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Comment by tcj_phx | Hacker News Reader

Naltrexone - the active ingredient in this $1000 reformulation of a generic drug - can also be injected as pellets under the skin for the same time-release effect.

It's been a while since I ran across this option. Here's a random site about this therapy:

http://www.naltrexpellet.com/

The active ingredient costs <$2, so Vivitrol is 90% price gouging.

Edit: IMHO, Naltrexone is a good prescription drug that actually helps people physiologically. People's pain receptors get overloaded; naltrexone helps to reset them. Naltrexone helps with alcoholism, and apparently with meth amphetamine [1] too.

[1] http://newsroom.ucla.edu/releases/ucla-researchers-identify-...

With that said, Naltrexone doesn't address the fundamental emotional problems that underlie most cases of addiction. So it doesn't do them a whole lot of good to force them to take it, without also helping them find stability, the lack of which probably led them to self-medicate in the first place.

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Then sterilizing the ingredient (which isn't always easy), and formulating a product that is very slow release. Not exactly easy. I give credit to the company for coming up with a useful slow release formulation of a product where nobody else did. Not just a re-hash/evergreening of an existing product for the sake of patent extension (oral Flomax CR, what was the point???)

My bigger concern is with naltrexone itself: If individuals on this need any dental/medical procedure, or have an accident, anaesthesia is very atypical. On-scene EMS won't be able to provide pain management beyond an ibuprofen.

Something like non-opioids that aren't typically used (ketamine, nitrous oxide, other volatile anaesthetics) or sufficiently high doses of short-acting opioids (fentanyl derivative) to overcome the naltrexone blockade (which would need active anaesthesiologist .management)

I'd say that on-scene pain management is a luxury compared to fixing an opioid addiction. (Maybe the desensitization makes pain management harder anyway).

A drug addict seems more likely to suffer from his addiction than to suffer from an accident. I am basing this on the assumption that naltrexone will only delay pain treatment by a day at most. If it has people in agonizing pain until it wears off things are different.

>With that said, Naltrexone doesn't address the fundamental emotional problems that underlie most cases of addiction. So it doesn't do them a whole lot of good to force them to take it, without also helping them find stability, the lack of which probably led them to self-medicate in the first place.

Could just as easily be exposure and genetic predisposition, there's plenty of "stable" addicts.

Vivitrol is 90% price gouging

So you're saying that the only cost associated with bringing a new drug to market is the cost of the ingredients?

No, he didn't say that at all. He strongly implied that the other costs involved don't add up to 90% of the list price.

Ofcourse bribing judges costs money too.

What evidence is there of judges being bribed here? That's a hell of an accusation.

He left another 9.8% for the other costs

It's shocking how confident people are in their understanding of economics when they clearly have never read a book on the subject or taken a 101 course on it. People have some kind of instinct for how much money is "too much" in different contexts and they fully believe they are right without any external frame of reference. Ask them what the "correct" margin should be based on and they'll say something like "the cost plus a little bit more to cover overhead." No understanding of supply/demand whatsoever.

I assume that your studies in economics identified what you are referring to as "cost-plus" pricing...which is not how any drug is priced. At the point of sales, R&D is a sunk cost and is not part of the pricing strategy, in most big modern companies. Companies price their product to maximize profit. That is not always the highest price they could charge, but is a function of total profits.

> Ask them what the "correct" margin should be based on and they'll say something like "the cost plus a little bit more to cover overhead." No understanding of supply/demand whatsoever.

Are you saying that's not the correct price in a competitive market? After accounting for all costs, of course.

Maybe you should read those people as saying "this market is lacking in competition to make prices reasonable".

My primate sense of fairness says that charging 100% of costs is actually a form of charity, 105% of costs is hyper-competitive, 110% of costs is quite respectable and meritorious, whereas 150% of costs is getting to be overly ambitious.

10000% of costs is, quite simply, asking for someone to put a shiv in your kidney.

The only way to achieve such margins is by literally suppressing all competition with armed force, with an unquenchable, non-substitutable demand. In the case of pharmaceuticals, the feds provide that force.

Feds provide force sometimes, but other times it's just a matter of time. When you produce a new product or service, you have a 'monopoly' on it until other people move in. Thus, margins start high and quickly lower even in a maximally competitive environment. Just wanted to share that concept in case others didn't make that connection!

That primate is sense is just that - namely, primitive.

It is shocking how many people will ignore the fact that health care and pharma in the U.S. are nothing like the toy models taught in econ 101, or an actual free market for that matter, but pretend that they are in order to defend rent seeking.

I haven't seen anyone arguing that health care in the U.S. is in anything resembling a free market... Have you actually ever seen that, or did your fingers/heart get ahead of your brain there? ;-)

Your first comment is clearly calling those toy models (of supply/demand in free markets and econ 101) relevant to this situation, which is healthcare in the US. Don't play games with wording.

Especially when you can remove the clause containing the words "free market" without changing the meaning of the comment. "It is shocking how many people will ignore the fact that health care and pharma in the U.S. are nothing like the toy models taught in econ 101, but pretend that they are in order to defend rent seeking."

There is a difference between the price that balances supply and demand, and the price that is 'fair' to ask. Specifically, when demand is very inelastic because things are plain necessary the balance point is no longer fair.

Normally, the balance point is the fair point. By making it cheaper, you get people who don't need it still buying it, leaving no supply for others that do need it. At the same time, making it more expensive leaves people who need it not being able to get it.

This reasoning is why we say the market price and fair price coincide. This breaks down when demand is inelastic. (It also breaks down when income inequality gets to be huge). Specifically, when there are no people that want something but don't need it, the argument breaks down. In this situation, the market price is called price gouging.

There are some cases where responding to the market makes sense. I.e. when there is a flood incoming, make flashlights and batteries a bit more expensive to discourage hoarding and encourage more supply. Don't charge the market price mark-up of 10x though.

Yeah, dude, totally! Like, people are stupid for not trying to price gouge every stranger they encounter.

Who doesn't think like that? If demand is high, it's the perfect excuse to exploit people. Why would anyone try to rationalize a reasonable exchange, when they can rip desperate people off?

>> cost associated with bringing a new drug to market

If you are referring to R&D, that is typically a sunk cost for existing drug companies and is typically not figured into the price.

The active ingredient's $2 market price includes the markups for R&D, failed previous projects, etc that are inherent in drug development. Repackaging an existing generic hardly merits the same.

> The active ingredient's $2 market price includes the markups for R&D

Not if it's generic, it doesn't. The cost of R&D has to be paid off during the patent period. Also, to call it "repackaged" is disingenuous. The delivery method is what's being charged for.

It's not disingenuous, it's just (probably) incorrect. Why does "disingenuous" get used so much around here? It's almost never used correctly.

I felt like he was reframing things to the point where it was no longer true. I think he knows that the new version is an extended release injection (I mean, it was mentioned explicitly in the article), but he said "repackaged" for rhetorical reasons.

That's clearly not what they said, since 10% of the current price is still fifty times the ingredient cost.

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