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Mylan overcharged Medicaid for EpiPen for years, despite warnings
- M_Grey 10y agoI imagine that it's too much to hope that this could ever lead to criminal charges?
- iopq 10y agoWhy would increasing the price of a good lead to criminal charges?
- newjersey 10y agoMy economics professor had an ax to grind but he's right in that we don't live in a free market. He gave the example of how the sheriff paid a gas station a visit when gas first reached a dollar. He said the gas station had two choices: sell at 99.9¢ or lower or shut down the gas station.
- iopq 10y agoActually the gas station was already selling at 99.9¢ because that pricing was already in effect from when one gas station owner sold it at 12.9¢ per gallon and everyone copied him since they were losing business.
- realusername 10y agoBecause it's not any good, it's a medical device
- iopq 10y agoAh, so necessities can't be too expensive? I guess we need to arrest the owners of restaurants that sell food for too much now.
- M_Grey 10y agoFood is a necessity. Eating at a restaurant is a luxury, hence the tax.
- iopq 10y agoOh, so we should put the grocery store owners in prison if they overcharge, then?
- M_Grey 10y agoYou've either gotten lost in your own useless metaphors, or you're trying to be clever and failing. Either way, this is no longer really a discussion.
- iopq 10y agoYou've given up because you can't justify putting people in prison only for raising their prices? Now you've excused yourself from the discussion because you have no arguments left. I'm fine with this.
- crazypyro 10y agoBecause the lied to the government and misclassified the drug as a generic. By doing this, they can give out half the discount as with brand name drugs. Generics are discounted ~11% when sold to Medicaid, but brand name drugs are often discounted 20-30%.
- iopq 10y agoThen just fine them, why does this have to be a criminal issue? It should only be a criminal issue when they did this knowingly and maliciously instead of checking the wrong box somewhere.
- hga 10y agoNote who the CEO's father is.... That was even high in the list of Google suggestions when I typed in mylan ceo....
- parennoob 10y agoI am sorry, but as someone who isn't from the US (but does live and work in the US) ... phrases like this make zero sense: > Mylan should have been paying a higher rebate of 23 percent, but did not do so because the company improperly classified EpiPen, despite being told its classification was incorrect. If a regular person defaults on paying their taxes, the IRS can seize their property and stuff. Why are Mylan's EpiPen warehouses not being seized to pay for these rebates? Instead, they are being gently chided saying "you really should have paid more, because um, the law requires it?" In my opinion, due to massive lobbying, there are really one set of rules in the US for regular people, and a different set for the ultra rich and large corporations. I would be delighted to be offered a working alternative explanation, or seeing massive financial and possibly criminal penalties for Mylan executives (if willful misclassification is proven).
- oldmanjay 10y agoIt's not like the laws you've cited were written by the same people for the same purposes, so there's no reason to be shocked that they are different in content and application. You'll have to find better examples if you want to stoke outrage.
- parennoob 10y agoHow are they different in fundamental principle? Money is being collected from people (taxes) or corporations (Medicaid rebates) for a collective good. > were [not] written by the same people for the same purposes...there's no reason to be shocked that they are different in content and application This argument is circular in nature. "Different laws are different, because they are different". Why are they different? Could it have anything to do with the fact that Mylan spent several million dollars lobbying various lawmakers? (https://www.opensecrets.org/lobby/clientsum.php?id=D000027765 https://www.opensecrets.org/lobby/clientsum.php?id=D00002776...)
- rayiner 10y agoThat's not how it really works for regular people either. Virginia sent me a letter last year stating "we think you were required to file a 2012 Virginia return." Several months later they decide "we think you owe us X." No Department of Revenue agents seizing my assets. A few months later I had my CPA call, gave them my W2s showing I lived in New York at the time, and the revenue agent was like "our bad, you didn't owe us anything after all." The government really doesn't go full bore after "you should have checked Box A instead of Box B" situations unless something really egregious happens, and that's true for little people too. When there is a big corp, involved in something like this, it's almost always true that there is ambiguity about which Box should've been checked. All these things get the blessing of some tax lawyer who doesn't want to go to jail. Here there doesn't look like there has been an adjudication (a decision in a lawsuit proving Mylan owes something). Until then, it's just some official's statement.
- ams6110 10y agoDoesn't say much for the ability of government run health care to control costs.
- striking 10y agoYeah, they really warned the pants off those folks. Y'know, if they hadn't pulled a Shkreli and flown too close to the sun, this would have never come out. What has to happen before regulation is more consistently applied here in the US?
- nickff 10y agoNobody in government wants to apply rules uniformly; they create broad, ambiguous rules, then apply them selectively to achieve their preferred outcomes. The people who have regulatory or legislative power want and/or need this arbitrariness to gain, maintain, and sustain themselves, their organizations, and their power.
- GavinMcG 10y agoGiven how hamstrung regulators are these days thanks to a pro-corporate Congress, it doesn't say much other than that the government we've elected has chosen not to control costs.
- nickff 10y agoWhen was the last time a regulator (or government agency) admitted to failing because of incompetence, stupidity, or bad luck? It seems they are eternally underfunded and understaffed, and never make mistakes. I consider myself and my associates to be quite diligent and intelligent, yet every one of us is sometimes at fault when we fail.
- colechristensen 10y agoThe NTSB/FAA does a _great_ job of regulating. Aircraft have the beneficial property of being immune to bullshit. Mistakes, incompetence, and corruption lead very directly to planes falling out of the sky which is a very public and costly failure. They're great because they have to be _and_ being great leads to success. You can, with solid engineering, completely understand and prevent failing. There aren't any act-of-God accidents. How and when aircraft fail is designed from the start; when they do fail there is always a cause and it's always fixable. You can read plenty of NTSB reports about accidents (and they take mistakes which don't actually result in harm very seriously too) and they really do point out incompetence and stupidity. The most important part is that it isn't about blame or prosecution, it's about finding, fixing, and preventing problems. Revenge against people who screw up intentionally or not isn't helpful, making it impossible to screw up is.
- gefh 10y agoThe graph of epipen pricing over time at the bottom of the article is jaw dropping. "Did we get in trouble yet? No? Add another 10% then". Only imaginary books on Amazon have price curves like that.
- refurb 10y agoIt's all how the system works. Take a look at this graph... https://2.bp.blogspot.com/-cs_lbJiHVkQ/VxV92flRB1I/AAAAAAAAKMM/cuaD4NQx2FI9CUIMR2KUReOsQLlVI8DBACLcB/s1600/IMS-Price_Growth-2011-2015.png https://2.bp.blogspot.com/-cs_lbJiHVkQ/VxV92flRB1I/AAAAAAAAK... This past year list prices have gone up 12.4%, but companies only capture 2.8% of that. Which is about inflation. Where is that other money going? You may want to ask your insurance company.
- deleted 10y ago[deleted]
- nitrogen 10y agoSomething is suspicious about a "net growth" chart that doesn't go below 0% ever.
- refurb 10y agoWhy? I'm assuming if you looked at say the auto industry you'd see the same trend as net prices rise to account for inflation.
- cmdrfred 10y agoI think he means inflation adjusted. I feel the same way about any large public firm that beats Standard and Poors for decades. It seems suspicious.
- fastball 10y agoSupply and demand?
- refurb 10y agoThis part is golden... "The company is in the hot seat and it is a bit convenient that CMS decides after 19 years that Mylan has been wrong all along while it did nothing about it, just in time to suit Congress’ needs." This product has been classified as a non-innovator product for the last 19 years and CMS is just getting around to it? Sure. And whenever someone says the US gov't doesn't negotiate down drug prices, take a 2nd look at the Medicaid rebate. This is how those negotiations went.... CMS: Oh that's your price? We're going to go ahead and give ourselves a 13% discount (it's 23% for most drugs). Drug company:....
- newjersey 10y agoIs anyone required to sell to CMS? Why can't they just say we won't sell it to you. Please go through our distributors.
- koolba 10y ago> Is anyone required to sell to CMS? Why can't they just say we won't sell it to you. Please go through our distributors. No but the Medicare/Medicaid market is huge and they tend to pay their share on time and without hassle. Companies put up with the pricing nonsense because they net out on top.
- chimeracoder 10y ago>the Medicare/Medicaid market is huge and they tend to pay their share on time and without hassle. Companies put up with the pricing nonsense because they net out on top This is certainly not true for providers (ie, hospitals and doctors). Medicare is notoriously painful with billing and reimbursements. In addition, they don't come out ahead. In fact, Medicare reimburses about 7% less than COGS, which means providers are already losing money per patient before they have to think about covering their overhead. The reason they accept Medicare is because it's very difficult, legally, not to. Despite this, Medicare has gotten so costly for them that many hospitals have recently started talking about finding a proper legal path to dropping Medicare altogether.
- EGreg 10y agoIf you think that's nuts, you should look at Medicare Part D: By the design of the program, the federal government is not permitted to negotiate prices of drugs with the drug companies, as federal agencies do in other programs. The Department of Veterans Affairs, which is allowed to negotiate drug prices and establish a formulary, has been estimated to pay between 40%[27] and 58%[28] less for drugs, on average, than Medicare Part D. Although generic versions of [frequently prescribed to the elderly] drugs are now available, plans offered by three of the five [exemplar Medicare Part D] insurers currently exclude some or all of these drugs from their formularies.…Further, prices for the generic versions are not substantially lower than their brand-name equivalents. The lowest price for simvastatin (generic Zocor) 20 mg is 706 percent more expensive than the VA price for brand-name Zocor. The lowest price for sertraline HCl (generic Zoloft) is 47 percent more expensive than the VA price for brand-name Zoloft." — Families USA 2007 "No Bargain: Medicare Drug Plans Deliver High Prices" Estimating how much money could be saved if Medicare had been allowed to negotiate drug prices, economist Dean Baker gives a "most conservative high-cost scenario" of $332 billion between 2006 and 2013 (approximately $50 billion a year). Economist Joseph Stiglitz in his book entitled The Price of Inequality estimated a "middle-cost scenario" of $563 billion in savings "for the same budget window".[29]:48 Former Congressman Billy Tauzin, R–La., who steered the bill through the House, retired soon after and took a $2 million a year job as president of Pharmaceutical Research and Manufacturers of America (PhRMA), the main industry lobbying group. Medicare boss Thomas Scully, who threatened to fire Medicare Chief Actuary Richard Foster if he reported how much the bill would actually cost, was negotiating for a new job as a pharmaceutical lobbyist as the bill was working through Congress.[30][31] A total of 14 congressional aides quit their jobs to work for the drug and medical lobbies immediately after the bill's passage.[32] (Wikipedia)
- drewm1980 10y agoRevoke the Epipen trademark immediately! They declared their own product to be generic after all.
- charlesdm 10y agoI believe they said the epinephrine in the pen is generic (i.e. non trademarked), but the actual device (the pen) is.
- AstralStorm 10y agoWhich means it was misclassified, as Medicare patients are not paying for Epinephrine, but for the pen.
- benmmurphy 10y agoit will be interesting to see how this is decided because apparently there is a generic epipen: 'adrenaclick' but pharmacists are not allowed to substitute the generic for epipen on a prescription. more details here: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-drugs-vs-chairs/ http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
- maxerickson 10y agoAdrenaclick is an alternative branded epinephrine auto-injector. There's a couple of companies that make generic versions of it, so you can get a pair for $150, but the branded version costs ~$400.
- martijn_himself 10y agoI'm torn on this subject, could someone explain to my why this is morally wrong? (honest question, equally torn on the Shkreli case). I don't have any knowledge of US medical policy, law and regulations but does the fault not lie squarely with government here? Surely one can not expect a commercial enterprise to price a product as 'fair' (whatever that means) when it is operating in a competitive environment? (I wouldn't have the heart to run such a company but isn't this to be expected?). There are soccer players here in the UK that get paid £100k per week to do nothing- noone is up in arms to regulate that market?
- subway 10y agoFootball fans don't tend to die when they can't afford to watch their favorite players.
- martijn_himself 10y agoThis would be my gut reaction too, reading about this in more detail has made me think the issue is more subtle than that. My point is, if you don't regulate a market, can you expect a market to regulate itself?
- pikzen 10y agoThat is the ideal world of some people, the invisible hand of the market regulating it blah blah. However there's never been a single instance where this has actually happened, markets have to be regulated by an outside power (namely, governments).
- martijn_himself 10y agoEDIT 1: Apologies @pikzen. Edited to agree with you :). I should read more carefully on a Friday morning. EDIT 2: And you :). I agree, there are plenty of examples where regulation works. The National Health Service in the UK is a shining example of this (it has its own issues but what can you expect when you are running one of the largest organisations in the world?). There are succesful regulations that reward companies (such as with subsidies and other indirect incentives) to choose the 'morally correct' option (this is done for example in the EU to limit environmental impact of industry).
- mtgx 10y agoReminder for this recent Harvard study: http://jamanetwork.com/journals/jama/article-abstract/2545691 http://jamanetwork.com/journals/jama/article-abstract/254569... Drug prices are high because of all the government-granted monopolies.
- Angostura 10y agoIt's really odd. The NHS in the UK does a reasonable job negotiating prices down and recommending generics. It's been recommending an alternative to the Epipen for a while now, I believe. So it shouldn't be intrinsic to state-run medical systems.
- ceejayoz 10y agoIt's definitely not intrinsic. "[The] federal government is prohibited from negotiating drug prices on behalf of Medicare Part D plans." http://www.politifact.com/wisconsin/statements/2012/sep/04/tammy-baldwin/uncle-sam-barred-bargaining-medicare-drug-prices-s/ http://www.politifact.com/wisconsin/statements/2012/sep/04/t... It probably doesn't take much guessing to figure out which industry's lobbyists helped that one along.
- ljf 10y agoYep - we've just been moved off EpiPen to one of the others (I forget which). Interesting is the network effect of EpiPen - many people have been trained to use them and are aware of there exact look and feel. For the new pens they are used in a similar but different way (I think the new ones are actually better/easier) but that might put some people off moving, where they do have a choice (not all doctors are being as strict with moving to the new version).
- mhb 10y agoThe World's Most Expensive Drugs: https://news.ycombinator.com/item?id=12654450 https://news.ycombinator.com/item?id=12654450
- ianai 10y agoThis means there are people who died who otherwise would not have. So weigh the loss of everything those people would have contributed to society and the economy over the increase in stock value.