3 ms·

The drug price was raised from $500 to $2300 (compared to $2800 for the brand name). This is certainly not a morality-driven decision, but it does seem like a r

The drug price was raised from $500 to $2300 (compared to $2800 for the brand name). This is certainly not a morality-driven decision, but it does seem like a reasonable business decision. It's capitalism at work. What's missing is, where are the other competitors to provide the same drug for $2100, resulting in a price war that eventually drops them back down to the $500 range, which was clearly profitable for them in the first place? EDIT: Hmm, apparently I've waded into a political minefield here. I was posting a theoretical question because I was curious... The price change is so large. What is stopping another company from coming in and eating lunch? Obviously there's a bit of a regulatory moat, but for that kind of margin, it seems surmountable.

metalliqaz 7y ago
"Capitalism" here assumes a free market, but the health care business isn't a free market. It's loaded with regulation and all kinds of other issues (you can't comparison shop when you're bleeding profusely, for example). And it's not like the regulation isn't there for good reason. Bad drugs, snake oil, and all kinds of quackery have hurt and/or killed many people in the past. We need to have a new social contract that prohibits profiting from suffering.
- darkerside 7y ago
  No market is truly free. Of course all markets exist on a continuum, and healthcare needs more regulation than many. That doesn't mean less free markets don't exhibit similar behaviors and reward competition.
zentiggr 7y ago
If the other players in the pharmaceutical supply weren't pushing regulatory capture, blind deals, collusion, and every other trick to keep ricing under their own control instead of by actual market forces, maybe this would work.
- darkerside 7y ago
  What are blind deals? Collusion seems unlikely between two parties. It's simply unnecessary. Adding a third competitor seems like it would resolve things.
  - zentiggr 7y ago
    Pharmacy benefit managers are middlemen who often dictate which drugs are available to a plan, and have been implicated in pushing more expensive alternative drugs in collusion with manufacturers desires to push certain lines for profit. They are also basically under the radar in the stream of third party companies 'providing benefits'.
Zenbit_UX 7y ago
The real question is why did the maker of the original (priced at $2800) hold strong when a generic existed at $500. Who was purchasing this highly marked up "premium" antibiotic for UTIs? In a free market the rational way this would play out is original manufacturer runs wild with their monopoly until a generic is made and undercuts them, they then in turn lower their prices to compete. The only way I see the current situation playing out is with some kind of pricing collusion between the two manufacturers.
- darkerside 7y ago
  Premium brands can charge premium prices. Part of that is their relationships with doctors. It's not great, but at least if there's a generic option that is truly affordable, people who are cost-conscious have an opportunity to pursue it. Yes, there are multiple problems with the healthcare industry, and I'm aware what I'm describing doesn't solve all of them.

metalliqaz 7y ago

"Capitalism" here assumes a free market, but the health care business isn't a free market. It's loaded with regulation and all kinds of other issues (you can't comparison shop when you're bleeding profusely, for example). And it's not like the regulation isn't there for good reason. Bad drugs, snake oil, and all kinds of quackery have hurt and/or killed many people in the past. We need to have a new social contract that prohibits profiting from suffering.

darkerside 7y ago
No market is truly free. Of course all markets exist on a continuum, and healthcare needs more regulation than many. That doesn't mean less free markets don't exhibit similar behaviors and reward competition.

zentiggr 7y ago

If the other players in the pharmaceutical supply weren't pushing regulatory capture, blind deals, collusion, and every other trick to keep ricing under their own control instead of by actual market forces, maybe this would work.

darkerside 7y ago
What are blind deals? Collusion seems unlikely between two parties. It's simply unnecessary. Adding a third competitor seems like it would resolve things.
- zentiggr 7y ago
  Pharmacy benefit managers are middlemen who often dictate which drugs are available to a plan, and have been implicated in pushing more expensive alternative drugs in collusion with manufacturers desires to push certain lines for profit. They are also basically under the radar in the stream of third party companies 'providing benefits'.

Zenbit_UX 7y ago

The real question is why did the maker of the original (priced at $2800) hold strong when a generic existed at $500. Who was purchasing this highly marked up "premium" antibiotic for UTIs? In a free market the rational way this would play out is original manufacturer runs wild with their monopoly until a generic is made and undercuts them, they then in turn lower their prices to compete. The only way I see the current situation playing out is with some kind of pricing collusion between the two manufacturers.

darkerside 7y ago
Premium brands can charge premium prices. Part of that is their relationships with doctors. It's not great, but at least if there's a generic option that is truly affordable, people who are cost-conscious have an opportunity to pursue it. Yes, there are multiple problems with the healthcare industry, and I'm aware what I'm describing doesn't solve all of them.