4 ms·

I understand your cynicism, but let’s inject some actual data. The price that the manufacturer charges for a course of blinatumomab (in a different indication

by mft_ 3y ago

I understand your cynicism, but let’s inject some actual data. The price that the manufacturer charges for a course of blinatumomab (in a different indication for adults, not that this is especially relevant in this discussion) is ~£56k [0] - so significantly lower than the price quoted from the US. NICE (the organisation which published the document referenced) exists to achieve value for money for the NHS for higher-priced and specialist treatments. If, following a thorough assessment, a medicine does not achieve the required value for money standard at the price proposed by the manufacturer, they are presented with two options: to not have the drug reimbursed in the UK at all, or to lower the effective price, so that the drug becomes cost-effective. [0] https://www.nice.org.uk/guidance/ta589/documents/final-appra https://www.nice.org.uk/guidance/ta589/documents/final-appra...

AnthonyMouse 3y ago
> If, following a thorough assessment, a medicine does not achieve the required value for money standard at the price proposed by the manufacturer, they are presented with two options: to not have the drug reimbursed in the UK at all, or to lower the effective price, so that the drug becomes cost-effective. Which is effectively price controls, because the number of people with the money to pay out of pocket will be low, so the choice is essentially to sell at the regulated price or not at all. And the company would be crazy to choose the latter because the high cost is to pay for R&D, not manufacturing, so they'll never be better off to abandon the market than to take whatever they're offered. Then you have prices being set by the political system. If the regulators get captured by pharma companies (as would be likely if implemented in the US) they'd overpay when the drug isn't worth it. If not, the regulators would have all the leverage and very little reason not to set prices too low, reducing the incentive for R&D and causing more people to die.
- pfdietz 3y ago
  They have a disincentive to sell to other countries at a discount if those countries allow medical tourism from the US. They don't want US patients taking advantage of the lower cost there.
  - AnthonyMouse 3y ago
    And then many countries don't allow that, for exactly that reason.
- Traubenfuchs 3y ago
  I'd assume this kind of pricing negotiations between government entities and state of the art pharmaceutical companies is a deadly dance around how much money needs to be paid to the companies to incentivise research, lobbying and how much money a life is worth. Yes, selling for cheap is better than not selling at all, but if the government entities keep being stingy, maybe next time the company won't develop a treatment for a rare disease at all because it's just not worth it...
  - AnthonyMouse 3y ago
    > Yes, selling for cheap is better than not selling at all, but if the government entities keep being stingy, maybe next time the company won't develop a treatment for a rare disease at all because it's just not worth it... Which is exactly the problem. And it's even worse than that, because it's a global market with national monopsony buyers. If your country is 4% of the global market, whatever you do isn't going to change the math for the drug company very much and you can ride on the coattails of other countries, so you might as well be as stingy as possible. But then everyone has the same incentive and the net effect is tragedy of the commons. Or in practice, the US disproportionately funding drug development for the whole world and then people from other countries criticizing them for having higher drug prices.
refurb 3y ago
That's not the real price in the UK because manufacturers will negotiate a confidential price with NICE. And the quoted price is not the price insurers pay in the US either. As someone who has worked in this space, the EU is lower than the US, but for oncology drugs the difference isn't that large.

by mft_ 3y ago

AnthonyMouse 3y ago

> If, following a thorough assessment, a medicine does not achieve the required value for money standard at the price proposed by the manufacturer, they are presented with two options: to not have the drug reimbursed in the UK at all, or to lower the effective price, so that the drug becomes cost-effective. Which is effectively price controls, because the number of people with the money to pay out of pocket will be low, so the choice is essentially to sell at the regulated price or not at all. And the company would be crazy to choose the latter because the high cost is to pay for R&D, not manufacturing, so they'll never be better off to abandon the market than to take whatever they're offered. Then you have prices being set by the political system. If the regulators get captured by pharma companies (as would be likely if implemented in the US) they'd overpay when the drug isn't worth it. If not, the regulators would have all the leverage and very little reason not to set prices too low, reducing the incentive for R&D and causing more people to die.

pfdietz 3y ago
They have a disincentive to sell to other countries at a discount if those countries allow medical tourism from the US. They don't want US patients taking advantage of the lower cost there.
- AnthonyMouse 3y ago
  And then many countries don't allow that, for exactly that reason.
Traubenfuchs 3y ago
I'd assume this kind of pricing negotiations between government entities and state of the art pharmaceutical companies is a deadly dance around how much money needs to be paid to the companies to incentivise research, lobbying and how much money a life is worth. Yes, selling for cheap is better than not selling at all, but if the government entities keep being stingy, maybe next time the company won't develop a treatment for a rare disease at all because it's just not worth it...
- AnthonyMouse 3y ago
  > Yes, selling for cheap is better than not selling at all, but if the government entities keep being stingy, maybe next time the company won't develop a treatment for a rare disease at all because it's just not worth it... Which is exactly the problem. And it's even worse than that, because it's a global market with national monopsony buyers. If your country is 4% of the global market, whatever you do isn't going to change the math for the drug company very much and you can ride on the coattails of other countries, so you might as well be as stingy as possible. But then everyone has the same incentive and the net effect is tragedy of the commons. Or in practice, the US disproportionately funding drug development for the whole world and then people from other countries criticizing them for having higher drug prices.

refurb 3y ago

That's not the real price in the UK because manufacturers will negotiate a confidential price with NICE. And the quoted price is not the price insurers pay in the US either. As someone who has worked in this space, the EU is lower than the US, but for oncology drugs the difference isn't that large.