8 ms·

Drugmaker to testify on why weight-loss drugs cost 15x more in the US

48 points by belter 2y ago

Daviey 2y ago
Must be supply and demand based pricing, surely? /s
jimrandomh 2y ago
If this were a normal commodity like chairs, the prices could not differ like that because people would buy it in a place where it's cheap, transport it to the US, and resell it. The reason this doesn't happen for medications is that if you do this at scale, the FDA will have you arrested. If you remove the FDA's power to do that, the price of medications will fall immediately, and drastically.
selfmodruntime 2y ago
Because Americans earn way more money than the average person elsewhere. It‘s really just that simple.
yurishimo 2y ago
How else will they pay for all of the marketing costs? /s It's supply and demand. 75% of Americans can be classified as overweight or obese. For $150, I can get a doctor to write me a prescription. If I have that much money to throw around for "cosmetic" medication, it makes sense that the drug companies are going to increase their prices to take advantage of middle-class/rich Americans with too much disposable income. This is also a side effect of the USAs lack of government subsidized healthcare. The gatekeeper to any treatment you want in America is $$$. That's fine for some things, but this is another aspect of that paradigm. Here in the Netherlands, we've having discussions in the government about taxing or limiting certain types of unhealthy foods because it is lowering health outcomes AND it costs the government a lot more if everyone becomes metabolically unhealthy at 45 instead of 75 because their diet is crap. [0] Until the paradigm changes, drug companies will keep milking Americans for all they're worth. 0: https://nltimes.nl/2024/06/17/health-disaster-making-netherlands-health-funds-warn-government https://nltimes.nl/2024/06/17/health-disaster-making-netherl...
- throwup238 2y ago
  > drug companies will keep milking Americans for all they're worth There’s a lot of blubber in them whales!
- gadflyinyoureye 2y ago
  That’s the thing about socialized medicine. The government should put limits on what citizens are allowed to do because it impacts the bottom line. In the US more people die per year of alcohol related diseases than by guns (1) (2). If we’re going to try to remove people’s rights to self defense, we need to remove people autonomy to purchase alcohol. The government would save billions of dollars a year on treatments if they just prohibit it. The same goes for cigarettes, highly processed foods, and high fructose corn syrup. All of these should be banned because they lead directly to obesity, which costs trillions of dollars over a 10 year period. As the EU and even the US budget for their universal healthcare, they need to control the children, I mean citizens under their watch. The citizens show themselves unable or unwilling to control their consumption. Therefore such things should be out right banned. 1 - https://www.cdc.gov/alcohol/features/excessive-alcohol-deaths.html https://www.cdc.gov/alcohol/features/excessive-alcohol-death... 2 - https://usafacts.org/data/topics/security-safety/crime-and-justice/firearms/firearm-deaths/ https://usafacts.org/data/topics/security-safety/crime-and-j...
  - chownie 2y ago
    That's only if prohibition works, prohibition of consumption does not have a great track record of actually accomplishing the intended outcome. If instead you look at why people drink, why they over consume, you can work levers that way. Are people seeking out escapes? Why? What can we do to make it so they don't feel that need?
    - gadflyinyoureye 2y ago
      Actually health improved under prohibition. https://www.vox.com/the-highlight/2019/6/5/18518005/prohibition-alcohol-public-health-crime-benefits https://www.vox.com/the-highlight/2019/6/5/18518005/prohibit... The provider of health care can require that individuals stop indulging in certain practices. In the EU they can say you stop drinking or no health care. A person would then be free to find an alternative provider of health insurance. Maybe the EU countries would allow private insurance.
tjpnz 2y ago
I live in Japan where you can get Ozempic from weight loss clinics for 15,000~20,000 JPY per month. There's no government subsidy and it's being sourced directly from the drug companies in the US. There's no excuse for what you're paying.
- deburo 2y ago
  Same thing in Canada, as a google search tells me that "Ozempic costs between $200 and $300 per month in Canada." But that doesn't tell us anything about the reasons behind the pricing strategy US drug companies are using.
optimalsolver 2y ago
"Because the average American, including you Mr. Senator, needs 15x the dose".
- ackbar03 2y ago
  Oh snap!
maxlybbert 2y ago
Lawrence Lessig had a blog post about this before he ran for president: drug prices are lower in places like Africa because they’re higher in the US. The rich US consumers (or insurance companies) subsidize the poorer African purchases. For that matter, they also subsidize Medicaid purchases. Economists view this as a good and obvious way to get medication to more people.
- maxlybbert 2y ago
  I think this is what I remember reading (or perhaps a first draft that turned into this): https://www.wired.com/2004/02/stop-making-pills-political-prisoners/ https://www.wired.com/2004/02/stop-making-pills-political-pr... . It was written before those drugs actually were made available to poorer countries for low cost for humanitarian reasons.
- tombert 2y ago
  That's fair enough, but that kind of feels like poor and middle class Americans are the sacrificial lambs for healthcare for the rest of the world. There are certain income brackets that make too much money to qualify for medicare, but still don't really make enough to pay for healthcare out of pocket and don't have jobs that provide it, so they can't milk the insurance companies for endless amounts of money to cover their treatment. This leads to situations where people know that they can't afford the healthcare, so they don't see a doctor until situations are dire, go to an emergency room (where they cannot be denied treatment), ending up with an even higher bill that then needs to be accounted for in the rest of the hospital pricing, and therefore insurance. I'm glad that we're able to subsidize drug prices to make it so Africans can get cheaper healthcare, and I am fine with charging the insurance companies lots of money and taking money from richer people in the process (since the high costs have to be rolled into the premium rates), but it's a little frustrating that it has to come at the direct expense of poorer Americans in the process.
  - blkhawk 2y ago
    you don't have to be glad about that because its clearly not why prices are lower in africa. Looking in from the outside this whole reasoning seems to me like some kind of propaganda thats meant to me easily swallowed by americans. It seems like a deflection that sells the disparity by leveraging american exceptionalism (US medicine is the best) to be swallowed resulting in variying thoughts depending on the disposition of the recipient ranging between "i am glad we are helping those poor people" to "WAAAA why should I pay for them". But neither of it is really true. The truth as it looks from the outside is that the american people are simply taken for a ride by pretty much all the parts of the healthcare sector.
gyudin 2y ago
Sucker Tax
marcusbuffett 2y ago
I think Ozempic cost somewhere around $3 billion to research and develop. What’s the steel man argument for how we could charge the same for the drug in America, and fund future research with the proceeds? I don’t want to be paying $800/mo for my drugs, but if the alternative is that everyone is paying $5/mo and there’s no hope of recouping the R&D costs, then we just won’t get biomedical breakthroughs like this at all. I think it’s easy to look at places in Europe that get drugs virtually for free, and want to be like that, but the US despite being 1/20 of the world’s population, funds something like 80% of the biomedical industry, due to our lack of price controls. There’s so many areas of medicine where we don’t see progress because the ROI just isn’t worth it. Do we want to risk making all medicine like that?
- EasyMark 2y ago
  They’re actually charging more like $1300+ to insurers for it
- deleted 2y ago
  [deleted]
- deleted 2y ago
  [deleted]
- dumbfool666 2y ago
  [flagged]
  - bognition 2y ago
    Well the research and development was originally for a diabetes. It actually worked quite well. The appetite suppression was a bonus (an extremely lucrative) side effect.
    - dumbfool666 2y ago
      Most people get diabetes because they are fat and unhealthy. My comment stands.
CoastalCoder 2y ago
I really don't understand the repeated drama about drug prices. IIUC, the dynamics are the same as with most other businesses: - Seller sets prices to maximize profits. If possible, on a per-market-segment / per-customer basis. - There are no laws (AFAIK) enforcing price caps, aside from what Medicare will pay. - Seller has a temporary monopoly on some drugs via the government -controlled patent system. - Seller is a for-profit corporation. So what do lawmakers expect??? They made the rules, and are uniquely empowered to change them if they don't like the resulting market dynamics.
- EasyMark 2y ago
  It’s one thing if you make yet another acne medicine to the market and let the market bear what it will but when you have something that can possibly save lives and improve general health for 40% of the US population that are obese then it might come time to do a little governmental intervention and give the middle finger to the market, pay off the company a handsome sum, and take over the medication.
- fabian2k 2y ago
  I mean almost half of them want to change the rules, any kind of universal healthcare would massively change how drug prices are negotiated. You'll have to blame the other politicians here that do not want to change the system here.
- trescenzi 2y ago
  They expect to get votes by creating theater that seems to show they care and blames others for problems. Obviously they can pass laws to do things but it’s more politically expedient to just talk about how they want to do things.
- RobotToaster 2y ago
  > Seller has a temporary monopoly on some drugs via the government -controlled patent system. That's the problem, it gives them a government enforced monopoly with no responsibility or obligation. Patents should expire after a certain amount of profit is made from them, or come with some level of responsibility to use them for the public good.
andrewstuart 2y ago
Is the answer “because we can”?
lenerdenator 2y ago
Because we got people fat on processed foods for the benefit of shareholders, so why not get them when they're trying to lose that weight, too?
DevX101 2y ago
If Europe makes several more blockbusters at the expense of the US pharma industry, I'd expect to see American price regulation take hold. Prices are unregulated because American pharma companies benefit disproportionately from this arrangement.
- lotsofpulp 2y ago
  Why would that matter? Novo is a publicly traded company on Nasdaq, surely lots and lots of Americans (including American taxpayer funded DB pension fund) have benefited from Novo stock going up. No less than any other “American” pharmaceutical company. It is also controlled by a charity that does global research. https://en.wikipedia.org/wiki/Novo_Holdings_A/S https://en.wikipedia.org/wiki/Novo_Holdings_A/S
  - EasyMark 2y ago
    A few thousand vs 100’s of millions of fat Americans who could beneficially use this? That hardly seems fair.
    - lotsofpulp 2y ago
      Stockholders are global, there is no disproportionate gain for Europeans. Novo trades on an American stock market, and Americans (whoever they may be) are reaping just as much of a benefit from Novo as they would from Eli/Pfizer/etc.
  - maxlybbert 2y ago
    I have no clue where most drug research or drug development takes place. Right now the discussion tends to end up with US companies saying they charge so much for new medications to recoup the costs of ideas that didn’t pan out. Since only the drug companies know what didn’t pan out, it’s hard to refute. If most drug research happens in the US (and, really, I don’t know if that’s true), then it suggests that the US model does a good job of incentivizing research. If another approach could get the same results, it would refute the drug companies’ argument.
vfclists 2y ago
Isn't it more important for food producers to explain why American's are so obese? I have seen Americans on Tiktok say that they lost about 40 pounds in weight when they stayed in Europe for a while even when they ate the same amount of food? Shouldn't those concerned about the health of Americans get their priorities right? Is this "Idiocracy" in the making or what?
overrun11 2y ago
Prices are signals carrying information about how valuable consumers find a product. When you artificially dampen the signal, you reduce the incentive to produce below the societally optimal amount. This is the Econ 101 argument. If you think drug prices are "too high" then you need to refute it directly.
psychoslave 2y ago
I wonder why are there so many people in this situation of obesity? I mean, really, what are the known causes? I get that we are all dissimilar regarding how much our organism will assimilate and store this or that on the genetics lottery. My supposition here would be that, given the proportion at stake, the bulk of issue is more likely coming from a diet that should be improved. What would it cost to pay people with public nutritional education and prescribing a catch for a few months, vs these drugs? Once again, I don’t imply it could be panacea for every single case, and I humbly recognize my ignorance of the topic, so feel very welcome to point me to relevant resources.

48 points by belter 2y ago

Must be supply and demand based pricing, surely? /s

If this were a normal commodity like chairs, the prices could not differ like that because people would buy it in a place where it's cheap, transport it to the US, and resell it. The reason this doesn't happen for medications is that if you do this at scale, the FDA will have you arrested. If you remove the FDA's power to do that, the price of medications will fall immediately, and drastically.

selfmodruntime 2y ago

Because Americans earn way more money than the average person elsewhere. It‘s really just that simple.

yurishimo 2y ago

How else will they pay for all of the marketing costs? /s It's supply and demand. 75% of Americans can be classified as overweight or obese. For $150, I can get a doctor to write me a prescription. If I have that much money to throw around for "cosmetic" medication, it makes sense that the drug companies are going to increase their prices to take advantage of middle-class/rich Americans with too much disposable income. This is also a side effect of the USAs lack of government subsidized healthcare. The gatekeeper to any treatment you want in America is $$$. That's fine for some things, but this is another aspect of that paradigm. Here in the Netherlands, we've having discussions in the government about taxing or limiting certain types of unhealthy foods because it is lowering health outcomes AND it costs the government a lot more if everyone becomes metabolically unhealthy at 45 instead of 75 because their diet is crap. [0] Until the paradigm changes, drug companies will keep milking Americans for all they're worth. 0: https://nltimes.nl/2024/06/17/health-disaster-making-netherlands-health-funds-warn-government https://nltimes.nl/2024/06/17/health-disaster-making-netherl...

throwup238 2y ago
> drug companies will keep milking Americans for all they're worth There’s a lot of blubber in them whales!
gadflyinyoureye 2y ago
That’s the thing about socialized medicine. The government should put limits on what citizens are allowed to do because it impacts the bottom line. In the US more people die per year of alcohol related diseases than by guns (1) (2). If we’re going to try to remove people’s rights to self defense, we need to remove people autonomy to purchase alcohol. The government would save billions of dollars a year on treatments if they just prohibit it. The same goes for cigarettes, highly processed foods, and high fructose corn syrup. All of these should be banned because they lead directly to obesity, which costs trillions of dollars over a 10 year period. As the EU and even the US budget for their universal healthcare, they need to control the children, I mean citizens under their watch. The citizens show themselves unable or unwilling to control their consumption. Therefore such things should be out right banned. 1 - https://www.cdc.gov/alcohol/features/excessive-alcohol-deaths.html https://www.cdc.gov/alcohol/features/excessive-alcohol-death... 2 - https://usafacts.org/data/topics/security-safety/crime-and-justice/firearms/firearm-deaths/ https://usafacts.org/data/topics/security-safety/crime-and-j...
- chownie 2y ago
  That's only if prohibition works, prohibition of consumption does not have a great track record of actually accomplishing the intended outcome. If instead you look at why people drink, why they over consume, you can work levers that way. Are people seeking out escapes? Why? What can we do to make it so they don't feel that need?
  - gadflyinyoureye 2y ago
    Actually health improved under prohibition. https://www.vox.com/the-highlight/2019/6/5/18518005/prohibition-alcohol-public-health-crime-benefits https://www.vox.com/the-highlight/2019/6/5/18518005/prohibit... The provider of health care can require that individuals stop indulging in certain practices. In the EU they can say you stop drinking or no health care. A person would then be free to find an alternative provider of health insurance. Maybe the EU countries would allow private insurance.

tjpnz 2y ago

I live in Japan where you can get Ozempic from weight loss clinics for 15,000~20,000 JPY per month. There's no government subsidy and it's being sourced directly from the drug companies in the US. There's no excuse for what you're paying.

deburo 2y ago
Same thing in Canada, as a google search tells me that "Ozempic costs between $200 and $300 per month in Canada." But that doesn't tell us anything about the reasons behind the pricing strategy US drug companies are using.

optimalsolver 2y ago

"Because the average American, including you Mr. Senator, needs 15x the dose".

ackbar03 2y ago
Oh snap!

maxlybbert 2y ago

Lawrence Lessig had a blog post about this before he ran for president: drug prices are lower in places like Africa because they’re higher in the US. The rich US consumers (or insurance companies) subsidize the poorer African purchases. For that matter, they also subsidize Medicaid purchases. Economists view this as a good and obvious way to get medication to more people.

maxlybbert 2y ago
I think this is what I remember reading (or perhaps a first draft that turned into this): https://www.wired.com/2004/02/stop-making-pills-political-prisoners/ https://www.wired.com/2004/02/stop-making-pills-political-pr... . It was written before those drugs actually were made available to poorer countries for low cost for humanitarian reasons.
tombert 2y ago
That's fair enough, but that kind of feels like poor and middle class Americans are the sacrificial lambs for healthcare for the rest of the world. There are certain income brackets that make too much money to qualify for medicare, but still don't really make enough to pay for healthcare out of pocket and don't have jobs that provide it, so they can't milk the insurance companies for endless amounts of money to cover their treatment. This leads to situations where people know that they can't afford the healthcare, so they don't see a doctor until situations are dire, go to an emergency room (where they cannot be denied treatment), ending up with an even higher bill that then needs to be accounted for in the rest of the hospital pricing, and therefore insurance. I'm glad that we're able to subsidize drug prices to make it so Africans can get cheaper healthcare, and I am fine with charging the insurance companies lots of money and taking money from richer people in the process (since the high costs have to be rolled into the premium rates), but it's a little frustrating that it has to come at the direct expense of poorer Americans in the process.
- blkhawk 2y ago
  you don't have to be glad about that because its clearly not why prices are lower in africa. Looking in from the outside this whole reasoning seems to me like some kind of propaganda thats meant to me easily swallowed by americans. It seems like a deflection that sells the disparity by leveraging american exceptionalism (US medicine is the best) to be swallowed resulting in variying thoughts depending on the disposition of the recipient ranging between "i am glad we are helping those poor people" to "WAAAA why should I pay for them". But neither of it is really true. The truth as it looks from the outside is that the american people are simply taken for a ride by pretty much all the parts of the healthcare sector.

gyudin 2y ago

Sucker Tax

marcusbuffett 2y ago

I think Ozempic cost somewhere around $3 billion to research and develop. What’s the steel man argument for how we could charge the same for the drug in America, and fund future research with the proceeds? I don’t want to be paying $800/mo for my drugs, but if the alternative is that everyone is paying $5/mo and there’s no hope of recouping the R&D costs, then we just won’t get biomedical breakthroughs like this at all. I think it’s easy to look at places in Europe that get drugs virtually for free, and want to be like that, but the US despite being 1/20 of the world’s population, funds something like 80% of the biomedical industry, due to our lack of price controls. There’s so many areas of medicine where we don’t see progress because the ROI just isn’t worth it. Do we want to risk making all medicine like that?

EasyMark 2y ago
They’re actually charging more like $1300+ to insurers for it
deleted 2y ago
[deleted]
deleted 2y ago
[deleted]
dumbfool666 2y ago
[flagged]
- bognition 2y ago
  Well the research and development was originally for a diabetes. It actually worked quite well. The appetite suppression was a bonus (an extremely lucrative) side effect.
  - dumbfool666 2y ago
    Most people get diabetes because they are fat and unhealthy. My comment stands.

CoastalCoder 2y ago

I really don't understand the repeated drama about drug prices. IIUC, the dynamics are the same as with most other businesses: - Seller sets prices to maximize profits. If possible, on a per-market-segment / per-customer basis. - There are no laws (AFAIK) enforcing price caps, aside from what Medicare will pay. - Seller has a temporary monopoly on some drugs via the government -controlled patent system. - Seller is a for-profit corporation. So what do lawmakers expect??? They made the rules, and are uniquely empowered to change them if they don't like the resulting market dynamics.

EasyMark 2y ago
It’s one thing if you make yet another acne medicine to the market and let the market bear what it will but when you have something that can possibly save lives and improve general health for 40% of the US population that are obese then it might come time to do a little governmental intervention and give the middle finger to the market, pay off the company a handsome sum, and take over the medication.
fabian2k 2y ago
I mean almost half of them want to change the rules, any kind of universal healthcare would massively change how drug prices are negotiated. You'll have to blame the other politicians here that do not want to change the system here.
trescenzi 2y ago
They expect to get votes by creating theater that seems to show they care and blames others for problems. Obviously they can pass laws to do things but it’s more politically expedient to just talk about how they want to do things.
RobotToaster 2y ago
> Seller has a temporary monopoly on some drugs via the government -controlled patent system. That's the problem, it gives them a government enforced monopoly with no responsibility or obligation. Patents should expire after a certain amount of profit is made from them, or come with some level of responsibility to use them for the public good.

andrewstuart 2y ago

Is the answer “because we can”?

lenerdenator 2y ago

Because we got people fat on processed foods for the benefit of shareholders, so why not get them when they're trying to lose that weight, too?

DevX101 2y ago

If Europe makes several more blockbusters at the expense of the US pharma industry, I'd expect to see American price regulation take hold. Prices are unregulated because American pharma companies benefit disproportionately from this arrangement.

lotsofpulp 2y ago
Why would that matter? Novo is a publicly traded company on Nasdaq, surely lots and lots of Americans (including American taxpayer funded DB pension fund) have benefited from Novo stock going up. No less than any other “American” pharmaceutical company. It is also controlled by a charity that does global research. https://en.wikipedia.org/wiki/Novo_Holdings_A/S https://en.wikipedia.org/wiki/Novo_Holdings_A/S
- EasyMark 2y ago
  A few thousand vs 100’s of millions of fat Americans who could beneficially use this? That hardly seems fair.
  - lotsofpulp 2y ago
    Stockholders are global, there is no disproportionate gain for Europeans. Novo trades on an American stock market, and Americans (whoever they may be) are reaping just as much of a benefit from Novo as they would from Eli/Pfizer/etc.
- maxlybbert 2y ago
  I have no clue where most drug research or drug development takes place. Right now the discussion tends to end up with US companies saying they charge so much for new medications to recoup the costs of ideas that didn’t pan out. Since only the drug companies know what didn’t pan out, it’s hard to refute. If most drug research happens in the US (and, really, I don’t know if that’s true), then it suggests that the US model does a good job of incentivizing research. If another approach could get the same results, it would refute the drug companies’ argument.

vfclists 2y ago

Isn't it more important for food producers to explain why American's are so obese? I have seen Americans on Tiktok say that they lost about 40 pounds in weight when they stayed in Europe for a while even when they ate the same amount of food? Shouldn't those concerned about the health of Americans get their priorities right? Is this "Idiocracy" in the making or what?

overrun11 2y ago

Prices are signals carrying information about how valuable consumers find a product. When you artificially dampen the signal, you reduce the incentive to produce below the societally optimal amount. This is the Econ 101 argument. If you think drug prices are "too high" then you need to refute it directly.

psychoslave 2y ago

I wonder why are there so many people in this situation of obesity? I mean, really, what are the known causes? I get that we are all dissimilar regarding how much our organism will assimilate and store this or that on the genetics lottery. My supposition here would be that, given the proportion at stake, the bulk of issue is more likely coming from a diet that should be improved. What would it cost to pay people with public nutritional education and prescribing a catch for a few months, vs these drugs? Once again, I don’t imply it could be panacea for every single case, and I humbly recognize my ignorance of the topic, so feel very welcome to point me to relevant resources.