6 ms·

On the 100x Price Rise of a Formerly Generic Drug

38 points by nameless_noob 16y ago

reader5000 16y ago
I dont understand. If the FDA wants to incentivize private companies to update the research on old drugs, why dont they just pay them to do it (AND not make the payment contingent on finding the drug marketable as this appears to do)? Obviously nobody knows the true value of new research on old drugs, but giving private companies blank checks to insurer's bank accounts doesnt seem like the best method to go about it.
- bigwally 16y ago
  It is the best method for the drug companies quarterly results.
- barrkel 16y ago
  Actually, some kind of prize system - setting a reward for a drug which has a certain degree of efficacy on some problem - has been proposed as an alternative to the government monopolies we currently have, which alleged free marketers are so in favour of. Dean Baker has written some stuff on it; http://prospect.org/cs/articles?article=patent_medicine http://prospect.org/cs/articles?article=patent_medicine has an overview of and argument for the approach.
Symmetry 16y ago
"How much is regulatory approval worth, anyway?" To the FDA it apparently matters a great deal.
eekfuh 16y ago
This reminds me of albuterol for asthema. I used to get it generic for $4. Now its $45+ with my insurance, since its no longer available as a generic. I now have to purchase Ventolin, which is no different medication wise, just the inhaler is different.
- kujawa 16y ago
  Well, it is different in that the propellant doesn't work as good and so the inhalers tend to fucking clog. Not that I'm bitter or anything. Not that I would ever suggest that the EPA and environmentalists prefer their CFC purity to be 100% at the expense of asthmatics.
srean 16y ago
One of the things that Indian law got right was its older patent law on drugs. The way it used to work was this: you could patent the process of making a particular drug, not the chemical composition of the drug itself. If you could build the same or a better product for cheap using a different process, good for you, and good for everybody else. In most other fields that would be called innovation and good entrepreneurship. I think the main if not the principal point of IP laws is to encourage innovation, technological advance and entrepreneurship. Unfortunately the older market leveling laws rub a significantly large class of free-market proponents the wrong way, at least the most vocal and politically relevant ones. But back to the laws, a popular counterargument has been that the existing laws encourage research whereas the older ones did not. I used to be sold on that line of reasoning till my exposure to the conduct of drug development and research. In US they are almost always always government funded.
- ericd 16y ago
  The counterargument is that if a company is the first to discover that a given molecule is useful medically, and is safe in humans, then they should get exclusive rights to sell that molecule for some time. This makes sense because it is atrociously expensive to get to that point, and the idea that another company should be allowed to manufacture and sell that same molecule after all the hard work has been done by subbing in different chemical reactions to get there is sort of silly. EDIT: Didn't see the last line there. Are you sure that the vast majority are govt. funded all the way to the end of clinical trials? This doesn't jive with what I've heard.
  - srean 16y ago
    Not sure if you are the down-voter. But regardless of that I have to say, I totally believed in what you just wrote, said so much myself if you note my last paragraph. But I was naive then. I have come to realize that the situation you describe is mostly hypothetical and fictional...good argument to buy favors...but not one that represents reality. The private companies are not the ones who are spending money or taking the risks in developing new drugs/molecules (it is mostly the tax payers by way of NIH). If it were the companies then I wouldn't mind it all. The companies do spend money. But it is not in the (re)search for more effective or new drugs. Edit: Re govt funding, I have quite a few friends who are in drug research, well, in the capacity of current and ex grad students and spread across 3 universities and a research institute. All of them are fed funded, and they claim that this is generally the rule rather than the exception. In my opinion the privilege of exclusivity should be doled out in proportion to the aggregated (monetary)risks entertained. Edit2: Don't like threads that nest too deep, so adding here. I would readily concede that I wouldn't have names of drugs at the drop of the hat. My opinions are largely assimilated from my friends working in the area and what I get to read. So hardly the person who would be able to quote stats. Recently an application for extending the period of protection for a anti-retroviral drug was denied in India on the grounds that the molecular change adds nothing to the efficacy of the drug and that the molecular changes in itself do not constitute a non-obvious modification to the chemical to a person of the trade. However, denials of extension like these are very very rare. It is common to keep extending a patent on an old molecule in quantums of decades at a time (Now I wish I had it bookmarked) However I think your test is stricter than need be. As I said, I am looking for proportionality between risk taken and period of exclusivity. That can be broken even if the govt did not carry the full weight from end to end (the example that you are seeking). Generally it is the research phase that incurs the most uncertainty and the kind of research that targets greater efficiency or cheaper production, not what will get the drug or derivative an extended protection. In the context of the older Indian scene, it was the govt funded labs that carried out the research, so it made perfect sense that patents be granted on the process and not on the compound. It also makes sense for the govt to be in the business of funding drug research as for many of the diseases the affected demographics are not most lucrative. (Well unless one is of the opinion that such a population is better of dead, not an unheard of opinion on the net) The research scene is still the same but the laws have been changed subject to international pressure. There is substantial benefit to be had by driving costs down. In the current scheme of things there are very little incentives to do so.
maxharris 16y ago
I have a right to choose what I put in my body.^ Companies that make drugs have a right to sell what they make, as long as they don't lie or defraud me. Simply by doing what it was created to do, the FDA is violating my rights as a patient, as well as the rights of all of those whose rights give rise to the drug companies (i.e., employees and shareholders). Suppose that a new regulation passed that eliminated off-label prescriptions. Many will agree that the suffering and death that would result would be immense. (Just ask anyone who has a friend or relative that's benefited from an off-label drug.) Yet off-label prescriptions fly in the face of what the FDA does. What's going on here? What we choose to do when we're sick ultimately rests on each of us, individually. We all need to be free to do the research ourselves or to delegate this responsibility to whomever each of us has trust in (a particular doctor, for example). The inevitable consequence of losing this freedom is that far more of us suffer and die today than would otherwise. The valid function of the FDA (valid insofar as it is a source of scientific information) should be performed by a private organization like Consumer Reports, which has a great deal of authority, but is completely independent of both companies and the government. Consumer Reports doesn't use violence or the threat of violence to back itself up: the one thing that keeps it in business is trust. Certainly, Consumer Reports doesn't offer its products or services for gratis. But many people find the service valuable enough to pay, and with our bodies, the stakes are much higher. Most people will pay for such a drug-vetting service, either directly or through the professional they delegate health decisions to. We all want safe drugs, and the market is capable of producing and selling safe drugs to us. All we need is to be left free (meaning that the government does one thing only: prevent force and fraud), and verification organizations that pride themselves on true independence will arise. ^This right over your own body really is absolute (so long as you're not hurting someone else). I don't use or advocate for the use of illegal drugs, but it really is no one's business but your own. Yaron Brook recently summed it up best when he said, "You know you're in trouble when you declare war on inanimate objects."
- alnayyir 16y ago
  Stow the politics, this isn't the place for it. Take it to Reddit. A few points: 1. Consumer Reports messes up, your dishwasher might break down before the end of the warranty. 2. A drug company messes up, hundreds, potentially thousands die or have their lifespans severely curtailed in terms of quality of life or length. That's the last I'll say on it, the magnitude of what's at stake should be otherwise self-evident.
chime 16y ago
Another example of this was Colchicine as an HN'er mentioned here: http://news.ycombinator.com/item?id=2263969 http://news.ycombinator.com/item?id=2263969
ck2 16y ago
"the market will balance prices" - oh wait

38 points by nameless_noob 16y ago

I dont understand. If the FDA wants to incentivize private companies to update the research on old drugs, why dont they just pay them to do it (AND not make the payment contingent on finding the drug marketable as this appears to do)? Obviously nobody knows the true value of new research on old drugs, but giving private companies blank checks to insurer's bank accounts doesnt seem like the best method to go about it.

bigwally 16y ago
It is the best method for the drug companies quarterly results.
barrkel 16y ago
Actually, some kind of prize system - setting a reward for a drug which has a certain degree of efficacy on some problem - has been proposed as an alternative to the government monopolies we currently have, which alleged free marketers are so in favour of. Dean Baker has written some stuff on it; http://prospect.org/cs/articles?article=patent_medicine http://prospect.org/cs/articles?article=patent_medicine has an overview of and argument for the approach.

Symmetry 16y ago

"How much is regulatory approval worth, anyway?" To the FDA it apparently matters a great deal.

eekfuh 16y ago

This reminds me of albuterol for asthema. I used to get it generic for $4. Now its $45+ with my insurance, since its no longer available as a generic. I now have to purchase Ventolin, which is no different medication wise, just the inhaler is different.

kujawa 16y ago
Well, it is different in that the propellant doesn't work as good and so the inhalers tend to fucking clog. Not that I'm bitter or anything. Not that I would ever suggest that the EPA and environmentalists prefer their CFC purity to be 100% at the expense of asthmatics.

srean 16y ago

One of the things that Indian law got right was its older patent law on drugs. The way it used to work was this: you could patent the process of making a particular drug, not the chemical composition of the drug itself. If you could build the same or a better product for cheap using a different process, good for you, and good for everybody else. In most other fields that would be called innovation and good entrepreneurship. I think the main if not the principal point of IP laws is to encourage innovation, technological advance and entrepreneurship. Unfortunately the older market leveling laws rub a significantly large class of free-market proponents the wrong way, at least the most vocal and politically relevant ones. But back to the laws, a popular counterargument has been that the existing laws encourage research whereas the older ones did not. I used to be sold on that line of reasoning till my exposure to the conduct of drug development and research. In US they are almost always always government funded.

ericd 16y ago
The counterargument is that if a company is the first to discover that a given molecule is useful medically, and is safe in humans, then they should get exclusive rights to sell that molecule for some time. This makes sense because it is atrociously expensive to get to that point, and the idea that another company should be allowed to manufacture and sell that same molecule after all the hard work has been done by subbing in different chemical reactions to get there is sort of silly. EDIT: Didn't see the last line there. Are you sure that the vast majority are govt. funded all the way to the end of clinical trials? This doesn't jive with what I've heard.
- srean 16y ago
  Not sure if you are the down-voter. But regardless of that I have to say, I totally believed in what you just wrote, said so much myself if you note my last paragraph. But I was naive then. I have come to realize that the situation you describe is mostly hypothetical and fictional...good argument to buy favors...but not one that represents reality. The private companies are not the ones who are spending money or taking the risks in developing new drugs/molecules (it is mostly the tax payers by way of NIH). If it were the companies then I wouldn't mind it all. The companies do spend money. But it is not in the (re)search for more effective or new drugs. Edit: Re govt funding, I have quite a few friends who are in drug research, well, in the capacity of current and ex grad students and spread across 3 universities and a research institute. All of them are fed funded, and they claim that this is generally the rule rather than the exception. In my opinion the privilege of exclusivity should be doled out in proportion to the aggregated (monetary)risks entertained. Edit2: Don't like threads that nest too deep, so adding here. I would readily concede that I wouldn't have names of drugs at the drop of the hat. My opinions are largely assimilated from my friends working in the area and what I get to read. So hardly the person who would be able to quote stats. Recently an application for extending the period of protection for a anti-retroviral drug was denied in India on the grounds that the molecular change adds nothing to the efficacy of the drug and that the molecular changes in itself do not constitute a non-obvious modification to the chemical to a person of the trade. However, denials of extension like these are very very rare. It is common to keep extending a patent on an old molecule in quantums of decades at a time (Now I wish I had it bookmarked) However I think your test is stricter than need be. As I said, I am looking for proportionality between risk taken and period of exclusivity. That can be broken even if the govt did not carry the full weight from end to end (the example that you are seeking). Generally it is the research phase that incurs the most uncertainty and the kind of research that targets greater efficiency or cheaper production, not what will get the drug or derivative an extended protection. In the context of the older Indian scene, it was the govt funded labs that carried out the research, so it made perfect sense that patents be granted on the process and not on the compound. It also makes sense for the govt to be in the business of funding drug research as for many of the diseases the affected demographics are not most lucrative. (Well unless one is of the opinion that such a population is better of dead, not an unheard of opinion on the net) The research scene is still the same but the laws have been changed subject to international pressure. There is substantial benefit to be had by driving costs down. In the current scheme of things there are very little incentives to do so.

maxharris 16y ago

I have a right to choose what I put in my body.^ Companies that make drugs have a right to sell what they make, as long as they don't lie or defraud me. Simply by doing what it was created to do, the FDA is violating my rights as a patient, as well as the rights of all of those whose rights give rise to the drug companies (i.e., employees and shareholders). Suppose that a new regulation passed that eliminated off-label prescriptions. Many will agree that the suffering and death that would result would be immense. (Just ask anyone who has a friend or relative that's benefited from an off-label drug.) Yet off-label prescriptions fly in the face of what the FDA does. What's going on here? What we choose to do when we're sick ultimately rests on each of us, individually. We all need to be free to do the research ourselves or to delegate this responsibility to whomever each of us has trust in (a particular doctor, for example). The inevitable consequence of losing this freedom is that far more of us suffer and die today than would otherwise. The valid function of the FDA (valid insofar as it is a source of scientific information) should be performed by a private organization like Consumer Reports, which has a great deal of authority, but is completely independent of both companies and the government. Consumer Reports doesn't use violence or the threat of violence to back itself up: the one thing that keeps it in business is trust. Certainly, Consumer Reports doesn't offer its products or services for gratis. But many people find the service valuable enough to pay, and with our bodies, the stakes are much higher. Most people will pay for such a drug-vetting service, either directly or through the professional they delegate health decisions to. We all want safe drugs, and the market is capable of producing and selling safe drugs to us. All we need is to be left free (meaning that the government does one thing only: prevent force and fraud), and verification organizations that pride themselves on true independence will arise. ^This right over your own body really is absolute (so long as you're not hurting someone else). I don't use or advocate for the use of illegal drugs, but it really is no one's business but your own. Yaron Brook recently summed it up best when he said, "You know you're in trouble when you declare war on inanimate objects."

alnayyir 16y ago
Stow the politics, this isn't the place for it. Take it to Reddit. A few points: 1. Consumer Reports messes up, your dishwasher might break down before the end of the warranty. 2. A drug company messes up, hundreds, potentially thousands die or have their lifespans severely curtailed in terms of quality of life or length. That's the last I'll say on it, the magnitude of what's at stake should be otherwise self-evident.

chime 16y ago

Another example of this was Colchicine as an HN'er mentioned here: http://news.ycombinator.com/item?id=2263969 http://news.ycombinator.com/item?id=2263969

ck2 16y ago

"the market will balance prices" - oh wait