11 ms·

The drug industry wants us to think Martin Shkreli is a rogue CEO, but he isn't

222 points by rottyguy 11y ago

gkoberger 11y ago
It's likely more nuanced than this, but at the end of the day, he's getting paid a lot of money to be the bad guy. He'll be "fired", and then he'll go on to do it again somewhere else. He even flat out admitted it (before deleting the tweet): "@matthewherper great question, I guess we will find out. I take the pain for my investors" -Martin Shkreli (@MartinShkreli) September 21, 2015 http://www.independent.co.uk/news/people/hedge-fund-trader-martin-shkreli-hits-back-at-critics-after-raising-price-of-hiv-drug-by-5000-10511960.html http://www.independent.co.uk/news/people/hedge-fund-trader-m...
- rco8786 11y ago
  I fully agree with your notion but I'm note sure how that tweet "proves" it.
  - gkoberger 11y ago
    Ah yes, I meant that it "proves" the first part ("My job is to take the heat"). You're right, the "being fired" part is just a theory.
    - hueving 11y ago
      Well every CEO's job is that, so it's not really proving anything.
WalterBright 11y ago
Generally, when massive price oddities become commonplace, it's evidence of government distortions of free market operation. Trying to blame it on 'rogue' CEOs is an exercise in futility.
- jsn117 11y ago
  except when the choice is "Buy this or die", people tend to pay whatever they have to.
  - tbrownaw 11y ago
    And they can only buy it from one place (which doesn't have to compete on price due to being the only one) because... guess what? Government interference.
    - username223 11y ago
      Frickin' government, man... If it weren't for them always interfering, I could have a diesel VW that was fast, efficient, and non-polluting!
      - deelowe 11y ago
        What does emissions regulation have to do with prescription drugs? People really need to stop it with the false dichotomy BS.
      - tbrownaw 11y ago
        Sure, but it wouldn't have seatbelts or airbags and the "non-polluting" would come with 2 pages of fine print redefining what pollution is (and it would probably give you cancer).
        gnaritas 11y ago
        He was being sarcastic.
        aianus 11y ago
        What if I don't want or can't afford seatbelts or airbags or accident insurance (not to be confused with liability insurance)? Poor people end up taking that increase in life expectancy and just wasting it on walking and sitting on the bus because it's so expensive to operate a vehicle here in Canada. It's your mother's place to tell you to wear your seatbelt, not the government's.
impostervt 11y ago
My daughter, like many kids, has an allergy that requires us to have epipens on hand. There was a good article the other day about how the owner of epipen have raised the price of epipen from $57/pen in 2007 to over $400/two-pack of pens today. I don't think you can get just one pen, btw. I think the difference is they didn't raise the price in one fell swoop. Frogs in boiling water, etc, etc. http://www.bloomberg.com/news/articles/2015-09-23/how-marketing-turned-the-epipen-into-a-billion-dollar-business http://www.bloomberg.com/news/articles/2015-09-23/how-market...
- pragone 11y ago
  In EMS, there's been a big push to allow basic EMTs to draw Epi up from a vial to administer it, precisely to avoid the absurd costs associated with EpiPens. I don't know if that would be an option for individuals; perhaps it's something you can talk to your doctor about
- rexf 11y ago
  In my anecdotal experience, the price of asthma inhalers (Albuterol) have gone up significantly, which sucks since they have a limited shelf-life & it's common to have multiple (car, office, bedroom, etc). Like epipen-countered allergies, asthma is a life & death situation. From a quick web search, this site[1] shows: > To go from inhalers that cost 5 dollars to 60 dollars especially for those who don’t have prescription drug coverage has been awful. As a consumer, I can either forgo inhalers or use expired ones (instead of spending $$$ to keep them current). [1] http://www.dailystrength.org/health_blogs/dr-orrange/article/your-inhaler-expensive-green-at-price http://www.dailystrength.org/health_blogs/dr-orrange/article...
  - grecy 11y ago
    Could you not buy them from another country? A quick trip across the border in either direction will save you a ton of money, and I'm sure you can mail order it too.
    - eli 11y ago
steve19 11y ago
I am not arguing for or against the drug industry, but naming a few drugs with price increases is meaningless. Telling me some random generic has gone up in price means nothing to me . For all I know, that might be an old fashioned drug hardly any doctors prescribe and the price increases is required in order to keep it available for the few people who require it... or it could just as easily mean the company has a monopoly and is price gouging consumers. There needs to be a weighted index, or multiple indexes, of drugs weighted by how important they are. Not sure how to define importance in this context, but quantity sold would be a good start, maybe another index weighted by average expenditure per patient per year and another weighted by lives saved. Edit: Downvoters, I did read the article. An unweighted group of any product is not very useful from an economics perspective. That is why the CPI is weighted. https://en.wikipedia.org/wiki/Consumer_price_index https://en.wikipedia.org/wiki/Consumer_price_index
- phkahler 11y ago
  >> Telling me some random generic has gone up in price means nothing to me . They state that the average price of a group of over 220 drugs has been increasing faster than inflation for some time. That's hardly "some random generic". In fact they say generics tend to drop in price, it's the name brands that are rising.
- refurb 11y ago
  You raise a good point and percentage increases can be deceiving. If a drug cost $0.01/tablet and now it's $0.03/tablet, yes that's a 300% increase, but it still costs pennies per day to treat someone. Unfortunately I can't find it right now, but the Us gov't did a study into generic drug price increases. There is no one reason why they went up. For some drugs it was because a company decided to stop making it and there were shortages. For other companies, they had manufacturing problems and shortages resulted.
  - developer1 11y ago
    Shortages don't seem like they should a valid reason. Choosing to no longer produce a needed drug shouldn't even be a legal option - free market shouldn't be allowed to trump health. I don't know how you write laws to require a corporation to produce a drug they own, and perhaps that isn't the right approach; but it doesn't seem morally acceptable to let this happen. Capitalism should be taking a back seat here compared to the common good. "Manufacturing problems" just seems ripe for abuse. "Oh, we fired 90% of our production line, and now we just can't seem to pump it out anymore". Manufacture should have safeties and redundancies in place to prevent the sudden inability to produce whatsoever. It's unfortunate that money trumps all, even for the health industry.
refurb 11y ago
The colchicine case is an interesting one if you dig down into the details. Colchicine has been used for hundreds (?) of years. It never went through phase 3 trials and it was never officially approved by the FDA. Instead it was grandfathered in. This made the FDA pretty uncomfortable [1] and I can't blame them. How do you properly regulate a drug where there is little to no data outlining it's efficacy and safety? So, the FDA decide to dangle a carrot in front of drug developers. If you formally take a grandfathered drug through the approval process, you will be awarded with something call "data exclusivity" (it's not a patent). For a period of 3 or 5 years (it depends on the filing), the FDA will not approve another form of the drug. In addition, they will tell/force all the other grandfathered manufacturers to stop selling their versions. Statement from the FDA: Colcrys is the only FDA-approved single-ingredient oral colchicine product available on the U.S. market. Approved by the FDA in 2009, Colcrys’ prescribing information contains important safety data and recommendations on drug interactions and dosing not available with unapproved products.[2] Of course this is a pretty attractive carrot for a drug company. Spend $X now and you've got a captive market where you can recoup your R&D spend and make a profit over 5 years. Plus the heavy hand of the FDA will help you get rid of competitors!. Due to the the FDA regulatory process, it shouldn't be surprising that the cost of colchicine went up, it's pretty much had to in order to pay for the FDA approval. Did it have to go up 5000%? No, probably not. But it did have to go up if the FDA wanted an approved version since producing a grandfathered, unapproved drug is pretty cheap compared to an FDA approved one. What made the colchicine case particularly unfair was that the company didn't actually run any trials. They just collected all the trial data that already existed (mostly published papers) and submitted that data. Another great example is Mr. Mucus, the cold medicine, it was the exact same play. In fact, a VC firm backed the entire process. The got the active ingredient approved by the FDA (again, it had been grandfathered in) and the FDA forced all other competitors off the market. This blog post has all the details [3]. Suffice to say, Aisling Capital made a 15x return off that investment. And that's why you see Mr. Mucus ads all over the place. [1]http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/EnforcementActivitiesbyFDA/SelectedEnforcementActionsonUnapprovedDrugs/ucm119899.pdf http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulat... [2]http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm227796.htm http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/uc... [3]http://biotechtranslated.com/2011/08/09/how-to-make-the-fda-your-friend/ http://biotechtranslated.com/2011/08/09/how-to-make-the-fda-...
phkahler 11y ago
The colchicine story reminds me of the Red Yeast / Lovastatin story. Red Yeast is a traditional Chinese medicine that can lower cholesterol due to several compounds it contains. Lovastatin was identified in it, put through trials and is now the standard for lowering cholesterol. Meanwhile, the gov has said you can't sell Red Yeast Rice with lovastatin in it, so they allegedly remove it. As a single datum, I was told I needed to be on statins, and when I balked, my heath care professional said I could try RYR for 3 months and if it didn't work I'd need a prescription for statins. My cholesterol dropped 97 points in 3 months. I said "so I don't need statins?" She said shes never seen that kind of drop with statins, so no. So yeah, take stuff from nature, patent it, then get the natural version banned, profit!
- refurb 11y ago
  Red Yeast has not been banned, you just can't sell it as a treatment for high cholesterol. Why? It hasn't gone through clinical trials. You might argue what's the difference between a tablet of lovastatin and Red Yeast? Well, I don't know and the FDA doesn't either that's why you can't make medical claims about it. I'm glad it worked for you! Also, lovastatin went generic a long time ago and it now costs a few hundred dollars (if that) a year to treat a patient.
  - carbocation 11y ago
    Along those same lines, if you fill your prescriptions at WalMart, then for $40 per year you can take atorvastatin 80mg (Lipitor; one of the best studied high potency statins) every day. This is about $10 per year (~3 cents per day) more expensive than cheap red yeast rice.
  - vonmoltke 11y ago
    > You might argue what's the difference between a tablet of lovastatin and Red Yeast? The tablet of lovastatin has a precise amount of active ingredient. Red yeast rice has some random amount that may or may not be clinically significant.
  - pmorici 11y ago
    "Red Yeast has not been banned, you just can't sell it as a treatment for high cholesterol." Wikipedia disagrees with you. It says, if a product has a measurable amount of monacolin K, i.e., lovastatin in it the FDA will stop it's sale even if there aren't any claims of cholesterol reduction. https://en.wikipedia.org/wiki/Red_yeast_rice#Regulatory_restrictions https://en.wikipedia.org/wiki/Red_yeast_rice#Regulatory_rest...
rokhayakebe 11y ago
I, for one, would like to see drugs increase very sharply similarly to what this guy did. Reason is we need a consumer reform, and not a government reform which is a temporary solution. The entirety of pharmaceutical R&D is $161 B globaly. If half of Americans were contributing $100 monthly to a pool, we could fund it entirely and make every drug available for free.I would love to see this done outside of the government. We MUST stop depending on government for Health, and Education. While they intend well (I truly believe they do individually as people), as an aggregate they are not able to solve these issues at scale.
- mikeash 11y ago
  What sort of organization do you propose would obtain and manage those $100/month contributions, and how would that organization differ from "a government"?
  - rokhayakebe 11y ago
    Your tax dollars do not fund drug R&D. Think KickStarter for issues that matter to us.
    - throwaway2048 11y ago
      tons of drug research is abolutely publicly funded, then often sold off to private companies for pennies...
      - rokhayakebe 11y ago
        Well then the matter is even worst than I suspected. I am funding drug research just so the government can sell it to a private company that will charge me 100x. Clearly this is rapacious.
    - throwaway2048 11y ago
      tons of drug research is abolutely publicly funded, then often sold off to private companies for pennies...
refurb 11y ago
I'm sorry, but I have to nitpick on the AARP graph showing the average annual rate of price increases for 227 drugs. Anytime I see data that is a subset of the real data set, I have to wonder why they did that. Why not the average annual rate of price increases over all prescription drugs? Why only 227 of them? Also, I disagree with this quote: "Only when a 46 percent discount was applied to a pricy Hepatitis C treatment, Harvoni, did it become a good health care value -- at about $40,000 per year." That's patently untrue. Hell, CTAF (California technology assessment forum, which assessed drugs for MediCal) found that Harvoni, at it's full price of almost $90K was cost effective. The real problem is that it would cost too much to treat everyone.
- msabalau 11y ago
  Of course, one could click through the link to the study, and read the 3 pages that describe the methodology behind their "market basket" of drugs. You don't have to wonder, or at least the curious don't.
- mikeash 11y ago
  The drugs were chosen simply as the most significant ones for the AARP's membership. The methodology is thoroughly discussed in Appendix A of the study: http://member.aarp.org/content/dam/aarp/ppi/2014-11/rx-price-watch-report-AARP-ppi-health.pdf http://member.aarp.org/content/dam/aarp/ppi/2014-11/rx-price... Also note that the drugs were chosen before they started tracking prices. I totally understand your skepticism, but rather than just wonder why they chose those, why not find out?
  - verbin217 11y ago
    They did find out. Why go digging when you could just make a comment and get all the work done for you.
    - mikeash 11y ago
      That's the internet for you. Ask a question and nobody answers, state the wrong answer and you get the right answer instantly. It's not my fault, I'm a victim of an oppressive system!
crdoconnor 11y ago
Meanwhile, Obama nominates Robert Califf as FDA chief. A guy who has been feeding at the pharma trough for several years: http://hcrenewal.blogspot.sg/2015/09/turn-that-door-around-physician.html http://hcrenewal.blogspot.sg/2015/09/turn-that-door-around-p...
- quaunaut 11y ago
  I'll just remind- remember everyone's skepticism of Wheeler. Judge each by their actions, there is time to tear them to shreds.
  - crdoconnor 11y ago
    On what basis could you judge Wheeler favorably? Because he backed down after a monumental backlash from the public combined with several very powerful and wealthy corporations? Wheeler can't claim credit for net neutrality after attempting to destroy net neutrality and losing.
roflchoppa 11y ago
people are jerks, they justify it by saying its business. Have I had an option for medicine provider I would go with the one thats not abusive to its employees. but i grow all my medicine out of the ground.
- jqm 11y ago
  If you really "grow all your medicine out of the ground" it's more than likely if you ever get truly ill or injured you yourself will be in the place you grow your medicine out of. Accept science. It works.
  - roflchoppa 11y ago
    Not sure about that brother, I mean people have been growing this stuff for thousands of years man. I got mine on that good good extra potent ja feel?
pbreit 11y ago
It's refreshingly that we are losing our appeal for pure moneymaking. I'm not sure the attempted t was to portray him as a rogue so much as a jerk. And the article doesn't refute that.
csense 11y ago
There are lots of problems here: (1) Medicine has a very inelastic demand function. If you need substance X to stay alive, you'll pay anything to get it. (2) Costs are hidden from consumers. If insurance / Medicare is paying for it, it literally makes no difference to the end user if it's $5, $50, or $50,000. (3) Free-market forces are distorted by patent monopolies and lack of diversity in the supply chain. With a patent, you can crank up the price as high as you want. Ditto if you're the only supplier and it'll take some time for competitors to bring production online, or you can deny them access to samples for the equivalence testing your competitors need to prove to regulators that their drug is the same as your drug. (4) Broken incentives for developing new drugs. A patient's going to be taking a drug to treat their diabetes / ED / high blood pressure for the rest of their life, whereas something like an antibiotic is only taken for a couple weeks. Guess which one is more profitable, hence attracts more R&D money? What's the solution? I don't know. Maybe market reforms to align the incentives; perhaps even bounding pharmaceutical companies' profit margin to some multiple of their costs (but of course you'd have to be careful about the wording of the regulation and auditing for compliance, to make sure it can't be gamed by e.g. deliberately inflating the costs). Or perhaps even some kind of socialism where the government tells people what to produce or how much to sell it for (agricultural subsidies might be regarded similarly -- the government is deliberately manipulating the market to push down the price and push up the supply of goods necessary to sustain life, so shocks don't result in lethal shortages). Bernie Sanders at one point talked about replacing patents for new drugs with prizes, but I think he may have given up on that.
zaidf 11y ago
Me and my siblings have a genetic mutation that requires us to take Colchicine 3 times/day for the rest of our lives so needless to say I am glad to see the drug industry being exposed.
Spooky23 11y ago
The entire health sector is rotten to the core. The fate of two of my friends is a great example of where priories lay. One is a registered nurse. She has seen her overall compensation shrink over the last 5 years as hospitals merge into regional cartels and medical practices consolidate. These cartel entities play rough, breaking unions and shipping in visiting nurses to keep wages low. Fortunately, her husband got a job with better insurance -- her family plan on his insurance costs less than her individual coverage. The other person is a pharma sales rep. She makes about 2-3x the nurse, gets a car, and usually wins 1-2 vacations to beach resorts or Vegas every year. For awhile it was peddling a viagra competitor, now she has a stable of different drugs to push. So when I hear about of the money needed for "research", from companies with huge sales forces pulling down $100-150k plus cars, etc... My first thought is "bullshit"
- drewgross 11y ago
  A sales force amplifies what you are already doing. If a research company can hire a salesman that brings in $1M in additional sales, it makes sense to pay that salesman $900k in salary and benefits, because that's an additional $100k the company can put towards it's research. If you agree with the research, you should be happy they hired that salesman. Saying you agree with the mission of a company as long as it pays it's salesman less than $x doesn't make any sense, unless you somehow know that the salesman is bringing in less than $x.
  - eli_gottlieb 11y ago
    Why should the employment question for salesmen be, "How generous can we afford to be?", when for everyone else it's "How stingy can we afford to be?"? The whole reason a company hires any employee, at all, is because it's profitable. The question is why employees who don't contribute to the core mission of the firm should receive 90% of the revenue they generate, while those who do receive a fixed salary irrespective of revenue (and also have to work long hours and take few vacations).
    - aianus 11y ago
mercurial 11y ago
Wouldn't all these problems disappear if the entire drug industry was nationalized? Once you remove the profit angle, there is no more incentive to raise prices dramatically, make minute changes to a molecule to extend your patents, or only focus research on medicine which is the most likely to make money.
- aianus 11y ago
  Careful. Money going exclusively towards research that is focused on earning more money might not be ideal, sure. But in a nationalized drug industry, money will instead go exclusively towards "research" conducted by those who are best at filling out forms and schmoozing with politicians. I think that would arguably be worse.
  - mercurial 11y ago
    Are you under the impression that big pharma looks at lobbying with disgust? As for "research" as you put it, I was under the impression that a number of countries already fund medical research. I'm not privy to how much "filling out forms" and "schmoozing with politicians" this involves, but I have a hard time imagining the methods and goals being worse than the "best practices" of the private sector.
    - aianus 11y ago
      > I'm not privy to how much "filling out forms" and "schmoozing with politicians" this involves My friends reported that their (highly educated and intelligent) supervisors in their university labs spent almost all their time doing funding applications instead of research. I imagine it's not the same in the private sector, you go to work and spend your day working not running around begging for funding because the company is already rich and has already decided to fund the project.
      - dragonwriter 11y ago
        AFAICT in the private sector its very often the same (and not just in pharma, but in biotech more generally), because in order to pursue a project a principal scientist will need to sell a business plan around it to the business management of the company so that they will devote company resources to it, which may involve securing (or identifying and waiting for the business-side folks to secure) funding via grants, cooperative ventures, etc. to do it. If the company has a big cash stockpile (e.g., because it is either a well-funded startup or a well-established big player) the likelihood of needing to secure outside funding may be less, but the scientist will still likely have to sell the idea to the business team.
logn 11y ago
Public utilities which have monopolies set prices according to a regulated process: https://en.wikipedia.org/wiki/Utility_ratemaking https://en.wikipedia.org/wiki/Utility_ratemaking Given the patents and difficult FDA approval processes, it might make sense to regulate drug prices similarly to public utilities. I'm all for free markets. But when there's zero competition, you can't still treat things like a free market.
- zurn 11y ago
  Nit: Patents are state-backed monopoly rights, patent supporters argue that free market would result in too much competition.
  - throwawaykf05 11y ago
    I've never heard any patent supporters say anything about "too much" competition. What they say is that anytime a competitor can freeride on your investment of resources, it is not fair competition.
on_ 11y ago
This is a symptom, not a problem. Drug prices are a good measure of how we are doing on healthcare policy and insurance regulation. It looks like poorly. It costs 2.5B dollars to develop a new drug. The regulatory hurdles are MASSIVE. We have a complicated and extremely compromised healthcare system that is focused on providing insurance when it should have been providing better healthcare. There is no easy answer here, but companies are going to want to make profits and the system incentivizes them to spend money developing a few critical drugs, holding on to the patent and pricing it as high as possible, the dev costs are passed to the insurance companies which are passed on to you in premiums as well as inflation, as insurance companies operate much like a bank. This comes full circle into the role that banks play in lending and increasing the money supply. Possible answers. Tighter fiscal policy, patent reform, smarter testing, looser regulations on known compounds, google x prize like gov't or private funding for cures, distributed computing using algorithms to evolve a cure (will be interesting to see what happens with that patent) [0]http://www.scientificamerican.com/article/cost-to-develop-new-pharmaceutical-drug-now-exceeds-2-5b/ http://www.scientificamerican.com/article/cost-to-develop-ne...
- Thimothy 11y ago
  I dunno. I don't think that in Europe the development costs or regulatory hurdles are smaller than in the US (if I had to make an uneducated guess I would say bigger), and yet the prices are way lower. I would add to that list "heavy government regulation on medicine prices", they are not a common commodity and should not be left to the markets free whims.
  - bko 11y ago
    That may be because the US is leading the way on drug development. After the drug has been developed, the drug company will be able discriminate on price to maximize revenue. I imagine the cost of getting approval to sell a drug in European countries that has already been developed and tested for the US is much smaller than the actual development. It could be that without the US system, these drugs would not be available in European countries as well. Mandating lower prices for drugs is unlikely to work as it hasn't worked in the past (Venezuela everything, US gasoline, etc).
digi_owl 11y ago
Looking over the anecdotes here, i find myself thinking that big pharma is just an example of the "profit uber alles" mentality that has been rampant in the corporate world since at least the 80s (if not before). An interesting set of documentaries in that regard may be The Mayfair Set: https://en.wikipedia.org/wiki/The_Mayfair_Set https://en.wikipedia.org/wiki/The_Mayfair_Set It recounts, from a British point of view, the rise of a type of finance capitalist that revolved around strip mining established companies. I think part 3 touched on how by the time the people that started it got cold feet about it all, it had become institutionalized thanks to pension funds and similar.
wiz21c 11y ago
I worked for Johnson&Johnson in Belgium years ago. On each desk of the open space I was on, there was a small "manifesto". The title was : "we work for the good of our patients and investors". Yes, patients and investors put on the very same level.

222 points by rottyguy 11y ago

It's likely more nuanced than this, but at the end of the day, he's getting paid a lot of money to be the bad guy. He'll be "fired", and then he'll go on to do it again somewhere else. He even flat out admitted it (before deleting the tweet): "@matthewherper great question, I guess we will find out. I take the pain for my investors" -Martin Shkreli (@MartinShkreli) September 21, 2015 http://www.independent.co.uk/news/people/hedge-fund-trader-martin-shkreli-hits-back-at-critics-after-raising-price-of-hiv-drug-by-5000-10511960.html http://www.independent.co.uk/news/people/hedge-fund-trader-m...

rco8786 11y ago
I fully agree with your notion but I'm note sure how that tweet "proves" it.
- gkoberger 11y ago
  Ah yes, I meant that it "proves" the first part ("My job is to take the heat"). You're right, the "being fired" part is just a theory.
  - hueving 11y ago
    Well every CEO's job is that, so it's not really proving anything.

WalterBright 11y ago

Generally, when massive price oddities become commonplace, it's evidence of government distortions of free market operation. Trying to blame it on 'rogue' CEOs is an exercise in futility.

jsn117 11y ago
except when the choice is "Buy this or die", people tend to pay whatever they have to.
- tbrownaw 11y ago
  And they can only buy it from one place (which doesn't have to compete on price due to being the only one) because... guess what? Government interference.
  - username223 11y ago
    Frickin' government, man... If it weren't for them always interfering, I could have a diesel VW that was fast, efficient, and non-polluting!
    - deelowe 11y ago
      What does emissions regulation have to do with prescription drugs? People really need to stop it with the false dichotomy BS.
    - tbrownaw 11y ago
      Sure, but it wouldn't have seatbelts or airbags and the "non-polluting" would come with 2 pages of fine print redefining what pollution is (and it would probably give you cancer).
      - gnaritas 11y ago
        He was being sarcastic.
      - aianus 11y ago
        What if I don't want or can't afford seatbelts or airbags or accident insurance (not to be confused with liability insurance)? Poor people end up taking that increase in life expectancy and just wasting it on walking and sitting on the bus because it's so expensive to operate a vehicle here in Canada. It's your mother's place to tell you to wear your seatbelt, not the government's.

impostervt 11y ago

My daughter, like many kids, has an allergy that requires us to have epipens on hand. There was a good article the other day about how the owner of epipen have raised the price of epipen from $57/pen in 2007 to over $400/two-pack of pens today. I don't think you can get just one pen, btw. I think the difference is they didn't raise the price in one fell swoop. Frogs in boiling water, etc, etc. http://www.bloomberg.com/news/articles/2015-09-23/how-marketing-turned-the-epipen-into-a-billion-dollar-business http://www.bloomberg.com/news/articles/2015-09-23/how-market...

pragone 11y ago
In EMS, there's been a big push to allow basic EMTs to draw Epi up from a vial to administer it, precisely to avoid the absurd costs associated with EpiPens. I don't know if that would be an option for individuals; perhaps it's something you can talk to your doctor about
rexf 11y ago
In my anecdotal experience, the price of asthma inhalers (Albuterol) have gone up significantly, which sucks since they have a limited shelf-life & it's common to have multiple (car, office, bedroom, etc). Like epipen-countered allergies, asthma is a life & death situation. From a quick web search, this site[1] shows: > To go from inhalers that cost 5 dollars to 60 dollars especially for those who don’t have prescription drug coverage has been awful. As a consumer, I can either forgo inhalers or use expired ones (instead of spending $$$ to keep them current). [1] http://www.dailystrength.org/health_blogs/dr-orrange/article/your-inhaler-expensive-green-at-price http://www.dailystrength.org/health_blogs/dr-orrange/article...
- grecy 11y ago
  Could you not buy them from another country? A quick trip across the border in either direction will save you a ton of money, and I'm sure you can mail order it too.
  - eli 11y ago

steve19 11y ago

I am not arguing for or against the drug industry, but naming a few drugs with price increases is meaningless. Telling me some random generic has gone up in price means nothing to me . For all I know, that might be an old fashioned drug hardly any doctors prescribe and the price increases is required in order to keep it available for the few people who require it... or it could just as easily mean the company has a monopoly and is price gouging consumers. There needs to be a weighted index, or multiple indexes, of drugs weighted by how important they are. Not sure how to define importance in this context, but quantity sold would be a good start, maybe another index weighted by average expenditure per patient per year and another weighted by lives saved. Edit: Downvoters, I did read the article. An unweighted group of any product is not very useful from an economics perspective. That is why the CPI is weighted. https://en.wikipedia.org/wiki/Consumer_price_index https://en.wikipedia.org/wiki/Consumer_price_index

phkahler 11y ago
>> Telling me some random generic has gone up in price means nothing to me . They state that the average price of a group of over 220 drugs has been increasing faster than inflation for some time. That's hardly "some random generic". In fact they say generics tend to drop in price, it's the name brands that are rising.
refurb 11y ago
You raise a good point and percentage increases can be deceiving. If a drug cost $0.01/tablet and now it's $0.03/tablet, yes that's a 300% increase, but it still costs pennies per day to treat someone. Unfortunately I can't find it right now, but the Us gov't did a study into generic drug price increases. There is no one reason why they went up. For some drugs it was because a company decided to stop making it and there were shortages. For other companies, they had manufacturing problems and shortages resulted.
- developer1 11y ago
  Shortages don't seem like they should a valid reason. Choosing to no longer produce a needed drug shouldn't even be a legal option - free market shouldn't be allowed to trump health. I don't know how you write laws to require a corporation to produce a drug they own, and perhaps that isn't the right approach; but it doesn't seem morally acceptable to let this happen. Capitalism should be taking a back seat here compared to the common good. "Manufacturing problems" just seems ripe for abuse. "Oh, we fired 90% of our production line, and now we just can't seem to pump it out anymore". Manufacture should have safeties and redundancies in place to prevent the sudden inability to produce whatsoever. It's unfortunate that money trumps all, even for the health industry.

refurb 11y ago

The colchicine case is an interesting one if you dig down into the details. Colchicine has been used for hundreds (?) of years. It never went through phase 3 trials and it was never officially approved by the FDA. Instead it was grandfathered in. This made the FDA pretty uncomfortable [1] and I can't blame them. How do you properly regulate a drug where there is little to no data outlining it's efficacy and safety? So, the FDA decide to dangle a carrot in front of drug developers. If you formally take a grandfathered drug through the approval process, you will be awarded with something call "data exclusivity" (it's not a patent). For a period of 3 or 5 years (it depends on the filing), the FDA will not approve another form of the drug. In addition, they will tell/force all the other grandfathered manufacturers to stop selling their versions. Statement from the FDA: Colcrys is the only FDA-approved single-ingredient oral colchicine product available on the U.S. market. Approved by the FDA in 2009, Colcrys’ prescribing information contains important safety data and recommendations on drug interactions and dosing not available with unapproved products.[2] Of course this is a pretty attractive carrot for a drug company. Spend $X now and you've got a captive market where you can recoup your R&D spend and make a profit over 5 years. Plus the heavy hand of the FDA will help you get rid of competitors!. Due to the the FDA regulatory process, it shouldn't be surprising that the cost of colchicine went up, it's pretty much had to in order to pay for the FDA approval. Did it have to go up 5000%? No, probably not. But it did have to go up if the FDA wanted an approved version since producing a grandfathered, unapproved drug is pretty cheap compared to an FDA approved one. What made the colchicine case particularly unfair was that the company didn't actually run any trials. They just collected all the trial data that already existed (mostly published papers) and submitted that data. Another great example is Mr. Mucus, the cold medicine, it was the exact same play. In fact, a VC firm backed the entire process. The got the active ingredient approved by the FDA (again, it had been grandfathered in) and the FDA forced all other competitors off the market. This blog post has all the details [3]. Suffice to say, Aisling Capital made a 15x return off that investment. And that's why you see Mr. Mucus ads all over the place. [1]http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/EnforcementActivitiesbyFDA/SelectedEnforcementActionsonUnapprovedDrugs/ucm119899.pdf http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulat... [2]http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm227796.htm http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/uc... [3]http://biotechtranslated.com/2011/08/09/how-to-make-the-fda-your-friend/ http://biotechtranslated.com/2011/08/09/how-to-make-the-fda-...

phkahler 11y ago

The colchicine story reminds me of the Red Yeast / Lovastatin story. Red Yeast is a traditional Chinese medicine that can lower cholesterol due to several compounds it contains. Lovastatin was identified in it, put through trials and is now the standard for lowering cholesterol. Meanwhile, the gov has said you can't sell Red Yeast Rice with lovastatin in it, so they allegedly remove it. As a single datum, I was told I needed to be on statins, and when I balked, my heath care professional said I could try RYR for 3 months and if it didn't work I'd need a prescription for statins. My cholesterol dropped 97 points in 3 months. I said "so I don't need statins?" She said shes never seen that kind of drop with statins, so no. So yeah, take stuff from nature, patent it, then get the natural version banned, profit!

refurb 11y ago
Red Yeast has not been banned, you just can't sell it as a treatment for high cholesterol. Why? It hasn't gone through clinical trials. You might argue what's the difference between a tablet of lovastatin and Red Yeast? Well, I don't know and the FDA doesn't either that's why you can't make medical claims about it. I'm glad it worked for you! Also, lovastatin went generic a long time ago and it now costs a few hundred dollars (if that) a year to treat a patient.
- carbocation 11y ago
  Along those same lines, if you fill your prescriptions at WalMart, then for $40 per year you can take atorvastatin 80mg (Lipitor; one of the best studied high potency statins) every day. This is about $10 per year (~3 cents per day) more expensive than cheap red yeast rice.
- vonmoltke 11y ago
  > You might argue what's the difference between a tablet of lovastatin and Red Yeast? The tablet of lovastatin has a precise amount of active ingredient. Red yeast rice has some random amount that may or may not be clinically significant.
- pmorici 11y ago
  "Red Yeast has not been banned, you just can't sell it as a treatment for high cholesterol." Wikipedia disagrees with you. It says, if a product has a measurable amount of monacolin K, i.e., lovastatin in it the FDA will stop it's sale even if there aren't any claims of cholesterol reduction. https://en.wikipedia.org/wiki/Red_yeast_rice#Regulatory_restrictions https://en.wikipedia.org/wiki/Red_yeast_rice#Regulatory_rest...

rokhayakebe 11y ago

I, for one, would like to see drugs increase very sharply similarly to what this guy did. Reason is we need a consumer reform, and not a government reform which is a temporary solution. The entirety of pharmaceutical R&D is $161 B globaly. If half of Americans were contributing $100 monthly to a pool, we could fund it entirely and make every drug available for free.I would love to see this done outside of the government. We MUST stop depending on government for Health, and Education. While they intend well (I truly believe they do individually as people), as an aggregate they are not able to solve these issues at scale.

mikeash 11y ago
What sort of organization do you propose would obtain and manage those $100/month contributions, and how would that organization differ from "a government"?
- rokhayakebe 11y ago
  Your tax dollars do not fund drug R&D. Think KickStarter for issues that matter to us.
  - throwaway2048 11y ago
    tons of drug research is abolutely publicly funded, then often sold off to private companies for pennies...
    - rokhayakebe 11y ago
      Well then the matter is even worst than I suspected. I am funding drug research just so the government can sell it to a private company that will charge me 100x. Clearly this is rapacious.
  - throwaway2048 11y ago
    tons of drug research is abolutely publicly funded, then often sold off to private companies for pennies...

refurb 11y ago

I'm sorry, but I have to nitpick on the AARP graph showing the average annual rate of price increases for 227 drugs. Anytime I see data that is a subset of the real data set, I have to wonder why they did that. Why not the average annual rate of price increases over all prescription drugs? Why only 227 of them? Also, I disagree with this quote: "Only when a 46 percent discount was applied to a pricy Hepatitis C treatment, Harvoni, did it become a good health care value -- at about $40,000 per year." That's patently untrue. Hell, CTAF (California technology assessment forum, which assessed drugs for MediCal) found that Harvoni, at it's full price of almost $90K was cost effective. The real problem is that it would cost too much to treat everyone.

msabalau 11y ago
Of course, one could click through the link to the study, and read the 3 pages that describe the methodology behind their "market basket" of drugs. You don't have to wonder, or at least the curious don't.
mikeash 11y ago
The drugs were chosen simply as the most significant ones for the AARP's membership. The methodology is thoroughly discussed in Appendix A of the study: http://member.aarp.org/content/dam/aarp/ppi/2014-11/rx-price-watch-report-AARP-ppi-health.pdf http://member.aarp.org/content/dam/aarp/ppi/2014-11/rx-price... Also note that the drugs were chosen before they started tracking prices. I totally understand your skepticism, but rather than just wonder why they chose those, why not find out?
- verbin217 11y ago
  They did find out. Why go digging when you could just make a comment and get all the work done for you.
  - mikeash 11y ago
    That's the internet for you. Ask a question and nobody answers, state the wrong answer and you get the right answer instantly. It's not my fault, I'm a victim of an oppressive system!

crdoconnor 11y ago

Meanwhile, Obama nominates Robert Califf as FDA chief. A guy who has been feeding at the pharma trough for several years: http://hcrenewal.blogspot.sg/2015/09/turn-that-door-around-physician.html http://hcrenewal.blogspot.sg/2015/09/turn-that-door-around-p...

quaunaut 11y ago
I'll just remind- remember everyone's skepticism of Wheeler. Judge each by their actions, there is time to tear them to shreds.
- crdoconnor 11y ago
  On what basis could you judge Wheeler favorably? Because he backed down after a monumental backlash from the public combined with several very powerful and wealthy corporations? Wheeler can't claim credit for net neutrality after attempting to destroy net neutrality and losing.

roflchoppa 11y ago

people are jerks, they justify it by saying its business. Have I had an option for medicine provider I would go with the one thats not abusive to its employees. but i grow all my medicine out of the ground.

jqm 11y ago
If you really "grow all your medicine out of the ground" it's more than likely if you ever get truly ill or injured you yourself will be in the place you grow your medicine out of. Accept science. It works.
- roflchoppa 11y ago
  Not sure about that brother, I mean people have been growing this stuff for thousands of years man. I got mine on that good good extra potent ja feel?

pbreit 11y ago

It's refreshingly that we are losing our appeal for pure moneymaking. I'm not sure the attempted t was to portray him as a rogue so much as a jerk. And the article doesn't refute that.

csense 11y ago

There are lots of problems here: (1) Medicine has a very inelastic demand function. If you need substance X to stay alive, you'll pay anything to get it. (2) Costs are hidden from consumers. If insurance / Medicare is paying for it, it literally makes no difference to the end user if it's $5, $50, or $50,000. (3) Free-market forces are distorted by patent monopolies and lack of diversity in the supply chain. With a patent, you can crank up the price as high as you want. Ditto if you're the only supplier and it'll take some time for competitors to bring production online, or you can deny them access to samples for the equivalence testing your competitors need to prove to regulators that their drug is the same as your drug. (4) Broken incentives for developing new drugs. A patient's going to be taking a drug to treat their diabetes / ED / high blood pressure for the rest of their life, whereas something like an antibiotic is only taken for a couple weeks. Guess which one is more profitable, hence attracts more R&D money? What's the solution? I don't know. Maybe market reforms to align the incentives; perhaps even bounding pharmaceutical companies' profit margin to some multiple of their costs (but of course you'd have to be careful about the wording of the regulation and auditing for compliance, to make sure it can't be gamed by e.g. deliberately inflating the costs). Or perhaps even some kind of socialism where the government tells people what to produce or how much to sell it for (agricultural subsidies might be regarded similarly -- the government is deliberately manipulating the market to push down the price and push up the supply of goods necessary to sustain life, so shocks don't result in lethal shortages). Bernie Sanders at one point talked about replacing patents for new drugs with prizes, but I think he may have given up on that.

zaidf 11y ago

Me and my siblings have a genetic mutation that requires us to take Colchicine 3 times/day for the rest of our lives so needless to say I am glad to see the drug industry being exposed.

Spooky23 11y ago

The entire health sector is rotten to the core. The fate of two of my friends is a great example of where priories lay. One is a registered nurse. She has seen her overall compensation shrink over the last 5 years as hospitals merge into regional cartels and medical practices consolidate. These cartel entities play rough, breaking unions and shipping in visiting nurses to keep wages low. Fortunately, her husband got a job with better insurance -- her family plan on his insurance costs less than her individual coverage. The other person is a pharma sales rep. She makes about 2-3x the nurse, gets a car, and usually wins 1-2 vacations to beach resorts or Vegas every year. For awhile it was peddling a viagra competitor, now she has a stable of different drugs to push. So when I hear about of the money needed for "research", from companies with huge sales forces pulling down $100-150k plus cars, etc... My first thought is "bullshit"

drewgross 11y ago
A sales force amplifies what you are already doing. If a research company can hire a salesman that brings in $1M in additional sales, it makes sense to pay that salesman $900k in salary and benefits, because that's an additional $100k the company can put towards it's research. If you agree with the research, you should be happy they hired that salesman. Saying you agree with the mission of a company as long as it pays it's salesman less than $x doesn't make any sense, unless you somehow know that the salesman is bringing in less than $x.
- eli_gottlieb 11y ago
  Why should the employment question for salesmen be, "How generous can we afford to be?", when for everyone else it's "How stingy can we afford to be?"? The whole reason a company hires any employee, at all, is because it's profitable. The question is why employees who don't contribute to the core mission of the firm should receive 90% of the revenue they generate, while those who do receive a fixed salary irrespective of revenue (and also have to work long hours and take few vacations).
  - aianus 11y ago

mercurial 11y ago

Wouldn't all these problems disappear if the entire drug industry was nationalized? Once you remove the profit angle, there is no more incentive to raise prices dramatically, make minute changes to a molecule to extend your patents, or only focus research on medicine which is the most likely to make money.

aianus 11y ago
Careful. Money going exclusively towards research that is focused on earning more money might not be ideal, sure. But in a nationalized drug industry, money will instead go exclusively towards "research" conducted by those who are best at filling out forms and schmoozing with politicians. I think that would arguably be worse.
- mercurial 11y ago
  Are you under the impression that big pharma looks at lobbying with disgust? As for "research" as you put it, I was under the impression that a number of countries already fund medical research. I'm not privy to how much "filling out forms" and "schmoozing with politicians" this involves, but I have a hard time imagining the methods and goals being worse than the "best practices" of the private sector.
  - aianus 11y ago
    > I'm not privy to how much "filling out forms" and "schmoozing with politicians" this involves My friends reported that their (highly educated and intelligent) supervisors in their university labs spent almost all their time doing funding applications instead of research. I imagine it's not the same in the private sector, you go to work and spend your day working not running around begging for funding because the company is already rich and has already decided to fund the project.
    - dragonwriter 11y ago
      AFAICT in the private sector its very often the same (and not just in pharma, but in biotech more generally), because in order to pursue a project a principal scientist will need to sell a business plan around it to the business management of the company so that they will devote company resources to it, which may involve securing (or identifying and waiting for the business-side folks to secure) funding via grants, cooperative ventures, etc. to do it. If the company has a big cash stockpile (e.g., because it is either a well-funded startup or a well-established big player) the likelihood of needing to secure outside funding may be less, but the scientist will still likely have to sell the idea to the business team.

logn 11y ago

Public utilities which have monopolies set prices according to a regulated process: https://en.wikipedia.org/wiki/Utility_ratemaking https://en.wikipedia.org/wiki/Utility_ratemaking Given the patents and difficult FDA approval processes, it might make sense to regulate drug prices similarly to public utilities. I'm all for free markets. But when there's zero competition, you can't still treat things like a free market.

zurn 11y ago
Nit: Patents are state-backed monopoly rights, patent supporters argue that free market would result in too much competition.
- throwawaykf05 11y ago
  I've never heard any patent supporters say anything about "too much" competition. What they say is that anytime a competitor can freeride on your investment of resources, it is not fair competition.

on_ 11y ago

This is a symptom, not a problem. Drug prices are a good measure of how we are doing on healthcare policy and insurance regulation. It looks like poorly. It costs 2.5B dollars to develop a new drug. The regulatory hurdles are MASSIVE. We have a complicated and extremely compromised healthcare system that is focused on providing insurance when it should have been providing better healthcare. There is no easy answer here, but companies are going to want to make profits and the system incentivizes them to spend money developing a few critical drugs, holding on to the patent and pricing it as high as possible, the dev costs are passed to the insurance companies which are passed on to you in premiums as well as inflation, as insurance companies operate much like a bank. This comes full circle into the role that banks play in lending and increasing the money supply. Possible answers. Tighter fiscal policy, patent reform, smarter testing, looser regulations on known compounds, google x prize like gov't or private funding for cures, distributed computing using algorithms to evolve a cure (will be interesting to see what happens with that patent) [0]http://www.scientificamerican.com/article/cost-to-develop-new-pharmaceutical-drug-now-exceeds-2-5b/ http://www.scientificamerican.com/article/cost-to-develop-ne...

Thimothy 11y ago
I dunno. I don't think that in Europe the development costs or regulatory hurdles are smaller than in the US (if I had to make an uneducated guess I would say bigger), and yet the prices are way lower. I would add to that list "heavy government regulation on medicine prices", they are not a common commodity and should not be left to the markets free whims.
- bko 11y ago
  That may be because the US is leading the way on drug development. After the drug has been developed, the drug company will be able discriminate on price to maximize revenue. I imagine the cost of getting approval to sell a drug in European countries that has already been developed and tested for the US is much smaller than the actual development. It could be that without the US system, these drugs would not be available in European countries as well. Mandating lower prices for drugs is unlikely to work as it hasn't worked in the past (Venezuela everything, US gasoline, etc).

digi_owl 11y ago

Looking over the anecdotes here, i find myself thinking that big pharma is just an example of the "profit uber alles" mentality that has been rampant in the corporate world since at least the 80s (if not before). An interesting set of documentaries in that regard may be The Mayfair Set: https://en.wikipedia.org/wiki/The_Mayfair_Set https://en.wikipedia.org/wiki/The_Mayfair_Set It recounts, from a British point of view, the rise of a type of finance capitalist that revolved around strip mining established companies. I think part 3 touched on how by the time the people that started it got cold feet about it all, it had become institutionalized thanks to pension funds and similar.

wiz21c 11y ago

I worked for Johnson&Johnson in Belgium years ago. On each desk of the open space I was on, there was a small "manifesto". The title was : "we work for the good of our patients and investors". Yes, patients and investors put on the very same level.