It Costs $30 to Make a DIY EpiPen
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I'm living in Russia and recently have been involved in medical devices market here. The local market for cardiology stents (little springs they insert non-surgically into your heart to remove artery clogging and prevent heart attack or stroke) has been long occupied by the three US companies. The Russian company I invested in, made their own stent design and launched a production factory in Western Siberia. Our prices are three to four times lower that prices for the same class of stents from the US competitors and the quality is the same or higher. We fought out 15% or the market for the last two years.
I have to say, that almost 99% of all stents in Russia are installed at the cost of the state medical insurance - every person in Russia is covered by this insurance, and that insurance is just sponsored by the state or local budget. The budget allocated to this kind of medical support is fixed, so if the yearly budget is 100M rubles (our local currency) and cost of a manipulation and a stent is 100K rubles then you can install stents in 1000 patients in one year. If the price goes down four-fold, then it will be 4000 patients. And this stent manipulation is a life saver in true sense of this word. So, basically with our stents we can save four times more people's lives, which on a scale of Russia would be tens of thousands of people.
Here enters the greed and corruption. One of the US companies approached one of the most powerful Russian oligarchs with good ties in the government. He lobbied a government decree stating that this US company will be single supplier for cardiology stents starting Jan, 2017. So, all hospitals and clinics are obliged to buy stents only from them, at the price they set. Tens of thousands of Russian people will die each year because of the greed and corruption - and we can't do much about it.
Medtronic is the US company (Ireland HQ of course..) partnered with them.
Sources (conveniently removed, Google cache version): http://webcache.googleusercontent.com/search?q=cache:YVnPx9a...
Victor's relationship with PM: http://uk.reuters.com/article/uk-russia-vekselberg-pm-idUKKC...
Perhaps the easiest way we can do something about this is make some noise. But we need indisputable facts in order to do that.
Edit: If you do decide to blow the whistle, please try to stay anonymous as best you can.
Russian company: Angioline (http://www.angioline.ru, the site is Russian-only)
US company: Medtronic (http://www.medtronic.com)
Oligarch: Victor Vekselberg (https://en.wikipedia.org/wiki/Viktor_Vekselberg)
Joint-venture created by Vekselberg and Medtronic for "technology transfer": http://stentex.ru/en/about/company_news/199
Ties in the government: http://www.renova.ru/en/press-center/releases/21/1995/
Single-source decree of the government: https://rg.ru/2015/05/14/stent-site-dok.html (sorry, I can't find English version)
Don't be fooled by the press releases above - no actual transfer or localisation has been done or planned in the nearest future, they are just moving stents from Medtronic to Russia.
Exactly
As I recall DOJ declined to file charges against Medtronic in a previous 4-5 year investigation of their practices regarding payments to govt doctors in Europe and Malaysia so there is probably a 10-K Form in the 2012-2103 timeframe.
DOJ/SEC have been actively pursuing health services and health technology companies so there is an open ear to complaints.
0: https://www.justice.gov/criminal-fraud/case/related-enforcem...
It could be a good case for FCPA investigation, though I doubt that the US will be interested in opening the FCPA case against the American company.
I just don't see what good will it do in Russia. They just reply with "it's all fabricated lies of our enemies in the West!" and it seems to be good enough for majority of population.
FWIW a lot FCPA cases are against American companies since it's an American rule. The only way a non-American company would end up against FCPA is if they were traded in US financial markets (so Renova Group couldn't be brought up on FCPA charges, but Medtronic definitely can be).
shame is an effective tool as a catalyst for change (sometimes)
So am I correct in understanding that the Russian healthcare system lets tens of thousands of people die every year because they can't get stents?
Why can't a patient just buy a stent from your company (vs. asking the govt. to pay for it) and ask their doctor to "install" it? Is that illegal?
(I have no idea how the Russian healthcare system works whatsoever.)
But maybe not, I'm not Russian and don't know what the rules are there.
Of course you may pay for the operation by yourself and don't expect any compensation - but this option is not affordable for 90% of the population.
Isn't that true of any nation's healthcare system? They do have finite budgets, and have to make decisions to draw a line somewhere.
This is the point that was blown out of proportion during the Obamacare debates, where the GOP claimed the legislation would involve "death panels". This caricature was hyperbolic enough to backfire, but the fact remains that there's always going to be a decision about where to invest scarce resources.
Not for coronary stents in the U.S. If needed to treat a heart attack, a coronary stent is administered regardless of the patient's ability to pay. Generally speaking, emergency treatment is available to all humans in the U.S. regardless of ability to pay. You might get a bill afterward, but first they will save your life.
As for prophylactic coronary stents, the little bit I've read about them suggests that they don't actually keep people from dying, compared to other cheaper and less invasive treatments.
In America, the coverage provided by Medicaid, Medicare, and private plans under ACA rules, will determine whether to approve or deny a treatment plan based on a number of criteria, which are largely based on a balance between the cost of the treatment versus its likelihood of resulting in additional QALYs (Quality-Adjusted Life Years) for the patient. An expensive treatment that's unlikely to help, or even a less-expensive treatment for somebody who's already 90 years old, is likely to be approved. Thus, there are potential treatments that the government will deny.
You're right that in America, emergency acute care is going to be provided in any case. This was true before ACA, and in this context may be seen as one way that the American system, as defective as it might be, is still better in many ways than is commonly admitted. (Source: my wife's job used to be Medicare reimbursement, and now centers on "DSH" payments to hospitals, which is essentially reimbursing hospitals for bad debts from indigent care and stuff like we're discussing in this sub-thread)
Non-emergency stents are a different question. It seems like there is an increasing body of evidence that they do not prolong life, just as you said.
I have no reason to doubt the OP's assertion of corruption in the Russian medicine market, as I have worked with several people who did research in the US and practiced medicine in Russia and have heard similar stories from them.
However, the OP's assertion that more stents = more lives saved is not entirely true as you and the above poster point out. They are clearly well studied and known to save lives, reduce long term morbidity from heart failure, etc.. in the setting of STEMI (ST elevation myocardial infarction, in other words a big acute heart attack).
However, a large number are placed for angina and many studies have shown that they may not make a difference. There are risks with the procedure of placing them, the issues of having to take blood thinning medications afterwards, and so on.
I guess the reason I wanted to comment is to expand this discussion a little because more stents (as the OP wants) in Russia doesn't necessarily mean more lives saved, but it does mean more business for OP. I do not know if there is such a shortage of stents in Russia that emergent catheterization is avoided, if someone knows this to be the case please correct me.
Also, I don't want to come off as implying that the OP is corrupt or only in it to make money. Medicine is complex and (at least in my current opinion) probably benefits from a business side seeking to maximize profits through innovation as long as it is countered with health care workers (and I guess federal oversight) scrutinizing things towards the patient's best health to act as a counterbalance.
And your point that some applications of stents can be useless or even dangerous are also valid, but we should take in consideration the other factor - number of stent operations per 1M of population. Russia is still way back from the value recommended by WHO, which means there are still a lot of people who need stents for live-saving purpose.
Corruption is bad, no doubt. But the double standard applied to medical companies makes no sense. If not saving lives is the same as taking ones, then many of the things developed by Silicon Valley are morally abhorrent. How many lives could be saved if the billions of dollars flowing into Facebook, Twitter, Tindr, YouTube, Netflix, etc. were used to buy or develop medicine? I could save the life of a kid in Africa suffering from malaria, but instead I chose to purchase a new Apple Watch. If people actually applied your moral principle in a non-hypocritical way, we'd have almost nothing to talk about on HN.
Otherwise locking someone in a room and not feeding them would not count as murder.
Well, if you read the comment you're replying to you'll see that, in fact, it does.
Being dead, he likely wouldn't.
Moral and logic (in the narrowest sense of the word) often don't go hand in hand. That having been said, your point is quite close to my own understanding.
If you only meant that to apply to the EpiPen, and not to Russians being killed by their own government because of corruption related to cardiac stents, you chose a really weird way to go about it.
https://theintercept.com/2016/08/24/epipen-uproar-highlights...
It gives three examples:
1) Lobbying to not let Medicare negotiate with drug manufacturers. Which is a perfectly reasonable policy to avoid a creating a monosopny buyer of drugs.
2) Lobbying for the Generic Drug User Fee Act. That law imposed fees on the industry to beef up FDA resources for reviewing applications of generics. It also imposed testing requirements on foreign production facilities equal to the testing requirements imposed on domestic facilities. Again, seems reasonable, and the Act was supported by public interest organizations.
3) Lobbying for federal funding to be used to purchase EpiPens for schools. Somewhat shady, but how does that kill anybody?
I also agree that the case of Mylan is not as dramatic as that of the Russian heart stent company.
The problem with #2 is that it creates artificial scarcity. In this case, there is plenty of justification as you don't want shady medicine on the market. The question is whether the FDA is being overcautious with generics and imports. As of now there's certainly plenty of people illegally importing prescription medicine from offshore pharmacies in an unregulated manner, because prescription prices are so inflated compared to most countries.
Lobbying does not produce some of the outright corruption that bribery does, but I've seen more than my fair share of lobbying encouraged laws in the US over the years where a subtext of the law was to eliminate competition. I'm not sure how much of current drug law is pharmaceutical industry influence (my gut feel is some but not all) but some of it definitely, for good reasons or not, blocks up the "invisible hand" of competitive forces.
At least the good thing about a system like the US (vs. the Russian example) is that there's some hope that public outrage over the most egregious examples (your Martin Shkrelis and whatnot) will cause some changes.
http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
RE the killing vs. not saving, let's maybe put it more precisely - it's decisions that kill people vs. decisions that prevent someone else from saving people. Now in a way, the whole economy indeed runs on the second kind - as long as medical research and medical care aren't money-saturated (i.e. have more of it than know what to do with), all the money that flows somewhere else is preventing lives from being saved. One issue is, we can't just simply redirect all that money to medicine without the world (or at least the country trying) going straight to hell.
As for personal moral responsibility, I think it kind of depends on the "degrees of separation" from the issue. In the Russian stents case, I'd say that what happened is pretty close to mass murder. The separation between patients and the company is just one somewhat fixed legal system, that was about to save lives if it was not for the company. That's like if someone was jumping from a burning building, and last-second you pulled the life net away from where that person was landing. It's not you who killed them, it's the dv/dt...
Most of us, including Netflix, YouTube, et al. are much further separated from life-and-death issues. Like, if I work for a company automating some part of manufacturing in a factory, should I be responsible for a worker who got hit by downsizing? Don't know, I sometimes do feel that way. Should I be responsible for that worker not being able to pay his barberer, who had to start working overtime to compensate, and then didn't have time to go to the gym, and died of a heart condition? There's no way to do that in practice - there's too many variables in between me and that dying person to pin responsibility on one actor, or to even determine the casual chain.
Economy at large is kind of "causality laundering" - too many variables, too much things happening, for a single bad outcome to depend on a single actor if they're not directly connected. But the Russinan thing? Sounds as explicit and direct as one can get without pulling the trigger themselves.
I disagree vehemently and fervently that the medical industry as whole should be lumped into the latter group: letting people die by passivity. In the poster's story, it's very clear that the US company is they very opposite of passive and worked quite hard to exclude the company with the less expensive product from the market. For sure, this isn't all on the US company and corruption in the state played a big role as well. Still, I don't think it's reasonable to excuse the US company as "just trying to make money".
You're absolutely correct that if we chose to apply the standard of "how many lives could this money have saved" to everything we'd never get anything done. But we can be judicious where we choose to wield that standard.
There is at least one line and that is law and it is crossed in most countries at the moment you e.g. bribe officials.
With that out of the way a judge shoud have at keast some leeway if he thinks what they did was unethical to begin with.
We want to maximize human quality of life.
People dying of a heart attack does not fit that goal, and a few corrupt politicians and some medical company executives and stockholders making millions while thousands also does not fit. Devoting the whole economy to keeping people alive, but not letting them enjoy that life does not fit either.
A middle path of efficient markets in areas where that works, and of artificially supporting and regulating areas where market forces do not produce the desired outcome due to a lack of profitability or externalities, is not that hard to understand. It's just hard to implement.
You're misrepresenting the issue by exaggerating in the opposite direction. It isn't "we built twitter instead of saving people". It's that some people have a life threatening problem, a company already has the solution to that problem but they charge a (perhaps unreasonably - depending on who you ask) large sum for it, they actively suppress competitors who provide it for much much cheaper (thus saving lives), and finally they do it for a profit motive (which is perhaps petty - depending on who you ask).
Yes, it's not murder, but on the scale, it's still closer to that part of the spectrum rather than the good side. The reason I say this is that I don't think it's unreasonable to conclude that this company chooses profits over saving lives, for whatever reason. If pharma companies truly valued saving lives over profits, they would reinvest some of those profits into actually saving lives instead of hoarding them. I don't envy those whose job it is to do that calculation.
Besides I thought (IANAL) this "maximize shareholder value" meaning short-term-economic-gain meme was massively misinterpreted and needs to die soon?
Your point about anti-competitive conduct is well-taken. But beyond that, it's government's obligation to make sure everyone who needs life-saving treatment has it. But going into the business of saving lives shouldn't entitle you to any less of a profit motive than going into businesses that don't even save lives at all.
> it's more immoral to develop a cure and make lots of money from it, than to spend billions on activities that don't even cure anything
OK, when you put it this way, yeah, it's hard to argue against.
What I was going for was more about the after-the-fact of having developed a cure: there's something about the fact that they /have/ the cure and at that point choose not to make it more available that seems reprehensible. This to me seems analogous to the sad fact that people are dying of hunger all the time in the world but a lot of us are isolated from that fact by sheer distance and go about our lives ignoring that with no moral weight on our shoulders (analogy to twitter, not having developed a cure - and not to say that this is a good thing), but if we directly encounter a person dying of hunger one day and we have food (analogy to insert-pharma-here), I'd like to think most of us would feel obligated to help. The immediacy and ability to help seems a factor.
Did the American company invent stents and was just protecting their R&D returns from evil Russian copycats? Also the "active suppression" issue is here - apparently the company bribed the government to prevent the competition. The point is more like "it's more immoral to be a life-saving cure provider who decides to make more money from it by shutting down competition that can provide that cure cheaper, than to not be in the life-saving business entirely".
> The money invested in Twitter's IPO alone could've saved more than half a million kids from malaria.
True only if taken out of context of the economy at large. There was no point in time where someone could make a business decision and whole money invested in Twitter's IPO would go directly to cure malaria. That money was not controlled by Twitter, but by many people who invested in it, each having a personal choice of what to do with their wealth.
The baseline is that -- in the real world -- there are people with skills and equipment and they may or may not put those skills and equipment to use. You can maybe get them to agree to work on producing and developing medicine instead of software. But most of those people and equipment aren't really qualified for that. For the most part, it would just be a huge waste of talent.
However, in theory, this could still lead to some kind of progress in medicine (after all, those people are supposed to be smart), but that depends on whether the key to better medicine lies indeed within the field itself. Also, those gains would still have to outweight whatever benefits occur as a side effect of business as usual, for example when an AI that was developed so teens can better sext each other turns out to be useful in automated diagnostics (or something unexpected like that).
A company named Nafferton, distributor of Boston Scientific, managed to drive all other companies out of the market via legislation:
http://www.elobservador.com.uy/con-monopolio-stents-otros-fa...
A year ago, the Court of Appeals annulled that, and we now can have more that one supplier (not sure if that's in practice now)
http://www.elpais.com.uy/informacion/gobierno-se-encamina-an...
Edit: Court of Appeals, not Supreme Court. Not sure if it reached the Supreme Court.
The "because of greed" way of phrasing these things seems like a weird place to stop to me. If a rock falls on your head and kills you, I think it's fair to say you died "because of a rock". That seems like the key difference between your situation and everyone else's, that explains why you _in particular_ just died. But it would be weird to say that you died "because of gravity" or "because of the frailty of man".
they're thought-terminating cliches.
It's as if I was drunk-driving and drove you over. It would not be said that "the car killed" you, but that "a drunk driver" killed you.
Mylan is a really great user of buying legislation. They leveraged their 90% market ownership of the epinephrine auto-injector market such that
[1] It lobbied hard to ensure that all parents of school going kids (or tax payers) paid for EpiPens by making it into a bill that politicians could easily justify.
Once the bill passed and schools all over the country purchased these by the boatloads, then they just kept raising the price over and over and milking the profits.
When it got too much and they could not ignore the patient backlash they have turned again to purchasing legislation..
[2] Now they want to make it so that the patients do not see the copays - instead every one suffers by paying more for health insurance.
[1] https://www.opensecrets.org/lobby/billsum.php?id=hr2094-113
[2] http://www.nytimes.com/2016/09/16/business/epipen-maker-myla...
With scumbags like these, is it any wonder that the USA has the most expensive healthcare system in the world?
When people don't have to pay for something straight from their pocket, they're not feeling the ripoff so strongly, so they don't revolt.
That's why I personally think that the systems where people vote with their wallets are much more efficient.
Sources: lots of research I could link to but don't have handy and, with great dismay/frustration, I've spent a decade analyzing the root causes of US healthcare spend.
Monopolies can dictate terms, which is why monopolistic companies are regulated. But if that monopoly is the state, then it actually works in the citizens favour if the monopoly presses down costs.
Also, it's important to distinguish between true R&D aimed at developing actual cures and iterative R&D aimed at developing medicine that will get you hooked on long-term courses that maximise profits.
As far as I understand it, yes. http://www.xconomy.com/seattle/2014/09/02/which-countries-ex...
As far as your claim about most drugs being a scam, I can't speak to that as I'm not familiar enough with the industry.
Uh, that's precisely the point of regulatory capture. Ensure nobody else can compete but you.
Beyond the pharmaceuticals, is that the most expensive healthcare services are provided by hospitals that are mostly locked in by proximity.
http://www.bizjournals.com/triangle/news/2016/07/19/where-gs...
Yes, assuming the monopoly actually wants to keep its costs low. In the US, corporate-funded legislators made it so that Medicare is not allowed to negotiate drug prices. It willy-nilly pays whatever the private drug companies prices its drugs at.[1]
This is why it's so profitable for companies to "purchase legislation". The return on investment is 10x or something insanely high, like in this case. Spend $10 million "donating" to the campaigns of a few unconscientious politicians, and soon you are milking an extra $100 million in profits from unwitting taxpayers.
[1] http://healthaffairs.org/blog/2016/09/19/the-politics-of-med...
Transparency could strip off lobbying. If we know who gets what money, and we know how people vote, a bit of clustering etc ought reveal patterns...
What's needed is something gimmicky that gets popular appeal and covered on mainstream media for fifteen minute fame...
E.g. an iphone app that you point at the live news on your TV and it OCRs the senator's name and queries opensecrets.org or something bigger and better and tells you how much money they got, from whom, and how this correlates with their voting record etc.
Something that makes politicians accepting money very counterproductive.
They realize that if they only cover marginal cost, and don't allow for development, they will only get the right product for a limited amount of time.
What often happens is that they agree on a more realistic price that will allow for that.
In many cases the company will go low to still be the supplier for a whole country - especially as they can still keep their margins in other countries, like US.
I'd compare it to a 'tragedy of the commons' scenario where one farmer keeps paying his son to re-turf the meadow, so the boy can have a job (and thereby feeds everyone else's sheep).
They can set up non-profit-driven suppliers, but it seems probable that normal for-profit suppliers will flourish.
I agree that the 'internationals' who control domestic drug consumption have little incentive to set up their own drug production systems, but if my supposition is correct, they need the US to keep paying higher prices for the same drugs.
http://www.bizjournals.com/triangle/news/2016/07/19/where-gs...
The government is responsible for using a fair price, both for itself and the supplier.
His non-profit nature ensure that it will not try to lower the price too far.
If a politician is dumb enough to make companies go bankrupt, it's the responsibility of the people to vote him out of office.
That's the only way to have a fair price on drugs. A free market cannot exist in these industries and the inelasticity of the demand will always, always distort the prices.
Yes, America will have to face its demons and trust its government. The alternative is to continue paying exhorbitant prices to greedy scumbags and let fellow citizens die as a result.
In this scenario, consumers drive the prices too low and put suppliers out of business. It's the same argument coming from the other direction.
Markets don't seem to work like that. Prices get driven down, but not to the point where suppliers go out of business, because they won't sell at that price. Sometimes if margins are too low new players will find efficiencies or new inventions that allows them more profit for awhile.
For this to happen you need a balance of power between buyer and seller. It's obvious to me that such a balance is radically absent in the US system right now.
Putting governments into the role of buyers is not anti-market - it's pro market because it allows an informed, more powerful buyer that balances the market forces and allows the market to work. (It's certainly possible that other entities, such as insurance companies, could fill the same role.)
A worry comes because of the label "single buyer" which is the inverse of a monopoly and is anti-market. But in practice drug companies are global and there are many governments.
All this would lead to much lower profits for drug companies, of course, but that's not a pro-market argument, that's a pro-monopoly concern.
I don't think I have heard such an argument, and I understand the parent comment just fine.
What he means is that, since pharmaceutical and medical supplies companies have large upfront research costs coupled with negligible marginal costs, they face a falling average-cost curve. However, a firm operating under competition has it output at the point where marginal and average costs are equal. The point is that for a firm who profits off research, reaching this point is unfeasible. What all this economic gobbledygook is that, in order to survive, firms have to charge above what would be otherwise the "warranted" price (like the price of the components and labor that go into a kit).
This is more obvious in the case of software, since the cost of copying any piece of software is pretty much zero, anyone trying to sell it for it's marginal price won't ever get what he put in by having written it in the first place. In such markets the socially efficient outcome, the one which makes both consumer and producer better off, is actually to have a single or few firms regulated firms operating under imperfect competition. And all this happens because of the cost structure of the firms, not because of the market itself.
Though I'm rather skeptic that pressing on the suppliers will push them near their marginal costs in this particular case.
Deadweight losses are a joke, if the sole buyer buys too much, they are at a loss. It just does not happen in this sector.
In concrete terms, this means something like "the price of a doctors visit is low enough that a nearby clinic closes down. Even though you were happy to pay the higher price for the convenience, and they were happy to provide service at that price, we no longer get to have that experience."
Insisting that moving to a single-payer system is the only solution is very one-dimensional thinking.
It can also be said that drug companies use Americans to make their profits and sell to other countries for the best they can get, we could well be paying for an unfair portion of the "real" cost and other countries are only doing better because we're paying the bill.
---
I'll switch to talking about something entirely different to expand on the last point. You'll often see people arguing about how the US has the highest military budget, higher than the next N countries combined.
The thing is, we're providing security for those next N countries, and the world as a whole. Many of those N countries are NATO allies who would have to spend a whole lot more if the US didn't. And also by making real war outside regional and civil conflicts impossible for the whole world with military dominance.
In other words, in an American military spending blackout, the game would change and everyone else would be spending a whole lot more. We couldn't simply reduce our defense spending to something comparable without significant consequences.
My personal opinion is that we should absolutely say no to a lot of scenarios when it comes to single payer. That and we should absolutely stop providing care in the worst cases if there is a strong likelihood that the patient will not make it out alive. We spend way too much in the last six months of a patient's life holding on to every last bit of hope grasping to keep their heart beating. I've heard doctors express frustration about this as well.
> In other words, in an American military spending blackout, the game would change and everyone else would be spending a whole lot more. We couldn't simply reduce our defense spending to something comparable without significant consequences.
Consequences for us too. We have to keep spending to maintain the status quo.
I mean I get that there are certain common goal costs that we contribute perhaps a little more than our tab but it isn't nice to point it out like this. At the end of the day, we aren't spending on our military prowess to be charitable. I'm not an expert so it is likely that some cost saving would be possible. I'd welcome efforts to do that.
With medicine, I think a single payer should be able to negotiate with manufacturers and suppliers to keep costs low.
We have to rethink end of life care for humans. I'm very willing to sign a medical release form that says pull the plugs if my treatment will cost over $10M regardless of who pays for it.
But that's a different topic. This current issue with epippen is a simple issue of rent seeking. There is no way anyone could side with the company of this one. I hope that the spotlight means their efforts will fail.
Are you suggesting we spend more than we can get away with hoping the slimeball companies will reinvest their profits into R&D?
We don't disagree that there's a problem: medically fighting to the last breath should be replaced by gracefully accepting the end at the appropriate time (for both cost reasons and for the quality of life at the end for the patient, etc.)
We do disagree on how. If you want to make progress on that front we should have education and cultural growth around accepting death and doing what's best at the end for doctors, patients, and families. We shouldn't have a bureaucrat forcing the decision on anyone.
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>This current issue with epipen is a simple issue of rent seeking
It's not an issue of rent seeking specifically, but abusing government granted monopolies (patent protection, trademark protection, forcing schools to buy, etc)
> Are you suggesting we spend more than we can get away with hoping the slimeball companies will reinvest their profits into R&D?
No, the high cost of R&D and slimeball behavior are often intermixed, but separate issues. I'm suggesting that a whole lot of the money for expensive drugs is actually going towards R&D. Lots of foreign countries are getting steep discounts and not paying equal shares because the drug companies are taking the path of least resistance. They can get funded in America more easily so they don't fight as much in places that are more difficult to win.
America couldn't magically get the foreign prices because the R&D money wouldn't appear from anywhere else. America's prices go down but the rest of the world's prices go up to meet in the middle ... or a lot less drug research happens (or a bit of both)
There are lots of things happening, and a lot of the problems are due to lacking regulation. What can get patented and for how long is wrong; more research should be publicly funded with stipulations that the results are free to society; drug approval mechanisms need to be more efficient; some barriers between national drug markets need to be broken down (you should be able to sell across borders between economically equal nations)
There are a lot of things which could lead to a healthier medical environment which aren't being done. We've got some small reforms out of the way, but there are still huge inefficiencies.
Our single-payer system covers a pile of things that low-end insurance often doesn't in the US as it is, so most people are happy with it.
Looking at per capita healthcare costs in India would be pointless, as the vast majority of people go without proper healthcare.
Here's a generalisation for you: The US has lower life expectancy than most of the 'developed' world and yet spends twice as much (OECD 2007).
See Meeker's USA Inc. slide 111 https://s3.amazonaws.com/kpcbweb/files/USA_Inc.pdf
Indian healthcare has its own can of worms, but since we are not talking about that, I won't open it.
I have direct experience with the French system, so I'll use that as an example. When you go to the doctor for an outpatient visit, you pay the whole bill right then and there. Your insurance company will then reimburse you for some significant percentage of the "reasonable and customary" cost of that visit. Do you need a shot as part of that visit? Guess what -- you have to go next door to the pharmacist and buy the dose. The doctor will then administer it.
Inpatient is different (fully covered and no billing) and indigent patients are given a special card that directs the doctor to bill insurance directly.
We could do that here in the US without universal health care and it would make a significant dent in our spend without a corresponding decrease in outcomes.
The great grandparent comment also seemed to be speaking to the way the government has incentivized employer-provided health insurance, which insulates people from making cost/benefit decisions. I think that if individuals had to pay $100 per juice box their insurer gets billed, they would likely find a way to cut costs.
If it's in regards to Obamacare, that's pretty recent compared to the trend of the medical lobbying getting one over on Americans... and definitely not "free healthcare" by really any measure.
A manager replaces free coffee in the office with a paid vending machine to save expenses. Moral goes down. Production goes down.
A team member is fired because she has the worst production level of the team. What they did not know is that this team member was holding the team together.
So there are a lot of side effects to every decision. And therefore I think voting with your wallet is a bad idea.
A manager sees that workers work better when well caffeinated, but that they are sucking up time with starbucks runs. So she installs a Keurig machine, an investment that saves money and time in the long run.
Alternatively, we might have a manager who buys a coffee machine to give the employees free coffee, as the former sees the latter will be happier and more productive for a low price; this the manager buys productivity cheaply.
For example, you might choose a higher airfare with a carrier that has better customer service than the cheapest. This is voting with your wallet and it has nothing to do with cutting costs.
The manager hasn't "voted with their wallet" in your example.
The US would need different regulations. But the American ideology will probably not allow that.
Ah, the old strawman. Let's bring it out and beat it around a bit.
That's the "American ideology" in the same way the "European ideology" is to not work and collect a check from the government.
And additionally, a gut-level fear of government and way too much trust in corporations.
Europe's social welfare programs, universal healthcare and free education don't make these countries "socialist" or "communist". These countries are still capitalist market economies with a few critical aspects about people's livelihood regulated for accessibility.
As long as the response to these ideas is always "but that's communism", it won't ever improve.
This is why the US has one of the smallest militaries, the smallest public road system, unsafe aviation due to no air traffic control, no public schools for children, and unsubsidized farming and food purchases. /s
http://thelibertarianrepublic.com/epipen-monopoly-hint-not-r...
The "no true capitalism" of the libertarians ? Communists also claim USSR was "no true communism". A doctrine or ideology is never "pure" or "perfect" in practice since men aren't.
Socialism is the collectivized ownership of the means of production and a centralized plan-based economy with fixed production quotas and prices.
Scandinavia isn't socialist. The Eastern Bloc in Cold War times was socialist.
Social democracy != socialism.
Look at the FDA process: you reform that and drug costs will decrease dramatically.
Beyond this would be a requirement of two sources for ALL medical prescriptions and devices in order to sell them in the U.S. (or whatever country you, the reader, are in).
This would ensure at least competition, even though there's still greed there can be momentum for competition.
I feel like health is a degenerate case of free markets. In any free market, the price is set by the consumers assessing their utility for the goods or services purchased. In cases of pencils, productivity software, energy, raw materials, etc, consumers compare the methods of resolving the need, or at baseline the cost of not addressing the need.
In healthcare, there are lots of situations where the cost is X dollars vs literal death. Of course, death is not an acceptable alternative, so an acceptable X ends up being very, very high for the treatment. Most people would pay their life savings to treat themselves of any life-threatoning ailment.
I honestly believe that free markets setting prices is good for most industries, but I cannot see it working in situations where the benefit categorically supercedes any amount of money.
It seems like we need to either rethink IP law surrounding healthcare, or have a monopsony (single payer or something else) setting prices.
This is a hard thing for me to resolve, as somebody who normally likes a libertarian approach.
In this case, it appears that supply has been artificially fixed by IP laws (which is obviously morally questionable situation in the health sector).
The healthcare system in the U.S. means that I consider the United States of America a second-world / not-fully-developed country: it doesn't belong in the first-world alongside those countries which look after their sick.
What is preventing other companies to come to market with cheaper versions of the EpiPen? Why are there no cheaper alternatives?
My understanding is if the prescription says "EpiPen" (or any non-generic drug brand name) the pharmacist must provide an EpiPen (or the brand-name drug). If the prescription says "epinephrine auto injector" or "EpiPen or generic," then the substitution is allowed.
> Are the products that different?
IIRC, they all the current alternatives deliver the same medicine, but they use different injector mechanisms to do so. I think the last alternative withdrew from the US market for some reason, because their mechanism wasn't as reliable with dosing.
IIRC, EpiPen's mechanism is apparently off-patent, so a true generic could enter the market if approved.
http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
'In [thirst], there are lots of situations where the cost is X dollars vs literal death. Of course, death is not an acceptable alternative, so an acceptable X ends up being very, very high for the [bottled water]. Most people would pay their life savings to treat themselves of [thirst].'
The parent 'proved too much'; there are many situations where a good or service is required for survival, but that alone does not cause the price to rise. The lack of alternatives (I.e. defensible monopoly) is what causes high prices.
I actually used bottled water for the example because it is easy to visualize and synonymous with potable water. I was recently on an island with 'tap water' which had poisonous levels of arsenic, so tap water seemed like a bad example.
This causes a principal-agent relationship where the decisions are made by health insurance companies (the 'agent') rather than the person who needs them (the 'principal'). This, of course, has it's own set of issues.
Price is not representitive of value. It's why diamonds cost more than water.
For certain things, I'd expect cheap prices in healthcare- if the market is allowed to function (i.e. Patents, regulation, etc are not in the way).
For others, high prices could actually be beneficial. Profits in an industry attract additional investment. When photo apps get bought for a billion, more people want to make photo apps.
Recently, specialty drugs for rare diseases started charging enormous prices. Do you think that led to more or fewer specialty drugs being developed?
In fact, there's been a boom in specialty drug development, which wouldn't have happened without the profits- but are saving many lives.
Fix prices, and you'll fix innovation to today's level. Allow profits, and the system will continue to magically improve.
The problem is not with the "greedy corporations", but with the poorly dedigned legislation regarding intellectual property rights.
The state created the protectionist environment in which companies can become bullies and be sure that they won't be exposed to any economic competition.
Of course, the complete lack of IP laws would deter companies from investing in research, but the same effect have too strong IP laws. Why would a company risk their money and do research once they found a cash cow which can be milked for a long time, having the state guarantee it?
Ah, so let's all just stay in line until we fix patent law. That'll work out!
The problem here is some cheap guys risking the lives of thousands of people to make a few bucks. You say it was inevitable that a company would take advantage of this cash cow; I say it was inevitable someone was going to route around this cash cow.
I also feel like no one in this comment section has taken a first aid course before. Anyone who has spent time around some epipens would start questioning the price. The thing itself does not have to be a super precise device.
Meanwhile administering epinephrine is not a big deal. Really, any idiot can administer epinephrine, and probably do about as well as people do with epipens. I would personally recommend most people who need it keep a vial and some syringes around if they need to administer it to their kid, and an epipen only for the convenience of the form factor and only if they really need it. Most of the time you can get away with benadryl.
So, hack away, cheap guys. You'll likely help a few, help a few others discover they can get away with a super cheap vial, and demonstrate to quite a few more that the prices currently listed are ludicrous.
You say "Cheap guys".. A growing number of people cannot afford an EpiPen. What are they supposed to do? Just die when they have a reaction?
I agree that this solution is not ideal and is probably prone to error or failure. For a lot of people who no longer have the means to purchase an EpiPen it looks like a solution that could save lives.
It's not poorly designed. It's designed very carefully and very well for the purposes of those who bought the legislation.
how do you think this effort puts thousands of people at risk?
if you download the instruction packet(o) it comes with a Links.txt file that has a link to an instructions video.. which at the time of writing this comment can be found at: https://www.youtube.com/watch?v=ldFFJRdhVs8 ; i suggest you watch it
all of the components are 'off the shelf' and the drugs are prescription
from this(i) ~random site epinephrine costs 74.95$ for 30mL, the instructions call for .3mL, that is 100 uses from this 75$ vial, or 75 cents of epineprhine per epipencil
when i read the article i thought this was a great effort that could save the lives of anyone who was unable to bare the new price of the epipen, but now i am wondering what from the epipen warrants the price tag? can a loved one even sue epipen if it malfunctions and kills the intended user?
IANAMD, but I suppose air bubbles in the injector could cause problems (?)
A very large bubble can kill you, but you need to put some serious effort [1].
[1] http://www.straightdope.com/columns/read/2866/can-air-inject...
in emergencies you are stressed and on a time constraint
if one takes the time to prepare for such an emergency by constructing the epipencil i would hope thae would follow the instructions given carefully, which notes:
7) Inspect carefully to make sure there are no air bubbles, and remove them if present.
i sent them an email requesting that they explicitly describe in the instructions and verbally describe in the video how to ensure the syringe is bubble free
> A 1mL vial of epinephrine costs about $2.50... Doses range from 0.01mL for babies, to 0.1mL for children, to 0.3mL for adults.
In other words, if your doctor will give you a prescription for the drug itself, you could assemble three epipen equivalents for less than $100.
[1] https://smile.amazon.com/AJ-1311-Autoject-Injection-Removabl...
It's awesome to see a 'hacker' building a $30 EpiPen. But looking only at the materials cost for a medical device ignores the millions (sometimes billions?) of dollars spent on R&D, IP licensing, and (perhaps most significantly) regulatory compliance.
The pricing system for devices and drugs is definitely screwed up in the US, but Mylan's 36% gross margin on the devices doesn't seem criminal.
Perhaps they're padding their cost numbers. And perhaps there are IP shenanigans at play that I'm not aware of. But one needs a thorough understanding of the total costs to invent, develop, achieve regulatory clearance for, and market a medical device in order to assess the morality of the pricing.
What's more, is that Mylan's costs would probably be much higher if they had to contact every school or district individually and sell them on this rather than show them legislation, meaning either a reduction in their gross margin (which is not huge) or an even further increase in prices.
And of course (gross) profit margins don't take the risk of failure into account.
I'm going to call the R&D costs a wash because that cost should also be factored into the price of the diabetic injector that forms the basis of the $30 homebrew design.
From your list, that leaves IP licensing and regulatory compliance which are both imposed by the state.
I believe we would still see plenty of (and actually probably more) innovation with a much more relaxed IP policy that favored small, incremental improvements and the diversity of product variations that competition would bring. In short, copyright terms should be 5-10 years max and should only be granted in cases where there's proof of significant research. Simply, if the ability to monopolize your 'idea' for the better part of a decade doesn't incentivize you sufficiently--it's likewise not worth depriving the public over it.
With regards to regulatory compliance, I believe we're seeing a case of the perfect becoming the enemy of the good. Imagine if the state extended the good-Samaritan policy to all medical providers--legally protecting anyone who exercises good-faith and due-diligence towards improving the health of their fellow man. Also, replace the old-west era FDA with information-age search engines, customer reviews and a plethora of private Consumer Reports -type organizations. In this scenario, there are several auto-injectors available on the market ranging from a $30 model which has failure rate of 50% to a $600 model that's been tested out the wazoo and only fails 1% of the time. Even under this very pessimistic scenario (50% seems pretty conservative to me), many lives are saved because there's a long tail of people who can't afford the $600 model but more than half of them end up surviving an episode of anaphylaxis because they can access the low and mid -range models.
I think this is what Mylan's CEO was attempting to convey on Bloomberg, although with questionable success.
It's still all medical grade parts isn't it?
The premise is that $57 was the old price. and they bumped it up to $318.
And a DIY group can pull it off for $30, without economy of scale.
From wikipedia "In 2007 when Mylan acquired the rights to market the product, annual sales of all epinephrine autoinjectors were about $200M and EpiPen had around 90% of the market; in 2015 the market size was around $1.5B and Mylan still had about 90% of the market"... $1.5B annually... So if FDA testing costs them $10,000,000 anually, thats still less than 1% of their revenue.
That means that with economy of scale, and dispersing the cost of testing over several million sales, they could easily produce a product for $30. But they don't because they dont really care about saving lives, they care about getting paid. They would prefer people die than them make less money.
Completely not about "hey do it this cheap easier way" but "heres the rock solid proof that a $300 (even $60) EpiPen is stupid"
As a consumer I could see this for $75 - $100 retail (and some discount to institutional buyers) but $30 is probably not viable and of course $300 is ridiculous.
If you are low volume, you're gonna have to sell at $8 - $10 to make something worthwhile.
Now, I get it, they are unquestionably overcharging for this drug and delivery system. I just don't think you can say that since I can make something at the rock bottom price of $x that someone else should be able to make a living (or run a pharma corp.) by selling at a similar price. The sweet spot is somewhere between $30 and $300, where it is is probably closer to $100.
A soda machine is basically free money because syrup and water cost pennies. The cup is the most expensive thing you give to the customer for his $1.99 soda.
Anyway, my main point was that ingredient cost is only one part of the cost of making/delivering something.
IIRC, restaurants aim for foodstuffs to amount to 30% or less of sales to be viable.
If significant competition existed, epipens would cost very close to $30 or however much they cost to make. There are many viable businesses operating at low margins.
They (including epipens) probably cost about $10 to make. That's total cost, from production to delivery to the retail outlet. They would have been handsomely profitable at the old price of $57.
They cost $35 to the NHS in the UK.
If healthcare is public service then profitability is not a primary concern. Data-driven decisions shows that approaching healthcare as a public service is much more effective.
The choice here is rather obvious, yet for some reason, average people who would benefit immensely from a public health system in the US seems to disregard it as socialist, paying for someone else and so forth.
Please note that drug corporations are insanely lucrative in Europe too, so a public health care system doesn't seem to harm drug companies all that much, financially speaking.
IMO you need to give the drug companies enough money to cover their operating expenses and R&D costs and give some margin to stay afloat. But not more than that. It's hard to do because this aspect is one that is handled well by free market - but in healthcare, you very much care about the thing free market utterly sucks at - product quality. You need regulation to ensure the product is good enough, and many of the important criteria are not immediately verifiable by the customer at the point of sale. Trying to reconcile those two issues is the hard problem.
That said, it looks like this is just reusing an existing off-the-shelf autoinjector used for insulin. If it fails, you could remove the needle and inject manually. The biggest risks I see here is making sure the epinephrine stays sterile, and that the dosage is correct. (To be clear: Either of these could have serious consequences.)
The not-so-grey ethical issue is the cost of these devices, and the fact that there are people who are too poor (medicare doesn't cover them, according to the article) to get them. Until we build a system that prevents this unjust situation, it is my opinion that there is nothing questionable about this 'hack'.
That said, USG may be too beholden to Big Pharma at this point for anything to be done.
Costs should cover R&D but this is outright greed and in an industry where it's literally peoples lives at stake it can't be allowed to continue.
http://www.bloomberg.com/politics/articles/2016-08-24/the-se... https://www.theguardian.com/business/2016/aug/24/epipen-ceo-...
So? Is she just not supposed to work?
You are basically saying that she needs to be kept below a glass ceiling because of who her father is.
The point is, it isn't all black and white. If a kid has a severe allergy, sure, make sure you have a real EpiPen and carry it with you always. For those borderline cases, well, something like this might be fine. Having it reduces a really small risk even more.
Another interesting point: even if a kid has a severe food allergy, they are still more likely to die from a car accident than from an allergic reaction. Some people lose perspective.
http://well.blogs.nytimes.com/2013/12/06/food-allergies-less...
Are we really complaining about an "onerous regulatory process" for a device which untrained laymen need to be able to use in a high stress emergency situation?
I'd like to see Four Thieves Vinegar fund the necessary trials to prove their device is safe, gain FDA approval, bring the device to market, and defend themselves against the inevitable lawsuits, and then tell us how they can sell the device with less than 80% gross margins. The marginal cost of making one more pill or one more device is almost entirely irrelevant, and any article that tries to make a case for a medical product being overpriced based on COGS isn't worth reading IMO.
The price for EpiPens went up because no one else was able to make a competing product that didn't malfunction or deliver the wrong dose of epinephrine.
Price hasn't gone up as much in the UK where a state monopoly negotiates.
> Four Thieves Vinegar have created and uploaded the plans for the simple version, called the Epipencil. Also spring loaded, the parts are gathered over the counter. The epinephrine will still need to be acquired with a prescription.
This still involves an FDA-approved drug obtained through normal channels; the DIY part is the injector.
Creating DIY medical drugs would certainly be something to be concerned about, but I don't see the problem with DIY medical tools.
A lot of thought goes into achieving dosage that is reliably correct and consistent between applications, not to mention when applied by non-pros.
Not to say that I know whether this design achieves this, but administering the drug properly seems almost as important as the drug itself.
And you don't f with severe allergic reactions.
The FDA does see a problem, though, which is why other companies have had a huge amount of difficulty trying to bring competitors to the epipen to market (in the US).
That stuff does go through FDA approval in the US, right? It's not all for nothing.
Funny enough, these devices don't need FDA approval, since they aren't medical devices, and the operators don't need to know anything about radiation effects on Humans...
http://www.fda.gov/Radiation-EmittingProducts/RadiationEmitt...
Everyone, that is, but law enforcement.
Thanks, FDA. Good job.
"A person would have to be screened more than a thousand times in one year in order to exceed the annual radiation dose limit"
some aspects of regulation protects monopolies, increases burdens on businesses trying to sell life-saving products, self-justifies bureaucracy and adds cost and delay. Other aspects of regulation prevents unsafe, scam and inferior products from endangering public safety. Both positives and negatives, to varying degrees, are in play simultaneously, given a particular product or issue. We need the FDA to not be lap-dogs of industry, not block dying cancer patients from trying almost any experimental, unapproved protocols and not taking forever to approve revolutionary therapies.
To modify James Madison's quote: "If everyone were angels, no government regulation would be needed and libertarianism would be as practical of an utopian system as communism."
It's balanced, expedient and effective regulation that is the primary duty of medical regulators.
The rest of us can then enjoy greater safety of pharmaceuticals and medical equipment without setting up such an expensive regulatory system.
The auto-injector apparatus is not regulated because it is dangerous; it is regulated because a failure to operate would be dangerous. It is regulated for reliability.
The hacker/maker ethos is awesome and drives a lot of innovation in our society, but sometimes there is also a need for careful engineering and rigorous testing.
I've got a heart issue going on and I've had some fascinating results from capturing my heart rate on a consumer grade chest band monitor, then uploading it to influxdb and viewing it with grafana. Total outlay a couple of hundred bucks. Invaluable to me in tracking what's going on with my heart.
Yet that whole stack would never be approved by... Anyone!
What is the cross section of america can carefully construct a DYI Epi-Pen, but can't afford the actual Epi-Pen?
If you think 90% is a better target than 100% for overall public health, well, fine, that's a classic kind of public health policy argument. But without a regulatory system of some kind, you won't know what the actual number is for a given product.
EDIT to add: I'm not arguing that DIY auto-injectors should be illegal to build in general. I'm in favor of people having the freedom to experiment with their own care if they want to.
I am arguing that DIY is not an adequate substitute for the general public unless the actual risks are well understood.
I'm just saying it's better than nothing.
Think of it as the best that can be achieved within a broken and unchangeable system.
One is the "Adrenaclick," which is another epinephrine autoinjector that (and this is key) must be specifically prescribed. You can't take an EpiPen prescription and ask for an Adrenaclick, your doctor has to specifically prescribe Adrenaclick. But right now it's a lot cheaper. A friend just switched and his copay went from $200 for EpiPen to $8 for Adrenaclick.
The other is to buy a bottle of epinephrine and use syringes, or buy pre-filled epinephrine syringes. Again, a doctor must specifically prescribe this, but it's a lot cheaper than EpiPen. More complicated to self-administer in an emergency, though--but better than nothing, especially for 3rd parties with access to training, like wilderness guides, teachers, etc.
(search for Adamis)
What's unlikely is that a DIY production scheme can ensure consistent manufacturing quality, since the careful, rigorous hackers are not going to be making this for everyone.
> It is regulated for reliability.
Then why aren't the tests and methods of testing reliability required to be published?
> it is regulated because a failure to operate would be dangerous
The risk of not having it at all far outweighs the risk of the injector failing.
Not to mention that regulated injectors fail too due to manufacturing defects.
> sometimes there is also a need for careful engineering and rigorous testing.
But should that need preclude private individuals from assembling their own life saving devices on a small scale (1-10 units)? We're not talking about someone else stealing your design, process, research, and building their own production line here.
Furthermore, careful engineering and rigorous testing is needed when you're creating a production line of these things. A competent individual can assess and test their own device. Yes, it's more time consuming, but for something as essential as a life saving drug, it's probably worth the extra time.
There was a non-EpiPen epinephrine injector on the market in the US up until last year, the Auvi-Q by Sanofi, that was taken off the market because there were problems getting accurate and consistent dosing.
Sanofi is the fifth largest pharmaceutical company measured by prescription drug sales. They have annual revenue of $37 billion, and 112000 employees.
The fact that Sanofi was not able to get the mechanical aspects of this thing right leads me to suspect that these kind of things are not as easy to make as it might at first seem.
First, epenephrine degrades when exposed to light so your epipencil may be ineffective from the start.
Second, parents when measured took 2.5 minutes to fill a syringe with epinephrine which is not fast enough in an emergency.
The price gouging is terrible. There are cheaper alternatives but Epi-pen has the most well known brand.
People buy Tylenol and Advil not Aspirin and Ibruprofen.
Drs have appealed to ban drug advertising. Medicine should have no place in capitalism.
Source: http://www.aaaai.org/ask-the-expert/effect-of-light-on-epine...
Aspirin is still a registered trademark of the acetylsalicylic acid in many countries and it's owned by Bayer AG. The generic name of Tylenol is acetaminophen (paracetamol).
[1] https://cyber.harvard.edu/metaschool/fisher/domain/tmcases/b...
i sent an email through the contact link suggesting they note this in the instructions and video
if you have any other helpful knowledge i ask you to share it with this group
https://www.facebook.com/barbara.k.hollinger/posts/128523673...
http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
(So all you have to do is convince your doctor to write Adrenaclick on your prescription and you can buy the generic for $145 at Walmart)
That price is interesting because it puts some kind of cap on the amount that regulation is leading to the price increase for Epipens. The regulation about substituting Adrenaclick on a prescription for Epipen can be argued, but any doctor that won't write Adrenaclick after a minute of discussion better have a good reason.
That means the epinephrine (adrenalin) itself is essentially free. What do they charge in the US/Europe/Australia?
(Edit reply to a3n below: My point was that it's not as dangerous as you are making out, not emotional appeals and cultural norms for responsible parenting. Self-administration: good enough for 3 billion+ in China/India/other developing world locations, good enough for me. The whole idea of stabbing yourself with a fat dose of adrenaline is pretty hackish anyway and shows how undeveloped our medical knowledge still is.)
The idea behind the auto injectors is accuracy with relatively little training and skill; a parent can do it while they're watching their kid strangle. That's why you buy an auto injector instead of syringes.
Competing auto injectors have not been as accurate and simple to use, is what I've read.
I would not trust my kid's life to a hacker injector; these are medical devices that are required to go through trials. Even traditional syringes are regulated. Sure, maybe you can decide to use an unregulated injector; I wouldn't, not for my kid.
The hack is putting in your own needle + medicine.
Also legally EpiPen must be fulfilled by a brandname version instead of alternatives, and alternatives are scarce due to the difficulty of passing regulatory approval: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
The main problem is that, if you're carrying around EpiPens for allergic anaphylaxis, particularly for a child, dealing with syringes and bottles isn't really a practical solution for day-to-day living (and definitely not an option if you're carrying them around for yourself -- hard to carry out delicate medical procedures while being unable to breathe). There are probably a lot of people without access to autoinjectors who have had to suffer the consequences of anaphylactic shock.
That means for an average human, LD50 = ~10 x 70 = 700mg... or perhaps more for typically overweight Americans.
Conclusion: Scare factor is being used to justify the market... you have been had.
"Mylan's efforts to maintain its market dominance were aided when Sanofi's competing product was recalled in November 2015 and further when Teva's generic competitor was rejected by the FDA in March 2016.[76]"
http://www.fiercepharma.com/sales-and-marketing/fda-swats-do...
Yes, you can load a precise dose into a device, but the device has to actually work, reliably and consistently. This is apparently a hard problem, for at least two Epipen competitors. Since Epipen has no serious competitors for a device like this, they get to charge as much as they dare.
They get to charge as much as the market will bare.
The precise and reliable dosing mechanism is out of patent.
It may be a better Idea to look into a syringe+vial combination on hand, prescribed by a doctor. Less convenient, and you need to learn how to use it (and preferably teach those close to you), but this may be a whole lot safer. The downside of course is the problem of self-administration when in anaphylactic shock.
I don't give a damn if the product is $50 or $500. I will buy it, it's saved my life many times. Its not awesome to see a hacker point out while the materials are cheap
If it's a case of having to choose between paying the paying the electricity bill and buying an epipen, and you have to guess at the probability of you needing an epipen in the next month vs the certainty of the electric company shutting off your power, with the extra fees and penalties that'll cost to turn it back on, "no matter the cost" is no longer the standard to use.
Including the cost of committing theft or murder. Sure. But it's not the kind of society we want to live in.
The article links to another that lists some of the issues: https://www.statnews.com/2016/09/09/epipen-lack-of-innovatio...
This points out (among other things) that the design is patent protected and FDA rules make it difficult to come up with other designs that don't violate the patent. It is also mentioned that the devices need to go through long and expensive regulatory process.
Now granted Shkreli is a controversial figure, but basically drug companies are businesses, and if you sort of detach yourself and look from a business perspective and value-based pricing, Epipen competes with the ER, and $600 is a bargain vs an ER visit.
And of course his ultimate conclusion is that maybe life saving drugs are more like water and power than cell phones and wine? Maybe the government should get involved in making generic drugs available.
Mrs. Bresch justified the increase of cost on the Epipen.
(Just making a note so that there is no confusion over who is responsible)
At least according to my last first aid course in Australia. At best you skip needing an ambulance
Using all of the other costs and aspects of an ER visit to justify a price increase of Epipens feels dishonest; I do realize that ERs are largely being misused in the US as general health care, but the E is supposed to be for emergency, and the cost comes from the support required to adequately respond to emergency situations.
Given that I was under the impression that if you have a situation where you need an epipen you're supposed to seek medical care anyways [1], I'm not sure how this reasoning of "it lowers costs" really plays out, since it seems to me like it's just hiking up the price of an already bad situation. I don't see this as particularly beneficial to anyone other than the sellers of epipens.
[1] I must note, my only reference to this is my own fractured knowledge from when I had a friend that required an epipen and reading the instructions for administration. This was a long time ago though and I don't particularly trust my own memory.
This is exploitation of inelastic demand (death is a pretty high priced alternative to $600), and it's pretty clear that's exactly what government regulations and market controls are supposed to protect against.
Someone else in the comment section shared another perspective which reaches the opposite conclusion: that these regulations have created the problems in the first place, and the government should not touch this sector at all: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
That said, the more downward pressure from competitors (commercial or nonprofit projects), the better for customers; especially where a monopoly existed, it's rational to for customers to band together and attack excessive hegemony.
Enteprising folks need to jump on this to sell this as a kit (w/ or w/o the medication).
Unfortunately, that's a real great way to get shut down by the FDA. Medical devices are after all subject to regulation. Others have tried making their own epipens too, but they all keep running into the slow approval process and unfavorable laws protecting Epipen: http://www.washingtonexaminer.com/fda-partly-to-blame-in-epi...
Also as we know from value based pricing, things aren't priced based on unit costs (otherwise all software should be essentially free, and the software industry is the greediest industry on earth), but rather what customers will pay. And when there are no alternatives, you get to set the price.
https://www.nice.org.uk/guidance/cg116/resources/costing-rep...
From 2011 - but I can't imagine the cost has gone up by that much.
The system it built in a very specific and deliberate way in the US - there are patented drugs that are expensive, by design, and the pharma is supposed to finance R&D and FDA testing and so on from that money, instead of financing it through taxation, or venture investing, or other means. Now, one can claim maybe Mylan is abusing the system and the money that were supposed to finance R&D are instead financing lavish salaries or whatever. And one can claim the system should not be built at all like this but should be built other way. Maybe.
But completely ignoring the whole design and saying "ah, we've discovered it costs $30!" is useless. Yes, it actually costs even less to manufacture, way less. It's obvious. The reason why Mylan charges more is not because it costs a lot to manufacture. The reason is because that's how patented drugs market in US works. If one wants to change it, it needs to be understood how it works. It's not corruption, it's the design of the system.
The non-generic at ~$350
The generic at ~$150
And the homemade at ~$30
The homemade is equivalent to the generic and the difference between generic and non-generic is not clearly mentioned so let's talk about the price of the generic epipen.
According to the article there is difficult bureaucracy to navigate and very large liability should an epipen fail. On top of that there's distribution and offices that needs a cut or to be paid for.
Is 5x markup that horrible?
I've been manufacturing products for thirty years. It's never simple for good products, not even a cup of coffee at Starbucks.
Truth is if it was more than one hacker in this collective making the 'Epipencil' they must have designed, procured materials, fabricated and did this all in less than an hour to say $30, and they would have had to do all of that in less than an hour to meet minimum wage requirements.
This does NOT speak to QA/QC, testing, insurance, FDA approval, legal costs or even their hacker lab overhead in equipment and energy to make one, let alone hundreds of thousands of these potentially life-saving products.
My guess is that the $150 per Epipen is close to what you need to fulfill all of the above and then some requirements. Far from the $300 or more in pen price hikes, so it was good they did this as an exercise for putting Mylan and government in the spotlight. Bravo, really!
My belief is that it is not solely big bad corporations, but big bad government AND big bad corporations. Just look at the moral integrity of our two current POTUS candidates.
I am trying to become more financially literate in my old age, and I am trying to teach my children likewise, since financial illiteracy is a deterrent to poor people improving their lives, or hackers making a worthwhile dollar in conjunction with learning and exploration.
I tell my kids to think twice when they reactively say or answer:
"ASAP" - when is that? Point to a date on the calendar;
"It will take 5 min." - It never takes just a minute or five;
"It only cost $8 for the materials." - How much is your time worth? Learning is a benefit that cannot be quantified too easily, but for other matters, you need to value your time.
If you really wanted a better estimate of costs, you should look at costs around wages, etc... as you indicate, as well as the cost reduction that comes from improved manufacturing processes.
The central issue though is not about the specific price, it's about looking at the point when profit evolves into price gouging. It's not something that can be quantified precisely, but it's fairly clear that we're far from an 'optimised' price for this product, and we'll probably only get to that price with effective competition.
I was speaking to financial illiteracy, and perhaps I didn't communicate it too well.
I know costing well, and I even had a truly innovative, potential Medicaid device to aid blind people in walking unassisted by canes, or canines way back in 1995.
I am not sure how cheap an Epipen can be made at a sufficient profit for a company to either take it on as their only product, or as a horizontal or vertical market offshoot of their existing business without looking at the numbers. I strongly suspect it is far from $30 if it is to be made and sold at sufficient profit and not charity work, or a device of the Theranos/Elizabeth Holmes kind.
I was pointing at the over-simplified, short title as possibly another misleading example of what things truly cost to make to have a final price at $60 or $150 when there is more involved than cost of materials whether bought in quantity for a prototype or discounted in bulk.
Did any of the lines at the bottom of my post ring with you? I only ask, since I am an experienced senior manager with a very eclectic skill set, and I have heard them from the young to the old and experienced, and I am still amazed when I hear them.
What we often get instead are completely self serving and crafty efforts in collusion with 'ngos' and lobbyists to leech tax payer subsidies and 'force' it onto institutions via legislation.
This pattern is repeated so often and widely its predictable. Also predictable is framing it as a capitalism vs socialism issue to trigger and distract while the corruption continues unabated.
The problem is healthcare is critical. If your checks and balances and idealised system does not work you risk letting people feed on others desperation and create demons. And these sociopaths then multiply within your society killing it from within. This is the biggest argument for socialized healthcare.
Can we please give blame where it's due? http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
You can also look at Mylan offering $300 coupons to consumers to get them to utilize their insurance. Maybe they are just incredibly generous, but it's more likely that they are happy to net the $300 from the insurance (in other words, they profit at $300).
Because the FDA is killing off any competitors. Did you read the link?
Feel free to complain about the substitution rules surrounding Epipen prescriptions, but it's clearly a competitor in the sense you invoke with killing off any competitors. It's the same dose of the same drug intended for use in the same situations.
As long as the needle hasn't been used, and the refill is the same dosage as it came with, I'd expect it to be just as effective as a new injector.
(Disclaimer: I am not a doctor, even if I were you're not paying me, this is not medical advice)
This may be legal to do commercially as well, since you're not manufacturing new devices that could infringe the patent. Sorting out FDA issues would be the only hard part (though likely very hard).
(Disclaimer: Nor am I a lawyer, and you are still not paying me, this is not legal advice)
This is true for nearly all drugs, medical equipment, or medical procedures in the US. This is one of the huge problems with our system. Everyone puts a huge price-tag on their stuff knowing that insurance with negotiate down.
To me, this seems like the biggest problem here.
Nobody cares about what insurance companies pay. Like you said, they have professional negotiators on their side. But cash patients, people without insurance, or people required to buy more than what their insurance covers, do need the help.
It seems like there's a lot of overhead, a lot of staff, time, and money that goes into these negotiations that doesn't add any value and could be avoided entirely if the medical industry worked like every other industry.
As a patient, this negotiating is completely opaque and feels very shady. I have no idea what to expect to pay for medical procedures, and the bills I receive are impossible to decipher - there's no clear bill of sale like there is for example when I take my car to the shop. Even worse, some providers (for example, an anesthesiologist) decide they are out of network or work independently from the hospital. Then I receive a bill that may or may not be legitimate, from a person I didn't choose to do business with, with costs seemingly pulled from thin air. If the person who installed the fuel pump at my auto shop decided to send me his own bill, I would laugh at him, but this is apparently normal practice in healthcare?!
I don't know how to fix healthcare, and I understand costs can be unpredictable when you are first admitted (especially in an emergent situation) but making costs consistent, clear, and transparent and discussing them at time of service, where possible, seems like a good first step.
Does it get prescribed more often in the US than other countries? Why didn't I know about the existence of this thing?
In EU we have more than a single brand of epinephrine autoinjectors in the wild.
Or perhaps it also only got famous in the US due to this price rise.
(in EU)
However.
It needs to be proved to work, which is rightly arduous. Unlike in (most)software, you can just fix it later. Defects kill. There needs to be a high bar of evidence to prove that:
A) the drug works
B) It doesn't cause your face to melt off
C) its reliable.
All of this is costly, Now, you have two choices, nationalise your drug R&D and charge a uniform cost spread over all drug classes, or through general taxation. Or Sweep away all your regulations on drug prices and start again. (like why the fuck is medicaid not allowed to collectively bargain on price? that's taxpayer subsidy right there...)
In the UK there is a thing called NICE, which is semi autonomous and run by people who can understand stats (ie not politicians) its job is to evaluate the cost of drugs, and crucially the effectiveness of all drugs prescribed within the NHS.
Is the drug actually effective? (sure 50% more powerful, but it costs 190%, just double up the old one, etc etc)
does it provide value for money?
is it safe?
are all the questions they ask. If a drug fails the tests its either written out of guidelines, or more unusually its banned.
The outrageous price of EpiPens is not a result of corporate greed so much as a failure of the FDA and Congress - but mostly Congress, the FDA is their subordinate. They failed to promogulate rules that maintained a competitive market for epinephrin auto injectors.
The cost is in the patented injector, the drug itself is cheap. Others have tried to market similar injectors, which didn't work as well as the Epipen.
As cost slowly rose, insurance paid for it, and parents didn't notice it as it was hidden in rising insurance premiums. Then deductibles skyrocketed, and suddenly insurance wasn't covering it all; parents had to pay the balance, or all of it.
If you didn't have insurance, you already watched it go up as it happened.
Finally the cost was raised arbitrarily, to cover the company's coming losses as their patent on the delivery system will expire. This, I've read recently, is common: a spike in price before generics take over.
The traffic bears this price, because parents don't want their kids to die from accidental exposure to peanuts and other allergens.
I bet their cheaper "generic" packaged version will see limited production to force supply shortages and drive people back to the overpriced pens.
I think you have a very liberal definition of "slowly."
http://www.cnbc.com/2016/08/23/this-chart-shows-you-why-a-lo...
Nobody has to buy an auto injector. Diabetics draw insulin from a vile and inject themselves all the time, those with severe allergies can keep viles and needles too. I buy EpiPens because I don't want to do that. And before Avi-Q was recalled, I bought those instead, even though my costs were twice as high, because I liked them better.
You can say that capitalism is the wrong way to produce drugs, in which case its Congress' fault for not instituting a different way. Or you can say this is a failure of the regulated drug market to produce a result in the public interest, in which case its Congress' fault for not regulating the market differently - thats what I believe. If you're arguing that this is a moral failure of the Mylan stockholders… well I think thats a hard position to take, and no matter what demonstrating that auto injectors aren't expensive to build doesn't really try to make that argument.
Your point about handling the injections the old fashioned way is a good one as well. But it's worth noting that diabetics have tons of experience self-injecting using standard needles and vials. A typical Epipen user has probably never had to do so, and when the drug is urgently needed is a bad time to get started. So for these users it's not simply a matter of convenience.
Don't get me wrong, I'm not defending anyone here; that whole industry needs some fixing. I'm just tossing out the question.
Mylan deserves our appreciation for inventing EpiPen when none of the other smarty pants who claim to make it in $30 bothered to help the needy.
Patents. FDA.
> Mylan deserves our appreciation for inventing EpiPen
Mylan didn't invent EpiPen. A guy named Sheldon Kaplan[1] working for company named Survival Technology did. He didn't get any special money from it. After a long chain of acquisions the rights to EpiPen ended up in Mylan. They have nothing to do with its invention except that they paid money to buy rights to it.
The patent and FDA is a problem not Mylan.
That is like saying Google had not hand in success of Youtube because it was initially done by someone else. Dont you agree that Mylan deserves a hifi for making it useful and famous ?
Ditto YouTube and Google.
Don't get me wrong, I don't object to the concept of private property, investment and profit. But I also don't feel particularly obligated to be thankful for something Mylan didn't actually do.
I'm sure this is an interesting article but the only way we will stop this practice is if we stop giving user-hostile publications our eyeballs.
Also: screw mylan
Companies exist to make a profit, why are we getting upset when they do so within the confines of law? Here, the law allows for lobbying and high regulatory burden which creates a monopoly for EpiPen.
I don't expect public shaming to reduce corporations from seeking profit. I do have great hopes for reforming laws to incentivize competition so that the desire for profit benefits us all.
However, I think that if someone were to try this, they'd find there are many more costs involved than the raw ingredients and it might not be quite so simple to massively undercut the competition. But still, they should go for it! Competition is is the best medicine for over priced goods.
Patents. FDA.
http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...