitrust violations in the generic drug industry: http://www.troutmansanders.com/the-dojs-generic-drug-antitrust-investigation-may-be-just-beginning-04-20-2015/ http://www.troutmansanders.com/the-dojs-generic-drug-antitru... We'll see if any of this survives our current President's tenure, though.
- nickff 11y ago
  It seems unlikely that the DOJ will continue this into the next administration, it has become increasingly politicized throughout this one (and arguably over the last 40 years or even longer). Perhaps every agency faces an unavoidable politicization if it survives long enough, and since they are never abolished or fundamentally restructured, they will all eventually fall victim to it.
aianus 11y ago
> undersell until they're the only supplier left I don't think this is illegal unless they're selling the drug below cost (dumping).
- tammer 11y ago
  IANAL, but I do know 2/3rds of the company existed entirely to push the papers that kept the place running above the boards, along with yearly inspections by the FDA, etc. Whether this is a problem of regulation or enforcement can't be discerned by me, but my simplistic understanding of it was ( cost of entry to market + stringent packaging requirements for these particular drugs ) / market = nobody else bothers to get in the game

danmaz74 11y ago

But what is preventing a different generics manufacturer to enter the market at that point? How long can an exploit like that go on?

ScottBev 11y ago
The cost to setup a process and maintain it according to FDA requirements. The market size is likely just under the cost to establish the manufacturing capacity for the US market.
- twoodfin 11y ago
  And yet the "bad guy" generic manufacturer was able to raise the capital to do this (and presumably make a profit). What's the difference?
  - ScottBev 11y ago
    Turing only acquired the US marketing rights. Someone else is making the drug. So that doesn't change the FDA licensing, but they get to increase the price in the US. http://www.prnewswire.com/news-releases/turing-pharmaceuticals-ag-acquires-us-marketing-rights-to-daraprim-pyrimethamine-300125853.html http://www.prnewswire.com/news-releases/turing-pharmaceutica...
- danmaz74 11y ago
  I guess that maintaining the process isn't that expensive, considering the previous price (which, I'm pretty sure, wasn't kept at a loss). So, probably, it's setting the process up which is expensive.

werber 11y ago

Tammer : If you wrote an article about your experience, I'd love to read it.

BurningFrog 11y ago

Why don't the other suppliers jump back in when the price gets jacked up?