Nonprofit Working to Block Drug Imports Has Ties to Pharma Lobby
npr.org
npr.org
Some medicines are expensive for a reason: they're new and need to have R&D (and FDA) costs recovered (this is why we have patents), they have niche use and are produced in small quantities (cancer immunotherapies), they're perishable (biologicals), or all three. Many others are expensive because we have no regulatory protections against price gouging. Epi-Pens are another example. A 1mL vial of epinephrine costs ~$5, and the syringe to inject it costs pennies. Auto-injectors add some value, but not the $700 Mylan charges. They're fundamentally a pre-filled syringe a spring, and an injection molded case.
I wonder what the system would look like if we granted longer pharmaceutical patents (say, 30 years), with the change that upon expiration of the patents medicines would be produced by the government and sold at cost (or provided for free).
See the vet, get fenbendazole for huge dogs.
Pay-to-delay is a big one. https://www.ftc.gov/news-events/media-resources/mergers-comp...
Thakur knew the drugs weren’t good. They had high impurities, degraded easily, and would be useless at best in hot, humid conditions. They would be taken by the world’s poorest patients in sub-Saharan Africa, who had almost no medical infrastructure and no recourse for complaints. The injustice made him livid. Ranbaxy executives didn’t care, says Kathy Spreen, and made little effort to conceal it. In a conference call with a dozen company executives, one brushed aside her fears about the quality of the AIDS medicine Ranbaxy was supplying for Africa. “Who cares?” he said, according to Spreen. “It’s just blacks dying.”[1]
[1]http://blogs.sciencemag.org/pipeline/archives/2013/05/17/a_l...
Everyone loves to hate on the FDA until there's a compounding pharmacy that really messes up. A couple of years ago there was one that distributed some medication for injection that had a fungal contaminant, and there were several dozens of fatalities. You'd ask yourself what would happen without adult supervision.
This is the full story: https://en.wikipedia.org/wiki/New_England_Compounding_Center...
This isn't comparative advantage, especially since we're often times talking about reimporting drugs (both brand-name and generics) that were manufactured in the US, but sold abroad for cheaper prices. The article doesn't make that very clear, and I wish it did, because it's an important distinction.
But your point is spot on - from a free market standpoint, this is a no-brainer. There is literally no reason to prevent US patients from buying drugs that were manufactured in the US from Canadian or European wholesalers. Except, of course, that this is a massive source of profit for pharmaceutical companies.
Or, guarantee single payer and become a monopsony, thus combating the monopoly effects with an opposite market force.
The reason is people don't "pay" for it. Insurance does, and so nobody cares.
Edit: Well, the insurance companies should care, but if it's something that's rarely prescribed, it might be easier to just pay the claim instead of devoting people to negotiating a lower price.
You expect the masses to think one step further, which will not happen on enough scale.
The bigger issue is the financing model that causes innovation to happen in all the wrong fields, but that is a different question and very complex.
Aside from the military[1], in what other categories of product do those waving that banner support mandatory payments to private entities supporting their preferred agenda[2]?
Never mind that the military is the best comparison to drugs in terms of regulation - the only products less "free-market" in the US than drugs are military weapons. In a way, there's a funny symmetry there.
[1] A huge amount of that money goes directly to private firms, just like pharma payments.
[2] Well, I guess one can opt out of medical care.
Pfizer opened their Sandwich site in 1954 and when they closed it in 2011 it wasn't because of the NHS.
Of the 252 drugs approved from '97 to '05... 58% from pharmaceutical companies, 18% from biotech companies, 16% from universities, transferred to biotech 8% from universities, transferred to pharma
Second of all, discovering a drug gets you about 1/4 of the way to an approved, marketed drug. Typically the breakdown between research and development costs are 1/3 and 2/3. No academic institutions do the development part, where most of the cost is.
[1]http://blogs.sciencemag.org/pipeline/archives/2010/11/04/whe...
I want to know how the R&D looks for compound group discovery. Everything else is just repackaging with a chemistry kit.
118 of the drugs during this period were considered to have scientific novelty (46%), and of those: 44% were from pharmaceutical companies. 25% were from biotech companies, and 31% were from universities (transferred to either biotech or pharma)
Of the 118 scientifically novel drugs (new MOA, etc), 69% were NOT from academia. That is, academia has zero to do with the discovery all the way up to the approval of the drug.
Please don't insult our intelligence.The context for this discussion is about greedy companies using existing research for free and contributing nothing back. The linked article doesn't show which scientific research contributed to the product development. Universities are not all primarily engaged in drug discovery.
Now, if you'd like to claim that that discovery was based on science paid for by the gov't, I won't disagree, but continuing that line of thought we could claim that drug companies are greedy because they are taking advantage of organic chemists who did work 200 years ago.
>No academic institutions do the development part, where most of the cost is.
Because they got for free all of the decades of scientific research.
Yes, the scientific research that cost maybe 1% of the total cost of bringing the drug to market. Makes sense that the company should share some of the wealth.
I definitely disagree here. There has been plenty of basic science discovered at private companies. I do agree they are hesitant to share it, but that's doesn't mean it doesn't happen. A great example of the Upjohn dihydroxylation reaction. Discovered at Upjohn Pharmaceuticals, freely disseminated through journal publications and now a key technology in organic synthesis.
I'm not sure they "should", at least from a financial standpoint. The ACA basically put a cap on insurance company profits, as a percentage. It's not phrased quite that way, but it's the upshot (look up "medical loss ratio"). This is the worst provision I know of in the ACA, because it sounds like a nice idea, but if you think it through, it actually disincentivizes insurance companies from doing what they can to lower costs.
It basically says that the maximum amount that insurance companies can keep is 20% of premiums (assuming no administrative cost or other overhead). Say the average cost per person is $4000 / year, so the average premium is $5000 / year; they're able to make a $1000 profit, or 20% of the premium. Now suppose the insurance company negotiates costs down to $3000 per year. Well, the maximum premium they can charge now is $3750, so they lose 25% of their profit. On the other hand, if they sit by and let costs skyrocket to $6000, they can raise premiums to $7500, and make $1500 in profit.
Now, of course insurance companies also compete on their premiums, so in theory, they still have some incentive to negotiate lower costs. But it seems like that must be seriously mitigated by the profit cap.
I'm not an expert on this by any means, so if someone who is wants to set me straight, I'd love to hear it. But I'm just very confused as to why this provision was thought to be a good idea.
Albendazole is used to counter a rabbit parasite called E. Cuniculi. A complete 30-day Albendazole regimen, for a rabbit, is about $40.
The big pharma players spend more on marketing than R&D. The smaller players like Mylan specifically try to find niche drugs so they can buy the rights and jack the prices. It's pure rent-extraction and a drain on our healthcare system and economy.
So apparently this medicine is used for treating parasitic worm infections, which I imagine is a vanishingly small market in the United States. That means that the costs of tooling up to produce the drug (and producing it to the standards of safety and purity demanded of any medicine produced in the U.S.) must be amortized over a tiny population of customers.
To make a comparison: a commercial Common Lisp IDE runs nearly $1,000 for a hobbyist edition, while you can get professional versions Clion or Jetbrains for $100-400. But there's no patent or other protections limiting competition in the development tools industry. It's simply the economics of making a product that caters to a tiny niche of potential customers.
It's incredibly common in veterinary medicine in the US.
Veterinary pharmaceuticals are oftentimes (though not always) manufactured in the same plants. Sometimes the inactive ingredients are not safe for human consumption, so that doesn't mean that you can always just take veterinary drugs safely, but sometimes (particularly in the case of antibiotics), they are literally manufactured on the same lines, and are simply packaged and distributed differently.
Given the massive difference in price between albendazole for humans and albendazole for animals, I'm willing to bet that this is another attempt at market segmentation (which we already know is rampant in the US pharmaceutical industry - that's how they make their global profits!), rather than a real necessity of the scale.
Unless it's okay because we can rationalize it as "it helps make the product accessible to poorer countries".
Want to lower drug prices? Enact tort reform.
I tried to google it myself but didn't find anything clear on the matter.
So yes, the syringe and container themselves don't cost that much on a per unit basis (no clue but it's not nothing.) The regulatory costs are astronomical and have to be paid for over time. The general inanity of this stuff is mind boggling. The amount of paperwork insane.
Mylan flat out admitted that costs aren't any more than $150 per pen when they launched a generic version of their own branded product. Everything above that is clearly them working to get as much price differentiation as possible.
One thing though, they would be epinephrine auto injectors, not Epipens, that's one of the things the patent did, it made it so that a prescription for Epipen could only be filled with Mylan's product.
Do you think the financial analysis involved with a new drug stops at "costs recovered"? Why should it?
I find it completely bizarre that, instead of getting behind the fact that the US is essentially subsidizing drugs for the 3rd world, people think rich first worlders should be paying sub-Saharan rates.
Could you explain more about what makes it a "fact" ?
Right now its like pulling a rope - we keep Obamacare at cost of billions of dollars, or we lose it at cost of millions lives affected, eventually.
Meanwhile big pharma thrives and examples like yours prove how corrupted US system is!
I'm still waiting for one single politician (not its not Trump) to actually start fixing healthcare from the bottom up! Fix the cost of drugs, therapies, etc, and all of sudden we need 1/10,000th of the initial costs.
Evergreen suggested reading: http://steve-yegge.blogspot.com/2009/04/have-you-ever-legali...
On the regulatory front, the difference is that India lets the US FDA work there and inspect plants that export to the US [2], while Canada doesn't, and although the US and Canada have been slowly easing into formally trusting the other's regulatory frameworks [3] by working up from food safety [4], they are not quite there on the medical front. How much of this is legitimately grounded in science, logistics, diplomacy, and protectionism are up for debate.
This is good investigative journalism. It certainly raises some additional questions that would have been difficult for an average person to learn on their own -- including questions about this nonprofit, about whether both parties' past attempts to allow Canadian drug imports have been comparable or different, about whether an organic movement concerned about drug safety exists at all, about the author's motivations for writing this piece; all good questions worthy of more research and conversation.
[1] http://www.huffingtonpost.com/al-norman/india-wal-marts-drug... [2] https://www.fda.gov/forconsumers/consumerupdates/ucm333944.h... [3] http://trade.gov/RCC/ [4] https://www.fda.gov/food/newsevents/constituentupdates/ucm49...
They do realize that for branded drugs, the "Canadian drug manufacturer" is the same as the US drug manufacturer, right?
Interestingly, the study also shows that the U.S. has one of the highest levels of generic drug use relative to total prescription volume, and that generic prices are lower in the U.S. than in all the countries except Canada, where the difference is 6%.
[1]http://knowledge.wharton.upenn.edu/article/analyzing-brand-n...
Or put differently, "Why does the USA fund so much of basic drug research and drug company profits daddy?" "Regulatory capture and bought politicians, son."
If you allow imports of drugs that are already approved by the FDA, then the objections are mostly about economic incentives (i.e. high prices reward the companies that made the drug, etc..)
If you allow imports on drugs that are approved in other countries but not by the FDA (iirc this was advocated by Ted Cruz in his debate against Bernie Sanders on health care a few months back), then the objection is that it basically neutralizes the ability of the FDA to block dangerous drugs and makes it easier to push drugs to market that aren't ready by promoting the drug in whichever country has the loosest standards or is most corrupt.