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EpiPen Maker Quietly Steers Effort That Could Protect Its Price

172 points by uptown 10y ago

mtgx 10y ago
Relevant post: http://www.forbes.com/sites/realspin/2016/09/14/government-hypocrisy-over-epipen-the-pot-calling-the-kettle-black/ http://www.forbes.com/sites/realspin/2016/09/14/government-h... It's Forbes, but the argument is backed by the recent Harvard study: http://jama.jamanetwork.com/article.aspx?articleid=2545691 http://jama.jamanetwork.com/article.aspx?articleid=2545691
- wyldfire 10y ago
  Waldmann/Ginn don't describe the FDA's complaints about the competitors, but it's probably: (1) a failure to validate claims or (2) insufficient design/manufacturing controls. IMO it's very unlikely that the FDA is engaged in protectionism of the sole manufacturer of this product. > Most definitely, the solution is not more government controls through regulation. I agree that we likely don't need any more regulation in this space. But it seems obvious to me that this issue is related to the overall shift lately. Employers are offering high-deductible insurance plans and employees are bearing a greater burden. The outrage over EpiPens is just another symptom of the US public clamoring for what they see as something that should be an entitlement. I don't know that I prefer it but it seems pretty clear to me that it's coming (within another generation or two at max). The point about patent protection is pretty huge. I wonder: what net effects would there be to removing patents entirely? Would we end up with less ambitious products and services because designs would just get copied by the cheapest production centers? Could we/should we restrict patents among different industries?
- jackmott 10y ago
  It is not made at all clear if the government is truly granting that monopoly (and if they are, did Mylan bribe the government for that privilege somehow?) or if the competing products were truly not deemed safe or effective enough. Anyone have expert knowledge in that area? The rest of the Forbes Articles seems like the usual delusional libertarian nonsense were they point out well known and obvious downsides of regulation while pretending no such downsides exist in deregulated markets (i.e., poor people would still die, even as prices drop, because some prices can only drop so much, and dangerous drugs brought to market by unscrupulous companies which are always common) Also I like to remind the HackerNews community, that everything you use every day (transistors, integrated circuits, information theory, communications satellites) were invented in whole or part at a government mandated monopoly (Bell Labs). Of course there were conditions on that mandate, like not patenting what they invented.
  - maxerickson 10y ago
    There's generic versions of a different auto-injector available, so the monopoly is very narrow, on prescriptions that say "Epipen". Patients can ask their doctor to prescribe Adrenaclick and then choose the generic.
  - andrewla 10y ago
    A serious question -- what do you mean when you say that Bell Labs was a government mandated monopoly? As far as I was aware, it was a privately funded privately owned research laboratory. I'm genuinely curious, not disagreeing, though I am a little dubious. The transistor, at least, was definitely patented, and just a cursory search [1] yields tons of patents involving transistors, so I don't think there was a restriction on patents. And as a minor issue, the IC is generally credited either to TI or Fairchild, depending on what you consider to be a modern integrated circuit; Bell Labs had no significant involvement. [1] https://www.google.com/search?tbm=pts&hl=en&q=transistor+schockley#hl=en&tbm=pts&q=transistor+shockley https://www.google.com/search?tbm=pts&hl=en&q=transistor+sch...
    - rayiner 10y ago
      In Bell Labs's heyday, AT&T was a government-sanctioned monopoly. See Part I of Wu's "The Master Switch." The same is true for Xerox PARC. At the time, Xerox was protected from competition by Xerox's printer/copier patents.
- tuna-piano 10y ago
  They look at the symptom, and might fix one case of high prices with public pressure, legal threats, etc - but if the system is broken, then what good is that? The question is not "why is this company so evil and greedy?" It's "why dont McDonald's hamburgers also cost $600?", and how do we make the market for drugs as competitive as for burgers?
  - vertex-four 10y ago
    Because it's a lot easier to prove that your hamburger doesn't harm people than a novel drug?
  - pravda 10y ago
    >It's "why dont McDonald's hamburgers also cost $600?", and how do we make the market for drugs as competitive as for burgers? Because insurance doesn't pay for McDonalds. To make the market for drugs competitive, step one is to get rid of health insurance. Or at least health insurance coverage for drugs. I think the going price for an iPhone is $700. How much would an iPhone cost if you only had to pay 20% of the price? Do the math, and now THAT's why drugs are so expensive.
  - rayiner 10y ago
    Because it doesn't cost a billion dollars to set up a burger stand?
- croon 10y ago
  From the article: > Dr. Ezekiel Emmanuel, one of the architects of Obamacare, admits that a free—“uncontrolled”—market would bring down prices. Yet, his solution is more government control, specifically price controls. > What does history teach us about price controls? > The U.S.S.R., Cuba, Korea, Spain, and Venezuela amongst others have all used strict government price controls. The results were: shortages of everything, viz., long lines of Russians standing in the snow waiting for government-issued shoes or toilet paper; poor worker productivity; very low standards of living; and no innovation. This is precisely what we don’t want. From the study: > The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability; providing greater opportunities for meaningful price negotiation by governmental payers; generating more evidence about comparative cost-effectiveness of therapeutic alternatives; and more effectively educating patients, prescribers, payers, and policy makers about these choices. That article is libertarian trash, and contradicts the study. Deregulating food - and much worse - drugs, would just end up in dangerous cheap products, and slightly less dangerous but still low quality products. Every company optimizing for profit will take every shortcut available to them. Deregulating opens up a lot of them. Most of them detrimental to consumers, few of them detrimental enough to warrant a decrease in public image.
- warfangle 10y ago
  Forbes trots out an interesting figure: $2.6bn to win FDA approval for a new drug. That sounds like a lot! It also sounds like a number pulled from a hat. So I went looking. It's from a Tufts Center for the Study of Drug Development study published in 2014 [0]. Which is, incidentally, supported financially by the pharmaceutical industry [1]. Even the published pdf is pretty lacking on actual data [2]. Because it's a PR piece. This other study, from the Office of Health Economics, 2012, reported the cost as $1.5bn [3]. (OHE is funded by research grants and consultancy fees from - you guessed it - the British pharma industry). Did the cost magically increase by $1bn in the two years between the studies, or is there something fishy going on here? One point in the Harvard study abstract was, > The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents. And that's true! But that exclusivity is an artifact of medicine-for-profit, instead of medicine-for-health. It's interesting that all of their recommendations for lowering prices fail to take into account (at least in the abstract, as I don't have access to the full article) the single biggest difference between the only market where per capital spending is $850 and the 19 markets where per capita spending is, on average, $400: for profit healthcare and medicine. Keep in mind that even after that astronomic cost for drug approval (the figure for which is iffy in providence), for-profit pharmaceutical companies still spend more on marketing than they do on research. 0. http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014... 1. http://csdd.tufts.edu/about/corporate_sponsorship http://csdd.tufts.edu/about/corporate_sponsorship 2. http://csdd.tufts.edu/files/uploads/Tufts_CSDD_briefing_on_RD_cost_study_-_Nov_18,_2014..pdf http://csdd.tufts.edu/files/uploads/Tufts_CSDD_briefing_on_R... 3. https://www.ohe.org/news/overview-ohe-study-cost-drug-development-presented https://www.ohe.org/news/overview-ohe-study-cost-drug-develo...
  - maxerickson 10y ago
    The studies of marketing spending are usually just as disingenuous, reporting the "Selling, general and administrative" line item from annual reports as the amount spent on marketing. But that line item includes things like salaries and office space and such, things that the company has to do to sell products which are not advertising. Marketing spending is huge, but it undermines their message when they do that.
jfb 10y ago
Rent-seekers seek rents, dog bites man, &c. &c.
maxerickson 10y ago
Does the FDA have the authority to deny marketing approval for minor improvements? Mylan pushed generics off the market by making a better cap or something, the FDA should just say no, that improvement is nice but it isn't enough to give you exclusive marketing rights. If you want to incorporate it into your product, license it to your competitors for cheap.
- wyldfire 10y ago
  FDA's genesis was bound pretty close to marketing. If you wanted to sell "Aunt Eliza's Magic Elixir" and claim that it "cures all ails: backaches, headaches, etc", you are required to show evidence that validates those claims. See Pure Food and Drug Act. FDA's responsibility is mutually exclusive with USPTO which would approve/deny patents based on "novelty".
  - maxerickson 10y ago
    I'm not suggesting that the FDA could deny a patent. I'm suggesting that the FDA could simply refuse to approve the new version of a product. In the case where there are generics and the improvement is small, it doesn't matter if the company decides to take their ball and go home. It might be a fine line to walk, but the improvements to the Epipen don't seem to be very substantial (it's kind of hard to figure out what the improvements are with so much coverage of the recent events).
    - wyldfire 10y ago
      What would be the basis on which they would deny a new product? If you were Mylan, you would bring suit. Courts would not side with the FDA, because they'd be wrong. The FDA's responsibility is dictated by legislation and there's nothing in the US Code that describes "you can't release new products if the new design isn't sufficiently improved." Legislators have all the power. If they can agree, they can say "Woo party free EpiPens for everyone, put it in the budget." FDA has some small amount of judgment they can apply within reason to restrict products that fail to comply with the law.
lettergram 10y ago
Having multiple deadly allergies and needing to purchase EpiPens regularly, their price doesn't seem outrageous to me. I pay about $10 a pen, insurance pays about $100 per (even after the price increase). That being said, people rarely use this drug. $100 to save your life once a year or so kind of seems like a fair trade. This seems more like the media is outraged as opposed to the country. All my friends don't even know about this price change, I only know about it because I read the news more often.
- JoeAltmaier 10y ago
  ...says the guy with (good) insurance.
  - jackmott 10y ago
    works on MY machine!
- jackmott 10y ago
  How much does your insurance plan cost you per year? If your employer pays it, ask them how much they have to pay. Part of the reason it is so expensive is because of monopolistic pricing on many drugs and treatments. You are paying way more than $100 Also you have to buy more than one because they expire.
  - maxerickson 10y ago
    It's entirely possible that their PBM has negotiated a price of $100 per pen. Mylan is happy to give people $300 coupons to get them to use their insurance, it wouldn't be weird for them to agree to sell the pens to an insurer for $100.
  - cylinder 10y ago
    You don't need to ask, it's on your W2.
    - codegeek 10y ago
mdrzn 10y ago
It's not a "quietly effort", Martin even said that this would be the best course of action on live TV[0]. The government will spend more money, but the public will get it for free. Of course there's two side to every story, but I think I choose to believe Shkreli on this. [0] - https://www.youtube.com/watch?v=RoMlxVimwiU https://www.youtube.com/watch?v=RoMlxVimwiU
- ceejayoz 10y ago
  > The government will spend more money, but the public will get it for free. You know where the government gets its money, right?
  - witty_username 10y ago
    So what if taxpayers are paying for it? Companies need to make a profit. Is there a specific reason why the price is unreasonable? (don't anchor the previous price)
    - ceejayoz 10y ago
      > So what if taxpayers are paying for it? People are not getting it for free, as you argued. > Is there a specific reason why the price is unreasonable? It is a clear case of price gouging and a harm to public health. > (don't anchor the previous price) Do I get to forbid you from making arguments too?
    - gizmo 10y ago
      The epi-pen equivalent costs a lot less in Europe. See for instance the Emerade Injector, $48 USD for an adult dose. Regulatory hurdles are worse in the US, but you can't explain a 6-7x price difference that way. http://www.emerade.com/hcp/adrenaline-auto-injector http://www.emerade.com/hcp/adrenaline-auto-injector
tn13 10y ago
And what does NYT expect him do to ? Open a charity, raise a kickstarter to provide free EpiPens ? I hope he makes a fortune and inspires more to come up with those kind of drugs.
- jackmott 10y ago
  Her. We expect her to be out of a job when healthcare becomes socialized, then she can move into the financial sector and rip people off there.
  - throwawayLink 10y ago
    Well, her $19M bonus would fund the production cost of 600,000 $30-Epipens... Suddenly, 1,000% profit looks a lot less ethical.
  - tn13 10y ago
    And if the healthcare becomes socialized who will make EpiPens ?
    - mikeyouse 10y ago
      The same company that currently makes them? Single-payer doesn't mean the government is going to try and run pharma manufacturing.
      - tn13 10y ago
        But without the incentive to make awesome windfall profits there wont be any EpiPens to begin with.
bradleyjg 10y ago
This whole drug company argument -- that the only thing that really matters is what end users pay as a co-pay or co-insurance and that no one should care what insurance companies (including governments) pay -- is so breathtakingly bad I can only imagine it is in bad faith. Where do they expect us to believe the institutional payments are coming from, out of thin air?
- gizmodo59 10y ago
  One of the things I do not understand is, the explanation given is that Obamacare fixes the donut hole where people who are not enrolled in company sponsored/medicare could get insurance. This has just let the drug companies to raise the price without any backslash because the end user is "not" paying the price. However, the rising premiums and plans with high deductibles meant that the drugs are still not affordable even if you are covered by some insurance. What is the solution to this? Single-payer health care?
  - whatshisface 10y ago
    If only insurance companies had some sort of pressure to reduce costs and prices. Some sort of... market.. pressure...
    - mhurron 10y ago
      Because that's happened before? Or are you suggesting that the US system isn't laissez-faire enough?
    - codegeek 10y ago
      They never have any reason to do that. Too much power. We need to get a system in place that gets rid of too much power away from the insurance companies, plain and simple. With the amount of money and lobbying they do, probably not likely in the near future unless the Congress grows some balls and do something real about healthcare and not just the usual talking points.
    - ch4s3 10y ago
StefanKarpinski 10y ago
How can any article about this issue not mention the word "patent" anywhere? Why is a 1970s technology still under patent? Patents are supposed to allow recouping of R & D costs, not grant an effectively permanent monopoly that can be sold over and over again until someone greedy enough does the inevitable – if we grant that sort of long-lived monopoly, what else can we possibly expect to happen? Reform the broken patent system and this problem vanishes due to natural competition. This patent reform isn't even a hard one: stop allowing patents to get extended indefinitely (with or without minor modifications).
- pravda 10y ago
  >How can any article about this issue not mention the word "patent" anywhere? Because there is no patent here. That is why.
  - bradleyjg 10y ago
    Patents do play a role here, though not the largest role. Both Teva Pharmaceuticals and Sandoz were sued when for patent infringement when they announced plans to introduce competitors to Epipen. [1] https://www.bloomberg.com/news/articles/2012-04-26/mylan-pfizer-announce-epinephrine-pen-settlement-with-teva-1- https://www.bloomberg.com/news/articles/2012-04-26/mylan-pfi... [2] http://www.law360.com/articles/181459/king-pharma-sues-sandoz-over-generic-epipen http://www.law360.com/articles/181459/king-pharma-sues-sando...
    - vonmoltke 10y ago
      They were, if I understand the background correctly, trying to make a workalike competitor, which King/Mylan asserts they cannot do without violating a patent on the current EpiPen injector. The only thing stopping them from making a non-workalike is getting doctors to prescribe it instead of EpiPen, since pharmacies can't autosubstitute in that case.
      - shanacarp 10y ago
squozzer 10y ago
>Mylan was actively involved in pushing a 2013 federal law encouraging schools nationwide to stock EpiPens. And the company takes credit for legislation in at least 10 states that require the product in hotels, restaurants and other places, and additional school-related legislation in nearly every state. It is also helping push legislation pending in Congress that would require epinephrine auto-injectors on all commercial airline flights. It would seem to me that a government-mandated market expansion would require a counter-balancing price regulation, but maybe my sense of reciprocity is misplaced.
- charlesdm 10y ago
  They probably conveniently forgot that..
asdffderty 10y ago
Just a reminder that the senator in this case is a Democrat.
throwawayLink 10y ago
This is why we need alternatives. Vote with your money: https://www.indiegogo.com/projects/allergystop-affordable-epinephrine-injection-health#/ https://www.indiegogo.com/projects/allergystop-affordable-ep...
- ceejayoz 10y ago
  I see little indication that that doctor has any experience getting a medical device through the FDA and manufacturing. Couple that with the flexible funding goal and that looks pretty damned scammy.
amluto 10y ago
One thing that really annoys me is the fact that drug makers can refund the co-pay to customers. In the auto repair industry, I believe this has a name: insurance fraud.
- FireBeyond 10y ago
  That's a very specific thing. The co-pay is a part of the price of the product that your insurer doesn't cover, so technically it's not theirs to begin with. Which is also why it's not a refund of the deductible paid, because that -is- considered part of the insurance contribution, i.e: (deductible paid by customer + insurance payment) = your insurance contribution co-pay = your personal contribution to the cost of the treatment.
  - aianus 10y ago
    It's obviously fraud. If your windshield breaks and your deductible (co-pay) is $500, I can't quote you $500 above market rate to fix it and give it back to you in cash to stick it to your insurance company.
    - Declanomous 10y ago
      Somehow there is a mechanic shop near me with a sign out front advertising that they will pay your deductible. It's not exactly hidden either -- it's located on one of the busiest streets in Chicago. Here's a street view image: https://goo.gl/maps/hUAUUEJwiQT2 https://goo.gl/maps/hUAUUEJwiQT2
      - aianus 10y ago
        If the real cost to fix a windshield is $300 but your shop advertises $800 to everyone along with an offer to 'pay the deductible' then it's not illegal. You can claim your shop is more expensive because it offers better service or better parts or whatever. It would only be illegal to quote $300 for those who are uninsured but quote $800 for those who do have a deductible. It's still clearly a scam against the insurance companies, whether actual fraud charges would stick in court or not.
fjejfjrjdjc 10y ago
I've been waiting to see a neurologist for a serious and worsening vision problem since May. For those keeping track, that's four and a half months. So between these high drug prices and low healthcare availability, why exactly are we so afraid of single payer again?
- mhb 10y ago
  How does single payer create an incentive for increasing the neurologist supply?
  - fjejfjrjdjc 10y ago
    By turning healthcare into a humanitarian mission instead of a business venture. My local clinic is for-profit and found that it made better business sense to only have the most rudimentary neurology department possible since it tends to be expensive. Instead they focus on their financial bread and butter like flu shots and annual checkups.
    - rayiner 10y ago
      Humanitarian missions and charity are notoriously ineffective at achieving real change. See, for example, the utter failure of aid organizations to achieve any fundamental changes in Africa. Meanwhile, big drug companies and their anti-retro viral cocktails changed the course of the AIDS epidemic there almost overnight.
      - fjejfjrjdjc 10y ago
        And yet I continue to go untreated thanks to the profit motive...
        witty_username 10y ago
        So? Money is a representation of human effort. Nobody wants to work for free or invest for 0% gain. Is there a reason you think the price should be lower? (remember people working need money too)
davidf18 10y ago
The solution to the cost problem is for competition to enter the market. It is my understanding FDA has in some way restricted market entry as competing firms (eg, generic giant Teva) come up with a device acceptable to the FDA.
throw2016 10y ago
Lobbying, crooked NGOs, corruption, price gouging. There is something completely rotten in the US healthcare system. If this were free markets and capitalism, wouldn't the response be a flood of alternatives at 1/100 or even 1/10 the price since the base ingredient costs pennies, and not this self serving and crafty effort to leech tax payer subsidies? This is organized corruption. When you let people feed on others desperation you create demons. This is the biggest argument for socialized healthcare.
ericfrederich 10y ago
Love or hate the guy, but Martin Shkreli has a good point here on the EpiPen: https://www.youtube.com/watch?v=RoMlxVimwiU https://www.youtube.com/watch?v=RoMlxVimwiU Basically: That $600 is a value to save your life - much cheaper than an ambulance / hospital stay That insurance companies should cover 100% of it
- mikeyouse 10y ago
  That's a terrible point and could be used to justify $10,000/dose EpiPens.
bcheung 10y ago
The government created this problem in the first place by granting monopolies on drugs. If it allowed others to manufacture it, the price would drop.
sleight42 10y ago
As a pharmacy company, wanting to charge a higher price for my products, doesn't it sound like an excellent strategy to outrage my customers, get them actively protesting, only to present a solution that many of those outraged customers will support while continuing to allow me to charge my higher price? This feels like a House of Cards-like strategy: take up an unpopular selfish position only to later use its most vociferous opponents as leverage in maintaining that strategy.

172 points by uptown 10y ago

mtgx 10y ago

Relevant post: http://www.forbes.com/sites/realspin/2016/09/14/government-hypocrisy-over-epipen-the-pot-calling-the-kettle-black/ http://www.forbes.com/sites/realspin/2016/09/14/government-h... It's Forbes, but the argument is backed by the recent Harvard study: http://jama.jamanetwork.com/article.aspx?articleid=2545691 http://jama.jamanetwork.com/article.aspx?articleid=2545691

wyldfire 10y ago
Waldmann/Ginn don't describe the FDA's complaints about the competitors, but it's probably: (1) a failure to validate claims or (2) insufficient design/manufacturing controls. IMO it's very unlikely that the FDA is engaged in protectionism of the sole manufacturer of this product. > Most definitely, the solution is not more government controls through regulation. I agree that we likely don't need any more regulation in this space. But it seems obvious to me that this issue is related to the overall shift lately. Employers are offering high-deductible insurance plans and employees are bearing a greater burden. The outrage over EpiPens is just another symptom of the US public clamoring for what they see as something that should be an entitlement. I don't know that I prefer it but it seems pretty clear to me that it's coming (within another generation or two at max). The point about patent protection is pretty huge. I wonder: what net effects would there be to removing patents entirely? Would we end up with less ambitious products and services because designs would just get copied by the cheapest production centers? Could we/should we restrict patents among different industries?
jackmott 10y ago
It is not made at all clear if the government is truly granting that monopoly (and if they are, did Mylan bribe the government for that privilege somehow?) or if the competing products were truly not deemed safe or effective enough. Anyone have expert knowledge in that area? The rest of the Forbes Articles seems like the usual delusional libertarian nonsense were they point out well known and obvious downsides of regulation while pretending no such downsides exist in deregulated markets (i.e., poor people would still die, even as prices drop, because some prices can only drop so much, and dangerous drugs brought to market by unscrupulous companies which are always common) Also I like to remind the HackerNews community, that everything you use every day (transistors, integrated circuits, information theory, communications satellites) were invented in whole or part at a government mandated monopoly (Bell Labs). Of course there were conditions on that mandate, like not patenting what they invented.
- maxerickson 10y ago
  There's generic versions of a different auto-injector available, so the monopoly is very narrow, on prescriptions that say "Epipen". Patients can ask their doctor to prescribe Adrenaclick and then choose the generic.
- andrewla 10y ago
  A serious question -- what do you mean when you say that Bell Labs was a government mandated monopoly? As far as I was aware, it was a privately funded privately owned research laboratory. I'm genuinely curious, not disagreeing, though I am a little dubious. The transistor, at least, was definitely patented, and just a cursory search [1] yields tons of patents involving transistors, so I don't think there was a restriction on patents. And as a minor issue, the IC is generally credited either to TI or Fairchild, depending on what you consider to be a modern integrated circuit; Bell Labs had no significant involvement. [1] https://www.google.com/search?tbm=pts&hl=en&q=transistor+schockley#hl=en&tbm=pts&q=transistor+shockley https://www.google.com/search?tbm=pts&hl=en&q=transistor+sch...
  - rayiner 10y ago
    In Bell Labs's heyday, AT&T was a government-sanctioned monopoly. See Part I of Wu's "The Master Switch." The same is true for Xerox PARC. At the time, Xerox was protected from competition by Xerox's printer/copier patents.
tuna-piano 10y ago
They look at the symptom, and might fix one case of high prices with public pressure, legal threats, etc - but if the system is broken, then what good is that? The question is not "why is this company so evil and greedy?" It's "why dont McDonald's hamburgers also cost $600?", and how do we make the market for drugs as competitive as for burgers?
- vertex-four 10y ago
  Because it's a lot easier to prove that your hamburger doesn't harm people than a novel drug?
- pravda 10y ago
  >It's "why dont McDonald's hamburgers also cost $600?", and how do we make the market for drugs as competitive as for burgers? Because insurance doesn't pay for McDonalds. To make the market for drugs competitive, step one is to get rid of health insurance. Or at least health insurance coverage for drugs. I think the going price for an iPhone is $700. How much would an iPhone cost if you only had to pay 20% of the price? Do the math, and now THAT's why drugs are so expensive.
- rayiner 10y ago
  Because it doesn't cost a billion dollars to set up a burger stand?
croon 10y ago
From the article: > Dr. Ezekiel Emmanuel, one of the architects of Obamacare, admits that a free—“uncontrolled”—market would bring down prices. Yet, his solution is more government control, specifically price controls. > What does history teach us about price controls? > The U.S.S.R., Cuba, Korea, Spain, and Venezuela amongst others have all used strict government price controls. The results were: shortages of everything, viz., long lines of Russians standing in the snow waiting for government-issued shoes or toilet paper; poor worker productivity; very low standards of living; and no innovation. This is precisely what we don’t want. From the study: > The most realistic short-term strategies to address high prices include enforcing more stringent requirements for the award and extension of exclusivity rights; enhancing competition by ensuring timely generic drug availability; providing greater opportunities for meaningful price negotiation by governmental payers; generating more evidence about comparative cost-effectiveness of therapeutic alternatives; and more effectively educating patients, prescribers, payers, and policy makers about these choices. That article is libertarian trash, and contradicts the study. Deregulating food - and much worse - drugs, would just end up in dangerous cheap products, and slightly less dangerous but still low quality products. Every company optimizing for profit will take every shortcut available to them. Deregulating opens up a lot of them. Most of them detrimental to consumers, few of them detrimental enough to warrant a decrease in public image.
warfangle 10y ago
Forbes trots out an interesting figure: $2.6bn to win FDA approval for a new drug. That sounds like a lot! It also sounds like a number pulled from a hat. So I went looking. It's from a Tufts Center for the Study of Drug Development study published in 2014 [0]. Which is, incidentally, supported financially by the pharmaceutical industry [1]. Even the published pdf is pretty lacking on actual data [2]. Because it's a PR piece. This other study, from the Office of Health Economics, 2012, reported the cost as $1.5bn [3]. (OHE is funded by research grants and consultancy fees from - you guessed it - the British pharma industry). Did the cost magically increase by $1bn in the two years between the studies, or is there something fishy going on here? One point in the Harvard study abstract was, > The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents. And that's true! But that exclusivity is an artifact of medicine-for-profit, instead of medicine-for-health. It's interesting that all of their recommendations for lowering prices fail to take into account (at least in the abstract, as I don't have access to the full article) the single biggest difference between the only market where per capital spending is $850 and the 19 markets where per capita spending is, on average, $400: for profit healthcare and medicine. Keep in mind that even after that astronomic cost for drug approval (the figure for which is iffy in providence), for-profit pharmaceutical companies still spend more on marketing than they do on research. 0. http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014... 1. http://csdd.tufts.edu/about/corporate_sponsorship http://csdd.tufts.edu/about/corporate_sponsorship 2. http://csdd.tufts.edu/files/uploads/Tufts_CSDD_briefing_on_RD_cost_study_-_Nov_18,_2014..pdf http://csdd.tufts.edu/files/uploads/Tufts_CSDD_briefing_on_R... 3. https://www.ohe.org/news/overview-ohe-study-cost-drug-development-presented https://www.ohe.org/news/overview-ohe-study-cost-drug-develo...
- maxerickson 10y ago
  The studies of marketing spending are usually just as disingenuous, reporting the "Selling, general and administrative" line item from annual reports as the amount spent on marketing. But that line item includes things like salaries and office space and such, things that the company has to do to sell products which are not advertising. Marketing spending is huge, but it undermines their message when they do that.

jfb 10y ago

Rent-seekers seek rents, dog bites man, &c. &c.

maxerickson 10y ago

Does the FDA have the authority to deny marketing approval for minor improvements? Mylan pushed generics off the market by making a better cap or something, the FDA should just say no, that improvement is nice but it isn't enough to give you exclusive marketing rights. If you want to incorporate it into your product, license it to your competitors for cheap.

wyldfire 10y ago
FDA's genesis was bound pretty close to marketing. If you wanted to sell "Aunt Eliza's Magic Elixir" and claim that it "cures all ails: backaches, headaches, etc", you are required to show evidence that validates those claims. See Pure Food and Drug Act. FDA's responsibility is mutually exclusive with USPTO which would approve/deny patents based on "novelty".
- maxerickson 10y ago
  I'm not suggesting that the FDA could deny a patent. I'm suggesting that the FDA could simply refuse to approve the new version of a product. In the case where there are generics and the improvement is small, it doesn't matter if the company decides to take their ball and go home. It might be a fine line to walk, but the improvements to the Epipen don't seem to be very substantial (it's kind of hard to figure out what the improvements are with so much coverage of the recent events).
  - wyldfire 10y ago
    What would be the basis on which they would deny a new product? If you were Mylan, you would bring suit. Courts would not side with the FDA, because they'd be wrong. The FDA's responsibility is dictated by legislation and there's nothing in the US Code that describes "you can't release new products if the new design isn't sufficiently improved." Legislators have all the power. If they can agree, they can say "Woo party free EpiPens for everyone, put it in the budget." FDA has some small amount of judgment they can apply within reason to restrict products that fail to comply with the law.

lettergram 10y ago

Having multiple deadly allergies and needing to purchase EpiPens regularly, their price doesn't seem outrageous to me. I pay about $10 a pen, insurance pays about $100 per (even after the price increase). That being said, people rarely use this drug. $100 to save your life once a year or so kind of seems like a fair trade. This seems more like the media is outraged as opposed to the country. All my friends don't even know about this price change, I only know about it because I read the news more often.

JoeAltmaier 10y ago
...says the guy with (good) insurance.
- jackmott 10y ago
  works on MY machine!
jackmott 10y ago
How much does your insurance plan cost you per year? If your employer pays it, ask them how much they have to pay. Part of the reason it is so expensive is because of monopolistic pricing on many drugs and treatments. You are paying way more than $100 Also you have to buy more than one because they expire.
- maxerickson 10y ago
  It's entirely possible that their PBM has negotiated a price of $100 per pen. Mylan is happy to give people $300 coupons to get them to use their insurance, it wouldn't be weird for them to agree to sell the pens to an insurer for $100.
- cylinder 10y ago
  You don't need to ask, it's on your W2.
  - codegeek 10y ago

mdrzn 10y ago

It's not a "quietly effort", Martin even said that this would be the best course of action on live TV[0]. The government will spend more money, but the public will get it for free. Of course there's two side to every story, but I think I choose to believe Shkreli on this. [0] - https://www.youtube.com/watch?v=RoMlxVimwiU https://www.youtube.com/watch?v=RoMlxVimwiU

ceejayoz 10y ago
> The government will spend more money, but the public will get it for free. You know where the government gets its money, right?
- witty_username 10y ago
  So what if taxpayers are paying for it? Companies need to make a profit. Is there a specific reason why the price is unreasonable? (don't anchor the previous price)
  - ceejayoz 10y ago
    > So what if taxpayers are paying for it? People are not getting it for free, as you argued. > Is there a specific reason why the price is unreasonable? It is a clear case of price gouging and a harm to public health. > (don't anchor the previous price) Do I get to forbid you from making arguments too?
  - gizmo 10y ago
    The epi-pen equivalent costs a lot less in Europe. See for instance the Emerade Injector, $48 USD for an adult dose. Regulatory hurdles are worse in the US, but you can't explain a 6-7x price difference that way. http://www.emerade.com/hcp/adrenaline-auto-injector http://www.emerade.com/hcp/adrenaline-auto-injector

tn13 10y ago

And what does NYT expect him do to ? Open a charity, raise a kickstarter to provide free EpiPens ? I hope he makes a fortune and inspires more to come up with those kind of drugs.

jackmott 10y ago
Her. We expect her to be out of a job when healthcare becomes socialized, then she can move into the financial sector and rip people off there.
- throwawayLink 10y ago
  Well, her $19M bonus would fund the production cost of 600,000 $30-Epipens... Suddenly, 1,000% profit looks a lot less ethical.
- tn13 10y ago
  And if the healthcare becomes socialized who will make EpiPens ?
  - mikeyouse 10y ago
    The same company that currently makes them? Single-payer doesn't mean the government is going to try and run pharma manufacturing.
    - tn13 10y ago
      But without the incentive to make awesome windfall profits there wont be any EpiPens to begin with.

bradleyjg 10y ago

This whole drug company argument -- that the only thing that really matters is what end users pay as a co-pay or co-insurance and that no one should care what insurance companies (including governments) pay -- is so breathtakingly bad I can only imagine it is in bad faith. Where do they expect us to believe the institutional payments are coming from, out of thin air?

gizmodo59 10y ago
One of the things I do not understand is, the explanation given is that Obamacare fixes the donut hole where people who are not enrolled in company sponsored/medicare could get insurance. This has just let the drug companies to raise the price without any backslash because the end user is "not" paying the price. However, the rising premiums and plans with high deductibles meant that the drugs are still not affordable even if you are covered by some insurance. What is the solution to this? Single-payer health care?
- whatshisface 10y ago
  If only insurance companies had some sort of pressure to reduce costs and prices. Some sort of... market.. pressure...
  - mhurron 10y ago
    Because that's happened before? Or are you suggesting that the US system isn't laissez-faire enough?
  - codegeek 10y ago
    They never have any reason to do that. Too much power. We need to get a system in place that gets rid of too much power away from the insurance companies, plain and simple. With the amount of money and lobbying they do, probably not likely in the near future unless the Congress grows some balls and do something real about healthcare and not just the usual talking points.
  - ch4s3 10y ago

StefanKarpinski 10y ago

How can any article about this issue not mention the word "patent" anywhere? Why is a 1970s technology still under patent? Patents are supposed to allow recouping of R & D costs, not grant an effectively permanent monopoly that can be sold over and over again until someone greedy enough does the inevitable – if we grant that sort of long-lived monopoly, what else can we possibly expect to happen? Reform the broken patent system and this problem vanishes due to natural competition. This patent reform isn't even a hard one: stop allowing patents to get extended indefinitely (with or without minor modifications).

pravda 10y ago
>How can any article about this issue not mention the word "patent" anywhere? Because there is no patent here. That is why.
- bradleyjg 10y ago
  Patents do play a role here, though not the largest role. Both Teva Pharmaceuticals and Sandoz were sued when for patent infringement when they announced plans to introduce competitors to Epipen. [1] https://www.bloomberg.com/news/articles/2012-04-26/mylan-pfizer-announce-epinephrine-pen-settlement-with-teva-1- https://www.bloomberg.com/news/articles/2012-04-26/mylan-pfi... [2] http://www.law360.com/articles/181459/king-pharma-sues-sandoz-over-generic-epipen http://www.law360.com/articles/181459/king-pharma-sues-sando...
  - vonmoltke 10y ago
    They were, if I understand the background correctly, trying to make a workalike competitor, which King/Mylan asserts they cannot do without violating a patent on the current EpiPen injector. The only thing stopping them from making a non-workalike is getting doctors to prescribe it instead of EpiPen, since pharmacies can't autosubstitute in that case.
    - shanacarp 10y ago

squozzer 10y ago

>Mylan was actively involved in pushing a 2013 federal law encouraging schools nationwide to stock EpiPens. And the company takes credit for legislation in at least 10 states that require the product in hotels, restaurants and other places, and additional school-related legislation in nearly every state. It is also helping push legislation pending in Congress that would require epinephrine auto-injectors on all commercial airline flights. It would seem to me that a government-mandated market expansion would require a counter-balancing price regulation, but maybe my sense of reciprocity is misplaced.

charlesdm 10y ago
They probably conveniently forgot that..

asdffderty 10y ago

Just a reminder that the senator in this case is a Democrat.

throwawayLink 10y ago

This is why we need alternatives. Vote with your money: https://www.indiegogo.com/projects/allergystop-affordable-epinephrine-injection-health#/ https://www.indiegogo.com/projects/allergystop-affordable-ep...

ceejayoz 10y ago
I see little indication that that doctor has any experience getting a medical device through the FDA and manufacturing. Couple that with the flexible funding goal and that looks pretty damned scammy.

amluto 10y ago

One thing that really annoys me is the fact that drug makers can refund the co-pay to customers. In the auto repair industry, I believe this has a name: insurance fraud.

FireBeyond 10y ago
That's a very specific thing. The co-pay is a part of the price of the product that your insurer doesn't cover, so technically it's not theirs to begin with. Which is also why it's not a refund of the deductible paid, because that -is- considered part of the insurance contribution, i.e: (deductible paid by customer + insurance payment) = your insurance contribution co-pay = your personal contribution to the cost of the treatment.
- aianus 10y ago
  It's obviously fraud. If your windshield breaks and your deductible (co-pay) is $500, I can't quote you $500 above market rate to fix it and give it back to you in cash to stick it to your insurance company.
  - Declanomous 10y ago
    Somehow there is a mechanic shop near me with a sign out front advertising that they will pay your deductible. It's not exactly hidden either -- it's located on one of the busiest streets in Chicago. Here's a street view image: https://goo.gl/maps/hUAUUEJwiQT2 https://goo.gl/maps/hUAUUEJwiQT2
    - aianus 10y ago
      If the real cost to fix a windshield is $300 but your shop advertises $800 to everyone along with an offer to 'pay the deductible' then it's not illegal. You can claim your shop is more expensive because it offers better service or better parts or whatever. It would only be illegal to quote $300 for those who are uninsured but quote $800 for those who do have a deductible. It's still clearly a scam against the insurance companies, whether actual fraud charges would stick in court or not.

fjejfjrjdjc 10y ago

I've been waiting to see a neurologist for a serious and worsening vision problem since May. For those keeping track, that's four and a half months. So between these high drug prices and low healthcare availability, why exactly are we so afraid of single payer again?

mhb 10y ago
How does single payer create an incentive for increasing the neurologist supply?
- fjejfjrjdjc 10y ago
  By turning healthcare into a humanitarian mission instead of a business venture. My local clinic is for-profit and found that it made better business sense to only have the most rudimentary neurology department possible since it tends to be expensive. Instead they focus on their financial bread and butter like flu shots and annual checkups.
  - rayiner 10y ago
    Humanitarian missions and charity are notoriously ineffective at achieving real change. See, for example, the utter failure of aid organizations to achieve any fundamental changes in Africa. Meanwhile, big drug companies and their anti-retro viral cocktails changed the course of the AIDS epidemic there almost overnight.
    - fjejfjrjdjc 10y ago
      And yet I continue to go untreated thanks to the profit motive...
      - witty_username 10y ago
        So? Money is a representation of human effort. Nobody wants to work for free or invest for 0% gain. Is there a reason you think the price should be lower? (remember people working need money too)

davidf18 10y ago

The solution to the cost problem is for competition to enter the market. It is my understanding FDA has in some way restricted market entry as competing firms (eg, generic giant Teva) come up with a device acceptable to the FDA.

throw2016 10y ago

Lobbying, crooked NGOs, corruption, price gouging. There is something completely rotten in the US healthcare system. If this were free markets and capitalism, wouldn't the response be a flood of alternatives at 1/100 or even 1/10 the price since the base ingredient costs pennies, and not this self serving and crafty effort to leech tax payer subsidies? This is organized corruption. When you let people feed on others desperation you create demons. This is the biggest argument for socialized healthcare.

ericfrederich 10y ago

Love or hate the guy, but Martin Shkreli has a good point here on the EpiPen: https://www.youtube.com/watch?v=RoMlxVimwiU https://www.youtube.com/watch?v=RoMlxVimwiU Basically: That $600 is a value to save your life - much cheaper than an ambulance / hospital stay That insurance companies should cover 100% of it

mikeyouse 10y ago
That's a terrible point and could be used to justify $10,000/dose EpiPens.

bcheung 10y ago

The government created this problem in the first place by granting monopolies on drugs. If it allowed others to manufacture it, the price would drop.

sleight42 10y ago

As a pharmacy company, wanting to charge a higher price for my products, doesn't it sound like an excellent strategy to outrage my customers, get them actively protesting, only to present a solution that many of those outraged customers will support while continuing to allow me to charge my higher price? This feels like a House of Cards-like strategy: take up an unpopular selfish position only to later use its most vociferous opponents as leverage in maintaining that strategy.