5 ms·

Top comment from the reddit thread on the same article: "Ophthalmologist here. As a physician responsible for prescribing and injecting these drugs, I can tel

Top comment from the reddit thread on the same article: "Ophthalmologist here. As a physician responsible for prescribing and injecting these drugs, I can tell you that this article glosses over the single most important factor involved in deciding between the three currently-available Anti-VEGF options: compounding pharmacies, and the lack of regulation thereof. Any Ophthalmologist at this point is very familiar with the results of the CATT study which confirmed the equal efficacy and safety of bevacizumab (Avastin) and ranibizumab (Lucentis). The reality is that the actual drug injected into the patient's eye either comes from the manufacturer in a sterile, ready-to-inject form (Lucentis), or an appropriate amount was prepared for intraocular injection by a local compounding pharmacy (Avastin). Compounding pharmacy regulation is notoriously poor, and the risk of an intraocular infection is not one many retina specialists are eager to take unnecessarily. Endophthalmitis frequently leads to blindness, even with early diagnosis and treatment. As much as everyone wants to think doctors are only interested in lining their pockets, the reality is that most of us simply don't want your grandparent going blind in one eye because a minimum-wage tech at a compounding pharmacy failed to follow appropriate sterile procedure. The American Society of Retina Specialists have been advocating for increased regulation of compounding pharmacies since Lucentis became available. Check out their website. I guess I should also point out that we get paid the same for injecting any medicine into the eye, regardless of the cost of the drug. And we purchase and stock both drugs in the clinic, and bill insurance for whichever is used. So we don't benefit financially for injecting one versus the other." http://www.reddit.com/r/politics/comments/1sdxz6/an_effective_eye_drug_is_available_for_50_but/cdwoh5j http://www.reddit.com/r/politics/comments/1sdxz6/an_effectiv...

manicdee 13y ago
Is the implication here that the technician at the "manufacturer" is not minimum-wage? Or is the implication supposed to be that the minimum-wage technicians who work for the "manufacturer" are magically better at following appropriate sterile procedures?
- rpedroso 13y ago
  If compounding pharmacies perform so poorly in this area, then it is certainly in the interest of the manufacturer to provide a better product for at least two reasons. 1) If they know ophthalmologists will prescribe the safer product, and since the demand for this drug is relatively price-inelastic, they are able to raise prices drastically (hence the $1950 discrepancy). 2) If compounding pharmacies are the ones who are under-regulated, perhaps the manufacturer actually faces sufficient regulation. In this case, they face greater liability for sterility issues, and they have a strong incentive to enforce sterile procedures. The problem with the pharmacies is not so much that the worker is paid low wages or under-skilled, but rather, that the lack of regulatory burden limits the incentive to ensure safe procedures.
- mbreese 13y ago
  The implication is that quality control is better at the manufacturer as opposed to the compounding pharmacy. It doesn't matter who is paid what. What matters is the quality and reproducibility of the product.
- rmrfrmrf 13y ago
  Legally, a manufacturer and a compounder are different. You can read about the regulatory differences here: http://en.wikipedia.org/wiki/Compounding#Regulation_in_the_United_States http://en.wikipedia.org/wiki/Compounding#Regulation_in_the_U...
- refurb 13y ago
  I think it's a fair comparison for the following reasons: 1) Manufacturer techs get paid a hell of a lot better than compounding pharmacy techs. I knew guys in the pharma industry, nothing more than high school pulling down $100K/yr with overtime. 2) There has been a recent incident (http://en.wikipedia.org/wiki/New_England_Compounding_Center_meningitis_outbreak http://en.wikipedia.org/wiki/New_England_Compounding_Center_...) where 48 people died and over 700 got sick from poor compounding pharmacy controls.
- tedunangst 13y ago
  The implication is that the minimum wage technicians at the manufacturer were magically transformed into robots who happen to be very good at following procedures.
- superuser2 13y ago
  Manufacturers are heavily regulated and have intensive quality control. Local compounding pharmacies do not necessarily live up to the same standards.
rayiner 13y ago
The minute I started reading the article, I knew something was up, and then I got to that part. It's not a $50 drug that treats as well as a $2,000 drug. It's a drug sold in large doses to treat cancer apportioned to a small dose to treat blindness. Complaining about Genentech's price structure in this case doesn't make any sense. It's like complaining that a restaurant won't sell you half-sized portions at half price. It totally ignores the underlying cost structure of the industry.
- Spooky23 13y ago
  Not really. It's more like a butcher selling a beef tenderloin in 40lb cases for $5/lb or a trimmed steak for $200/lb. Same product, just a cut that's too big for consumers to handle. In the case of my hypothetical butcher, he would be out of business, as the free market will push prices down. In the case of Genentech, using patent monopoly and regulatory procedure as a weapon nets them massive profit.
  - rayiner 13y ago
    No its not like that at all. Almost all the cost of beef is the beef. Cows are a certain size, overhead is relatively low, and so twice as much beef costs roughly twice as much. With pharmaceuticals, cost is highly unlinked with volume. Marginal cost is almost nothing, but fixed costs are very high. Its like the restaurant: because most of the cost of the product is overhead and per diner rather than the food cost, half as much food sells for way more than half the price. This is true even though restaurants are in highly competitive markets.
    - Spooky23 13y ago
      Genentech refuted your argument for you. They took the previous development costs and research for the cancer drug, made some relatively minor optimizations for ophthalmologic application, and packaged it appropriately. It probably cost them a few million to go through the regulatory process. End result is that Doctors can write prescriptions on-label and avoid compound pharmacies (eliminating risk) and Genentech makes $1B/year, mostly off of Medicare. The only "fixed cost" is the cost to the Medicare taxpayer.
lowkeykiwi 13y ago
Interesting. Thanks. So you're saying that more regulation could substantially decrease medical costs for the patient?

manicdee 13y ago

Is the implication here that the technician at the "manufacturer" is not minimum-wage? Or is the implication supposed to be that the minimum-wage technicians who work for the "manufacturer" are magically better at following appropriate sterile procedures?

rpedroso 13y ago
If compounding pharmacies perform so poorly in this area, then it is certainly in the interest of the manufacturer to provide a better product for at least two reasons. 1) If they know ophthalmologists will prescribe the safer product, and since the demand for this drug is relatively price-inelastic, they are able to raise prices drastically (hence the $1950 discrepancy). 2) If compounding pharmacies are the ones who are under-regulated, perhaps the manufacturer actually faces sufficient regulation. In this case, they face greater liability for sterility issues, and they have a strong incentive to enforce sterile procedures. The problem with the pharmacies is not so much that the worker is paid low wages or under-skilled, but rather, that the lack of regulatory burden limits the incentive to ensure safe procedures.
mbreese 13y ago
The implication is that quality control is better at the manufacturer as opposed to the compounding pharmacy. It doesn't matter who is paid what. What matters is the quality and reproducibility of the product.
rmrfrmrf 13y ago
Legally, a manufacturer and a compounder are different. You can read about the regulatory differences here: http://en.wikipedia.org/wiki/Compounding#Regulation_in_the_United_States http://en.wikipedia.org/wiki/Compounding#Regulation_in_the_U...
refurb 13y ago
I think it's a fair comparison for the following reasons: 1) Manufacturer techs get paid a hell of a lot better than compounding pharmacy techs. I knew guys in the pharma industry, nothing more than high school pulling down $100K/yr with overtime. 2) There has been a recent incident (http://en.wikipedia.org/wiki/New_England_Compounding_Center_meningitis_outbreak http://en.wikipedia.org/wiki/New_England_Compounding_Center_...) where 48 people died and over 700 got sick from poor compounding pharmacy controls.
tedunangst 13y ago
The implication is that the minimum wage technicians at the manufacturer were magically transformed into robots who happen to be very good at following procedures.
superuser2 13y ago
Manufacturers are heavily regulated and have intensive quality control. Local compounding pharmacies do not necessarily live up to the same standards.

rayiner 13y ago

The minute I started reading the article, I knew something was up, and then I got to that part. It's not a $50 drug that treats as well as a $2,000 drug. It's a drug sold in large doses to treat cancer apportioned to a small dose to treat blindness. Complaining about Genentech's price structure in this case doesn't make any sense. It's like complaining that a restaurant won't sell you half-sized portions at half price. It totally ignores the underlying cost structure of the industry.

Spooky23 13y ago
Not really. It's more like a butcher selling a beef tenderloin in 40lb cases for $5/lb or a trimmed steak for $200/lb. Same product, just a cut that's too big for consumers to handle. In the case of my hypothetical butcher, he would be out of business, as the free market will push prices down. In the case of Genentech, using patent monopoly and regulatory procedure as a weapon nets them massive profit.
- rayiner 13y ago
  No its not like that at all. Almost all the cost of beef is the beef. Cows are a certain size, overhead is relatively low, and so twice as much beef costs roughly twice as much. With pharmaceuticals, cost is highly unlinked with volume. Marginal cost is almost nothing, but fixed costs are very high. Its like the restaurant: because most of the cost of the product is overhead and per diner rather than the food cost, half as much food sells for way more than half the price. This is true even though restaurants are in highly competitive markets.
  - Spooky23 13y ago
    Genentech refuted your argument for you. They took the previous development costs and research for the cancer drug, made some relatively minor optimizations for ophthalmologic application, and packaged it appropriately. It probably cost them a few million to go through the regulatory process. End result is that Doctors can write prescriptions on-label and avoid compound pharmacies (eliminating risk) and Genentech makes $1B/year, mostly off of Medicare. The only "fixed cost" is the cost to the Medicare taxpayer.

lowkeykiwi 13y ago

Interesting. Thanks. So you're saying that more regulation could substantially decrease medical costs for the patient?