6 ms·

Congress asks if developing slightly fewer medicines is OK if it lowers prices

33 points by wiggles_md 7y ago

wiggles_md 7y ago
Note that I had to trim the lengthy title: I think this issue is an interesting and an important one to discuss, and that the discussion doesn’t benefit from the political framing. I certainly did editorialize however and would appreciate a better short title if one is offered.
- ars 7y ago
  The current title answers a question, it should instead raise a question. [Currently: Developing slightly fewer medicines is OK if it means lower prices] Suggestion: Congress debates if developing slightly fewer medicines is OK if it means lower prices
  - wiggles_md 7y ago
    I both appreciate the pointer and the suggestion. Thank you. The suggestion was sadly too long by 6. I’ve gone with “Congress asks if developing slightly fewer medicines is OK if it lowers prices”.
zallarak 7y ago
The compound effect of lost progress might become more significant over time.
- Jyaif 7y ago
  The money saved would be used for something else, e.g. education. That effect would also compound over time.
  - AnthonyMouse 7y ago
    That's assuming the alternative thing actually benefits from the money. You mention education, but we've already seen that education spending has a threshold past which spending more money no longer improves outcomes (it just inflates prices), and we're already above that level of education spending. And even if we weren't, it doesn't follow that moving resources from one place to the other is the right choice. When you have two things that both produce benefits exceeding their costs, you're better off to do both of them.
    - Jyaif 7y ago
      > It doesn't follow that moving resources from one place to the other is the right choice. When you have two things that both produce benefits exceeding their costs, you're better off to do both of them. Yes, in an imaginary world we can invest in all the good things at the same time. In the real world you have a limited amount of resources, so you can't do everything at the same time without borrowing money. But guess what, borrowing money is moving resources from one place to an other.
      - AnthonyMouse 7y ago
        The world in which you can invest in both drug research and education is not imaginary. We in actual fact already do both of those things at the same time.
mieseratte 7y ago
Well this is, in essence, the concern of the "ObamaCare Death Panel"! Only instead of determining by a board of doctors whether you are entitled to care, a bureaucratic measure to determine whether a company should investigate cures to what ails you. Better for society, worse for you as an individual.
- nradov 7y ago
  Who is "you"? A public policy change along these lines would be better for some individuals and worse for others.
  - mieseratte 7y ago
    With an insurer, you at least have a backstop of changing insurers. If the government makes this decision, your backstop becomes "move to a new polity." This is the core of the argument, that the government should not have this power. Say what you will of the sad state of the US health situation, there are potential solutions not involving this level of "We choose who can have what." I'm not one with exotic health problems, the kind that involve going to a hospital for a week for a batter of tests and analysis, but I know people for whom this is the case. I suppose those people are the ones this is writing off.
- RaiseProfits 7y ago
  I always assumed death panels were a tongue in cheek reference to what health insurance companies already do.
  - mieseratte 7y ago
    Well you have assumed wrong. It was a reference to giving the government, likely unelected bureaucracies, power to decide who receives what healthcare.
    - KirinDave 7y ago
      In as much as it is a clever bit of propaganda for the corporatist idea that only private industry should be able to arbitrarily decide who does and does not receive life-preserving care, you're right. In principle, there is no difference between this outcome and what HMOs like Kaiser do to this very day.
adrianmonk 7y ago
Well, that depends on specifically which drugs you subtract out of the set. Some new drugs are not that critical to have. Others might be. Given that we don't / can't know which drugs will be developed in the future, it's kind of impossible to answer with certainty.
- bluGill 7y ago
  The problem is we don't really know. Drugs that are almost out will probably still come out. However we are most likely to lose ones that are in the here are 100 things we could try at high cost - we know from experience than 1 in 1000 of these ideas is useful. If the cost recovery is high enough you try all 100 ideas to see if they lead anywhere, and then find another list of 100... If cost recovery isn't high enough you don't try any, and we don't really know what we lost because we don't know which of the ideas before actually will turn out to work.
aantix 7y ago
That’s socialism at its core. The sacrifice of innovation to equalize everyone’s humanity. But we’re obviously not all born equal in capability. Nor do we remain so. It steals people’s ability to improve their own life. So resentment settles in by those now required to hold up the less capable.
- jmfayard 7y ago
  The conservative movement keeps insisting than making decent healthcare and education affordable is socialism. That almost never convince anyone that those are bad ideas, but it does a lot to make socialism looks good again!
  - bluGill 7y ago
    That is a straw man socialits try to make. Conservatives do not have a common voice. That socialism doesn't work is but one (there are some complex arguments for why it cannot that you are ignoring - though to be fair they are too complex to put into a short post) Conservatives often point out that we don't have a free market to start with. We have a strictly regulated market (designed by socialists) that cannot help but increase costs because nobody who cares about costs gets a seat at the table. Wanting to get rid of the regulations and allow an actual market is a small point a few conservatives makes.
    - jmfayard 7y ago
      It's trivially true that no system is purely capitalistic it socialist. The delusion is to not see that going more "socialist" is both hugely popular and supported by the evidence from other countries. Going more capitalist is unpopular and supported by Ayn Rand fictions.
- LargeWu 7y ago
  The "less capable" Keep in mind, we're not all born with the same socio-economic advantages. The idea that you're more capable because you're successful is merely confirmation bias. Furthermore, your comment necessarily implies that anyone not as "capable", whatever that means, is therefore deserving of poverty and hardship. That's a moral stance I cannot support.
mtgx 7y ago
You don't need to restrict the number of drugs, just how they are awarded patents. Big Pharma has learned bow to exploit the system, by making drugs slightly different or using the same drug to claim that it now also treats another issue, and this is basically how they're getting +20 year extensions in perpetuity, almost. Patents should be awarded much more sporadically, and/or their time period should be reduced, while generics should be more encouraged. Then the pricing issue will fix itself. Also it might be a good idea to drastically cut the patent time for drugs where >50% or so of the research was done with government grants. I don't see why such drugs should get more than a 5-year patent.
StaticRedux 7y ago
I'm sure it's not ok to the people that need those new medicines
- sgift 7y ago
  That's a rather weak argument, since medicine development is speculative.
- elil17 7y ago
  But the current system is not okay for people who need medications that exist and are cheap to manufacture (eg insulin) but can’t afford rates being charged
  - tathougies 7y ago
    There are other means to achieve this though that do not hinder progress, such as covering such people with Medicaid.
  - jeffdavis 7y ago
    There is no patent protection on regular insulin, so it's some kind of ordinary monopoly problem, it appears. I suspect a better set of regulations around generics would solve the problem with ordinary market forces. Probably there are quite a few policies that protect the existing drug companies that don't make any sense for generics.
    - AnthonyMouse 7y ago
      IIRC the issue with insulin is that while "regular" insulin is not under patent, there are better insulin products on the market that are, and those are what everybody prefers. Then, because most people do actually have insurance, the insurance pays for the more expensive version and so that's the only one anybody makes. The market for "regular" insulin is limited to people without insurance, which isn't a big enough market to justify all the regulatory work needed to manufacture it. What's really needed there is to make it easier for generics manufacturers to get regulatory approval.
tpmoney 7y ago
That’s a pretty privileged view point. On the other hand I have a family member whose genetic makeup makes it so that they cannot use ~90% of the medications available for their condition. As a result every new medication in that area is of extreme interest to them and their doctors because it might be something they can use. Given the choice between higher prices or not having treatment at all, I suspect those whose medications would be culled would gladly choose higher prices.
- hyperpape 7y ago
  And your point of view is also privileged by that standard. For people who can't afford the drugs for their conditions, reducing the price is "of extreme interest to them". I'm not saying that your position is wrong--medical innovation is really important. I'm saying you're being reductionist. There are really hard questions here, and accusing others of privilege does nothing to make this discussion more productive.
  - tpmoney 7y ago
    Sure, being able to afford medications is also a privileged position. But too often I see these sorts of dismissals of “just a few less new medications a year” without an acknowledgement of the real human costs that will be paid. Further I posit that the problem of “some people cannot afford some medications” should and does have a solution other than “all people will lose access to otherwise viable medications”
- EpicEng 7y ago
  That works for your 1 in a million (10 million? 100 million?) family member, but how about the 85 million who need insulin? Talking about "privilege" seems silly here as you're just prioritizing one person's needs over another's in the opposite direction.
cde-v 7y ago
NO! This inevitably will end up as slightly fewer medicines with no reduction in price.
- elil17 7y ago
  Why wouldn’t it lead to a reduction in price? Removing artificial barriers to competition lowers prices, that’s like the whole idea behind supply/demand in economics.
  - AnthonyMouse 7y ago
    The bill is about about "negotiating prices", i.e. price controls. But if you legislate lower prices by fiat and the result is fewer drugs, that's less competition -- which can raise prices. If there are two drugs available for a condition then not covering one because it's too expensive is more viable. Take one of those companies out of the market and what does that do to your leverage when you're "negotiating" with the other one?
__s 7y ago
Surprised by the comments in this thread US drug prices are not because of R&D. This title presents a false dichotomy Drug companies have enough capital at this point that they don't need old drugs to fund new drugs. They can charge a high price for new drugs to recoup their development costs, & then charge closer to the cost of production once that development has been covered
- zbyte64 7y ago
  Also surprised by the lack of mention of reformulating existing drugs to extend their patents. The poster child of this practice is insulin, where Americans pay absurdly higher amounts for something where generics are abundant.
  - bluGill 7y ago
    To be fair, reformulation isn't exactly cheap (though compared to a new drug it is), and often they are better than the generic. Generic insulin still exists, but the reformulations are better - or so the diabetics I've heard from have said.
  - vonmoltke 7y ago
    > Also surprised by the lack of mention of reformulating existing drugs to extend their patents. Reformulation does not extend patents, it creates a new patent on the new substance. The substance in the existing patent can be manufactured as a generic after the existing patent expires. The wrinkle is that the new and existing substances are not equivalent, and thus cannot be substituted for one another. Thus, if a doctor prescribes the new one, that is what needs to be dispensed.
    - eyko 7y ago
      Can't a patient ask a doctor to prescribe a generic, when it exists? It seems like that would be an easy fix: a law that requires doctors to give you the alternative name for a generic, and make the sponsored version an optional upgrade. I'm European and the whole concept of a doctor prescribing a "brand" sounds alien to me.
ghostwriter 7y ago
Healthcare and medicine is a commodity service, similar to airway transportation and food supply, and the more abundance is there on all levels of it, the lower the prices get across time. Artificial caps on the cost of medicine creates unhealthy bureaucratic incentives like this one instance within NHS in the UK https://eu.usatoday.com/story/opinion/2019/06/15/trump-criticize-uk-single-payer-health-care-column/1419339001/ https://eu.usatoday.com/story/opinion/2019/06/15/trump-criti...
- zbyte64 7y ago
  Medicine is still a commodity even if another entity collectively bargains for it (ie NHS). Why doesn't the parent just by the medicine directly? Surely the NHS doesn't prevent that from happening. Oh, right, it is too expensive to purchase for most people without collectively bargaining. But I guess even that kind of bureaucracy isn't tolerable to an absolutist.
  - ghostwriter 7y ago
    The entity may and should collectively bargain 90% discount, as long as the parents of those who need the unavailable medicine right now can withdraw from contributing their taxes to NHS and use the freed funds for direct purchases of the otherwise unavailable drug. I’m not sure it’s possible at the moment.
    - zbyte64 7y ago
      I get that sounds "fair" but when you consider the family can suffer from any number of ailments that is rather cruel to say "your son requires special medicine, to afford that you must withdraw from public health care and you are on your own if you break your arm or back"
      - ghostwriter 7y ago
        That’s why I mentioned that abundance of options on all levels of the service of “providing healthcare” is crucially important for reducing costs over time. I can imagine different plans for different people of different healthcare needs (young and old, employed and unemployed etc), covered by more than one healthcare provider, in the same manner it is currently done in airway transportation.

33 points by wiggles_md 7y ago

Note that I had to trim the lengthy title: I think this issue is an interesting and an important one to discuss, and that the discussion doesn’t benefit from the political framing. I certainly did editorialize however and would appreciate a better short title if one is offered.

ars 7y ago
The current title answers a question, it should instead raise a question. [Currently: Developing slightly fewer medicines is OK if it means lower prices] Suggestion: Congress debates if developing slightly fewer medicines is OK if it means lower prices
- wiggles_md 7y ago
  I both appreciate the pointer and the suggestion. Thank you. The suggestion was sadly too long by 6. I’ve gone with “Congress asks if developing slightly fewer medicines is OK if it lowers prices”.

zallarak 7y ago

The compound effect of lost progress might become more significant over time.

Jyaif 7y ago
The money saved would be used for something else, e.g. education. That effect would also compound over time.
- AnthonyMouse 7y ago
  That's assuming the alternative thing actually benefits from the money. You mention education, but we've already seen that education spending has a threshold past which spending more money no longer improves outcomes (it just inflates prices), and we're already above that level of education spending. And even if we weren't, it doesn't follow that moving resources from one place to the other is the right choice. When you have two things that both produce benefits exceeding their costs, you're better off to do both of them.
  - Jyaif 7y ago
    > It doesn't follow that moving resources from one place to the other is the right choice. When you have two things that both produce benefits exceeding their costs, you're better off to do both of them. Yes, in an imaginary world we can invest in all the good things at the same time. In the real world you have a limited amount of resources, so you can't do everything at the same time without borrowing money. But guess what, borrowing money is moving resources from one place to an other.
    - AnthonyMouse 7y ago
      The world in which you can invest in both drug research and education is not imaginary. We in actual fact already do both of those things at the same time.

mieseratte 7y ago

Well this is, in essence, the concern of the "ObamaCare Death Panel"! Only instead of determining by a board of doctors whether you are entitled to care, a bureaucratic measure to determine whether a company should investigate cures to what ails you. Better for society, worse for you as an individual.

nradov 7y ago
Who is "you"? A public policy change along these lines would be better for some individuals and worse for others.
- mieseratte 7y ago
  With an insurer, you at least have a backstop of changing insurers. If the government makes this decision, your backstop becomes "move to a new polity." This is the core of the argument, that the government should not have this power. Say what you will of the sad state of the US health situation, there are potential solutions not involving this level of "We choose who can have what." I'm not one with exotic health problems, the kind that involve going to a hospital for a week for a batter of tests and analysis, but I know people for whom this is the case. I suppose those people are the ones this is writing off.
RaiseProfits 7y ago
I always assumed death panels were a tongue in cheek reference to what health insurance companies already do.
- mieseratte 7y ago
  Well you have assumed wrong. It was a reference to giving the government, likely unelected bureaucracies, power to decide who receives what healthcare.
  - KirinDave 7y ago
    In as much as it is a clever bit of propaganda for the corporatist idea that only private industry should be able to arbitrarily decide who does and does not receive life-preserving care, you're right. In principle, there is no difference between this outcome and what HMOs like Kaiser do to this very day.

adrianmonk 7y ago

Well, that depends on specifically which drugs you subtract out of the set. Some new drugs are not that critical to have. Others might be. Given that we don't / can't know which drugs will be developed in the future, it's kind of impossible to answer with certainty.

bluGill 7y ago
The problem is we don't really know. Drugs that are almost out will probably still come out. However we are most likely to lose ones that are in the here are 100 things we could try at high cost - we know from experience than 1 in 1000 of these ideas is useful. If the cost recovery is high enough you try all 100 ideas to see if they lead anywhere, and then find another list of 100... If cost recovery isn't high enough you don't try any, and we don't really know what we lost because we don't know which of the ideas before actually will turn out to work.

aantix 7y ago

That’s socialism at its core. The sacrifice of innovation to equalize everyone’s humanity. But we’re obviously not all born equal in capability. Nor do we remain so. It steals people’s ability to improve their own life. So resentment settles in by those now required to hold up the less capable.

jmfayard 7y ago
The conservative movement keeps insisting than making decent healthcare and education affordable is socialism. That almost never convince anyone that those are bad ideas, but it does a lot to make socialism looks good again!
- bluGill 7y ago
  That is a straw man socialits try to make. Conservatives do not have a common voice. That socialism doesn't work is but one (there are some complex arguments for why it cannot that you are ignoring - though to be fair they are too complex to put into a short post) Conservatives often point out that we don't have a free market to start with. We have a strictly regulated market (designed by socialists) that cannot help but increase costs because nobody who cares about costs gets a seat at the table. Wanting to get rid of the regulations and allow an actual market is a small point a few conservatives makes.
  - jmfayard 7y ago
    It's trivially true that no system is purely capitalistic it socialist. The delusion is to not see that going more "socialist" is both hugely popular and supported by the evidence from other countries. Going more capitalist is unpopular and supported by Ayn Rand fictions.
LargeWu 7y ago
The "less capable" Keep in mind, we're not all born with the same socio-economic advantages. The idea that you're more capable because you're successful is merely confirmation bias. Furthermore, your comment necessarily implies that anyone not as "capable", whatever that means, is therefore deserving of poverty and hardship. That's a moral stance I cannot support.

mtgx 7y ago

You don't need to restrict the number of drugs, just how they are awarded patents. Big Pharma has learned bow to exploit the system, by making drugs slightly different or using the same drug to claim that it now also treats another issue, and this is basically how they're getting +20 year extensions in perpetuity, almost. Patents should be awarded much more sporadically, and/or their time period should be reduced, while generics should be more encouraged. Then the pricing issue will fix itself. Also it might be a good idea to drastically cut the patent time for drugs where >50% or so of the research was done with government grants. I don't see why such drugs should get more than a 5-year patent.

StaticRedux 7y ago

I'm sure it's not ok to the people that need those new medicines

sgift 7y ago
That's a rather weak argument, since medicine development is speculative.
elil17 7y ago
But the current system is not okay for people who need medications that exist and are cheap to manufacture (eg insulin) but can’t afford rates being charged
- tathougies 7y ago
  There are other means to achieve this though that do not hinder progress, such as covering such people with Medicaid.
- jeffdavis 7y ago
  There is no patent protection on regular insulin, so it's some kind of ordinary monopoly problem, it appears. I suspect a better set of regulations around generics would solve the problem with ordinary market forces. Probably there are quite a few policies that protect the existing drug companies that don't make any sense for generics.
  - AnthonyMouse 7y ago
    IIRC the issue with insulin is that while "regular" insulin is not under patent, there are better insulin products on the market that are, and those are what everybody prefers. Then, because most people do actually have insurance, the insurance pays for the more expensive version and so that's the only one anybody makes. The market for "regular" insulin is limited to people without insurance, which isn't a big enough market to justify all the regulatory work needed to manufacture it. What's really needed there is to make it easier for generics manufacturers to get regulatory approval.

tpmoney 7y ago

That’s a pretty privileged view point. On the other hand I have a family member whose genetic makeup makes it so that they cannot use ~90% of the medications available for their condition. As a result every new medication in that area is of extreme interest to them and their doctors because it might be something they can use. Given the choice between higher prices or not having treatment at all, I suspect those whose medications would be culled would gladly choose higher prices.

hyperpape 7y ago
And your point of view is also privileged by that standard. For people who can't afford the drugs for their conditions, reducing the price is "of extreme interest to them". I'm not saying that your position is wrong--medical innovation is really important. I'm saying you're being reductionist. There are really hard questions here, and accusing others of privilege does nothing to make this discussion more productive.
- tpmoney 7y ago
  Sure, being able to afford medications is also a privileged position. But too often I see these sorts of dismissals of “just a few less new medications a year” without an acknowledgement of the real human costs that will be paid. Further I posit that the problem of “some people cannot afford some medications” should and does have a solution other than “all people will lose access to otherwise viable medications”
EpicEng 7y ago
That works for your 1 in a million (10 million? 100 million?) family member, but how about the 85 million who need insulin? Talking about "privilege" seems silly here as you're just prioritizing one person's needs over another's in the opposite direction.

cde-v 7y ago

NO! This inevitably will end up as slightly fewer medicines with no reduction in price.

elil17 7y ago
Why wouldn’t it lead to a reduction in price? Removing artificial barriers to competition lowers prices, that’s like the whole idea behind supply/demand in economics.
- AnthonyMouse 7y ago
  The bill is about about "negotiating prices", i.e. price controls. But if you legislate lower prices by fiat and the result is fewer drugs, that's less competition -- which can raise prices. If there are two drugs available for a condition then not covering one because it's too expensive is more viable. Take one of those companies out of the market and what does that do to your leverage when you're "negotiating" with the other one?

__s 7y ago

Surprised by the comments in this thread US drug prices are not because of R&D. This title presents a false dichotomy Drug companies have enough capital at this point that they don't need old drugs to fund new drugs. They can charge a high price for new drugs to recoup their development costs, & then charge closer to the cost of production once that development has been covered

zbyte64 7y ago
Also surprised by the lack of mention of reformulating existing drugs to extend their patents. The poster child of this practice is insulin, where Americans pay absurdly higher amounts for something where generics are abundant.
- bluGill 7y ago
  To be fair, reformulation isn't exactly cheap (though compared to a new drug it is), and often they are better than the generic. Generic insulin still exists, but the reformulations are better - or so the diabetics I've heard from have said.
- vonmoltke 7y ago
  > Also surprised by the lack of mention of reformulating existing drugs to extend their patents. Reformulation does not extend patents, it creates a new patent on the new substance. The substance in the existing patent can be manufactured as a generic after the existing patent expires. The wrinkle is that the new and existing substances are not equivalent, and thus cannot be substituted for one another. Thus, if a doctor prescribes the new one, that is what needs to be dispensed.
  - eyko 7y ago
    Can't a patient ask a doctor to prescribe a generic, when it exists? It seems like that would be an easy fix: a law that requires doctors to give you the alternative name for a generic, and make the sponsored version an optional upgrade. I'm European and the whole concept of a doctor prescribing a "brand" sounds alien to me.

ghostwriter 7y ago

Healthcare and medicine is a commodity service, similar to airway transportation and food supply, and the more abundance is there on all levels of it, the lower the prices get across time. Artificial caps on the cost of medicine creates unhealthy bureaucratic incentives like this one instance within NHS in the UK https://eu.usatoday.com/story/opinion/2019/06/15/trump-criticize-uk-single-payer-health-care-column/1419339001/ https://eu.usatoday.com/story/opinion/2019/06/15/trump-criti...

zbyte64 7y ago
Medicine is still a commodity even if another entity collectively bargains for it (ie NHS). Why doesn't the parent just by the medicine directly? Surely the NHS doesn't prevent that from happening. Oh, right, it is too expensive to purchase for most people without collectively bargaining. But I guess even that kind of bureaucracy isn't tolerable to an absolutist.
- ghostwriter 7y ago
  The entity may and should collectively bargain 90% discount, as long as the parents of those who need the unavailable medicine right now can withdraw from contributing their taxes to NHS and use the freed funds for direct purchases of the otherwise unavailable drug. I’m not sure it’s possible at the moment.
  - zbyte64 7y ago
    I get that sounds "fair" but when you consider the family can suffer from any number of ailments that is rather cruel to say "your son requires special medicine, to afford that you must withdraw from public health care and you are on your own if you break your arm or back"
    - ghostwriter 7y ago
      That’s why I mentioned that abundance of options on all levels of the service of “providing healthcare” is crucially important for reducing costs over time. I can imagine different plans for different people of different healthcare needs (young and old, employed and unemployed etc), covered by more than one healthcare provider, in the same manner it is currently done in airway transportation.