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Why Drug Prices Keep Rising Despite Congress's Efforts
- skullborg 8y agoEfforts? I think they have a different meaning of effort than anyone else :/
- josefresco 8y agoThe headline is odd - not one mention of Congress in the entire article.
- duxup 8y agoBloomberg articles do that a lot. Many feel like "this is a good title" and then they sort of fill content that may or may not fit underneath it.
- Bartweiss 8y agoIt's an increasingly common issue with web news, yeah. Editors titling stories without input from writers is an old practice, but pay-by-page-load has moved it from a way to have consistent tone to a horrible runaway optimization. It doesn't even matter that much if you read the article, as long as the title is click-worthy enough to trigger those impressions. I assume Bloomberg is probably just slapping bad titles on stories, but I know Mic has been specifically accused of doing it the other way, like you mention; they'd hand a clickbait title to a writer and ask them to a fill in a relevant-enough-to-publish story under it.
- iicc 8y agohttps://www.businessinsider.com/bloomberg-reporters-compensation-2013-12 https://www.businessinsider.com/bloomberg-reporters-compensa... > Bloomberg News has an unusual practice of paying some of its reporters explicitly for publishing "market-moving" stories. So, yeah.
- duxup 8y agoThat makes sense. You get some Bloomberg stuff that just seems like really low effort spam / blog stuff.
- stephanimal 8y agoWell they mention the Hatch-Waxman Act of 1984 passed by congress to try to limit runaway drug pricing.
- josefresco 8y agoGood point although it highlights how lame Congress has been on the subject.
- duxup 8y agoI'm not really sure there is much in the way of "efforts". The drug companies now control and manipulate the market. One law here or there won't fix it. I think the larger question is if congress wants to effectively break the market and if the politicians want to take on the task of rewriting a lot of law / taking on the drug companies.
- maxxxxx 8y agoWhatever they will be doing will end like Obamacare. There may be some changes around the edges but the fundamental problems of US healthcare won’t even be touched. The incumbents are way too entrenched and their propaganda is very successful with a lot of citizens.
- nagVenkat 8y agoLot of incumbent democrats lost their seats in 2010 after voting for Obamacare.
- Dirlewanger 8y agoDon't have the data, but I'm willing to bet part of the reason is probably because a lot of people that didn't have an insurance plan before Obamacare now were forced to lest they pay the penalty; that's all the ACA really is anyway: a glorified mandate saying one had to pick private insurance from the government's limited marketplace or they'll be fined. Didn't solve dick...but hey, Obama did it so it must be progress!
- maxxxxx 8y agoThe change how preexisting conditions are handled was huge. Before Obamacare it was really hard to get and keep health insurance for people with chronic conditions. Unfortunately it seems the current administration wants to go back to these “glory days”
- scarface74 8y agoAs opposed to the way it was before where if you didn’t have insurance , you could go to the emergency room and they still had to treat you?
- exabrial 8y agoLikely because they lack an understand of macroeconomics and keep treating the symptoms instead of the causes like "Drug prices are too high, lets make price caps!"
- frontloadpro 8y agoIt's weird, intellectuals understand that price caps don't work. But then you will hear intellectuals suggest something insane like, No cars in cities, it makes me wonder where the logical disconnect starts.
- oppositelock 8y agoIn the US, we have a ban on re-importing cheaper drugs which our companies produce. Congress did that. We do not admit competitive medications from other first world countries without full FDA approval. Congress did that. We do not have visibility into prices due to the structure of our insurance cartel. Congress did that. I fail to see how congress' efforts would do anything but increase prices.
- briffle 8y agocongress also banned medicare from negotiating drug prices...
- maxerickson 8y agoMedicare Part D is provided by private companies that have formularies and negotiate prices and so on. That the government doesn't directly negotiate prices there is technically true and sort of beside the point.
- refurb 8y agoThe reason we did that is thalidomide.
- maxxxxx 8y agoI don't think so. You can't even re import FDA approved drugs.
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- rayiner 8y agoI'm sure the book is better, but the soundbite on what's called evergreening is very misleading: > RF: Yes, 78 percent of the drugs associated with new patents are not new drugs. They are existing ones. Instead of innovation, we are seeing secondary protections piled onto old drugs over and over again. They make minor medical modifications by adjusting the dosage or the delivery system. The patent system does not allow you to "extend" the protection of an existing invention by making minor changes. Once a product is released into the marketplace, the product itself becomes prior art. You can make improvements to the product, and patent those changes, but the original product is now in the public domain. So evergreening can't work as a unilateral action from the drug company. It also has to be the case that doctors must be unwilling to prescribe a generic that doesn't have those improvements. And here is where the article buries a lot of complexity in a hand-waving dismissal: > Here’s the most important point: When a drug company makes a secondary change to a drug, the R&D investment is minimal compared with what’s required for the drug’s initial development. Also, the change may mean little from a therapeutic standpoint. As a threshold matter, no scientist or engineer (note the author is neither, she is a lawyer) would say that incremental improvements don't count as "innovation." And incremental improvement, though cheaper than building a brand-new drug, is not cheap, just like developing each new iteration of iPhone is not cheap. So what's really doing all the work here is the assertion that a "change may mean little from a therapeutic standpoint." If the change doesn't actually result in a therapeutic benefit, then doctors shouldn't prescribe the new drug over the generic. For various reasons, doctors have little incentive to do that. The main thing is that neither the doctor nor the patient are paying for the drug. When you're not paying, you have no incentive to prescribe the "older model." Insulin is a good example of this. The first biosynthetic insulin was released in 1982. It is long out of patent. If you wanted to release that exact same product today, you could. But the newer iterations are at least a little bit better, and who wants to give their kid with Type-1 diabetes anything but the latest and greatest version?
- JumpCrisscross 8y ago> who wants to give their kid with Type-1 diabetes anything but the latest and greatest version? Lots of people. FYI, this is the strategy of several generics shops. The challenge is doctors' reluctance to prescribe them.
- clarkmoody 8y ago"Government intervention in market produces opposite of intended effect. Experts baffled." Economists not surprised.
- tacomonstrous 8y agoI wonder if you actually read the article as opposed to just the headline.
- patrickmay 8y agoAn excellent, detailed discussion of this is in "Overcharged: Why Americans Pay Too Much For Health Care". Drug prices are only one aspect of the problem. The root is that government involvement focuses on the demand side and proactively reduces the supply. https://www.cato.org/overcharged https://www.cato.org/overcharged
- vkou 8y agoThe root problem is that it is in the interests of everyone, from the doctor, to the pill manufacturer, to the hospital, to the insurer, to bilk patients for everything they are worth. The insurer makes a profit as a % of money spent on healthcare, the doctor needs to pay the million-dollar student loan (his education cost a million dollars because the student loan underwriters know his patients will pay), the hospital makes a profit as revenues - expenses - it's not like patient can price-shop. Pointing fingers at the supply of doctors ignores the other five elephants in the room. Markets simply don't work when the person who has to pay can't price shop. Please, come to your senses, and either make healthcare an actual free market, or, more sensibly, single-payer.
- JustSomeNobody 8y agoBecause: > RF: It is the way the system operates now. And really, one can’t blame the drug companies. These are profit-making companies. We can’t expect drug companies to behave differently. Imagine if a CEO went to his board and said, “I have decided to lower prices and reduce our profits. It’s the right thing to do.” That CEO would be fired.
- tasty_freeze 8y agoOf course it wouldn't happen that way. Instead, what if the maker of a drug or medical device found that they were the only ones making it because patents had long ago expired on it and it wasn't the new hotness. They could say: shit, let's increase the price 10x, and if someone else ramps up production, then we can lower our price again, but in the meantime we've obtained piles of cash. But there is a PR price to be paid when the public finds out that the company is gouging people who have eczema or whatever the drug treats. Some companies obviously do decide to go that route and either are hoping nobody notices, or are willing to pay the PR price. Others obviously are willing to accept a certain return on their boring drug and leave well enough alone.
- andjd 8y agoI was disappointed by this sentiment by the author >And really, one can’t blame the drug companies. These are profit-making companies. We can’t expect drug companies to behave differently. The notion that corporations should only work for the maximization of shareholder value is relatively modern, and leads to companies doing societally destructive things like this all the time, yet the author takes it as an inviolate truth. I would suggest that this is also part of the problem, and an area to look to fix it.
- reutinger 8y agoIt's important to note that institutions respond to outside forces, not the will of the people in those institutions. I'm sure plenty of the top bankers donate to the Sierra Club, but they still invest in fuel pipelines and oil projects. No one can blame the drug companies for operating as an institution and it's hard to pin that blame on the individuals operating in it, too. You're right that the incentives that form these companies haven't been around forever and we should seek to find ways towards a better solution.
- seanmcdirmid 8y agoWhat kind of room is there for not optimizing profits in a publicly traded or even a professionally managed private company? How does one decide the morals that the company should abide by when it isn’t their investment/retirement/etc... at stake. Actually, I’m not sure when this hasn’t been the case. Can you point out any good examples of corporations acting selflessly in the past that wouldn’t occur today?
- manifestsilence 8y agoI think the only way corporations can reliably act morally is if that is in their best interests. PR, in other words, has to have monetary value, whether it be the appearance of morality to the customers, or an internal increase in their ability to hire and keep good workers. If customers and workers judge a company on its ethics and take their talent and business elsewhere, that will drive the market. Edit: I think this is also an argument for unions. If a group of workers all agree to hold firm on an ethical standard and block the talent pool, that has power. Without this layer of organizing power, there will always be someone willing to subvert the ethical standards for a quick buck.
- cc439 8y agoThere is one bright spot on the pharma horizon and that is the industry's discovery and pipeline crisis. There has been a marked slowdown in the discovery of novel drugs over the past decade, a trend that has remained resilient even in the face of enormous R&D spending. Whether you think big pharma spends too much on marketing in comparison to R&D doesn't dampen the importance of the sheer volume of dollars being spent. The pipeline for many pharma giants is practically dry and only getting drier with each passing year. Many have tried to offload the risks involved in massive R&D efforts by letting small companies develop the drug and then obtaining their IP through mergers and acquisitions but even then, the pace of discovery for novel drugs has still slowed meaning the number of M&A opportunities are also shrinking. Maybe the pharma giants simply played themselves, greedily focusing on exorbitant short term profits and naively assuming R&D would always deliver something at their existing levels of funding while ignoring the long term effects this would have on their business model. Maybe we've simply reached "peak pharma", running out of easy discoveries that are best treated by applying a chemical and entering a world where biotech and immunotherapy will drive the future of healthcare. Either way, the patent cliff looms and we are rapidly approaching the threshold where enough profitable drugs go generic that the industry can no longer afford to buy out, bribe, and cheat their way to maintain their position.
- gregmac 8y agoHow much money is wasted in duplicated efforts of two or more companies working on the same thing? There's merit, of course, to having different teams of people trying different approaches, but I assume even the learnings of failed attempts aren't shared between competitors. How many medical breakthroughs are on the verge of discovery, of only someone had complete access to data that's currently spread in silos across multiple companies?
- hjk05 8y agoI get he gist of what you are saying is “if only we had cross company collaborations” but reality is that you’ll find people even inside the same company not collaborating. Heck you’ll find professors sitting in the same hallway for decades who are working on the same thing and not collaborating. As for opening up data, as soon as the data becomes valuable to share companies do share it, but quite naturally they charge for it to recoup the costs of creating that same data. And when one company abandons a druf, they don’t just dump it in the ocean, they sell it of to other companies again to recoup some of the costs.
- lghh 8y agoAs long as the FDA exists as the arbiter of what can and cannot be sold and the US government defends the intellectual "property" of these businesses, it is unlikely that drug prices will drop in a meaningful way.
- lukeschlather 8y agoI really want to see trials with these $200+/week drugs where the control group gets catered meals managed by a personal nutritionist, weekly massages, physical trainers, yoga or free housekeeping or whatever. Trouble is you can't patent the result of such a trial, and it would probably often end badly for the people pushing the drugs. It seems like our whole medical funding model in this country is fundamentally broken.
- refurb 8y agoI'm pretty sure "catered meals managed by a personal nutritionist, weekly massages, physical trainers, yoga or free housekeeping" isn't going to matter much when you're dying of cancer.
- lukeschlather 8y agoThat's more a value judgement though isn't it? And I think it totally could matter in some ways. Chemo sounds like hell. It's easy to imagine 1-year survival rates for most cancers are highest with no intervention, and 5-year survival rates are highest with chemo. But 1-year survival rates with any of the things I mentioned might be higher than no intervention whatsoever. And 5-year survival rates with cancer are pretty bleak regardless so it's not hard to imagine simply helping people de-stress might be the best intervention depending on how you value a slightly better chance of full remission vs. keeping people comfortable.
- thorwasdfasdf 8y agoThe hospitals are getting kickbacks for offering more expensive drugs. This is fraud, plain and simple. It should prosecuted to the fullest extent of the law: they really need to start going after these hospitals and doctors that are colluding with the drug companies. "The PBMs negotiate discounts from drug companies and then help determine patient access to drugs. In theory, that is supposed to encourage PBMs to drive prices down on the drugs. But drug companies have very cleverly turned the system on its head. Before they give a discount to the PBMs, they raise the price each year. It is like a department store raising prices before a sale so that the sale price looks more appealing. Then the PBM can claim to have negotiated a great deal, and will pocket the rebates. In return, the drug companies want the PBM to make sure their competitors are disadvantaged." And once again, the patent system is being abused to no end. The patent office, swimming in money, just rubber stamps the same old patents over and over again: "78 percent of the drugs associated with new patents are not new drugs. They are existing ones. Instead of innovation, we are seeing secondary protections piled onto old drugs over and over again. They make minor medical modifications by adjusting the dosage or the delivery system." Someone seriously needs to sue the patent system for the enormous amount of financial damage they've caused to this country.
- bluGill 8y agoSlow down a little here. While it is true that new drugs are the old drugs with minor tweaks, that doesn't mean those tweaks are not valuable. Minor tweaks can change effectiveness, side effects, and other things that are often important.
- mindslight 8y ago> The hospitals are getting kickbacks for offering more expensive drugs. This is fraud, plain and simple. It should prosecuted to the fullest extent of the law 100x this. Much of the breakdown of trust in our society is due to existing laws and crimes being enforced extremely unevenly. Simple crimes committed by lower class individuals are prosecuted relentlessly, even when they are ultimately victimless or otherwise overly harsh. Meanwhile huge scale crimes committed en masse by companies are rarely pursued, and in the rare cases they are it basically results in civil slap-on-the-wrist fine that comes out of one quarter's profits. Law in general only works when it proactively deters bad behavior. Corporate counsel should be pointing out that such setups fit the shape of fraud, and advising the CEO/board that they'll personally be facing down prison terms. But rather than discouraging they enable - advising how to complexify the scheme to prefortify future defenses. The deviance has been so normalized that wider society just shrugs it off as them maximizing shareholder value. I have no idea how this can actually be remedied. The screws of demanding justice keep being turned up based on a desire to punish those who escape, yet those with the resources continue to insulate themselves just fine. We're effectively headed towards anarcho-capitalism for those at the top, and totalitarianism for those at the bottom.
- narrator 8y agoToo bad the guy who Trump put in charge of lowering drug prices died recently: https://www.cleveland.com/metro/2018/11/ohios_daniel_best_who_led_hhs.html https://www.cleveland.com/metro/2018/11/ohios_daniel_best_wh...
- m0zg 8y agoThe answer to OPs question is simple: because they have gold-plated Cadillac of a health plan themselves. They aren't much affected by the Obamacare cost increases either, unlike the rest of us peons. So we get "let them eat cake" type healthcare legislation.