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The Same Pill That Costs $1,000 in America Sells for $4 in India
- stickfigure 11y agoWith prices like that, seems like insurance companies could arbitrage this by paying their patients to live on a beautiful resort island somewhere near India for the 3 month treatment course. You can afford to bring the patient to the pills instead of the other way 'round.
- MichaelApproved 11y agoMedical tourism is a thing https://en.m.wikipedia.org/wiki/Medical_tourism https://en.m.wikipedia.org/wiki/Medical_tourism As someone living in the US, I'm looking forward to seeing if Cuba turns out to be a destination for something like this.
- mc32 11y agoI've heard some companies have begun looking at medical tourism as an option for some (locally expensive) treatments. Of course a few people are unhappy about this proposition, from medical practitioners to some patients...
- Houshalter 11y agoI suspect they will get sued after someone dies, accusing them of cutting cost by making them get subpar third world medicine.
- mc32 11y agoSo they can offer it as their discounted option. Choose platinum, gold, silver, or the aluminum plan. The aluminum plan is 30% the cost of the silver plan but with low deductibles. Your choice. Plus, these are not chop shops, they are accredited, vetted, with excellent records, great surgeons, they just happen to be out of country.
- desdiv 11y agoThe pills in question are self-administering oral pills, so you don't even need to stick around for 3 months. Just fly in and fly out. The FDA allows self-importation of personal use prescription medicine, as long as it's within a 3 months supply. What a wonderful coincidence. Better yet, you don't even need to fly there. The FDA, along with their UK, Australia, and NZ counterparts[0], allow you to import the drugs by mail, as long as you have a valid prescription and it's within a 3 months supply. [0] http://fixhepc.com/getting-treated/how-to-do-it/worldwide-import-regulations.html http://fixhepc.com/getting-treated/how-to-do-it/worldwide-im...
- ascorbic 11y agoWhy not a beautiful resort in India?
- stickfigure 11y agoOops! I can see how what I wrote could be interpreted as dismissive as India as a vacation destination. Not what I intended - I was trying to create the mental image of "beach vacation on an idyllic island" and I usually speak of islands as being "near" or "just off" a country rather than in a country, even when the island is part of that country. Sorry! I'm sure India has lovely coasts and I look forward to visiting someday soon, although hopefully not seeking Sovaldi :)
- vijayr 11y agoThere is already "medical tourism" happening in India - there are companies that organize everything, all one has to do is go there, get surgery (or whatever treatment), then go sight seeing before returning to the US and the cost of the entire trip would be less than what the procedure would cost here. Only downside is, it is driving up costs for the locals.
- kamaal 11y ago>>Only downside is, it is driving up costs for the locals. As an India I can attest to this. Also even by these standards(that appear to cheap to people in western economies), health care is prohibitively expensive to most poor people in India.
- 37prime 11y agoThis is similar with Bayer’s Nexavar (Sorafenib)and its India-market-only counterpart. India had to impose an export-restriction for these drugs.
- logicuce 11y agoPricing a medicine, like pricing any other product, will have its own complexities. * You need to fix a price which would cover the cost of your research that went in (and also for unsuccessful researches that you write off for other ailments) * You have idea about the scale of the ailment but little idea about market acceptance and reaction to your price. * After market has accepted a price, even if it exceeds your predicted consumption by many fold, you have little incentive to change the price especially if insurance is paying for it. * In a new market, because you have already recovered what went in to build the medicine, you can price it better. In fact, insurance itself work very differently in US vs India. In India, in most cases your insurance won't pay for your medicines and medical expenses (diagnostics) if you don't end up hospitalized for at least a day. And that can govern how medicines are priced here because price has a direct implication on adoption.
- jakobegger 11y agoYou forgot one part: * You have to finance your highly paid sales staff. People always claim that pharma companies spend so much money on R&D, but when I look at job ads in the news paper I don't see ads for research positions, but lots of ads for sales positions (from pharma companies). I'd love to see actual numbers, but I'm pretty sure that sales is at least as costly as research (if not more so)
- drewrv 11y agoHere's some actual numbers for marketing vs research: https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/ https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
- logicuce 11y agoI believe the sales function is very much incentive driven. As a sales staff, your pay is very much correlated to the sales you do which means the stuff needs to sell. I think of it as, you get money for company and company gives you a small portion of that but in the process company is essentially paying you only when you bring in much more than what you cost.
- deleted 11y ago[deleted]
- melling 11y agoIndia is bigger than the US and Europe combined. I think we can even add in the US again. They are a rapidly developing economy with a strong educational system. Wouldn't we all benefit if the moved up from generics and created new medicines? More drugs, more competition, etc
- meagain20000 11y agoYou mean if india started doing their own research? Well of course, we the general population would benefit. Nobody is stopping them. Except maybe cost.
- srean 11y agoWhat's stopping them is the vision of those who are in a position to change things, and a mix of arm-twisting by superpowers into signing laws that make these hard.
- lloyd-christmas 11y agoQuality. The problem tends to come down to human trials. Very few countries have a combination of the quality of medicine, the proper oversight, and a large enough population to actually make the trials worthwhile. China/India simply don't have the same quality control as that of US/Europe/Japan. Beyond that, humans aren't all equal. Drug trials in the US make an effort to represent the general US demographics within their studies (which is also representative of Europe). Clinical trials of a 100% Indian population have questionable relevance any other country, and will likely require the entire study to be redone with a population-representative sample.
- option_greek 11y agoAre there any drugs that work well with one populace but are harmful to another ?
- lloyd-christmas 11y ago
- 47 11y agoThe cynic in me wonders if it is because people are able and willing to pay higher prices in America.
- abtinf 11y agoNo cynicism is required. All market prices are determined by demand, which is defined as the desire and ability to obtain a good at a given price. It is tautological to say that higher prices indicate a greater willingness and ability to pay.
- ascorbic 11y agoThat's not cynical, that's exactly the reason. It's basic economics. If it cost thousands of dollars then virtually nobody in India would be able to afford it, whereas insurance companies in the US are willing to pay tens of thousands and don't try to negotiate prices. Medicare is even forbidden from negotiating prices. Rich countries with single-payer healthcare systems will lie somewhere in between. e.g. in the UK, there's an agency (NICE) that negotiates prices for drugs, and decides if they are worth the cost. They'll sometimes agree to pay massive prices if the drug is extremely effective and there are no substitutes, but if it's only a marginal improvement over an existing drug, or even if all it does is extend life by a month or two then they'll just refuse to allow it to be prescribed. Of course as you'd imagine, the prices quoted then have a habit of dropping. This is separate to the normal regulatory approval of drugs.
- teslabox 11y agoIn America, we have insurance companies to pay the drug cabal on our behalf.
- JacobJans 11y agoIt could be because the government is not allowed to negotiate drug prices. (Medicare.) They pay whatever the drug companies ask. Or, maybe because most individuals in the U.S. don't pay the full price. They pay a 'co-pay.' Insurance companies pay the rest. But, they can only make profit as a percentage of revenue. If they lower drug costs significantly, they significantly lower their potential profits. Why would they do that? From a shareholder's perspective, that's a very bad idea. In the U.S. relatively few people really know how much a drug costs, so why would price be taken into consideration?
- trentmb 11y ago> "From each according to his ability, to each according to his needs" People that can pay more do, those that can't... don't?
- Houshalter 11y agoWell of course, I don't know why people find this surprising. You are not paying for the cost of manufacturing the single individual pill. You are paying for the cost of researching it and testing it, as well as a thousand other drugs that didn't make it to market. If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
- tracker1 11y agoBullshit... marketing budgets outstrip research, development and manufacturing all by very large margins... in most big pharma companies it's over 80-90% of the budget.
- Dwolb 11y ago>Bullshit... marketing budgets outstrip research, development and manufacturing all by very large margins... in most big pharma companies it's over 80-90% of the budget. I was pretty skeptical of this claim being true so I had to do a quick internet search. I'm surprised to find there was some truth to the first half of the comment but the second claim appears to be wrong. [1] [1] http://skeptics.stackexchange.com/questions/16472/do-typical-modern-pharmaceutical-firms-spend-more-on-marketing-than-on-rd http://skeptics.stackexchange.com/questions/16472/do-typical...
- tracker1 11y agoI stand corrected, but would be surprised if other expenses weren't really disguised marketing/sales.
- Houshalter 11y agoI don't recall seeing any advertisements for this specific drug. Regardless, I don't see how this disproves my point for drugs in general. If investing in advertisement increases their profit, then logically they should do it. It's not like the advertisements are taking away money that would otherwise go to research. They are increasing the total amount of revenue, some of which will go to even more research.
- hackaflocka 11y agoIndian person here, in case what I'm about to write is offensive to anyone: The difference is that the Indian companies are simply stealing intellectual property paid for by American taxpayers. These companies didn't spend years and billions of dollars going through the FDA maze to develop the drugs. They simply stepped in after all the hard work was done, to develop an alternative process for a proven drug. That's right, India has "process" patents, not "product" patents, for pharmaceuticals. Look it up.
- vaidhy 11y agoThat is incorrect. India changed to product patents about 10 years ago. If you read the article,you would have realized that Gilead licensed the drug for generic production in India and it was not someone "stealing" the IP.
- hackaflocka 11y agoSorry, I didn't read the carefully. Apologies if what you are saying is correct.
- pavanred 11y agoThe article mentions, Gilead licensed 11 companies in India to make generics. I don't see how licensing to make generics make it stealing intellectual property. Besides I am curious how $1000 in USA compares to $4 (about ₹ 265) with the per capita income in perspective, as a measure of affordability of the drug.
- jsudhams 11y ago265 per pill? if you need two pills per day then it is out of reach for i would 80% of Indians it is required for more than a week. Average per day for coolie(low level worker) is around 300 bugs , our maid worker charges Rs 1200 per month for 1 hour work every day with 4 day leaves in a month but she works in another 4/5 house as maid as well for similar pay.
- hackaflocka 11y ago
- narrator 11y agoI think making cheap drugs widely available is a way for China and India to improve their soft power in a way that the west can't really match. However, they first need to find a way to counteract the safety fear-mongering with regards to drugs produced outside of western countries.
- lloyd-christmas 11y agoTo be fair, China produced toxic drywall. For my epilepsy, I'm happy paying $1k for drugs produced in the US compared to $10 in China. Even countries like Japan can barely manage human trials. My father is an oncology physician/researcher/consultant. He goes there yearly to tell them to stop chopping out every prostate that walks through their doors.
- calvinbhai 11y agoWest can match, only if it gets out of the clutches of the health insurance industry. Doctors hate health insurance companies Patients hate health insurance companies only ones to love health insurance companies, are their share holders.
- fiatmoney 11y agoSo why isn't someone smuggling bottles' worth back to the US until the price equilibriates? That's a pretty nice profit margin even for the illegal drug trade, and the US can't even reliably keep things like heroin from being readily shipped on a retail basis.
- sahaj 11y agoBecause this isn't the type of drug that one would buy off of craigslist? It's the insurance companies who are in war with big pharma.
- replicatorblog 11y agoThe primary distribution channels, pharmacies, want nothing to do with grey market suppliers. There's also not a lot of direct price sensitivity. People with 3rd party insurance have relatively inexpensive copays. The poor have access to Medicaid. In neither case are you paying full-freight out of pocket. So you've got no mass distribution channels and a user base that is shielded from the true cost. People do try, drug co's all have "anti-diversion" strategies, but it's pretty well contained.
- wobbleblob 11y agoIs that really considered smuggling? If the whole 12 week treatment costs $84000 in the US and apparently $336 in India according to the article, you could take a nice vacation to India with your family, get your bottle of 84 pills there, and save $75k to $80k. A smart insurance company would cover it.
- baddox 11y agoThat's assuming the insurance company is fine paying whatever the vacation to India costs.
- deleted 11y ago[deleted]
- wobbleblob 11y ago
- heavenlyhash 11y agoOne of the biggest problems with the pharmaceutical/insurance hybrid system I experience is the inability to express choice. My family has an insurance plan in which we pay a set premium cost monthly, and then for some set of health services our insurance promises covers (and thus reduce for us) some of the costs. I think most Americans are in a similar situation. The insurance company is allowed to reject claims for some services. In particular, they frequently reject claims for drugs for which there is a cheaper "preferred" alternative. To some extent, this seems reasonable and wise: if there's a cheaper, completely substitutable version of the drug, then let's use it. The trouble is, things aren't nearly so simple. My grandmother has a strong preference for certain kinds of pain relief medication because some (let's call it Drug A) will knock her out effectively all day, and others (let's call it Drug B) let her function wonderfully and pain-free. However, Drug A is "preferred" to Drug B. As a result, the insurance refuses to cover it. Every single incentive structure in this system is unproductive: * My grandmother is left expressing her preference by voting with her dollars, out of pocket -- punishing her for expressing a preference. Because the price gap between Drug A and Drug B is inflated by the effect of the insurance company, this disincentive is so vicious that many people would be unable sustain this at all. Many consumers are effectively unable to express preference in the market because of the synthetically inflated price gap. * The insurance company feels no pressure whatsoever to cover Drug B, even though the devastating side effects reported by my grandmother are extremely common. There's simply zero incentive for them to behave pro-consumer, or even to bargain the price of Drug B down. * The drug manufactory feels reduced pressure to change the pricing of Drug B, because unless they drop it to below the price of their current high-seller Drug A, the insurance company will powerfully influence the market away from Drug B, despite the fact that it is in almost all cases superior to Drug A and no more difficult to manufacture. By completely failing to align incentives to match good outcomes, we've ended up with a system that's pitted against its own progress. Hackers, can we construct a better market?
- meric 11y agoEstablish a government monopoly for purchasing drugs. A painkiller costs maximum X or the government won't subsidise it. A drug to heal a disease costs maximum Y. People will spend everything they have to save their lives, even when it's to the detriment to the rest of society - There's a limited set of medicine available, and it's funnelling society's resources into the pharmaceutical industry because everyone's trying to compete for the best drug. Eventually people will work their whole lives to save up just so their parents can live 2 more years when they're 75, and that's not really good for society. Living out years isn't the end goal, enjoying what time we have is. An appropriate government institution will ensure that happens, while providing sufficient drug supply (but not as much as if everyone spent their life savings on drugs and nothing much else). That's how it works in many countries outside the U.S. For example, https://en.wikipedia.org/wiki/Pharmac https://en.wikipedia.org/wiki/Pharmac
- skyhatch1 11y agoPricing comparison charts for 8 drugs in 14 countries: http://www.bloomberg.com/graphics/2015-drug-prices/ http://www.bloomberg.com/graphics/2015-drug-prices/ US tops the list every time - even with discounts negotiated by insurers. The flipside to these exorbitant costs is the accessibility they bring. It's easy to ignore the fact that US pricing arrangements motivate pharmaceutical companies to market more of these drugs. Keyword: market. As sad as it feels to say this, a more socialist agenda wouldn't nurture as much drug commercialization - development perhaps, but not marketable products. Australia's social healthcare, Medicare, is driving down the price of common "molecules" to negligible amounts. These days, you can really sense apathy on the pharmas' part. Stock outages are frequent because there simply isn't a $ factor to make them care. On top of being a geek, I'm a pharmacist business manager - knowing how drug pricing economics works is part of my job.
- calvinbhai 11y ago"Discount negotiated by insurers" is the mirage americans live in. $10 pill is marked up to $100, charged to insurer. your health insurance with a premium of $250 per month, negotiates the price and enables you to buy it for $15, giving you a illusionary savings of "$85". Same pill, is probably available in India, at a market rate of $5-$7. People compare market rate of the pill in India $5 with the pre-negotiation sticker price in US of $100. Q to the Pharmacist Business Manager: Do you think prices of these drugs would remain so high, if health insurance companies didn't exist and everyone paid for medicines and services out of pocket?
- calvinbhai 11y agoThere is no market for healthcare and medicines in the US. Its just an illusion. US runs so much on the whims of the health insurance industry, that $1000 pill justifies a rich/middle class family's $1000 a month insurance premium. Would the families/individuals pay the same expensive premium every month, if the pill was available for even $100 in US? I pity the guy who jacked up the price of the pill in US, and got burned online. All he was doing, was to take a bigger chunk from the stinking rich health insurance companies, and providing the product in the US "Market". I live in US and have spoken many Americans as to why they don't think of going to India for medical reasons. I was expecting some kind of a condescending / patronizing response about quality of service etc. Often, the response is that they have a "sunk cost of expensive monthly premiums", which gives them the illusion that getting treated in US costs lesser. The blow of a $1000 pill is softened, to those who pay the expensive premiums. As someone who moved from India to US, I can know market prices of individual tablets /medicines in India, but its way too difficult to know the "market rate" of medicines in US, unless you go by the rates shown by your health insurance company.
- known 11y agoIndia follows the "Sheep Herd" mentality. The whole country's economy is based on people getting into "Profitable" domains mostly following the success of a pioneer in the field. The most recent example of this ideology is the "Business Process Outsourcing" industry. New BPO units are propping up here and there at a dime a dozen leading to a quality deterioration in the final deliverable. This process will continue till a saturation level is reached and then they will wait till another "Killer" domain picks up momentum. Till then India will be in a so called "Calm Period" where nothing great and major takes place. http://qz.com/519777/why-india-needs-a-new-constitution/ http://qz.com/519777/why-india-needs-a-new-constitution/