11 ms·

>The second is that nobody is making a generic of the more bioavailable version even though the patent is expired. I've been taking this drug since 1995 and th

>The second is that nobody is making a generic of the more bioavailable version even though the patent is expired. I've been taking this drug since 1995 and the brand-name version has been in production (in its current format) since 1938. I don't think there have been any substantial improvements in the formulation in decades (as evidenced by my dosage, at least.) It certainly isn't expensive due to patents. What's happening here is that in the US generic alternatives are supposed to demonstrate bioequivalence (meaning the same bioavailability), but the standards are lax and not well-enforced. Insurance formularies aren't going to spring for a brand-name drug formulation that costs 10x when the government has certified the cheap generic as bioequivalent. Manufacturers of the unpatented (but more bioavailable) brand-name drugs know that in reality some subset of their patients will need their formulation to keep blood levels stable, which means that in the US they can crank their prices way up and soak a bunch of sick people. In Canada they can't do this. Nothing about this is really defensible. Which brings me back to the larger issue. High US drug prices can be due to both (1) recouping R&D costs and (2) greed, but the greed is enough to render our current system unworkable. You can't just assign manufacturers a monopoly and the right to charge whatever they want, and expect that they won't abuse this to soak desperate sick people with prices far in excess of their costs (as they are clearly doing.) So yes, you can point to the cost of R&D as one reason we should all (globally) pay more for some drugs, but you can't really use the need for R&D to justify the US system, which is inefficient and dangerous.

AnthonyMouse 1y ago
Here's the part where it seems like we're still missing some information. There is an unpatented formulation of the drug which is better enough that patients are willing to pay a large premium for it, but there is only one company making it. It can't be that the other companies don't like money, so what's the actual reason?
- matthewdgreen 1y ago
  I think you misunderstand how US drug purchases work. There is very little competitive market whatsoever anywhere in the prescription med system; there are simply "brands" and "patented meds" and "generics" plus various underserved niches where pharma companies can extract high prices from desperate patients (see e.g., Martin Shkreli and Daraprim.) With respect to generics, there's little incentive to make a better formulation. If patients have insurance, they'll get whatever "bioequivalent" generic is available from the pharmacy if it matches the insurance provider's formulary price requirements. That manufacturer can change any time, since by law they're all deemed equivalent. It's like buying generic store-brand ibuprofen: you have no idea which factory is actually making the stuff, and it can change from package to package. There's also very little benefit to having a "brand name" generic that has better bioavailability since you really can't charge more for it: insurance companies and pharmacies will just switch to another generic brand with lower costs. Trying to argue better bioavailability could also involve admitting that your existing bioequivalence studies are bunk, which would require an expensive new certification process. Plus, even in a functioning and truly competitive market, trying to experiment with different formulations to figure out which "gets better results" is a dangerous game for individuals; it's not like buying different Kleenex and deciding which holds together better. You have to do a lot of risky trial and error and get frequent blood tests. So basically we have a system that ensures a completely non-functioning non-competitive market, and then we throw in an exclusive term where new medication can be sold at any price and we expect market forces to somehow constrain manufacturers. But the market forces are very weak and limited here. When we clearly end up paying dozens of times more than other countries (even for unpatented medicine) people raise the R&D issue to justify the costs. But that's sort of like saying "hey, the Mafia spends a lot on churches, so their extractive business model is fine." If you really want churches (or R&D) we should find a more rational way to come up with those funds. PS this paper is a good (old) study: https://pubmed.ncbi.nlm.nih.gov/8026413/ https://pubmed.ncbi.nlm.nih.gov/8026413/
  - AnthonyMouse 1y ago
    I was kind of curious if there was some specific failure with this outside of the general brokenness of US healthcare competition, but it's starting to sound like the classic one: The biggest problem with US health insurance is that it's not actually insurance. The purpose of insurance is to cover major claims. If a storm does $30,000 in damage to your house, you file an insurance claim. If it does $30 in damage, you go to the hardware store and pay $30. But we expect health "insurance" to cover the little stuff. Health insurance should be for if you get cancer or need major surgery, not for a generic drug that ought to cost $30. Which in turn is what messes up what could otherwise be a competitive market. Instead of picking who you want to buy the drug from, most people have insurance, and the insurance company picks. And then most people get insurance from their employer so they also don't get to pick their insurance which makes the insurance company unresponsive because the patient can't easily switch. And then it sounds like what happened is that the manufacturers make nearly all of their sales through insurance, who only care about regulatory compliance, and there aren't enough people paying out of pocket to get them to compete on actual quality. But the other problems shouldn't be there if we could get people actually buying what ought to be cheap generics themselves instead of through insurance: > Plus, even in a functioning and truly competitive market, trying to experiment with different formulations to figure out which "gets better results" is a dangerous game for individuals; it's not like buying different Kleenex and deciding which holds together better. You have to do a lot of risky trial and error and get frequent blood tests. This wouldn't be something most people would have to do themselves. If there are five companies making the same drug then forums for people with the condition it treats would have people already taking each of them, and if some of them are actually not right then aggregate data should show that, and then everybody would find out without each person having to do their own trials. And somebody needs to be doing that anyway or you're going to have a lot of people whose medication is wrong who don't realize that it's because they're not getting what they paid for while the one that works is available from someone else. > When we clearly end up paying dozens of times more than other countries (even for unpatented medicine) people raise the R&D issue to justify the costs. But then we're back to, the trouble is that it's both. And then people propose to have the government set prices, which is only trading one problem for another. Whereas what we ought to do is address the things causing the markets that are supposed to be competitive to not.

AnthonyMouse 1y ago

Here's the part where it seems like we're still missing some information. There is an unpatented formulation of the drug which is better enough that patients are willing to pay a large premium for it, but there is only one company making it. It can't be that the other companies don't like money, so what's the actual reason?

matthewdgreen 1y ago
I think you misunderstand how US drug purchases work. There is very little competitive market whatsoever anywhere in the prescription med system; there are simply "brands" and "patented meds" and "generics" plus various underserved niches where pharma companies can extract high prices from desperate patients (see e.g., Martin Shkreli and Daraprim.) With respect to generics, there's little incentive to make a better formulation. If patients have insurance, they'll get whatever "bioequivalent" generic is available from the pharmacy if it matches the insurance provider's formulary price requirements. That manufacturer can change any time, since by law they're all deemed equivalent. It's like buying generic store-brand ibuprofen: you have no idea which factory is actually making the stuff, and it can change from package to package. There's also very little benefit to having a "brand name" generic that has better bioavailability since you really can't charge more for it: insurance companies and pharmacies will just switch to another generic brand with lower costs. Trying to argue better bioavailability could also involve admitting that your existing bioequivalence studies are bunk, which would require an expensive new certification process. Plus, even in a functioning and truly competitive market, trying to experiment with different formulations to figure out which "gets better results" is a dangerous game for individuals; it's not like buying different Kleenex and deciding which holds together better. You have to do a lot of risky trial and error and get frequent blood tests. So basically we have a system that ensures a completely non-functioning non-competitive market, and then we throw in an exclusive term where new medication can be sold at any price and we expect market forces to somehow constrain manufacturers. But the market forces are very weak and limited here. When we clearly end up paying dozens of times more than other countries (even for unpatented medicine) people raise the R&D issue to justify the costs. But that's sort of like saying "hey, the Mafia spends a lot on churches, so their extractive business model is fine." If you really want churches (or R&D) we should find a more rational way to come up with those funds. PS this paper is a good (old) study: https://pubmed.ncbi.nlm.nih.gov/8026413/ https://pubmed.ncbi.nlm.nih.gov/8026413/
- AnthonyMouse 1y ago
  I was kind of curious if there was some specific failure with this outside of the general brokenness of US healthcare competition, but it's starting to sound like the classic one: The biggest problem with US health insurance is that it's not actually insurance. The purpose of insurance is to cover major claims. If a storm does $30,000 in damage to your house, you file an insurance claim. If it does $30 in damage, you go to the hardware store and pay $30. But we expect health "insurance" to cover the little stuff. Health insurance should be for if you get cancer or need major surgery, not for a generic drug that ought to cost $30. Which in turn is what messes up what could otherwise be a competitive market. Instead of picking who you want to buy the drug from, most people have insurance, and the insurance company picks. And then most people get insurance from their employer so they also don't get to pick their insurance which makes the insurance company unresponsive because the patient can't easily switch. And then it sounds like what happened is that the manufacturers make nearly all of their sales through insurance, who only care about regulatory compliance, and there aren't enough people paying out of pocket to get them to compete on actual quality. But the other problems shouldn't be there if we could get people actually buying what ought to be cheap generics themselves instead of through insurance: > Plus, even in a functioning and truly competitive market, trying to experiment with different formulations to figure out which "gets better results" is a dangerous game for individuals; it's not like buying different Kleenex and deciding which holds together better. You have to do a lot of risky trial and error and get frequent blood tests. This wouldn't be something most people would have to do themselves. If there are five companies making the same drug then forums for people with the condition it treats would have people already taking each of them, and if some of them are actually not right then aggregate data should show that, and then everybody would find out without each person having to do their own trials. And somebody needs to be doing that anyway or you're going to have a lot of people whose medication is wrong who don't realize that it's because they're not getting what they paid for while the one that works is available from someone else. > When we clearly end up paying dozens of times more than other countries (even for unpatented medicine) people raise the R&D issue to justify the costs. But then we're back to, the trouble is that it's both. And then people propose to have the government set prices, which is only trading one problem for another. Whereas what we ought to do is address the things causing the markets that are supposed to be competitive to not.