15 ms·

The 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 ago
If 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 ago
  While 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 ago
    Because 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 ago
      Because 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?
      - edko 9y ago
        Maybe the market in the US isn't big enough to recover the fixed costs. How many pills at 4 cents would they have to sell?
        harryh 9y ago
        Yes, it definitely could be this which is why I said "my gut suspects the arduous FDA approval process." This could be the source of a lot of that fixed cost. I'd be generally curious to see data on what is involved in starting up a new production line for these kinds of pills. Is there a chemist in the house? :)
        gizmo 9y ago
        https://dailyreckoning.com/generic-bioequivalence-and-outrageous-profits-in-biotech/ https://dailyreckoning.com/generic-bioequivalence-and-outrag... Look for the explanation by Derek Lowe in the linked article. Key points: > The FDA grants market exclusivity to companies that are willing to take ‘grandfathered’ compounds into compliance with their current regulatory framework.” Once a company does that, it gains an effective monopoly through the "generic bioequivalence" rules. Setting up the production line isn't the issue, because the pharmaceutical company will outsource the actual manufacturing of the drugs anyway.
        Symmetry 9y ago
        If fixed prices inherent to the production of the drug were the key then I wouldn't expect a manufacturer would be able to provide this same drug in the UK for $2 without going out of business. Now, there are probably reasonable health and safety procedures done in the UK but not in Tanzania that bump the price up that much which I want done to my drugs as a wealthy resident of the first world but which I might not be able to afford if I were a Tanzanian. But $400 is clearly not required to make the drug up to reasonable safety standards.
      - jacquesm 9y ago
        At a guess because then that other manufacturer would undercut the first manufacturers cash cows. In other words: it could easily be a cartel of sorts with some regulatory capture thrown in to ensure the cake stays divided between entrenched parties. Situations like these should count as evidence that something isn't quite as it should be.
  - justin66 9y ago
    > It's unclear to me why another drug manufacturer doesn't come in and undercut the price. From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug. (Some of that is about FDA regulatory approval, but not much since it's not a new drug. They'd be manufacturing something that has already been tested and approved.) Ideally the drug company making this thing would just stop being boneheads about pricing. Having this in the news will probably help.
    - jonwachob91 9y ago
      >>From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug. The article also says albendazole, the drug in question, can be purchased in the UK for $2. Why can I not start a pharma company that A) imports albendazole (and other rare disease drugs) from the UK and other 1st world country at a reasonable markup or B) orders albendazole, and other rare disease drugs, from the same manufacturer that makes it for the UK, and other 1st world countries, at a reasonable markup? I'm genuinely curious about the regulatory landscape of that question.
      - test1235 9y ago
        GlaxoSmithKline produce Zentel[1] (manufactured in India), and they already operate in US[2]. 1. https://www.unitedpharmacies-uk.md/Zentel-Albendazole-400mg-1-Tablet-p-1811.html https://www.unitedpharmacies-uk.md/Zentel-Albendazole-400mg-... 2. https://en.wikipedia.org/wiki/GlaxoSmithKline#Facilities https://en.wikipedia.org/wiki/GlaxoSmithKline#Facilities
      - rhino369 9y ago
        I think our system is so fundamentally broken, you should be able to do that. But if you could, it would be an end run around the FDA. Might as well shut the FDA down in that case. If you add burdensome regulatory costs to some competitors (domestic pills) but not others (foreign pills), the others will win all business. That is an unfair playing field. So part of the deal with regulating drugs in America is that you can't import drugs from other countries. I think I'd probably allow importation of the exact drug, by the exact manufacturer. Or just set a price control saying you cannot sell a drug for more than 120% of the average price in the EU + Japan + Canada + Australia + NZ etc.
  - barry-cotter 9y ago
    You are correct. The FDA is insanely parochial. They won’t allow importation of generics approved by their European, Canadian or Japanese equivalents of generics with decades of use. The only reason Martin Shrkeli was able to jack up the price of the drug he did, a generic, is because the FDA won’t white label or fast track drugs from other jurisdictions.
- gizmo 9y ago
  Albendazole was developed in 1975. The R&D cost has been recouped ages ago.
  - gaius 9y ago
    Presumably there is other R&D to be done on other drugs? Or is the company making $399.96 profit on every pill?
    - gizmo 9y ago
      The company typically outsources the actual manufacturing of the pill, as well as the packaging and shipping. Those are real costs. The largest expenses are marketing and sales. Doctors won't prescribe drugs they don't know exist, so "educating" doctors about the benefits of a drug is a paramount. Contracts have to be negotiated with all insurance companies, and that's expensive too. How profitable the business of generics actually is, we don't know for sure. The pharmaceutical industry is notoriously vague about how much profit they make, and the numbers they report are questionable. For instance they'll call market research into which drug to buy next "R&D".
- Gracana 9y ago
  You're not really helping anyone if you die because you can't afford medicine.
- stuaxo 9y ago
  Ben Godacre's book Bad Pharma is pretty good. He points out that a large % of this R&D cost is actually marketing. A lot of R&D is also spent on taking existing drugs and subtly changing them so that a non-generic one can be launched. So it's not as cut and dried as it seems.
- chapium 9y ago
  Since the patent has expired, the incentive to R&D the drug has as well.
- 1024core 9y ago
  > If the pill retailed for $0.04 in the US could the R&D be recouped? The same tired old and wrong argument. The article clearly states that the patent expired decades ago. So why not read the article and see that this old excuse is WRONG ? What do you stand to gain by putting out these lies? What will it take for idiots like you to stop doing so?? [Note to "dang" or any other mod: yes, I called this person an idiot. I was trying to be restrained. I am tired of people making excuses for the greed of pharma companies. They always use "recoup R&D costs" as an excuse for price gouging, and killing people.]
- maxxxxx 9y ago
  This often repeated line about the high drug prices in the US being a good thing because it subsidizes R&D for the rest of the world sounds like very self serving propaganda by pharmaceutical companies. I don't believe it a single second.
- cryoshon 9y ago
  psst (most money is spent marketing the drug, not developing it) (marketing includes bribing doctors and healthcare systems to prescribe it)
snarf21 9y ago
Yes, this is true. There are other things that would change too. We could have these (or other) pills for pennies. However, we can't have a 24 hour drive through pharmacy on every other corner and an Urgent Care on the other AND pills for pennies. Yes, the companies are making tons but a lot of that money pays for people to make it convenient for you to get your pills. And as someone else commented, we are basically subsidizing the pharmaceuticals for the rest of the world. (But before you get too upset about that remember we also get slave labor in China to build our iPhones and TVs that now cost comparatively nothing compared to if they were made here.)
- Retric 9y ago
  McDonald's can have 24/7 drive though windows while selling burgers and fries, but most pharmacy's are not open close to 24/7.
  - swarnie_ 9y ago
    Pharmacists cost a lot more to employ then a couple of 17 year olds
    - Retric 9y ago
      The gap is less extreme than you might think. You can get a pharmacist for less than 4 teens making 15$ an hour. But again mostly you need to get your drugs in the day.
  - SaintGhurka 9y ago
    Burgers and fries don't require clinical trials.
    - xellisx 9y ago
      We've had clinical trials for burger and fries. Results: America is now a lot heavier.
    - Retric 9y ago
bufferoverflow 9y ago
Typical socialist answer. Burn a working system to the ground, so everyone suffers equally. At the very least the current system allows poor countries to enjoy cheap excellent drugs, researched and paid for by the wealthy western countries.
- ceejayoz 9y ago
  > working Well, yes, it'd be horrible to burn a working system to the ground.
- geekamongus 9y ago
  Please let us know what is "working" for US citizens about the current system.
  - bufferoverflow 9y ago
    You pay, you get healthcare. Yeah, it's not cheap, but your max out of pocket for 2017 with a marketplace plan is just $7150. https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ https://www.healthcare.gov/glossary/out-of-pocket-maximum-li...
    - vorotato 9y ago
      When you get robbed, you pay and you don't get shot. Yeah it's not cheap....
      - bufferoverflow 9y ago
        There's no free healthcare. You either pay it directly, or through taxes. Europeans pay high taxes, social security and VAT on most things. My brother in law pays almost 55% on his 80k salary in Italy. I don't think I ever paid over 38% even when I was making $160K in the US. If you look at the median salaries, $4.7K in premiums over a year is not a big deal, and then you spend another $7K in case you need to max out your insurance, which most people don't do until much later in life.
geekamongus 9y ago
The answer is that we buy health insurance, not health care.
- FLUX-YOU 9y ago
  The problem is that insurance costs continue to rise for no real reason. They even made costs rise when more people were insured because of ACA. In what world does that make sense?
  - isoskeles 9y ago
    One where ACA did other things besides just raising the number of insured people?
  - sol_remmy 9y ago
    > They even made costs rise when more people were insured because of ACA. In what world does that make sense? I'm surprised you don't remember the reason because it was in the news 24/7. It's because insurance costs 10X for sick people (because they also draw 10X in insurance), those sick people could not afford their insurance, and the ACA gave those uninsured sick people deeply subsidized insurance, raising the average cost to insurance companies of each insured person
    - ZeroGravitas 9y ago
      The ACA reduced the rate of price rises, so it can't possibly be the cause of the price rises.
      - harryh 9y ago
        You and sol_remmy are talking about two different things. You are talking about overall expenditures in the health care system. He is talking about insurance prices charged to individual purchasers, in particular ones that are relatively young and healthy.
        9y ago

gaius 9y ago

If 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 ago
While 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 ago
  Because 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 ago
    Because 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?
    - edko 9y ago
      Maybe the market in the US isn't big enough to recover the fixed costs. How many pills at 4 cents would they have to sell?
      - harryh 9y ago
        Yes, it definitely could be this which is why I said "my gut suspects the arduous FDA approval process." This could be the source of a lot of that fixed cost. I'd be generally curious to see data on what is involved in starting up a new production line for these kinds of pills. Is there a chemist in the house? :)
        gizmo 9y ago
        https://dailyreckoning.com/generic-bioequivalence-and-outrageous-profits-in-biotech/ https://dailyreckoning.com/generic-bioequivalence-and-outrag... Look for the explanation by Derek Lowe in the linked article. Key points: > The FDA grants market exclusivity to companies that are willing to take ‘grandfathered’ compounds into compliance with their current regulatory framework.” Once a company does that, it gains an effective monopoly through the "generic bioequivalence" rules. Setting up the production line isn't the issue, because the pharmaceutical company will outsource the actual manufacturing of the drugs anyway.
      - Symmetry 9y ago
        If fixed prices inherent to the production of the drug were the key then I wouldn't expect a manufacturer would be able to provide this same drug in the UK for $2 without going out of business. Now, there are probably reasonable health and safety procedures done in the UK but not in Tanzania that bump the price up that much which I want done to my drugs as a wealthy resident of the first world but which I might not be able to afford if I were a Tanzanian. But $400 is clearly not required to make the drug up to reasonable safety standards.
    - jacquesm 9y ago
      At a guess because then that other manufacturer would undercut the first manufacturers cash cows. In other words: it could easily be a cartel of sorts with some regulatory capture thrown in to ensure the cake stays divided between entrenched parties. Situations like these should count as evidence that something isn't quite as it should be.
- justin66 9y ago
  > It's unclear to me why another drug manufacturer doesn't come in and undercut the price. From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug. (Some of that is about FDA regulatory approval, but not much since it's not a new drug. They'd be manufacturing something that has already been tested and approved.) Ideally the drug company making this thing would just stop being boneheads about pricing. Having this in the news will probably help.
  - jonwachob91 9y ago
    >>From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug. The article also says albendazole, the drug in question, can be purchased in the UK for $2. Why can I not start a pharma company that A) imports albendazole (and other rare disease drugs) from the UK and other 1st world country at a reasonable markup or B) orders albendazole, and other rare disease drugs, from the same manufacturer that makes it for the UK, and other 1st world countries, at a reasonable markup? I'm genuinely curious about the regulatory landscape of that question.
    - test1235 9y ago
      GlaxoSmithKline produce Zentel[1] (manufactured in India), and they already operate in US[2]. 1. https://www.unitedpharmacies-uk.md/Zentel-Albendazole-400mg-1-Tablet-p-1811.html https://www.unitedpharmacies-uk.md/Zentel-Albendazole-400mg-... 2. https://en.wikipedia.org/wiki/GlaxoSmithKline#Facilities https://en.wikipedia.org/wiki/GlaxoSmithKline#Facilities
    - rhino369 9y ago
      I think our system is so fundamentally broken, you should be able to do that. But if you could, it would be an end run around the FDA. Might as well shut the FDA down in that case. If you add burdensome regulatory costs to some competitors (domestic pills) but not others (foreign pills), the others will win all business. That is an unfair playing field. So part of the deal with regulating drugs in America is that you can't import drugs from other countries. I think I'd probably allow importation of the exact drug, by the exact manufacturer. Or just set a price control saying you cannot sell a drug for more than 120% of the average price in the EU + Japan + Canada + Australia + NZ etc.
- barry-cotter 9y ago
  You are correct. The FDA is insanely parochial. They won’t allow importation of generics approved by their European, Canadian or Japanese equivalents of generics with decades of use. The only reason Martin Shrkeli was able to jack up the price of the drug he did, a generic, is because the FDA won’t white label or fast track drugs from other jurisdictions.
gizmo 9y ago
Albendazole was developed in 1975. The R&D cost has been recouped ages ago.
- gaius 9y ago
  Presumably there is other R&D to be done on other drugs? Or is the company making $399.96 profit on every pill?
  - gizmo 9y ago
    The company typically outsources the actual manufacturing of the pill, as well as the packaging and shipping. Those are real costs. The largest expenses are marketing and sales. Doctors won't prescribe drugs they don't know exist, so "educating" doctors about the benefits of a drug is a paramount. Contracts have to be negotiated with all insurance companies, and that's expensive too. How profitable the business of generics actually is, we don't know for sure. The pharmaceutical industry is notoriously vague about how much profit they make, and the numbers they report are questionable. For instance they'll call market research into which drug to buy next "R&D".
Gracana 9y ago
You're not really helping anyone if you die because you can't afford medicine.
stuaxo 9y ago
Ben Godacre's book Bad Pharma is pretty good. He points out that a large % of this R&D cost is actually marketing. A lot of R&D is also spent on taking existing drugs and subtly changing them so that a non-generic one can be launched. So it's not as cut and dried as it seems.
chapium 9y ago
Since the patent has expired, the incentive to R&D the drug has as well.
1024core 9y ago
> If the pill retailed for $0.04 in the US could the R&D be recouped? The same tired old and wrong argument. The article clearly states that the patent expired decades ago. So why not read the article and see that this old excuse is WRONG ? What do you stand to gain by putting out these lies? What will it take for idiots like you to stop doing so?? [Note to "dang" or any other mod: yes, I called this person an idiot. I was trying to be restrained. I am tired of people making excuses for the greed of pharma companies. They always use "recoup R&D costs" as an excuse for price gouging, and killing people.]
maxxxxx 9y ago
This often repeated line about the high drug prices in the US being a good thing because it subsidizes R&D for the rest of the world sounds like very self serving propaganda by pharmaceutical companies. I don't believe it a single second.
cryoshon 9y ago
psst (most money is spent marketing the drug, not developing it) (marketing includes bribing doctors and healthcare systems to prescribe it)

snarf21 9y ago

Yes, this is true. There are other things that would change too. We could have these (or other) pills for pennies. However, we can't have a 24 hour drive through pharmacy on every other corner and an Urgent Care on the other AND pills for pennies. Yes, the companies are making tons but a lot of that money pays for people to make it convenient for you to get your pills. And as someone else commented, we are basically subsidizing the pharmaceuticals for the rest of the world. (But before you get too upset about that remember we also get slave labor in China to build our iPhones and TVs that now cost comparatively nothing compared to if they were made here.)

Retric 9y ago
McDonald's can have 24/7 drive though windows while selling burgers and fries, but most pharmacy's are not open close to 24/7.
- swarnie_ 9y ago
  Pharmacists cost a lot more to employ then a couple of 17 year olds
  - Retric 9y ago
    The gap is less extreme than you might think. You can get a pharmacist for less than 4 teens making 15$ an hour. But again mostly you need to get your drugs in the day.
- SaintGhurka 9y ago
  Burgers and fries don't require clinical trials.
  - xellisx 9y ago
    We've had clinical trials for burger and fries. Results: America is now a lot heavier.
  - Retric 9y ago

bufferoverflow 9y ago

Typical socialist answer. Burn a working system to the ground, so everyone suffers equally. At the very least the current system allows poor countries to enjoy cheap excellent drugs, researched and paid for by the wealthy western countries.

ceejayoz 9y ago
> working Well, yes, it'd be horrible to burn a working system to the ground.
geekamongus 9y ago
Please let us know what is "working" for US citizens about the current system.
- bufferoverflow 9y ago
  You pay, you get healthcare. Yeah, it's not cheap, but your max out of pocket for 2017 with a marketplace plan is just $7150. https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/ https://www.healthcare.gov/glossary/out-of-pocket-maximum-li...
  - vorotato 9y ago
    When you get robbed, you pay and you don't get shot. Yeah it's not cheap....
    - bufferoverflow 9y ago
      There's no free healthcare. You either pay it directly, or through taxes. Europeans pay high taxes, social security and VAT on most things. My brother in law pays almost 55% on his 80k salary in Italy. I don't think I ever paid over 38% even when I was making $160K in the US. If you look at the median salaries, $4.7K in premiums over a year is not a big deal, and then you spend another $7K in case you need to max out your insurance, which most people don't do until much later in life.

geekamongus 9y ago

The answer is that we buy health insurance, not health care.

FLUX-YOU 9y ago
The problem is that insurance costs continue to rise for no real reason. They even made costs rise when more people were insured because of ACA. In what world does that make sense?
- isoskeles 9y ago
  One where ACA did other things besides just raising the number of insured people?
- sol_remmy 9y ago
  > They even made costs rise when more people were insured because of ACA. In what world does that make sense? I'm surprised you don't remember the reason because it was in the news 24/7. It's because insurance costs 10X for sick people (because they also draw 10X in insurance), those sick people could not afford their insurance, and the ACA gave those uninsured sick people deeply subsidized insurance, raising the average cost to insurance companies of each insured person
  - ZeroGravitas 9y ago
    The ACA reduced the rate of price rises, so it can't possibly be the cause of the price rises.
    - harryh 9y ago
      You and sol_remmy are talking about two different things. You are talking about overall expenditures in the health care system. He is talking about insurance prices charged to individual purchasers, in particular ones that are relatively young and healthy.
      - 9y ago