Drug Prices Too High? Sometimes, They’re Not Costly Enough | Hacker News Reader

Drug Prices Too High? Sometimes, They’re Not Costly Enough

nytimes.com

20 pointstysone42 comments

As a type 1 diabetic in the US forced into paying $400+/month in copay to a premium PPO plan in the US for insulin that costs $1200+/month without insurance, on insulin that costs a mere $180 month WITHOUT INSURANCE in Canada, I say:

SHILL

So you are buying your insulin in Canada, right?

(I don't mean mail order, but a border run).

Insulin doesn't require a prescription here.

Insulin doesn't require a prescription in most US states either.

Not yet.

Have you considered an HMO instead of PPO? My brother is a type 1 and his copay with Kaiser is less than $25 per month. Obviously the HMO plan is more expensive, but not $400 per month more expensive and the $0 copay for appointments and immunizations is nice.

That's just another horrible and perfect example how U.S. citizens suffer thanks to their government officials being non-americans and rigging the system for profit and using people as cattle.

Here, all my insulin, check-ups etc. were covered by the welfare state until they changed it a few months back to cut expenses. Now I have to spend ~80€ a month from my unemployment check to keep myself alive and it makes me beyond depressed, I couldn't even begin to comprehend how horrible it must be for you.

Not a problem of too low prices, but a failure of the market. Which means you need the state to intervene. And that's exactly what they did with the 2012 FDA laws mentioned at the end of the article.

It's worth noting that the failures in the market were often due to high (state imposed) regulatory burdens, and that the 2012 FDA laws helped to loosen those burdens.

Or one could accept that for essential things it is a very bad idea to hope that the market will provide and instead the state could provide them itself, which could guarantee a steady supply.

How does shifting the burden from a profit-motivated company to a hell-if-I-know-by-what-motivated government bureaucracy guarantee anything?

> hell-if-I-know-by-what-motivated government bureaucracy

If I have to decide between a company which is guaranteed to not be motivated by my well-being and a government which is at least partially motivated by that (unfornately only partially due to issues[1]) I know what to choose.

[1] Mainly lobbyism and greed. Where people are there is greed, where there's greed there's potential for misbehaviour.

> If I have to decide between a company which is guaranteed to not be motivated by my well-being

False premise. The dead can't buy their products, and the so much as merely pissed off will be motivated to take their business to the competition. Both of these hurt profit.

> and a government which is at least partially motivated by that

What do you base this on? The warm fuzzy feelings by bureaucrats? Employees are people too, with their own fuzzy warm feelings. What makes government employees special?

The fact that their job security is dependent on who we elect to public office.

Politicians are motivated by power, not by your needs. We have had repeated examples of just how bad states truly are at providing for people's basic needs. Every time it's been tried, it's resulted in chronic shortages, often to the point of starvation. The USSR, Cuba, North Korea, China (before they went capitalist). I'm going to take a wager and say that the days when the USSR was still a major world power were before your time, and if I'm right, I strongly encourage you to do some reading on what it was like for the people who lived in it.

And yet we still have states, and they still provide basic services (e.g. roads, water, waste disposal). Why is that? If they were as useless as you think they are we would have removed them a long time ago. Maybe there's still something useful in them?

Regarding your point of reading up on USSR etc.: I've talked with people who lived in these countries at that time, thanks. They don't see it as black and white as you do. Which kind of makes my point.

Government provides many basic needs in the U.S., from roads to airports to sanitation to education to security (police, fire, and military); to food, water, shelter and healthcare for the needy; to justice, to much more.

These services generally function relatively well in the U.S. and other wealthy countries.

Because countries with public health care spend less on health care. Its fine if you have a moral disagreement with having a public sector, but the facts don't lie, the health insurance bureaucracy, misleading pharmaceutical marketing/sales etc, is way more inefficient than even the shittiest implementation of a public healthcare system.

Interestingly this is somewhat similar to what the US is doing for some food items. For example farmers are being paid to milk cows then dump in on the ground. This makes sure we have higher milk production capacity than necessary. Then if a disaster strikes or war that could reduce production, we have some extra production capabilities to help.

This is one of the main reasons for the European Union's Common Agricultural Policy, which has existed since the 1960s and covers a lot of food types.

The excess food is stored, and if it's not needed is sold (or sometimes given) to other countries. This is criticised as farmers in those countries might be left unable to compete.

> one of the main reasons for the European Union's Common Agricultural Policy

Hmmm ... based on what I've read, that might be the main rationalization. The reason is that the agricultural industry demands subsidies and has the political power to obtain them (as in many countries).

Europe had just finished a period of food shortage caused by World War II, which lasted years after the war in some countries. Governments were keen to prevent future shortages.

Three words for interesting (relevant) google food: toilet paper USSR. State production does not guarantee a steady supply of essentials.

The USSR suffered from mismanagement, poor treatment of workers, rampant corruption, a lack of natural resources, and crippling trade embargoes, and they nationalized virtually their entire economy. There are plenty of other examples of nationalizing critical industries going well, case in point Britain's NHS.

(copied from another comment that I posted this in originally by accident)

You consider NHS to be an example of a well run nationalized system, and yet the NHS deals with chronic rationing [0] [1], has queues for many things (and actually lets you pay to jump place in line) [2]. I'd hardly call that efficient or well run - instead, I'd call it symptomatic of central planning. During the 90s and 00s I thought that perhaps China's simultaneous transition from poverty and shortage to (relative) wealth and abundance (which was driven by their transition from state control to capitalism) would have finally put this 'the state could eliminate shortages and give everybody everything' nonsense to rest, but it seems that people have very short memories indeed (or just weren't born yet when the major experiments in nationalization were underway).

To give you a preview of the links, this quote is particularly poignant:

"Rationing is nothing new, of course. When waiting lists stretched to many months and even years, treatment was often rationed simply by the patient dying before they reach the operating table."

[0] http://www.theguardian.com/society/2015/dec/08/nhs-rationing...

[1] http://www.theguardian.com/healthcare-network/2015/apr/24/ra...

[2] http://www.dailymail.co.uk/health/article-3104106/NHS-charge...

Yet people in the UK love the NHS, afaict. I watched the debates on Scottish secession; both sides, Yes and No, were emphatic that if the vote went their way, citizens would retain what they called their "treasure", the NHS.

Unfortunately it ends up being the lesser of two evils.

Many people would rather have to wait for treatment rather then pay $10,000 a year for a policy and still be completely unable to get treatment because they can't afford the copay, since their policy doesn't kick in until after they shell out an additional $5,000, and even then only pays half.

From [0], "Patients are being denied mental health care, new hips and knees, and drugs to boost their recovery from illnesses". Does this also happen in the US or does the market ensure that everyone get every medical treatment they need?

And neither does a market, regulated or not. You can generally find bad examples of such things.

At least it is possibly to cut back your use of toilet paper without dire consequences so long as you have clean water. It might not be pretty or wanted for most of us, but it is possible while still keeping clean. Bidets might get more popular, if available, and others would learn from the folks that use cloth diapers and real washclothes on their babies.

This situation isn't as easy to fix when you replace toilet paper with medication or health care. It isn't like one can simply make do if they are out of medicine.

EDIT: Disregard 'you consider the NHS...' - got your comment mixed up with somebody elses.

The actual point is that nationalization tends to have mismanagement and shortages as an outcome, and private markets do not (at least not to the same extent). You consider NHS to be an example of a well run nationalized system, and yet the NHS deals with chronic rationing [0] [1], has queues for many things (and actually lets you pay to jump place in line) [2]. I'd hardly call that efficient or well run - instead, I'd call it symptomatic of central planning. W/ regard to people using bidets, cloth diapers, and washclothes - in a system with chronic shortages, people don't have those either. During the 90s and 00s I thought that perhaps China's simultaneous transition from poverty and shortage to (relative) wealth and abundance (which was driven by their transition from state control to capitalism) would have finally put this 'the state could eliminate shortages and give everybody everything' nonsense to rest, but it seems that people have very short memories indeed (or just weren't born yet when the major experiments in nationalization were underway).

[0] http://www.theguardian.com/society/2015/dec/08/nhs-rationing... [1] http://www.theguardian.com/healthcare-network/2015/apr/24/ra... [2] http://www.dailymail.co.uk/health/article-3104106/NHS-charge...

The shortages in the American private market is simply much more difficult to see. Folks might theoretically be able to go to the doctor, but not having the money to do so - instant shortage of healthcare. There are wait times here for doctors, but can you really tell me that the insurers in the states have no mismanagement? They had to pass a law to cover pre-existing conditions like diabetes. There is a lot of waste in the system in the states - there is truly no reason for an expensive MRI machine to sit there empty most times unless it is reserved for emergencies... yet they are such.

No system is perfect. My experience with private care has been in the US, and my experience with nationalized is in Norway. I've tried to go to doctors both places with waiting lists of weeks, and the waiting is a bit longer for specialists here than there. Give and take. I'd still prefer to actually be able to get health care when i need it regardless of having the finances to do it. I actually prefer to have a mix of the two - strong national care with an option to be private.

Is the government incentivized and managed well enough to take big risks on new drugs and have a good chance at making them work?

Sometimes I wonder how much the rest of the world benefits from the US's capitalist-ish healthcare policies. How much do drug companies rely on their ability to charge US customers insane amounts of money to help recover their costs of developing new treatments?

No is the answer to your second question, other first world nation's governments pay for the drugs and bear the cost burden.

But do they pay as much as US citizens do? Note that I'm not suggesting that it's bad if they don't. It seems like part of the purpose of single payer insurance is that you can negotiate much better rates with pharmaceutical companies. So either other first world nations aren't negotiating really good rates, or they are negotiating good rates and they're paying less than US citizens are. (I would hope it's the latter.)

Let me sum up my thoughts this way - if single payer insurance saves money overall, that money is coming from somewhere. As it's been explained to me, that money is most likely coming out of the pockets of pharmaceutical companies and private insurance providers. Obviously saving money is great for everyone - except the pharmaceutical companies and private insurance companies. If that money dries up, is it possible that will stifle innovation?

I don't know the answer, and I'm not using this as an argument directly against single payer insurance. I see the value of single payer insurance. I'm just curious about side effects.

EDIT: Just to be totally clear, I'm not crying any tears for drug and insurance companies losing money. If we can get people the treatments they need at a lower cost I'm all for it. I'm just mildly curious about the macro effects of these types of changes.

> If that money dries up, is it possible that will stifle innovation?

I think its a complicated question. Most of the money spent by drug companies is on advertising and not R&D. If they are in an environment where profits are guaranteed via government contracts, and advertisements are banned, then where else can they spend their money except admin and R&D.

Will people invest as much into drug companies if they aren't seen as volitile anymore?

R&D costs are primarily because of having to navigate the legal structure of drug trials. If the government is more involved in the industry, how will this change? If for instance, the government foots the bill then costs go down, and the only downside is that time-to-market is increased due to government bottlenecking and inefficiencies.

If you truly believe that -- move to Venezuela.

Or maybe I stay where I am, in a country with a healthy mix of government provided services and market provided services. Shocking idea, isn't it?

tl;dr: Generic drug makers, with low profit margins, don't have a lot of excess capacity. Any disruption to supply can have a lasting effect, especially for complicated products like injectables.

Part of the fault is regulatory: Once that product is labelled for sale in country X, you can't sell excess inventory in country Y, even though it's the same product from the same production line.

Sounds like what's needed is a drug reserve, to act as a buffer if there is a disruption.

The artificially short expiration dates for drugs makes this hard. Drugs last a LOT longer than they say, but no one wants to spend the money to see how much longer.

This is actually a huge deal. Insulin is famous for lasting several times the listed shelf life if properly refrigerated, but people unaware of this still throw away unfinished vials. Other drugs are so stable they may never expire, so the dates on the bottles are completely arbitrary.

Yup, but running stability studies is also costly too, not so much for the testing, but for regulatory approvals - you need to write up the stability part again, argue why the results are still acceptable in case you see any increase of degradation products, and pay a fee and wait 6 months to 1 year to get it approved, then enjoy paying again to relabel all your package, PIL, etc... that goes with it.

Most of the time, unless you had a realllllly short shelf life at submission timing, the additional work is not worth it for the pharma industry side. Resources are better used working towards new/pending products.

Even if it didn't cost a dime, some drug companies might not be interested in longer expiration dates. If the expiration date is passed, and you throw it out, you'll have to buy a new supply. More profit! It's a perverse effect, but that's the way it is.

http://www.genericpedia.com has price list of generic medicines

Reply on news.ycombinator.com