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Why drug prices in America are so high
- joering2 10y agoBecause of a free market. And limited rules against making profit. A CEO of a new drug company can legally set his salary at $10MM and have it be a part of the cost of running his business, hence selling drugs for $10MM+.
- ekianjo 10y agoTo be fair the Pharma market is so regulated calling it Free Market is a seriously good joke.
- fivesigma 10y agoIf the market were free drugs would be commoditized, like aspirin. The reality is: * As a pharma company you can't compete because another player is holding the patent for decades * Governments around the world will indirectly spend trillions by way of social insurance on your products, so prices will balloon because that money has to go somewhere * The barrier to entry is so high thanks to regulation This is a made-up situation of artificially low supply coupled by propped up demand. How is this a free market exactly?
- DanBC 10y ago> These high prices support innovation, they argue—not just for America, but for the world. But it is unclear if firms’ profits need be so high to sustain research. Thank fuck someone finally says that this isn't mostly about the US subsidising the rest of the world. (A nonsensical claim when you look at how much drug companies spend on marketing).
- allendoerfer 10y agoI wonder if we should (some day) gradually start to regulate marketing in some industries. Cannibalizing through marketing only increases prices for consumers, creates bullshit jobs and destroys the environment. If it is about commodities, the increasing profits could then be taxed away until the product is virtually free for society. Not regarding the obvious opposition from shareholders a big problem seems to be to decide when something is really a commodity. Drugs are obviously not, we still seem quite mortal.
- hannob 10y agoConsumer marketing for drugs is forbidden in many parts of the world, the US is more an outlier. However this still leaves marketing to doctors, which is a problem. There are some initiatives that reject that (e.g. there's a german group called Mezis). It also completely makes sense. The decision for or against a drug should be guided by scientific evidence. So the only form of "marketing" that should be allowed are high quality scientific studies. And they shouldn't be delivered to the doctors or patients via marketing brochures, but via scientific articles and recommendations from independent organizations reviewing scientific articles.
- allendoerfer 10y agoAbsolutely. I was including pharmaceutics only for the second part of my comment (essentially a way to gradually socialize commodities). Marketing regulations can be great. In Germany (physical) mail and phone spam is already quite nicely regulated, but it could go even further, I think. I heard phone spam is a thing in the US.
- bipson 10y agoWhich sounds perfect. But then you have pharma companies paying for research and these studies - but only if they yield favorable results. At least in Europe it is close to impossible doing a study or any other research without having a "sponsor", i.e. a big pharma company who pays for it. And why would they? Because good results are good for business. Everything else? Pay it yourselves. Oh, you had two PhD students working on it for 3 years? Not my problem. Better than nothing, but a lot of people are screaming for all those unfavorable results, as the available publications obviously only paint a partial picture, one in favor of the sponsors.
- allendoerfer 10y agoBad results can be good for business if it is about a competitor's product.
- hannob 10y agoI agree with everything you said, but it's a different set of problems. Only publishing favorable results should be prevented with preregistration and requirements to publish. Ideally more (or all) pharma research should be done by independent researchers and not by pharma sponsors.
- ekianjo 10y agoIts definitely not the research you pay for. Thats a small piece of the big picture. Marketing, lobbies, pseudo medical conferences in resorts, high salaries, you name it Big Pharma has it. The research part sounds just like politicians justifying less Freedom because "terrorists".
- HarryHirsch 10y agoPharma Bro and Valeant do innovation? Come again!
- replicatorblog 10y agoYou could make the case that the Epi-pen is just a form of marketing. As people have noted, the molecule is the same as other generic products, but the company developed a device that delivers substantial benefits to the customers and makes their molecule more important. Absent a free market and financial incentives it is very likely that the standard of care would be clumsy syringes. I worked on a number of diabetes devices that greatly improved the quality of care for patients with diabetes and none would have been feasible as stand alone devices. They were marketing tools to make our test strips and insulins more attractive. It's easy to criticize marketing, but the field goes far beyond tv ads.
- endtime 10y agoScott at Slate Star Codex recently discussed this in depth: http://slatestarcodex.com/2016/09/07/reverse-voxsplaining-brand-name-drugs/ http://slatestarcodex.com/2016/09/07/reverse-voxsplaining-br... tl;dr: Regulation is the problem, not the solution.
- rickycook 10y agoor potentially more correctly, "the regulations" are the problem, since plenty of health care systems work much more efficiently with different regulations so saying that regulation is the problem is clearly incorrect
- pjc50 10y agoUnregulated medicine is literally where the phrase "snake oil" comes from, meaning an oversold but ineffective solution.
- UncleSlacky 10y agoIronically, the original snake oil actually worked: http://www.scientificamerican.com/article/snake-oil-salesmen-knew-something/ http://www.scientificamerican.com/article/snake-oil-salesmen...
- GFischer 10y agoReally interesting, hadn't read that :) . Might be worth a submission of its own.
- infinite8s 10y agoNot only ineffective, but often times actually dangerous.
- mseebach 10y agoThere's an excellent comment by the author on the predecessor post to the linked one (which is, in itself, quite excellent), elaborating on why regulation is actually a worthwhile target, and not just a convenient scapegoat -- worth quoting in full: > I understand why you think it’s bad to lump all regulations together in the category “regulation”, but in this case, I think it sort of makes sense. I think there’s a general principle that once you pass dumb regulations, it’s going to make bad things happen, and then if you try to solve those bad things by passing further regulations, you’re just going to get caught in an endless trap. So first they regulate Mylan into a monopoly on EpiPens. Then they realize that made them too expensive, so they regulate that the government gets to set the price of drugs. Then drug companies stop making EpiPens to switch to more profitable unregulated drugs, so the government has to mandate that you’re not allowed to be a drug company unless you make a certain amount of EpiPens below cost. So drug companies leave the US and headquarter overseas to avoid that law, and then the government regulates that only drug companies headquartered in America can sell drugs in America. Then cheaper foreign drugs start coming in as contraband, so the government regulates that all packages must be inspected at the border. Then drug mules ingest contraband medications into their bodies, so now everyone entering the country needs to have an X-ray… I realize some of these steps are probably stupid and would never happen, but I think there’s a risk of this general sort of thing, where you play Whack-A-Mole against the economy, and each mole you whack decreases efficiency and just makes another mole come up somewhere else. http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-drugs-vs-chairs/#comment-403064 http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
- mrweasel 10y agoIt's not just America, there's a case in the EU right now where a company for some reason as gotten a 10 year exclusive on a drug that cost basically nothing. It has now gone up 4000% in price. This is for an out of patent drug. That company for some reason got an exclusive, by using a law that was suppose to ensure that companies could recoup development cost. In this case it's a drug that pharmacies used to make, there's absolutely NO COST to recoup.
- willvarfar 10y agoGot any links, or name of the drug?
- mrweasel 10y agoSure, it's Caffeine Citrate: https://en.wikipedia.org/wiki/Caffeine_citrate https://en.wikipedia.org/wiki/Caffeine_citrate it's now being sold under the brand Peyona, by a company called Chiesi. If you feel like learning Danish: http://www.dr.dk/nyheder/indland/fra-en-20er-til-800-kroner-medicinalfirma-haever-prisen-paa-livsvigtig-medicin-til http://www.dr.dk/nyheder/indland/fra-en-20er-til-800-kroner-... Basically the price has jumped from 3.33USD to 121USD.
- replicatorblog 10y agoThis also happens in the case of Shkreli-types. Part of the problem is that the market size for the drugs tend to be small, but the R&D and regulatory costs are high enough to keep out competitors so you have these "orphan drug" companies able to jack up prices even in the absence of patent protection.
- jfoutz 10y agoThere are many many reasons. IMHO medicare not being able to negotiate prices is silly and expensive but not the whole story. If i could wave a magic wand and change any one thing, I'd require drugs and perhaps devices for clinical trials to be produced by the patent office, from the text of the patent. I think this would reduce the FDA approval for generics down to, Can the manufacturer make the drug correctly and consistently? I don't have a problem with companies charging whatever they wish for the shiny new drug. But the transition to generic needs to be as simple, cheap and smooth as possible.
- ianai 10y agoIs there an example for the difficulty of making a generic being a barrier to entry for competitors?
- jfoutz 10y agoThe epipen is a glib response. Biologics are pretty notorious for not being reproducible. Etanercept (Enbril) is the last one i looked at deeply. There winds up being some 'secret sauce' that doesn't quite make it into the patent. edit Enbril is around $2000/month, for what it's worth.
- dnautics 10y agoStrictly speaking, epipen is a device, not a drug... The drug inside sells for pennies.
- deleted 10y ago[deleted]
- kikimaru 10y agoEvery time I see an article explaining why system so-and-so is corrupt, the answer is always "companies lobby politicians with campaign donations". Why is it so hard for publications to use the word "bribe" instead?
- ghostDancer 10y agoI always have seen it as a legalized corruption. You can't buy a politician but if you give money to fund a campaign instead of giving it directly, it's not corruption. That's prostitution of a democracy.
- CapitalistCartr 10y agoUnless the publication can prove quid-pro-quo, they would be open to charges of defamation.
- abpavel 10y agoIt would be illegal for the article to call lobbying a bribe, because lobbying is a legal form of bribery, while bribery is illegal form of the same. However they can argue that really there is no difference between the two, and that would be legal. The issue is that the majority thinks that lobbying is ok, while bribing is not. Once you fix that, then you can call it "bribing".
- gpderetta 10y ago> It would be illegal for the article to call lobbying a bribe which law would be violated?
- cderwin 10y agoPresumably OP is thinking of libel laws, because accusing someone of talking a bribe is tantamount to accusing them of breaking one of any amount of anti-corruption laws. I'm (extremely) doubtful of the claim since the plaintiff would have to prove in a court of law that bribery can only possibly refer to a specific action (breaking one of the above laws) that he did not commit. Though the threat of a lawsuit may be enough.
- GrumpyNl 10y agoWe as a manufacturer, want to make as much money as possible. Its as simple as that. If nobody stops us, we will maximize profits.
- ianai 10y agoIt's called inflation.
- tracker1 10y agoThe pharma industry, iirc is seeing 40% year over year growth, which should be unsustainable in a free market.
- ianai 10y agoI was referring to industry specific factors that continually push prices up. In the medical industry insurance companies have market power but individuals do not. So providers see their prices slashed by insurance Companies. If their desired price is X and they know he insurance company will cut their price in half they charge 2X. To do so they also have to charge uninsured patients 2X. Because the uninsured have no market power they largely get stuck with 2X and the price sticks. Suddenly the listed price has less to do with the greater market than the specifics of the medical.
- tracker1 10y agoIt's still anything but a natural free market... it's far more captive with motivated players all around. In reality what is needed is a FRAND-like compulsory licensing requirement for patent licensing as well as a gov't requirement of two manufacturers/distributors for approval, with limitations on exclusivity in contracts. That would afford some reduced patent protections, and ensure competition. That's the only way to drive prices down in the long term.
- tracker1 10y agoWhat they need is government enforced FRAND style patent licensing for prescribed medications and drugs that are to be covered by government programs, and all medications prescribed must have at least two sources... that would increase competition.
- listentojohan 10y agoCould a reason also be that there's rarely a lot of competition between firms supplying the drugs? They basically get a state-sponsored monopoly through patents - not much of a market-dynamic.
- JohnDoe365 10y agoBecause it's a largely unregulated market.
- rufusroflpunch 10y agoIf you read many other posts in this thread, you will see it's the exact opposite. Unregulated markets nearly always result in lower prices. Pharmaceuticals are, by far, one of the most register markets.
- antisthenes 10y agoUnregulated markets never stay unregulated for long. It's an unstable system. The biggest players in the market have incentives to create regulatory capture mechanism through influence on policymakers.
- ekianjo 10y agoI am asumming this is sarcasm.
- mirimir 10y agoIt's a concise article, and yet tl;dr ... > The simple answer is because they can. > Rather than lower prices, rules for Medicare help raise them. ... And it is illegal for Medicare to negotiate with drug companies. > But [negotiating] would be effective only if the government could also refuse to pay for some medicines, ... The spectre of so-called government “death panels” looms large.
- gonzo41 10y ago> The simple answer is because they can. Americans social contract is more about money than about their fellow man. Case in point, Epi-pen, assumed actual cost $30, sale price $600. They would still be doing great if they only cost $50.
- mirimir 10y agoYes, it's about money. Monetization of intellectual property. Whether it's entertainment, software, drugs or medical devices. Regarding EpiPen, epinephrine has been generic for many decades, but the device is still protected by patent.
- throwaway049 10y agoIn the USA, if I have a potentially fatal medical problem and I can't pay for treatment (myself or via insurance) what are my options? I ask because I imagine I could not get treated which is the same outcome as 'death panels' but without the government bureaucracy.
- Broken_Hippo 10y ago"And it is illegal for Medicare to negotiate with drug companies. Private insurers do so instead, but the government binds their hands, for example by requiring them to pay for six broad categories of drugs, without exception. This suits pharmaceutical firms." While requiring companies to pay for broad categories of drugs may suit pharmaceutical firms, I'm going to guess this was more to help folks that are sick. What they must cover include [1]: 1. HIV/Aids treatments 2. Antidepressants 3. Antipsychotic medication 4. Anticonvulsive treatments for seizure disorders 5. Immunosuppressant medications 6. Anticancer drugs (unless covered by Medicare Part B). These are generally categories that people really do need a drug that works. Different antidepressants work for different people - the same with antipsychotic medication. Many of these make a huge difference in quality of life - or life itself. The medicare regulations aslo state they must have a range of medications that are generally needed by the population it serves, insulin (even if available without prescription), and things only available by prescription (so some allergy medication won't be covered, for instance). Yet the article proposes this is too much regulation: To me, these are very basic things one expects out of drug coverage. This sort of interpretation makes me question the objectiveness of the article itself. [1] https://www.ncoa.org/wp-content/uploads/part-d-drug-coverage-rules.pdf https://www.ncoa.org/wp-content/uploads/part-d-drug-coverage...
- DanBC 10y ago> Yet the article proposes this is too much regulation: Doesn't the article say it's just the wrong type of regulation, and compares to the US (weird regulation, expensive meds) to other countries (plenty of regulation, cheaper meds)?
- Broken_Hippo 10y agoIt points it out as being an unwise regulation with bad price consequences. It does state that other governments set price controls in various ways - like the UK refusing to pay for a drug if it doesn't meet cost-effectiveness.. though I'm not sure how exactly that winds up affecting which drugs are available and which aren't. Then the actual reason for the listed example is that it makes sure folks are covered for some things. Rules for coverage in itself doesn't raise prices. And when these are the things they highlight as soft spots in the regulation system instead of focusing more on the non-negotiations, the systems itself, the money on advertising, and other such things, to me it comes down to having a weird slant or poorly thought out.
- Randgalt 10y agoAn article on US drug prices that doesn't talk about the effect the FDA has on the market is journalist malpractice.
- fivesigma 10y agoNot US specific: * Ridiculously long patent validity periods. Let's put aside the fact that patenting a fucking molecule is even a thing, 20+ years is way too long a term to guarantee profit to a private corporation. Enforced by governments. * Heavily subsidized (read: price artificially propped up) by insurance laws. This is student loans all over again. Again, created by governments. * Astronomically high R&D costs, most of which is the cost of obtaining regulatory approval. Enforced by government agencies. Free market? Yeah, right.
- mtgx 10y agoDon't forget to add stuff like banning Canadian drug imports. Medicine absolutely should be validated before being sold in a country, but other than that, I see no reason why Canadian companies, or companies from other countries, couldn't sell a competing drug in the U.S. for whatever price they want. Obama played a big role in banning this type of imports. Just saying. And TPP/TTIP would make this problem much worse, and virtually irreversible, because then they can just say "well, we wish we could change the monopoly laws now, but it's in the treaty, you see...so tough luck."
- Houshalter 10y agoThere are ridiculous levels of regulatory capture. E.g. epi pens are off patent and there are many competing companies in Europe, but the FDA refuses to approve any of them. Or cancer drugs that have been used for decades in Europe very effectively with tons of data there to support them, but the FDA refuses to allow them. One time they even required a drug to have a trial with more patients than exist in the US with that disease. They kill way more people than they save by preventing terminally ill patients from getting life saving drugs. And raising the cost developing them. The FDA needs to be shut down. Perhaps replaced with something like a prediction market, where people can bet on how likely a drug is to pass a trial or even work in specific patients.
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- Nursie 10y agoOn a recent vacation in the US a friend and I dropped into a pharmacy to pick up a relatively mundane and day-to-day pharmaceutical. In the UK this would cost around £5-£7. We were told that it was available but we would need a doctor's appointment,a prescription and then to pay $100-$200 for the exact same product. They had a similar medication with a different active ingredient for around $20, but the price difference was astounding!
- maxerickson 10y agoMany generic forms of prescription only drugs have a cost of $5-$10. Not after insurance or anything, the negotiated price. For people without insurance it may be necessary to whisper magic numbers to receive a better price (I say that sarcastically because the pharmacy gives anyone access to better prices, so long as they simply ask for the better price): http://www.costsofcare.org/drug-discount-cards-liftin-the-veil-of-secrecy/ http://www.costsofcare.org/drug-discount-cards-liftin-the-ve... So you might have a drug with a PBM negotiated price of $5 for the generic, a cash price of $40 for the generic and a cash price of $400 for the name brand drug.
- Nursie 10y agoIn that situation the name-brand was the same in both countries! I had put the procing effect down to the fact that insurance companies get involved as soon as 'prescription' is mentioned, so prices can rise very high. That was just my guess anyway.
- ryuker16 10y agoEven generic can be pretty dang high without insurance at the cheapest vendors.
- maxerickson 10y agoSure, it depends on the drug. But lots and lots of them are inexpensive, the system isn't completely broken. It's also often worthwhile to see what the price is with a discount card or at Walmart, as it can easily make a 90% difference in the price for someone with no insurance.
- atemerev 10y agoThe only thing that can drive prices down is competition. No competition — no price reduction. Economy 101.
- jonlucc 10y agoThat's true, but it's important to figure out how to increase competition without destroying expensive innovation and risk. It's arguably the most important question in any industry when regulation is discussed.
- camperman 10y agoIt's not hard to understand. Pick a medical commodity that costs a few dollars in Europe or anywhere else in the world but is exorbitant in the US. Could be insulin, an epipen - whatever. Try and bring some back in to the country with you. You're breaking the law. Try and bring back a whole box of it and you're off to jail. Without the government-backed threat of jail, the market would very quickly find the proper price.
- rayiner 10y agoAppeals to the "market" are baseless. There is no competitive "market" for drugs anywhere. In Europe, drug prices are artificially suppressed by central governments exercising buyer-side market power.
- malinens 10y agoEuropean pharmaceutical companies are still earning billions of dollars. Suppressed are hikes of prices and not drugs themselves
- vonmoltke 10y agoHow much of that is coming from the United States?
- refurb 10y agoThere is no competitive "market" for drugs anywhere. I guess it depends on what you define as competitive. When hepatitis C competitors were launched, Gilead dropped their price really dam quick to keep market share. I would call that a competitive pharmaceutical market.
- themartorana 10y ago"But it is unclear if firms’ profits need be so high to sustain research." It's very clear, and they don't. Profits are enormous. Profits are also calculated after the cost of R&D. So no, profits don't need to be astronomical for companies to still be profitable after the cost of R&D.
- qaq 10y agoIt's important to remember that the largest expense item for big pharma is not R&D but marketing & administrative.
- specialist 10y agoI support moving R&D and early stage trials back to the government. Then pharmas place their bets by licensing the drugs to manufacture and bring to market. The earlier they license, the greater the risk, the lower the cost.
- refurb 10y agoBack to the government? What makes you think the government was ever doing it to begin with? And what problem would that solve? Right now a lot of drugs are invented by small biotechs then purchased by the big pharma companies.
- zaroth 10y agoHere's the actual data: http://endpts.com/which-big-biopharma-companies-put-rd-as-their-top-priority/ http://endpts.com/which-big-biopharma-companies-put-rd-as-th... SG&A is perhaps a broader category than most people understand it to be. Also, I assume that "R&D" does not include depreciation on all the assets necessary to actually perform the R&D. So I think it's an interesting metric but perhaps not incredibly meaningful. Most companies spend a lot less on R&D as a percentage of revenue than pharma. Here's a similar chart for the big tech companies: https://www.theatlas.com/charts/N1Gs8E4v https://www.theatlas.com/charts/N1Gs8E4v
- refurb 10y agoYou do realize that S&GA is a catch all for the general expenses for running a company right? Why would you be surprised it's such a high percent? Also, you may want to do a side-by-side comparison of which industry spends the most on R&D. It's ~20% in pharma which dwarfs most other industries.
- qaq 10y ago
- Steeeve 10y agoResearch isn't cheap. Testing isn't cheap. Marketing isn't cheap. Manufacturing, distribution, the list goes on. There has to be a financial incentive to build an infrastructure around a product. Add in that access is highly controlled, meaning that there is significant IT and non-IT security infrastructure that needs to be in place throughout the life cycle of a given drug. There will always be instances that are easy to politicize - pick your favorite disease and there's a company with an overly expensive drug on the market. But what happens when the financial incentive to innovate goes away? There are cheap drugs all over the third world. Not too many of them were developed there. A major change in how the industry worked would be a significant event that I'm not ready for, and I don't think the rest of the world is either. It will take years for new economic strategies to build - and not all of those strategies will be consumer friendly. Today the solution is that access to expensive drugs is subsidized by insurance which is subsidized by law. It's not the best solution, but it's a working solution. The political and economic climate that we have tells me that we'll talk about change for another decade and look to actually implement some sort of real change sometime 20-40 years from now as the industry ages and stabilizes. You have to remember how young "modern medicine" actually is. Rabbit tests for pregnancy aren't that far back in our history. We're still at the point where compulsory sterilization is seen as a reasonable resolution to problems. We're mere decades away from a time when companies like Baxter and Abbot enjoyed an almost competition free environment and not too long before that, heroin was a common ingredient in cough remedies and parasites were commonly sold weight loss solutions.
- bisRepetita 10y agoI very much like free market. But here, the final consumer is not in a position to bargain prices when getting sick, which is a pre-requisite for a free market to function. Single-payer system works way better in that very particular industry, because both parties can now effectively negotiate. Example: GSK is selling Advair Diskus for $300 in the US, and the same Seretide Diskus for 30 euros in France. Because on one side, they negotiate, and on the other, the enact laws to prevent negotiations (see Medicaid). When you need that disk every month, it's a huge difference. I understand why this system is better for GSK, their shareholders and management. But why is it better for American people to persevere with a system where you pay 10, 100 times the fair price? And don't blame the lobbyists, they can lobby all they want, the voters are the boss. If the majority wants to stop paying 100 times what they should, if the majority is tired to go bankrupt when they get sick, it just takes to publically support a single-payer system, and to vote for that. Politicians will listen.
- rm_-rf_slash 10y agoMost Americans believe in a single-payer system. However, even if the Democrats made it a solid goal, the Republicans would essentially convey the message: "Sure, you can vote for the Democrats if you want, but be prepared for them to take all of your guns, force you to pay welfare for Syrian immigrants, and use your taxes to pay for abortions." Enough people would consider those things - even if they have an iota of truth - more important than universal health care, so they vote against the politicians who support it. This assumes republicans do not adopt a single payer system in their party platform. I think that assumption is plausible.
- snowwrestler 10y agoThe argument against government single-payer is to imagine the politicians you dislike the most in charge of your health care. Would Democrats still favor single-payer if they knew that Republicans would get to make all the policy decisions about what is covered?
- Nursie 10y ago
- emodendroket 10y agoIs it really mysterious?
- Lazare 10y agoI'm not sure an article about "drug prices" makes much sense; the reasons why an EpiPen is expensive have practically nothing to do with the reasons why Hervoni is expensive. If you lump it all together and start looking for reasons why both are expensive, I doubt the answers you end up with will get you very far I think this was covered in excellent detail here: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-drugs-vs-chairs/ http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
- AngeloAnolin 10y agoEverybody wants to maximize the value of their investment, or product. To the consumers affected so much by the high price, this comes around as greedy. While to the business themselves, they see this as good business incentive. Of course, there are other factors: + economics of how much people are willing to pay for, the scarcity of the product (and resources used to build it) + the derived (and perceived) value of the people taking the medication + politics and lobbying cost In the end, it all comes down to the business' bottom line and the consumer's capacity to pay. It is very probable that the pharmaceutical companies have done a lot of calculations to ensure that their price point would be at the stage where they have balanced everything to lean on profit for their side.
- supergeek133 10y agoIt seems we really like to focus on "the evil" company, but it goes two ways. Example: A family member has serious adult scoliosis, which causes quite a bit of pain. For years she has taken Fentanyl Nasal Spray that was made by a compound pharmacist (e.g., they take the raw Fentanyl powder, and mix it with a liquid solution by hand). The retail cost of this is ~$3k for a 30 day supply. Her insurance brought that down to sub $100. 2 years ago, she received a letter from her insurance company stating that because the FDA refuses to guarantee compound (made by hand) drugs, they will no longer cover her current nasal spray and she must move to one of the alternatives. One alternative was a lollipop, which she used to take but caused her teeth to rot and she now has dentures. Another was different oral delivery system, but it was discontinued by the mfg less than 6 months after this. So far her only option is a product called Lazanda, they are individually packaged and metered glass bottles of Fentanyl nasal spray. Each bottle is roughly half a day's dose, has it's own box, literature in EACH BOX, and a month's supply is 60 of these boxes. The retail value of this? Last time I looked it was >$30,000. And the insurance just accepts it. Madness.
- replicatorblog 10y agoOften the "sticker price" is just a negotiating chip. Big drug co's and big pharma have a byzantine relationship of price hikes and rebates. I wouldn't be surprised if the price the insurer pays is not materially higher than the original $3K.
- supergeek133 10y agoThat could be true, she has chosen to pay for the compound version with cash more than once, and the price is $3k. It provides much more relief than the packaged version. Obviously on the EOB from the insurer, they show they paid the same price the pharmacy communicates. That's pretty crazy if the TRUE price is obscure Not sure on the packaged version price if cash was paid..
- pkaye 10y agoMy guess is the insurer will get a rebate at the end of the year from the drug manufacturer based on volume discount.
- diogenescynic 10y agoBecause America refuses to swallow its pride and admit our health care system is flawed and completely inefficient. All we have to do is follow a health care system that actually functions, but we refuse and just keep doubling down on stupid. It's the sunk cost fallacy. It's just like Iraq, Afghanistan, Vietnam, and gun laws. America is in denial.
- diogenescynic 10y agoBecause America refuses to swallow its pride and admit our health care system is pathetic. All we have to do is follow a health care system that actually functions, but we refuse and just keep doubling down on stupid. It's the sunk cost fallacy. It's just like Iraq, Afghanistan, Vietnam, and gun laws. America is in denial.
- nomercy400 10y agoAnswer: Capitalism. And monopoly.
- atom-morgan 10y agoI think most would agree that protected monopolies wouldn't exist in a pure capitalist economy.
- perseusprime11 10y agoWhenever I see such articles, I attribute the cause to collective laziness not economics. Why are health insurance costs high? Answer: Laziness Why are drug prices high? Laziness Why is higher education expensive? Laziness Somebody is lazy and they don't want to do the important job of making these fundamental things cheaper and accessible. This somebody could be 'we' collectively or govt or companies or just our greed.
- chatmasta 10y agoAn acquaintance of mine made quite a bit of money running a "compound pharmacy" for a few years. With his pharmaceutical degree, he was licensed to "compound" common combinations of prescription medication into a single dose. Insurance companies would consider the combination a separate drug (i.e. not just the sum of its parts). Therefore each new combination he made was a "new" drug and he was, quite literally, able to name any price. The insurance company would then pay for it. He had a nice operation going, even shipping to multiple states. He eventually shut down the business when regulation tightened after a few compound pharmacy scares.
- Mendenhall 10y agoDrug prices are so high because people will almost always pay anything to stay alive. What I find interesting is people think they have some sort of right to someone else keeping them alive. Do you really ? To me as harsh as it sounds its reverse greed. I want to live therefore other people should be forced to produce a good for a cost I want/can afford. Its a harsh truth that is the real issue but the vast majority will never say it or talk about it. They just want to live.
- Animats 10y agoCompetition doesn't force prices down unless there are at least four suppliers. Two are not enough - price collusion, implicit or explicit, results. With three, some price competition may appear. An EU study indicated that it takes four before prices really get competitive and fall to near actual manufacturing cost. There's a huge price difference between drugs where there are at least four suppliers (those are really cheap) and ones with fewer suppliers. When there's one name brand drug and one generic equivalent, the generic drug tends to be only slightly cheaper than the name brand. (Some of that comes from retail pharmacies, who tend to price that way. Costco doesn't; they just mark up everything they sell by about 15% over wholesale.)
- rdslw 10y agoalmost 20 years old GSM market in Poland confirms that. Up to the moment we had 3 telcos, prices were stagnant. Introduction of fourth one (major three were prohibited to own/acquire it) driven prices down really fast. Market literally entered not-yet-ended downward trend (in terms of prices). BTW, exactly 14 USD gives you today nolimit voice/text/inet plan. Dodge that AT&T ;)