6 ms·

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/r

by 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.

by mtgx 10y ago

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.