7 ms·

Will your company become obsolete once the US removes the ridiculous law that US citizens can't buy drugs from other countries? Every modern country has solved

Will your company become obsolete once the US removes the ridiculous law that US citizens can't buy drugs from other countries? Every modern country has solved the low price drug problem except the US because of criminal and fraudulent healthcare laws.

alexosh1 6y ago
Ideally yeah, would be good if we didn't need to exist. There are a variety of policy initiatives the US could likely implement to bring costs down. My kind of mindset with the company though is I am a nobody from nowhere, and congress isn't going to listen to me. I can make cheap / sell medicine at an affordable price though. So I will do that. I'm not sure drug importation will work though, not because it's a bad policy per se, but I'm not sure that other countries will let the US import their low-cost medicines if US law changes in order to protect their domestic supplies. There's Canada as an example case. We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it. Think it's worth a shot though. I know there are some trial programs going into place in Colorado and Florida around allowing drug importation. Will be cool to follow and see how they play out.
- stevebmark 6y ago
  Makes sense, I always appreciate healthcare companies that capitalize on bad laws saying that ideally they wouldn't exist and they're trying to work within the existing framework. Cross-border drug buying works well in the EU, where any European country can buy drugs from any other European country, so whoever has the lowest price usually wins the market. As a private company, your incentive is to maximize profit for shareholders. Since all you have to do is undercut high drug prices a little, what will stop you from the same price gouging that all other US drug companies perform?
  - alexosh1 6y ago
    Well, there's some technical measures we've taken and some practical ones to ensure we work to be profitable but remain focused primarily on improving public health and helping patients. On the technical level, we incorporated as a public benefit corporation, so we are judged not only on how profitable we are for shareholders, but how well be maintain our social mission. That is actually in our charter documents and is a legal requirement. On a practical level, Mark Cuban is our lead investor and his interest is very much focused on helping people and fixing system issues in healthcare. We also did some screening to ensure our other investors are socially minded and prioritize social benefit as well as profits. My mindset is that we need to be profitable to be sustainable and grow enough to help the overall system, but we won't be extortionate.
    - peteretep 6y ago
      > On a practical level, Mark Cuban is our lead investor and his interest is very much focused on helping people and fixing system issues in healthcare. Also he got to write his name on it
      - bsimpson 6y ago
        I wonder how much credibility his name adds in the short term. People might take it more seriously if it's backed by someone with a reputation. In the longer term, success in the health space could add prestige to his name, ala the Nobel prize.
        peteretep 6y ago
        Yes, I agree with both. Seems win/win, and a much better claim to fame than putting radio on the internet! ;-)
        po 6y ago
        The only reason I clicked and am reading these threads right now is because I was curious why he put his name on a drug company.
      - fuzzfactor 6y ago
        Even more importantly, the company got to put his name on it.
      - nojvek 6y ago
        Nice! We had Obamacare, now we get MCubanocare?
        DevKoala 6y ago
        Obamacare actually increases the cost of drugs. Here is a study showing the comparison adjusted for inflation. https://pubmed.ncbi.nlm.nih.gov/28224469/ https://pubmed.ncbi.nlm.nih.gov/28224469/
  - freddyfx 6y ago
    In Italy our representatives negotiates the prices of the important drugs with the pharmaceutical industry, and they have little or no cost for the individual. There are always some very annoying exceptions, of course, but that's the general rule. We all take it for granted and demand it, doesn't matter the political orientation. I think your representatives are not doing a good job (not that ours are better, eh;), and makes me wonder what you vote for, if not for this basic things.
- pjanoman 6y ago
  Would it not be somewhere in the middle though? Instead of completely saying yes or no, maybe Canada would say "We'll allow you to purchase X% of all drugs produced in the country, as we need to hold onto some, but we'd love it if you'd buy the surplus."
  - refurb 6y ago
    Canada produces very little. They are importing it from the big manufacturers. Last time importation from Canada became an issue the companies just said to Canada “we’ll sell you what you bought last year plus 5%.”. Then Canada got to choose - give those drugs to Canadians or sell them to the US. But they can’t do both.
- jmckib 6y ago
  > We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it. Couldn't Canadian drug companies increase supply if the demand was there? In the short term, sure, they would not be able to handle our level of demand, but unless there's some constraint I'm not aware of they could always just scale up and make more animal insulin or whatever.
  - TylerE 6y ago
    They don’t make the drugs in Canada. They buy them in the open market, likely from us.
    - Scoundreller 6y ago
      It's sort of the open market. The history is that Canada used to have "compulsory licensing" for patented drugs. Anyone could manufacture a patented drug in Canada and pay a ?6?% or whatever royalty to the patent owner and they just had to deal with it. Over the years, first 4, then 10 years of exclusivity were provided to the patent owner. Then the WTO came along, and presently, everyone has agreed to ~20y exclusivity and charge/pay the median price of OECD countries before it's a royalty-free free-for-all. http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.htm http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.h... Canadian generic drugs today aren't usually cheaper than US generics, except where patent exclusivity mismatches.
- deleted 6y ago
  [deleted]
- CuriousNinja 6y ago
  > There's Canada as an example case. We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it. Depends on the country. For example India is the largest generic drug manufacturer and has a population of over 1 billion, and they already export their drugs to many countries.
- antman 6y ago
  India would go for it without even noticing I guess.
jariel 6y ago
The laws regarding importation from other countries are odd, but they are not what you think they are. In effect, it's about 're-importation' of drugs, not so much regular import. The Government of Ontario negotiates drug prices for it's citizens, as to other entities elsewhere. By selling to XYZ regime at ABC price, drug companies create a situation wherein 'the resulting price will be the lowest price we sell to any regime' - because of course everyone will want to import from there. In many cases, the price sold to XYA regime isn't quite a very good measure of net market prices. Ergo, it's a weird law, but it's rational on a level. To start - there could be a slew of laws requiring transparency on pricing for everything in the medical domain. That would be a good start. More challenging - Americans could actually get together and start negotiating hard on prices. This may require some legislation. So the 're-importation' issue is an artifact of an odd system, not in and of itself the issue.
- arcticbull 6y ago
  Ontario's a great example of how this problem is usually solved in developed countries. OHIP negotiates the prices of all drugs on behalf of Ontarians by being the sole purchaser, and then drugs are sold at that rate (cost plus, I believe) in pharmacies. Further, the cost of all services is listed on the OHIP website. [1] Not that anyone needs to worry about that as they are fully covered for everyone - not the drugs (yet, fingers crossed), the procedures. [1] http://www.health.gov.on.ca/en/pro/programs/ohip/sob/physserv/sob_master20200306.pdf http://www.health.gov.on.ca/en/pro/programs/ohip/sob/physser...
  - inter_netuser 6y ago
    Tons of new drugs are never even marketed in Canada due to this, or marketed much later. Almost all expensive drugs end up being on a special permission list, where you must to beg the government for access. Not any different than dealing with an insurance company, really. At least you can sue an insurer.
    - arcticbull 6y ago
      You can sue the province too. However of course consider delays in getting a drug to market aren’t always provincial; Health Canada has their own timelines and schedules for approvals, sometimes it’s faster than in America and sometimes it’s slower. The difference is frequently you’re forced to sue insurers as they have a profit motive to screw you. The province only cares about getting you healthy within their means.
arcticbull 6y ago
Other countries don't solve the problem via re-importation. Re-importation shouldn't be illegal, but it shouldn't be necessary - it's really kinda dumb. Other countries have solved this problem by making healthcare universal, and forming a bulk purchasing group which strong-arms providers into charging something the system can bear. The end user doesn't have to care how much that is, because most developed countries simply pay for the drugs people need in the first place. The ideal way to obsolete this problem is to follow their lead - get Medicare for All to happen and restore Medicare's ability to negotiate the price of drugs directly with manufacturers. Then nobody has to pay for the drugs directly in the first place.
- smabie 6y ago
  the bulk prices developed countries in Europe are paying is still much greater than some countries that have a truly free market system. For example, I lived in Tanzania and all drugs were imported and all of them over the counter. Drugs that literally cost thousands of dollars a month in America without insurance would usually come to around $5-10. I doubt the American people (or American industry) would ever allow such a truly free market system to transpire, but I know for a fact it can work. Labor is cheaper in Tanzania obviously, but even if you adjusted for the more expensive labor, a free market system (vs the crony capitalist system we have now) would probably be 10-100x cheaper. Also, even controlling for median wage, the drugs are vastly cheaper in Tanzania vs America. A median worker there might make around $5-10 in wage, so most drugs for a month supply would be only a day of work. Median hourly wage in America of $15 would correspond to drug prices between $60-120 dollars, much cheaper than most medications without insurance. In reality, it should be much cheaper, as the marginal cost can be reduced a lot through online pharmacies (remember that $5-10 cost in Tanzania not only factors in product cost and labor cost, but a staggeringly inefficient distribution network). In short, I don't believe there's any theoretical reason why generic drugs couldn't be dirt cheap and affordable by all in a free market system. After all, capitalism has done a stellar job at reducing the cost of consumer goods over time, and medication should be no different. If everyone could buy lightly regulated pills from alibaba, it would definitely be a win from a utility standpoint. But of course such a thing would never fly, as maximizing total utility doesn't get people elected. Everyone might win except one guy who died from bad pills and the whole gig would be up, even though the total utility function of every citizen in aggregate was being correctly maximized. The strong needs of the few always trumps the weak needs of the many. If everyone paid one $1 dollar per day in order to prevent one death, I'm sure some politician would call it a massive win, even though that's an aggregate loss of 100bn dollars annually and the money saved generated more utility than the utility lost by that one guy dying. Unfortunately, human beings are unable to make correct statistical/utilitarian decisions and support so many policies that are a net negative utility wise.
uhhhhhhhhhhhhhh 6y ago
Sure, our healthcare and insurance laws are straight-up scams, but can a law be criminal?
IfOnlyYouKnew 6y ago
This would just screw over poor countries. See the example of Tanzania someone gives below: selling drugs cheaper in such a country will stop immediately if it risks undercutting the US market.
- sumedh 6y ago
  > This would just screw over poor countries. Lot of drugs are manufactured and exported from India.
- simias 6y ago
  While the general idea that rich countries should help poorer ones has some merits, the idea that poor people in rich countries should be shafted in order to provide cheaper drugs for everybody else doesn't quite make sense to me. I've heard the argument that Americans effectively subsidize drugs for everybody else. While it may be true, it still seems like a terrible situation to me, even as a non-american. There's got to be a fairer way to work this out.

alexosh1 6y ago

Ideally yeah, would be good if we didn't need to exist. There are a variety of policy initiatives the US could likely implement to bring costs down. My kind of mindset with the company though is I am a nobody from nowhere, and congress isn't going to listen to me. I can make cheap / sell medicine at an affordable price though. So I will do that. I'm not sure drug importation will work though, not because it's a bad policy per se, but I'm not sure that other countries will let the US import their low-cost medicines if US law changes in order to protect their domestic supplies. There's Canada as an example case. We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it. Think it's worth a shot though. I know there are some trial programs going into place in Colorado and Florida around allowing drug importation. Will be cool to follow and see how they play out.

stevebmark 6y ago
Makes sense, I always appreciate healthcare companies that capitalize on bad laws saying that ideally they wouldn't exist and they're trying to work within the existing framework. Cross-border drug buying works well in the EU, where any European country can buy drugs from any other European country, so whoever has the lowest price usually wins the market. As a private company, your incentive is to maximize profit for shareholders. Since all you have to do is undercut high drug prices a little, what will stop you from the same price gouging that all other US drug companies perform?
- alexosh1 6y ago
  Well, there's some technical measures we've taken and some practical ones to ensure we work to be profitable but remain focused primarily on improving public health and helping patients. On the technical level, we incorporated as a public benefit corporation, so we are judged not only on how profitable we are for shareholders, but how well be maintain our social mission. That is actually in our charter documents and is a legal requirement. On a practical level, Mark Cuban is our lead investor and his interest is very much focused on helping people and fixing system issues in healthcare. We also did some screening to ensure our other investors are socially minded and prioritize social benefit as well as profits. My mindset is that we need to be profitable to be sustainable and grow enough to help the overall system, but we won't be extortionate.
  - peteretep 6y ago
    > On a practical level, Mark Cuban is our lead investor and his interest is very much focused on helping people and fixing system issues in healthcare. Also he got to write his name on it
    - bsimpson 6y ago
      I wonder how much credibility his name adds in the short term. People might take it more seriously if it's backed by someone with a reputation. In the longer term, success in the health space could add prestige to his name, ala the Nobel prize.
      - peteretep 6y ago
        Yes, I agree with both. Seems win/win, and a much better claim to fame than putting radio on the internet! ;-)
      - po 6y ago
        The only reason I clicked and am reading these threads right now is because I was curious why he put his name on a drug company.
    - fuzzfactor 6y ago
      Even more importantly, the company got to put his name on it.
    - nojvek 6y ago
      Nice! We had Obamacare, now we get MCubanocare?
      - DevKoala 6y ago
        Obamacare actually increases the cost of drugs. Here is a study showing the comparison adjusted for inflation. https://pubmed.ncbi.nlm.nih.gov/28224469/ https://pubmed.ncbi.nlm.nih.gov/28224469/
- freddyfx 6y ago
  In Italy our representatives negotiates the prices of the important drugs with the pharmaceutical industry, and they have little or no cost for the individual. There are always some very annoying exceptions, of course, but that's the general rule. We all take it for granted and demand it, doesn't matter the political orientation. I think your representatives are not doing a good job (not that ours are better, eh;), and makes me wonder what you vote for, if not for this basic things.
pjanoman 6y ago
Would it not be somewhere in the middle though? Instead of completely saying yes or no, maybe Canada would say "We'll allow you to purchase X% of all drugs produced in the country, as we need to hold onto some, but we'd love it if you'd buy the surplus."
- refurb 6y ago
  Canada produces very little. They are importing it from the big manufacturers. Last time importation from Canada became an issue the companies just said to Canada “we’ll sell you what you bought last year plus 5%.”. Then Canada got to choose - give those drugs to Canadians or sell them to the US. But they can’t do both.
jmckib 6y ago
> We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it. Couldn't Canadian drug companies increase supply if the demand was there? In the short term, sure, they would not be able to handle our level of demand, but unless there's some constraint I'm not aware of they could always just scale up and make more animal insulin or whatever.
- TylerE 6y ago
  They don’t make the drugs in Canada. They buy them in the open market, likely from us.
  - Scoundreller 6y ago
    It's sort of the open market. The history is that Canada used to have "compulsory licensing" for patented drugs. Anyone could manufacture a patented drug in Canada and pay a ?6?% or whatever royalty to the patent owner and they just had to deal with it. Over the years, first 4, then 10 years of exclusivity were provided to the patent owner. Then the WTO came along, and presently, everyone has agreed to ~20y exclusivity and charge/pay the median price of OECD countries before it's a royalty-free free-for-all. http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.htm http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.h... Canadian generic drugs today aren't usually cheaper than US generics, except where patent exclusivity mismatches.
deleted 6y ago
[deleted]
CuriousNinja 6y ago
> There's Canada as an example case. We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it. Depends on the country. For example India is the largest generic drug manufacturer and has a population of over 1 billion, and they already export their drugs to many countries.
antman 6y ago
India would go for it without even noticing I guess.

jariel 6y ago

The laws regarding importation from other countries are odd, but they are not what you think they are. In effect, it's about 're-importation' of drugs, not so much regular import. The Government of Ontario negotiates drug prices for it's citizens, as to other entities elsewhere. By selling to XYZ regime at ABC price, drug companies create a situation wherein 'the resulting price will be the lowest price we sell to any regime' - because of course everyone will want to import from there. In many cases, the price sold to XYA regime isn't quite a very good measure of net market prices. Ergo, it's a weird law, but it's rational on a level. To start - there could be a slew of laws requiring transparency on pricing for everything in the medical domain. That would be a good start. More challenging - Americans could actually get together and start negotiating hard on prices. This may require some legislation. So the 're-importation' issue is an artifact of an odd system, not in and of itself the issue.

arcticbull 6y ago
Ontario's a great example of how this problem is usually solved in developed countries. OHIP negotiates the prices of all drugs on behalf of Ontarians by being the sole purchaser, and then drugs are sold at that rate (cost plus, I believe) in pharmacies. Further, the cost of all services is listed on the OHIP website. [1] Not that anyone needs to worry about that as they are fully covered for everyone - not the drugs (yet, fingers crossed), the procedures. [1] http://www.health.gov.on.ca/en/pro/programs/ohip/sob/physserv/sob_master20200306.pdf http://www.health.gov.on.ca/en/pro/programs/ohip/sob/physser...
- inter_netuser 6y ago
  Tons of new drugs are never even marketed in Canada due to this, or marketed much later. Almost all expensive drugs end up being on a special permission list, where you must to beg the government for access. Not any different than dealing with an insurance company, really. At least you can sue an insurer.
  - arcticbull 6y ago
    You can sue the province too. However of course consider delays in getting a drug to market aren’t always provincial; Health Canada has their own timelines and schedules for approvals, sometimes it’s faster than in America and sometimes it’s slower. The difference is frequently you’re forced to sue insurers as they have a profit motive to screw you. The province only cares about getting you healthy within their means.

arcticbull 6y ago

Other countries don't solve the problem via re-importation. Re-importation shouldn't be illegal, but it shouldn't be necessary - it's really kinda dumb. Other countries have solved this problem by making healthcare universal, and forming a bulk purchasing group which strong-arms providers into charging something the system can bear. The end user doesn't have to care how much that is, because most developed countries simply pay for the drugs people need in the first place. The ideal way to obsolete this problem is to follow their lead - get Medicare for All to happen and restore Medicare's ability to negotiate the price of drugs directly with manufacturers. Then nobody has to pay for the drugs directly in the first place.

smabie 6y ago
the bulk prices developed countries in Europe are paying is still much greater than some countries that have a truly free market system. For example, I lived in Tanzania and all drugs were imported and all of them over the counter. Drugs that literally cost thousands of dollars a month in America without insurance would usually come to around $5-10. I doubt the American people (or American industry) would ever allow such a truly free market system to transpire, but I know for a fact it can work. Labor is cheaper in Tanzania obviously, but even if you adjusted for the more expensive labor, a free market system (vs the crony capitalist system we have now) would probably be 10-100x cheaper. Also, even controlling for median wage, the drugs are vastly cheaper in Tanzania vs America. A median worker there might make around $5-10 in wage, so most drugs for a month supply would be only a day of work. Median hourly wage in America of $15 would correspond to drug prices between $60-120 dollars, much cheaper than most medications without insurance. In reality, it should be much cheaper, as the marginal cost can be reduced a lot through online pharmacies (remember that $5-10 cost in Tanzania not only factors in product cost and labor cost, but a staggeringly inefficient distribution network). In short, I don't believe there's any theoretical reason why generic drugs couldn't be dirt cheap and affordable by all in a free market system. After all, capitalism has done a stellar job at reducing the cost of consumer goods over time, and medication should be no different. If everyone could buy lightly regulated pills from alibaba, it would definitely be a win from a utility standpoint. But of course such a thing would never fly, as maximizing total utility doesn't get people elected. Everyone might win except one guy who died from bad pills and the whole gig would be up, even though the total utility function of every citizen in aggregate was being correctly maximized. The strong needs of the few always trumps the weak needs of the many. If everyone paid one $1 dollar per day in order to prevent one death, I'm sure some politician would call it a massive win, even though that's an aggregate loss of 100bn dollars annually and the money saved generated more utility than the utility lost by that one guy dying. Unfortunately, human beings are unable to make correct statistical/utilitarian decisions and support so many policies that are a net negative utility wise.

uhhhhhhhhhhhhhh 6y ago

Sure, our healthcare and insurance laws are straight-up scams, but can a law be criminal?

IfOnlyYouKnew 6y ago

This would just screw over poor countries. See the example of Tanzania someone gives below: selling drugs cheaper in such a country will stop immediately if it risks undercutting the US market.

sumedh 6y ago
> This would just screw over poor countries. Lot of drugs are manufactured and exported from India.
simias 6y ago
While the general idea that rich countries should help poorer ones has some merits, the idea that poor people in rich countries should be shafted in order to provide cheaper drugs for everybody else doesn't quite make sense to me. I've heard the argument that Americans effectively subsidize drugs for everybody else. While it may be true, it still seems like a terrible situation to me, even as a non-american. There's got to be a fairer way to work this out.