7 ms·

"The simple answer is because they can. European governments control prices in various ways—Britain has the strictest system, refusing to pay for medicines that

"The simple answer is because they can. European governments control prices in various ways—Britain has the strictest system, refusing to pay for medicines that fail to meet a threshold of cost-effectiveness. But in America companies set whatever official price they like."

Apfel 10y ago
If anyone's interested, England's system of health technology assessment (HTA) for the NHS is extremely transparent and world-leading. It's one of the things that we Brits should be extremely proud of (although pharma-sponsored sob story campaigns in tabloid newspapers may suggest otherwise). All new technologies are investigated in terms of incremental quality of life gain (vs current treatment norms) and changes in costs. Furthermore, they consider everything in a wider context of opportunity cost of adopting a new treatment and budget constraints. For a lot more detail, have a look at the NICE reference case here: https://www.nice.org.uk/process/pmg9/chapter/the-reference-case https://www.nice.org.uk/process/pmg9/chapter/the-reference-c...
- grabcocque 10y ago
  The interesting thing about NIHCE and its short existence is that it's a startling reminder that the idea that health policy should be evidence-based is still a new one. NIHCE's greatest contribution has been that, in insisting on being evidence-based as de-politicised any and all questions about what treatments should be available. I think this week's US shenanigans have showed that de-politicising healthcare is a very laudable goal.
  - Apfel 10y ago
    Just for the record, although the acronym does technically spell out NIHCE since they changed the name, they've stuck with the "NICE" branding. It allows for all sorts of pun titles for academic papers like the following: [i] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1734179/pdf/v031p00373.pdf https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1734179/pdf/v03... [ii] http://www.nature.com/bdj/journal/v215/n5/full/sj.bdj.2013.832.html http://www.nature.com/bdj/journal/v215/n5/full/sj.bdj.2013.8...
- chimeracoder 10y ago
  > It's one of the things that we Brits should be extremely proud of (although pharma-sponsored sob story campaigns in tabloid newspapers may suggest otherwise). They consider everything in a wider context of opportunity cost of adopting a new treatment and budget constraints. For context, this is literally what risk-bearing entities in the US already do (both insurers and at-risk providers). I could get behind the statement that risk-bearing entities should be performing methodical cost-benefit analysis of care coverage, but the fact remains that, at the end of the day, that means that someone is making the decision to deny certain people coverage because it's not cost-effective. Whether you have clinicians and analysts at an insurance insurance company performing that role or the government clinical panel of clinicians and analysts performing that role, it still results in some people having their care approved and some having their treatments denied[0]. It's weird to then dismiss the negative side of the tradeoffs as "pharma-sponsored sob story campaigns" in the UK, when those same stories are accepted as evidence of the systemic problems within the US. [0] And to pre-empt the common misguided criticism that "it's better because it's not a for-profit company making the decision", that assumes that government agencies don't have a profit motive just because they that's not recorded on their balance sheet (they do), and it also forgets the counterintuitive fact that the explicit profit incentive in the US actually incentivizes the company to permit claims on more expensive treatments if the patient requests them.
  - sharemywin 10y ago
    -> that assumes that government agencies don't have a profit motive just because they that's not recorded on their balance sheet (they do) As long as you say so. Every must agree.
  - sharemywin 10y ago
    At the end of the day if you don't have the money to pay for a treatment yourself then someone else is making a cost to benefit analysis.
    - chimeracoder 10y ago
      > At the end of the day if you don't have the money to pay for a treatment yourself then someone else is making a cost to benefit analysis. Exactly, that's the point. You can label it however you want, and set up whatever system you want to allocate the resources, but that doesn't change the fact that this decision has to be made.
- refurb 10y ago
  I would argue HTA is not without it's problems. That's why the UK has a cancer drug fund. NICE has said "no" to those drugs, yet the public still clammers for them. So a separate funding mechanism was created to pay for them.[1] [1]https://www.england.nhs.uk/cancer/cdf/ https://www.england.nhs.uk/cancer/cdf/
  - chimeracoder 10y ago
    > I would argue HTA is not without it's problems. That's why the UK has a cancer drug fund. NICE has said "no" to those drugs, yet the public still clammers for them. So a separate funding mechanism was created to pay for them. See also: PrEP. PrEP is available in the US (and covered by almost every private insurer[0] with drug co-pays covered by the manufacturer[1]). And while it's less convenient, there are public clinics where you can get prescriptions to avoid paying the co-pay to a GP. In other words, absent the cost of your time, you can get it in the US for free. In the UK, PrEP is not covered by the NHS. The National AIDS Trust had to sue the NHS just to get them to announce their decision not to cover it - before that, they refused to make a statement one way or the other, and kept kicking the can down the road. Now, you can only get it by paying a private doctor (out-of-pocket) for a prescription, and then fill that prescription privately, which can cost up to $13/pill. (This is technically not HTA, but for the purposes of this discussion that distinction isn't relevant.) [0] And, as an aside, on the rare case that your insurer does not cover it, Gilead (the manufacuter) offers assistance programs that provide it essentially for free. [1] This is a separate program to enroll in; Gilead basically reimburses the co-pays that the insurers charge
    - DanBC 10y ago
      Sexual health is part of public health, and thus we'd expect PrEP to be funded by Public Health England, not the NHS. The target of your anger here should be local authorities (who hold responsibility for Public Health), not the NHS. https://www.england.nhs.uk/2016/11/update-on-prep/ https://www.england.nhs.uk/2016/11/update-on-prep/
      - chimeracoder 10y ago
chimeracoder 10y ago
> "The simple answer is because they can. The easiest way to fix the fact that 'they can' would be to permit re-importating drugs that were manufactured within the US. Shortly before Obama left office, there was a bill that would have fixed that, but nine Democrats joined the Republicans in voting it down: https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=115&session=1&vote=00020 https://www.senate.gov/legislative/LIS/roll_call_lists/roll_...
- refurb 10y ago
  Please explain how that would work. If I'm Pfizer, why on earth would I dramatically increase my sales of drugs to Canada knowing they're just going to be reimported into the US? The answer is, I wouldn't. I would put a quota on Canadian sales. Sell them enough drugs for Canadians. This was actually done about a decade ago when reimportation was more popular.
  - toomuchtodo 10y ago
    That's how you get your patent broken.
    - harryh 10y ago
      Has the US ever disallowed a patent because the company holding it refused to sell a product to the government at the price the government wanted? It's hard to imagine SCOTUS allowing that sort of thing. The US gov't is subject to its own laws.
      - toomuchtodo 10y ago
        Has the US ever fought hard to institute a travel ban in order to prevent people of a certain religion from entering the country, despite judicial intervention. That's the thing about governments: they can do whatever they want. And your recourse is to deal with it or spend years fighting against it (or die in the streets fighting it, lest we forget that option). Disclaimer: I'm for breaking patents when necessary, although 3D printing drugs is around the corner making it a moot point. EDIT: @refurb: I love coming to HN and having people say "its too hard, it'll never be done". ;) I can run the laser sintering machine in my garage and build metal parts from a fine powder, parts that are aircraft grade, but I won't be able to 3D print drugs at home? No imagination.
dustingetz 10y ago
That quote seems to me to be missing a really important bit, which is that there doesn't seem to be a functioning free market which is a necessary condition to determine the price. (This comment is not aimed at you, it is aimed at the article for supplying such a broken explanation)
- sharemywin 10y ago
  if a company has a monopoly there isn't by definition a functioning free market.
  - ancap 10y ago
    The question therefore is, why does the monopoly exist? You will find that, as _jal has commented, it is not because of some natural phenomenon springing out of a free market.
    - sharemywin 10y ago
      sure it's natural. why would anyone compete if they could carve up a market and make monopoly profits.
      - clarkmoody 10y ago
        Because in a free market, companies cannot keep out competitors. Only through regulatory capture / cooperating with government are monopolies sustained. Even the greatest monopoly of all time -- Standard Oil -- which at its peak had 96% market share was whittled down to 64% by competition by the time the "white knight" regulators had it broken up. And who knows the long-term consequences of empowering the government to determine what is and isn't a monopoly? Well in the case of friendly relationships with well-lobbied corporate interests, there will probably not be any anti-monopoly action forthcoming.
- _jal 10y ago
  This is very, very important. The drug market is one of the farthest things we have from a free market in the US outside of military weapons. It is just massively dysfunctional due to a combination of special interest lobbying combined with stepwise path-dependency. A huge part of the health care discussion in the US starts from assuming our current system is somehow natural. It isn't. It is an engineered thing, with the engineering performed by in a non-coordinated fashion with incompatible goals by non-experts, piecewise, over a long period of time. Even though I doubt it (healthcare truly is different than most services/goods), a truly free market might even be superior to what we have, in terms of outcomes by patient count. Of course, that would lead to unsightly public corpses, a much different drug industry and a lot of unemployed clerical workers, among other things. And the big, unanswered question remains: why the US is such a special snowflake that what works in various ways in every other first-world country cannot work here. (Aside from the obvious answer.)
ancap 10y ago
For a publication named "The Economist" that's quite the intellectually lazy answer. They say nothing of the existing conditions which make it possible for a company to arbitrarily set drug prices (after all, few other businesses in the economy enjoy such a privilege). Furthermore, the answer is not even satisfying to those who may have a rudimentary grasp on economics. After all, if the reason is "because they can" why not raise the price of their drugs to $1 million per dose? This argumentum ad absurdum demonstrates that even with the lack of medicinal alternatives, there are certain economic factors which prevent astronomically high prices.

Apfel 10y ago

If anyone's interested, England's system of health technology assessment (HTA) for the NHS is extremely transparent and world-leading. It's one of the things that we Brits should be extremely proud of (although pharma-sponsored sob story campaigns in tabloid newspapers may suggest otherwise). All new technologies are investigated in terms of incremental quality of life gain (vs current treatment norms) and changes in costs. Furthermore, they consider everything in a wider context of opportunity cost of adopting a new treatment and budget constraints. For a lot more detail, have a look at the NICE reference case here: https://www.nice.org.uk/process/pmg9/chapter/the-reference-case https://www.nice.org.uk/process/pmg9/chapter/the-reference-c...

grabcocque 10y ago
The interesting thing about NIHCE and its short existence is that it's a startling reminder that the idea that health policy should be evidence-based is still a new one. NIHCE's greatest contribution has been that, in insisting on being evidence-based as de-politicised any and all questions about what treatments should be available. I think this week's US shenanigans have showed that de-politicising healthcare is a very laudable goal.
- Apfel 10y ago
  Just for the record, although the acronym does technically spell out NIHCE since they changed the name, they've stuck with the "NICE" branding. It allows for all sorts of pun titles for academic papers like the following: [i] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1734179/pdf/v031p00373.pdf https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1734179/pdf/v03... [ii] http://www.nature.com/bdj/journal/v215/n5/full/sj.bdj.2013.832.html http://www.nature.com/bdj/journal/v215/n5/full/sj.bdj.2013.8...
chimeracoder 10y ago
> It's one of the things that we Brits should be extremely proud of (although pharma-sponsored sob story campaigns in tabloid newspapers may suggest otherwise). They consider everything in a wider context of opportunity cost of adopting a new treatment and budget constraints. For context, this is literally what risk-bearing entities in the US already do (both insurers and at-risk providers). I could get behind the statement that risk-bearing entities should be performing methodical cost-benefit analysis of care coverage, but the fact remains that, at the end of the day, that means that someone is making the decision to deny certain people coverage because it's not cost-effective. Whether you have clinicians and analysts at an insurance insurance company performing that role or the government clinical panel of clinicians and analysts performing that role, it still results in some people having their care approved and some having their treatments denied[0]. It's weird to then dismiss the negative side of the tradeoffs as "pharma-sponsored sob story campaigns" in the UK, when those same stories are accepted as evidence of the systemic problems within the US. [0] And to pre-empt the common misguided criticism that "it's better because it's not a for-profit company making the decision", that assumes that government agencies don't have a profit motive just because they that's not recorded on their balance sheet (they do), and it also forgets the counterintuitive fact that the explicit profit incentive in the US actually incentivizes the company to permit claims on more expensive treatments if the patient requests them.
- sharemywin 10y ago
  -> that assumes that government agencies don't have a profit motive just because they that's not recorded on their balance sheet (they do) As long as you say so. Every must agree.
- sharemywin 10y ago
  At the end of the day if you don't have the money to pay for a treatment yourself then someone else is making a cost to benefit analysis.
  - chimeracoder 10y ago
    > At the end of the day if you don't have the money to pay for a treatment yourself then someone else is making a cost to benefit analysis. Exactly, that's the point. You can label it however you want, and set up whatever system you want to allocate the resources, but that doesn't change the fact that this decision has to be made.
refurb 10y ago
I would argue HTA is not without it's problems. That's why the UK has a cancer drug fund. NICE has said "no" to those drugs, yet the public still clammers for them. So a separate funding mechanism was created to pay for them.[1] [1]https://www.england.nhs.uk/cancer/cdf/ https://www.england.nhs.uk/cancer/cdf/
- chimeracoder 10y ago
  > I would argue HTA is not without it's problems. That's why the UK has a cancer drug fund. NICE has said "no" to those drugs, yet the public still clammers for them. So a separate funding mechanism was created to pay for them. See also: PrEP. PrEP is available in the US (and covered by almost every private insurer[0] with drug co-pays covered by the manufacturer[1]). And while it's less convenient, there are public clinics where you can get prescriptions to avoid paying the co-pay to a GP. In other words, absent the cost of your time, you can get it in the US for free. In the UK, PrEP is not covered by the NHS. The National AIDS Trust had to sue the NHS just to get them to announce their decision not to cover it - before that, they refused to make a statement one way or the other, and kept kicking the can down the road. Now, you can only get it by paying a private doctor (out-of-pocket) for a prescription, and then fill that prescription privately, which can cost up to $13/pill. (This is technically not HTA, but for the purposes of this discussion that distinction isn't relevant.) [0] And, as an aside, on the rare case that your insurer does not cover it, Gilead (the manufacuter) offers assistance programs that provide it essentially for free. [1] This is a separate program to enroll in; Gilead basically reimburses the co-pays that the insurers charge
  - DanBC 10y ago
    Sexual health is part of public health, and thus we'd expect PrEP to be funded by Public Health England, not the NHS. The target of your anger here should be local authorities (who hold responsibility for Public Health), not the NHS. https://www.england.nhs.uk/2016/11/update-on-prep/ https://www.england.nhs.uk/2016/11/update-on-prep/
    - chimeracoder 10y ago

chimeracoder 10y ago

> "The simple answer is because they can. The easiest way to fix the fact that 'they can' would be to permit re-importating drugs that were manufactured within the US. Shortly before Obama left office, there was a bill that would have fixed that, but nine Democrats joined the Republicans in voting it down: https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=115&session=1&vote=00020 https://www.senate.gov/legislative/LIS/roll_call_lists/roll_...

refurb 10y ago
Please explain how that would work. If I'm Pfizer, why on earth would I dramatically increase my sales of drugs to Canada knowing they're just going to be reimported into the US? The answer is, I wouldn't. I would put a quota on Canadian sales. Sell them enough drugs for Canadians. This was actually done about a decade ago when reimportation was more popular.
- toomuchtodo 10y ago
  That's how you get your patent broken.
  - harryh 10y ago
    Has the US ever disallowed a patent because the company holding it refused to sell a product to the government at the price the government wanted? It's hard to imagine SCOTUS allowing that sort of thing. The US gov't is subject to its own laws.
    - toomuchtodo 10y ago
      Has the US ever fought hard to institute a travel ban in order to prevent people of a certain religion from entering the country, despite judicial intervention. That's the thing about governments: they can do whatever they want. And your recourse is to deal with it or spend years fighting against it (or die in the streets fighting it, lest we forget that option). Disclaimer: I'm for breaking patents when necessary, although 3D printing drugs is around the corner making it a moot point. EDIT: @refurb: I love coming to HN and having people say "its too hard, it'll never be done". ;) I can run the laser sintering machine in my garage and build metal parts from a fine powder, parts that are aircraft grade, but I won't be able to 3D print drugs at home? No imagination.

dustingetz 10y ago

That quote seems to me to be missing a really important bit, which is that there doesn't seem to be a functioning free market which is a necessary condition to determine the price. (This comment is not aimed at you, it is aimed at the article for supplying such a broken explanation)

sharemywin 10y ago
if a company has a monopoly there isn't by definition a functioning free market.
- ancap 10y ago
  The question therefore is, why does the monopoly exist? You will find that, as _jal has commented, it is not because of some natural phenomenon springing out of a free market.
  - sharemywin 10y ago
    sure it's natural. why would anyone compete if they could carve up a market and make monopoly profits.
    - clarkmoody 10y ago
      Because in a free market, companies cannot keep out competitors. Only through regulatory capture / cooperating with government are monopolies sustained. Even the greatest monopoly of all time -- Standard Oil -- which at its peak had 96% market share was whittled down to 64% by competition by the time the "white knight" regulators had it broken up. And who knows the long-term consequences of empowering the government to determine what is and isn't a monopoly? Well in the case of friendly relationships with well-lobbied corporate interests, there will probably not be any anti-monopoly action forthcoming.
_jal 10y ago
This is very, very important. The drug market is one of the farthest things we have from a free market in the US outside of military weapons. It is just massively dysfunctional due to a combination of special interest lobbying combined with stepwise path-dependency. A huge part of the health care discussion in the US starts from assuming our current system is somehow natural. It isn't. It is an engineered thing, with the engineering performed by in a non-coordinated fashion with incompatible goals by non-experts, piecewise, over a long period of time. Even though I doubt it (healthcare truly is different than most services/goods), a truly free market might even be superior to what we have, in terms of outcomes by patient count. Of course, that would lead to unsightly public corpses, a much different drug industry and a lot of unemployed clerical workers, among other things. And the big, unanswered question remains: why the US is such a special snowflake that what works in various ways in every other first-world country cannot work here. (Aside from the obvious answer.)

ancap 10y ago

For a publication named "The Economist" that's quite the intellectually lazy answer. They say nothing of the existing conditions which make it possible for a company to arbitrarily set drug prices (after all, few other businesses in the economy enjoy such a privilege). Furthermore, the answer is not even satisfying to those who may have a rudimentary grasp on economics. After all, if the reason is "because they can" why not raise the price of their drugs to $1 million per dose? This argumentum ad absurdum demonstrates that even with the lack of medicinal alternatives, there are certain economic factors which prevent astronomically high prices.