4 ms·

California could launch generic prescription drug label

18 points by tareqak 7y ago

refurb 7y ago
I find this news quite odd. The generic drug market is very competitive (with a few outliers). Margin for high volume generic drugs are measured in hundreds of basis points. California is likely getting a very good price for generic drugs today. There are some reasons why they might do this: 1) the odd generic drug where prices are still high or 2) one of the many generic drugs where there are shortages. The big caveat is that many of the shortages are for injectable drugs which are very difficult to make (hence why there are shortages). But the monetary savings will be pretty limited.
- GeekyBear 7y ago
  There are antitrust actions that would beg to differ. >What started as an antitrust lawsuit brought by states over just two drugs in 2016 has exploded into an investigation of alleged price-fixing involving at least 16 companies and 300 drugs, said Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut who has been a leading force in the probe. “This is most likely the largest cartel in the history of the United States,” Nielsen said. In just one instance of extraordinary cost surges, the price of a decades-old drug to ease asthma symptoms — albuterol, sold by generic manufacturers Mylan and Sun — jumped more than 3,400%, from 13 cents a tablet to more than $4.70. https://www.latimes.com/business/la-fi-generic-drugs-prices-20181213-story.html https://www.latimes.com/business/la-fi-generic-drugs-prices-...
  - refurb 7y ago
    Doesn’t it make more sense to prosecute the companies rather than just bypassing them by making it yourself? Also, CA wouldn’t be making the drug, but rather contracting with a generic company.
    - toomuchtodo 7y ago
      It makes sense to establish your own manufacturing capacity for critical infrastructure (pharma production) in order to have the necessary control, while also suing for antitrust actions (and, if feasible, using extracted penalties to bootstrap the state’s initiative).
      - refurb 7y ago
        But this is being framed as cost saving. Critical infrastructure? Sure, that makes sense. But I highly doubt there will be much cost savings.
        toomuchtodo 7y ago
        Doubts are reasonable. Government should be held accountable. Reserve judgment until after the attempt and there’s data. Isn’t this what we want? For government to iterate to improve quality of life for citizens?
        GeekyBear 7y ago
        I'm quite certain that the cost of making albuterol didn't suddenly rise by three thousand percent. How is bypassing that sort of extortionate pricing not a clear price savings?

18 points by tareqak 7y ago

I find this news quite odd. The generic drug market is very competitive (with a few outliers). Margin for high volume generic drugs are measured in hundreds of basis points. California is likely getting a very good price for generic drugs today. There are some reasons why they might do this: 1) the odd generic drug where prices are still high or 2) one of the many generic drugs where there are shortages. The big caveat is that many of the shortages are for injectable drugs which are very difficult to make (hence why there are shortages). But the monetary savings will be pretty limited.

GeekyBear 7y ago
There are antitrust actions that would beg to differ. >What started as an antitrust lawsuit brought by states over just two drugs in 2016 has exploded into an investigation of alleged price-fixing involving at least 16 companies and 300 drugs, said Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut who has been a leading force in the probe. “This is most likely the largest cartel in the history of the United States,” Nielsen said. In just one instance of extraordinary cost surges, the price of a decades-old drug to ease asthma symptoms — albuterol, sold by generic manufacturers Mylan and Sun — jumped more than 3,400%, from 13 cents a tablet to more than $4.70. https://www.latimes.com/business/la-fi-generic-drugs-prices-20181213-story.html https://www.latimes.com/business/la-fi-generic-drugs-prices-...
- refurb 7y ago
  Doesn’t it make more sense to prosecute the companies rather than just bypassing them by making it yourself? Also, CA wouldn’t be making the drug, but rather contracting with a generic company.
  - toomuchtodo 7y ago
    It makes sense to establish your own manufacturing capacity for critical infrastructure (pharma production) in order to have the necessary control, while also suing for antitrust actions (and, if feasible, using extracted penalties to bootstrap the state’s initiative).
    - refurb 7y ago
      But this is being framed as cost saving. Critical infrastructure? Sure, that makes sense. But I highly doubt there will be much cost savings.
      - toomuchtodo 7y ago
        Doubts are reasonable. Government should be held accountable. Reserve judgment until after the attempt and there’s data. Isn’t this what we want? For government to iterate to improve quality of life for citizens?
      - GeekyBear 7y ago
        I'm quite certain that the cost of making albuterol didn't suddenly rise by three thousand percent. How is bypassing that sort of extortionate pricing not a clear price savings?