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Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S
- remy_luisant 9y agoStupid question from an idiot from communist Canada: Can't you just import the bloody pills from somewhere that isn't the USA?
- nasmorn 9y agoI think the FDA will fight to your death for your right to safe medicine.
- notyourday 9y agoI'm baffled by the snark. Could someone please attempt to reconcile the following positions for me: 1. We need regulation of drugs/medicine/etc because we do not want some snake oil peddlers peddling arsenic as medicine? 2. Regulations prevent us from getting shit cheap! Baaaaa!
- ztjio 9y agoFDA is given power to do a necessary job: keep us from eating poison instead of medicine, or whatever. But the same power is abused to prevent competition by "suggestion" of the industry that provides these medicines. It's hardly a complicated situation.
- notyourday 9y agoExactly: it is a very simple situation - we collectively as the society decided that we do not want garbage peddled as medicine. FDA established how we determine "not garbage". Full stop.
- notyourday 9y agoEdit: yes, based on our current position Export from US->Other Country->Import to US for medicine violates "Not Garbage" state. It is no different than importing USB chargers that sell in China for $1.02. We do not want the vast majority of the population engaging in this though those who know how to are allowed to do it themselves.
- jsjohnst 9y agoI think you are jumping to a conclusion without having enough supporting evidence. Regulation on drugs didn’t suddenly get 8,000x more expensive for drug companies in the last few years. An alternative theory, which I can’t prove any more than you can prove yours, is that due to some pharmaceutical companies realizing they were leaving serious money on the table, they tried hiking prices. Once they realized there would be little repercussions, all jumped in and we have a new industry norm.
- notyourday 9y agoIt contradicts basic economics. If you raise prices 8000x and I will go into competition with you and raise prices 7999x i.e. do what MCI did to ATT and Vizio did to Samsung.
- jsjohnst 9y agoIn the examples you gave, they were huge markets and they were ripe for disruption. As the article laid out, most of the drugs which have experienced this huge hike are ones with very limited markets. It’s not worth it for a pharmaceutical company to jump into a new drug with almost no market for it.
- notyourday 9y agoMedications blow electronics market out the water.
- jsjohnst 9y agoThat’s such a vague statement you could either be wildly wrong or mostly right. If you’re talking average profit margin, yes medications generally have higher, but electronics are fairly good margins generally too. If you’re talking market cap / overall market size, you definitely aren’t correct. Even the biggest pharmaceutical company pales in comparison to the electronics top three.
- yequalsx 9y ago
- ashelmire 9y agoPresumably, other first world nations also regulate drugs. Are the drugs as expensive in those nations? If not, why not?
- notyourday 9y agoThey have different rules than we do. Adjusting rules is fairly easy: change the bloody FDA. Agency lives at the pleasure of administration. We had (D)s in control of all three branches of government. Now we have (R)s in control of all three branches of government. The reason why this is not changing is because a compelling case is made that the current rules for !Garbage are better than the proposed alternatives.
- dragonwriter 9y agoThe reconciliation is that some countries have what appears to be perfectly adequate regulations to address #1, but much smaller effect of #2, suggesting that some aspect of the US regulatory environment is suboptimal.
- jklein11 9y agoI enjoy having the option of buying drugs that are covered by strict regulatory controls. I understand that there is a cost associated with this. If I choose to forgo that cost and roll the dice that I am getting arsenic as medicine that should be my prerogative.
- notyourday 9y agoAnd it is - you can import those drugs just fine. It simply means you have to jump through some hoops. What we do not want as a society is that the guy on a corner stall that sells $4.00 USB chargers that may or may not explode sell a million pills to little old ladies which may or may not do what they are supposed to. This is the current societal contract. [Edit:] Now I personally think we should live in the more Darwinian society and in my view we should allow dude on a corner sell pills just like he can sell chargers and should some benefit manager buy the pills from the corner dude from Nigeria without vetting the corner dude from Nigeria and his suppliers and therefore killing and maiming a few thousand old ladies, we should throw the book at the benefits manager and not the corner dude from Nigeria (who should be thrown a book based on fraud and not manslaughter) but that's just me.
- dmm 9y ago1. The vast majority of the cost of FDA regulation is in ensuring the effectiveness of medicines, yet whenever someone defends the purpose of the FDA they cite examples of medicine safety. 2. The FDA keeps arsenic out of our medicines and that's totally related to fulfilling arbitrary and expensive effectiveness regulations! Ineffective and dangerous medicines like fen-phen getting through just proves we need more regulations! Baaa!
- notyourday 9y agoWe have one very interesting and totally unregulated market that is quite similar. The market is cosmetics and beauty products. As long as products make no medical claims it is total buyer beware. I seriously doubt anyone in the United States wants that to be applied to medicine and medical instruments.
- matthewmacleod 9y agoIn line with the enduring trend of public discourse, all nuance is cast aside. We self-evidently need regulation of medicines and medical devices, at least until we hit some glorious future utopia of flawless consumer knowledge. Otherwise, people will come along, and they will sell products and devices that will harm people, and they will do it by lying about them and covering up their problems. On the other hand, it's possible that the relatively slow pace of regulation and medical testing could cause problems bringing potentially beneficial treatments to market. This might represent an excess focus on safety at the expense of the benefits in access to new and innovative treatments. Naturally the argument should be something along the lines of "I think we should reform medical testing to enhance the availability of innovative treatments" versus "I think that the loosening of medical regulation will result in an increase in the harmful outcomes of dangerous and untested treatments". Both ideas that are totally reasonable to think might be the case, and for which you can imagine undertaking some kind of evidence-based process to establish if reform is needed, and if so what form it might take. But of course, snark is much easier.
- mikeash 9y agoSafety might be a good reason to prohibit imports from a place like Tanzania, but it makes no sense as a reason to prohibit imports from Canada. Canada has some equivalent to the FDA which is about as good as ours, so there should be no safety problem when it comes to importing their medicine.
- notyourday 9y agoWe do not have reciprocity agreement with Canada regarding drug approvals.
- mikeash 9y agoAnything approved in both countries ought to be OK, no?
- notyourday 9y agoYou are describing this: Canada->US, approved US->Canada, approved i.e. Canadian companies are successfully selling to the united states medicine that is manufactured in Canada and is regulated by the US. US companies successfully selling products to Canada that are manufactured in the US and regulated in Canada. If we had a reciprocity then we would have: US->Canda->US auto-approved Canada->US->Canada auto-approved i.e. if a product is sold to Canada then it can be re-imported into the US.
- mikeash 9y agoI’m saying that even if we don’t have reciprocity, if the drug is separately approved in both countries, it should be legal to buy in Canada and take to the US.
- notyourday 9y agoNo, because our system of approvals does not treat re-import the same as direct import.
- vorotato 9y agoBoth of these things can be true?
- notyourday 9y agoOnly if you can define lines.
- acdha 9y agoPeople do but there’s an entire industry devoted to lobbying against competition.
- harryh 9y agoThe issue is that there is no real competition for drug pricing in Canada due to the fact that the Canadian government imposes price controls. You are, of course, free to argue that this is a better way of doing things. But it's not "competition."
- acdha 9y agoSo there's no way for a company to compete on how to hit that price threshold while still turning a profit?
- rasz 9y agoClearly Canadian system is flawed and unable to viably finance modern drug development. https://www.thestar.com/news/canada/2014/11/25/the_strange_tale_of_canadas_ebola_vaccine_walkom.html https://www.thestar.com/news/canada/2014/11/25/the_strange_t...
- deleted 9y ago[deleted]
- TehCorwiz 9y agoNope. It's actually against the law. There are some in congress that have been fighting for years to allow US citizens to personally import from Canada. There used to even some be surreptitious "tourism" along the border for day trips to Canada get prescriptions filled, but they put a stop to that shortly after the ACA passed.
- jmisavage 9y agoWith a few exceptions its not legal to bring foreign drugs or re-import drugs (made here and sent overseas and brought back) into the USA.
- empath75 9y agoThe answer is that our insurance and medical billing system is a complete tirefire and needs to be burned to the ground and replaced with something sane.
- gaius 9y agoIf the pill retailed for $0.04 in the US could the R&D be recouped? Americans should feel good about high drug prices: that's your aid to the Third World right there. Not the most efficient technique but still better than not doing it at all.
- harryh 9y agoWhile in general I agree with you that is not the case here. The drug's patent expired decades ago. The issue is that there is only 1 US manufacturer giving them pricing power. It's unclear to me why another drug manufacturer doesn't come in and undercut the price. This is what happens in most other industries. My gut suspects the arduous FDA approval process, but I have no real evidence for this hypothesis.
- gizmo 9y agoBecause there is no price the competitor can charge that the original supplier can't match. There is no profit to be made, unless there is only a single manufacturer. Also, it's difficult to acquire approval needed from the FDA to demonstrate the new drug is safe and equivalent to the already approved because the original producer won't cooperate and provide relevant samples to their competition so they can demonstrate equivalence.
- harryh 9y agoBecause there is no price the competitor can charge that the original supplier can't match. This is a commonly cited reason but I don't buy it. They're selling these things for 4 cents in tanzania so we're talking about something that is practically free to make. There are lots of things that cheap where we see competition in the US: paperclips, reams of paper, chewing gum, whatever. Why is there competition for these things but not cheap drugs?
- throwaway2016a 9y agoNo mention that the average wage in Tanzania is $45 to $50 a month? As a proportion to wage it is actually more comparable than at first glance. As a solution though, I think we need reciprocity between drug regulatory agencies and open up drug sales between countries that have reciprocity. For example, if a drug is approved for sale in Canada it should be purchasable by people in the US and visa versa. It would allow competition between regulatory agencies (which should in theory make them more efficient because they have to compete) and lower the cost of bringing a drug to market because you no longer need to get approval in as many countries. Which in theory should lower consumer costs. Combine that with transparent pricing so that everyone knows what the costs are before they need to make a purchasing decision and we might be part way to a solution.
- cvsh 9y agoThe median monthly household income in the U.S. is $4710. The difference is two orders of magnitude.
- throwaway2016a 9y agoCorrect, if you were to go purely by the wages, the pill should cost $4 in the US not $400. It is still high, I was just pointing out that there are market differences. And to expand on that, the illness the drug in question is more common in Tanzania (per the article) so I can only presume the drug company can sell an order of magnitude more and might actually be making almost as much profit in aggregate on that $0.04 as they do the $400 here.
- mtgx 9y agoThe article explains why it's so expensive: > Why are prices so different in the U.S.? > "In other countries, there are price control methods. The government steps in to ensure drug prices do not increase by a certain amount," Alpern says. "There are no price control mechanisms in the U.S." > Between 2011 and 2016, mebendazole's price jumped more than 8,000 percent, from $4.50 to $369. So it was indeed $4.5 in the U.S. - until the company decided to get greedy.
- jryan49 9y agoSupply and demand? Because we'll pay for it anyway?
- maxehmookau 9y agoBecause American healthcare is, from an outside perspective, utterly insane.
- chmaynard 9y agoFrom the article: "In the years following albendazole's price hike in 2011, Medicaid spending on the drug went from under $100,000 in 2008 to more than $7.5 million in 2013." To most Congressional Republicans, this is beautiful music begause it means one of their constituents is getting rich by ripping off taxpayers. (Indeed, it may be the only form of music they can appreciate.)
- maxerickson 9y agoI would really like to see a detailed analysis of why Medicaid is paying these higher prices. It seems to be because their payments are benchmarked to what private insurers pay and the private insurers don't fight price hikes on drugs with (for them) small total costs. One fix might be to use a benchmark that is less dependent on whether private insurance bothers to negotiate. Another would be to allow HHS (working with FDA) to arrange for import of certain drugs.
- pb000 9y agoWhile the article talks about big pharma, we can solve this specific parasite issue by switching to another approach: Traditional Chinese medicine. At $60/week per tea made of 8-12 ingredients one can completely expel parasites from the body in a few weeks. Of course, big pharma never makes that known or even knows about it themselves. People in rural areas of East Asia certainly do.
- 1024core 9y agoWhat's to prevent someone from importing the $0.04 pill and selling it for, say, $1?
- wafflesraccoon 9y agoIt is against the law.
- turc1656 9y agoWhat the article leaves out is that the real reason is that there are laws that were specifically passed to make import of drugs nearly impossible and illegal in most cases. The system is tightly controlled such that no price arbitrage can be had. This shit wouldn't fly with any other product. If it wasn't illegal, companies would be buying in bulk and importing to the US since the US price is literally 10,000x higher. Price would converge quickly. But Congress decided that should be outlawed. And to be clear, we're not talking about off-brand or fake pills that are manufactured in violation of the patent owners wishes. We're talking about the same pills manufactured by, for example, GSK and shipped to different locations around the world. The current system is simply global welfare that everyone in the US pays for.
- ZeroGravitas 9y agoThis seemed a great comment until the very last sentence. Are you really claiming that Congress wanted to fund the advancement of medicine globally, and they did so by banning imports of pharmaceuticals? Surely there's simpler explanations for this that fit the facts better?
- turc1656 9y agoNo, that's not what I'm claiming. I'm claiming that pharmaceutical companies wanted a way to increase profits. They concluded that if they raised prices that would be bad PR because of the poorer nations that couldn't afford it and they would be seen as villains. Yet, the US had the potential to pay more. So they found a way to go right down the middle and lobbied congress hard to pass those laws. Now they get to be the benevolent rich guys who get to prattle about how many doses they donate globally and how cheap they can make the pills in the lesser developed nations while simultaneously ripping off US citizens to cover all that, and more.
- deleted 9y ago[deleted]
- exabrial 9y ago> https://www.drugpatentwatch.com/p/NDA/020666 https://www.drugpatentwatch.com/p/NDA/020666 From what I can tell, there are no patents. That means the only thing making this expensive is the lack of competition. The company bought the marketing rights and took over manufacturing. I would imagine after a second supplier enters the market prices will crash.
- mabbo 9y agoThis is a great case where unregulated free markets absolutely fail to solve the problem. Companies like Impax Laboratories are sole-suppliers, and the cost to produce is the smallest cost, once initial capital costs are laid down to build the factories to produce them. What would happen if a challenger appeared? A new company gets some funding to try to make a small number of high profit drugs, competing with Impax? Impax can drop their price on those drugs lower than the challenger until the challenger is out of money. Any incumbent has already paid the initial capital costs, while challengers haven't. Challengers can't win unless they've got big enough pockets to equal the incumbent, or new techniques that let them undercut even the lowest price the incumbent can do. But in a field like this, where the lowest price is apparently in the pennies, I can't really see how you can undercut enough. I don't really see any simple solution to this problem.
- maxerickson 9y agoDrugs are heavily regulated in the US.
- mabbo 9y agoBut is that the problem here? I mean, yes, if the rules about importing went away this problem would vanish over night, but let's ignore that for just a moment and imagine this same problem exists on a world-wide scale (it very well could!). How can a newcomer get into this market and undercut a competitor who can essentially drop prices as low as they want without losing their profitability?
- stmfreak 9y agoIf the USA would stop outlawing importation of same drugs for resale, these price disparities would disappear overnight. Let's not pretend this is some bizarre problem that needs more money to solve. Congress only has to erase one law.