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Comment by curiousgeorgio | Hacker News Reader

To the commenters suggesting that the FDA should do more to punish this company, consider another alternative: if the FDA actually did less to begin with (while still investigating and providing information transparency), we'd probably be better off.

Instead of relying on the government to fix the situation with slow legislation (which usually ends up with enough loopholes to be circumvented anyway), we should allow the industry to function as an actual free(ish) market. If that were the case, we would already have dozens of better EpiPen alternatives as a result of the previous shenanigans from these companies. In other industries, when a company's product is clearly defective, inferior or overpriced, they lose market share and are forced to either improve the product or go out of business. But when the government plays the role of (slow, expensive, often corrupt) "gatekeeper", that is what creates these abusive monopolies.

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I remember reading about EpiPen when they did their price hike. The main reason they were able to do it is the FDA had given them (intentionally or not) a de-facto monopoly in the US.

https://mises.org/blog/lack-epipen-competitors-fdas-fault

Of course, we don't want just anyone to be able to package up anything and sell it (unless it's the nutrition industry, for some reason) but at the same time, the EpiPen business isn't good for the country either.

What's funny, is this company did the same thing as Shkreli, but does their CEO get the same treatment?

What treatment? Nothing happened Shkreli in response to what he did with Daraprim. His criminal trial had nothing to do with it. That's a common misconception thanks to our bottom-feeding media.

His public and constant grilling by the media. You certainly didn't hear endless stories about "Pharma Chick," who is the good senator's daughter.

I'm aware that the "Pharma Bro" was convicted of securities fraud after tripling his investors investments.

Ah, ok, we're in agreement.

> I'm aware that the "Pharma Bro" was convicted of securities fraud after tripling his investors investments.

"Well you see, your honor, I did try to murder the man. But I failed, and the half hour run he took trying to escape me kick-started a healthy lifestyle that added years to his life. So, I did try to murder him, but in the end everyone benefited."

This post-facto justification is like something out of an SNL skit.

While I agree with you, the problem is trying a person is at the discretion of the state. I suspect the state was motivated by Shkreli's public reputation when they otherwise wouldn't be as motivated to prosecute if it were someone else of lesser celebrity, particularly since the investment outcome was overwhelmingly positive.

We agree.

Perhaps our point of disagreement is this: I believe that justifying objectively blatant criminality via the "discretion of the state" defense is counter-productive to changing this situation.

False equivalence. Shkreli's intent was never to lose these peoples' money.

Fraud does not necessarily result in loss. Losses do not necessarily result from fraud. The whole point of fraud laws is to outlaw behavior, not outcomes. Ditto "attempted X".

> False equivalence

Fraud != intent to lose people's money was literally the point of my post.

> In other industries, when a company's product is clearly defective, inferior or overpriced, they lose market share and are forced to either improve the product or go out of business.

No, they really aren't. [1][2][3]

[1] https://en.m.wikipedia.org/wiki/United_States_v._Microsoft_C....

[2] https://m.phys.org/news/2005-06-amd-sues-intel-monopoly-abus...

[3] http://money.cnn.com/2015/03/19/technology/google-monopoly-f...

In none of those cases did the government actually step in and do anything to break up those "monopolies" (other than perhaps an insignificant "slap on the wrist" in Microsoft's case).

So if the government didn't solve those problems, what did? Answer: innovation and competition from other market players.

> Answer: innovation and competition from other market players.

I'm not sure what you're referring to. AMD was on its deathbed a few years ago and Intel still has a near-monopoly on desktop and server CPUs. Google continues to be a monopoly on search and website ads. Microsoft has fallen somewhat, but you could argue that this was only due to pressure from regulators (e.g. browser bundling ban in Europe and when Microsoft was funding Apple to keep the perception of competition alive).

And how exactly are these so-called "near-monopolies" hurting consumers? Last I checked, nobody is forced to use Google for search, and people have a choice between buying Intel or AMD processors.

Just because a company makes better products than other companies, that doesn't make it abusive or detrimental to society (in fact, quite the opposite is true). If Intel's prices were unreasonable, no one would buy their processors and the next best alternative (AMD or otherwise) would steal their market share. Same with Google and Microsoft.

Yes and no, industry also has it's fair share of monopolies that gatekeep themselves. If a company becomes big and powerful enough it can write tailored legislation and corrupt the right people so that other competitors have no chance.

In this case I'd say you're probably right because the EpiPen is a very simple product, so you'd find a lot of potential competitors, even some with good enough funding to contend with the current market players. However with more complicated medical devices it's harder and harder to compete, because you need so much upfront research money, that you in fact always get a anti-competitive monopoly or oligopoly.

> you need so much upfront research money, that you in fact always get a anti-competitive monopoly or oligopoly

Industries with high R&D costs may be more prone to the formation of natural monopolies, but in most cases that's a better scenario than the coercive monopolies created as a byproduct of government regulation.

It could be argued that the tech industry, as one example, has similarly high R&D costs (at least in certain fields), and Apple, Google, Microsoft, etc. have all been blamed for monopolistic practices, but even then, the tech world operates in a much healthier market environment than the healthcare or pharmaceutical industries.

Personally, I'd feel more confident being treated in a theoretical Apple hospital (heck, I'd even go for the cheaper Android version) than any of our real-world hospitals with shiny government seals of approval (and more inefficiencies than one can imagine) - as long as I can rely on a decent level of transparency in safety/quality/pricing of those options.

There are plenty of clearly defective products in a barely regulated health-adjacent industry that don't lose marketshare: the entire supplement industry, including homeopathic and "herbal" remedies. Relying on free markets to regulate themselves depends on rational consumers. But we are not rational.

Its not really a problem for me if people buy homeopathic remedies. It is a problem for me that I can't buy cheap, effective epipen alternatives.

What, exactly, are you suggesting the FDA do less of? Are you suggesting that pharmaceutical companies should be allowed to bring their products straight to the market? Or just that their clinical trials process should be relaxed?

What exactly is preventing another company for creating an EpiPen clone?

Probably payouts from the current manufacturer to stay out of the market. Those payoffs are probably greater than the profit they could make as an off-brand generic.

Requiring financial transparency among all possible parties to regulators and banning collusion like the above would actually be the correct way to ensure the market functions properly.

The FDA. Or at least, the FDA has made it extremely expensive and time-consuming for any competitor who wishes to enter the market.

The argument is that a high bar of safety requirements protects consumers (and I'll admit it does to some degree, however inefficiently), but a free market system is more efficient at producing the results that people actually care about (quality, safety, affordability, etc).

Also, patents - another government-run monopoly-maker that should be eliminated.

I don't buy the regulatory argument. See my previous answers.

Patents, indeed, are a much more efficient way of keeping a monopoly, that's their whole point after all. But I don't a link with regulations in that case.

a free market system is more efficient at producing the results that people actually care about (quality, safety, affordability, etc)

You have no evidence to support that view; where are the free markets full of safe, high-quality, low-cost medicines? Nowhere.

Markets are brilliant, but they are not flawless. All of our experience suggests that they need robust, independent regulation to avoid negative outcomes. There is plenty of scope for talking about how time-to-market for drugs can be improved, or other steps that can be taken to reduce regulatory burden where it's causing problems. But this whole 'let the free market sort it out' is the worst kind of high-school libertarianism.

We haven't had free markets for a very, very long time. Consequently, your claim of free markets unavoidably producing negative outcomes lacks evidence.

I didn't say we don't need any regulation, but I will say that government-imposed regulation isn't needed. A truly free market can and will fill that same need in ways that are much more efficient than any government could hope to do through force.

We haven't had free markets for a very, very long time. Consequently, your claim of free markets unavoidably producing negative outcomes lacks evidence.

This is basically a "no true Scotsman" argument. What is a "free market"?

I didn't say we don't need any regulation, but I will say that government-imposed regulation isn't needed.

Non-authority-imposed regulation isn't 'regulation' in any real sense.

A truly free market can and will fill that same need in ways that are much more efficient than any government could hope to do through force.*

All evidence we have seen suggests that an absence of government regulation leads to collusion, anticompetitive practices, races-to-the-bottom, and consumer rights violations. On the other hand, removing regulation can allow more innovative approaches to the market. Point is – it's a case of fine-tuning the balance to make sure that participants in a market have equal power. "Throw is all away and start again" is a seductive and ultimately silly argument.

>Non-authority-imposed regulation isn't 'regulation' in any real sense.

How exactly isn't it "real"? Even in the absence of a truly free market, plenty of industries have developed their own self-regulated quality standards.

Have you ever checked reviews about something before purchasing? Did a government mandate those reviews to be written?

> an absence of government regulation leads to collusion, anticompetitive practices, races-to-the-bottom, and consumer rights violations

Isn't it odd that we see more of those problems in industries with the most regulation? In a free market, collusion is ineffective, since any newcomer can undercut prices, forcing the colluding market players to compete. The same could be said for any other unethical or harmful practices; if consumers care enough about a problem, they'll vote with their dollars for better alternatives.

"We haven't had free markets for a very, very long time. Consequently, your claim of free markets unavoidably producing negative outcomes lacks evidence."

You could easily replace "free markets" with "communism" and make the same statement.

lol.

FDA is the golden standard for medical testing for around the world (I worked for the FDA and that quote I'll quote one of the employee that stated it). After animal testing there are 4 phases of clinical testing.

You sound like all those libertarians that think free market is gonna some how reduce toxicity and dangerous drug from flooding the market.

That's some crazy pipe dream you got there.

These testing is also base on science and more importantly statistic (survival analysis and such). It is stupid as hell to just ignore it. Statistic is every where in lives and have increase the quality of our life including reliability and quantifying on what is statistic significant or not (random chance).

You are a perfect example of why I'm sick of debating libertarian and just straight up call it out.

Free Market is another excuse for ignorant. Whether it is ignorance of how the FDA and drug works to how the economy work (let's back everythign by the gold standard!).

The FDA's approval process is to ensure only safe and effective products make it to the market. This is unquestionably good. The problem is that companies can take advantage of the inherent delays in this process to obtain undue market power, and impose monopoly pricing.

The FDA should not reduce it's standards, but it should recognize that the expensive and drawn-out approval process creates large inefficiencies in that market, and they should at least strive to minimize those effects.

It takes quite a long time and a significant amount of money to perform the necessary studies and get the FDA approval. The time factor alone makes it difficult for a competitor to react efficiently if the main or sole provider for a drug or device increases prices drastically.

Mylan reportedly also used a few more anti-competitive tactics like contracts with schools that lower the price for them, but prohibit the school from buying any competing products (see e.g. http://www.reuters.com/article/us-mylan-new-york/new-york-to... )

I myself am kinda glad it is not easy to put a medication to market. However, big pharma is quite proficient at dealing with regulatory bodies already since they have so many products on the market, so I don't think that's tthe main reason

The strict FDA requirements are there to make sure only safe and effective products come onto the market. That's a good thing. What's bad is that some can use this system to their advantage to create artificial monopolies.

If you're the only maker of a drug, and even if it's not covered by any patents, you know it'll still take months or perhaps years for a competitor to get FDA approval and compete with you. You can jack up your prices until competitors go through the approval, and you can signal to the market that you will quickly drop the prices if another competitor comes onto the market. This discourages the competitors from even spending the time and money on FDA approval.

Two possible solution to this: (1) reduce the cost of FDA approval for companies that want to make generic copies; or (2) impose taxes or price caps on FDA products that have no competition and command market power.

This all assumes patents are not involved (as is the case here), but both solutions would reduce the intensive for companies to game a system that is intended to make sure only safe products make it onto the market.

> The strict FDA requirements are there to make sure only safe and effective products come onto the market

How did this product fail then?

I would guess because once approved, the FDA has a much more limited role. I believe they can force a recall though. Technically the problem was mechanical, not pharmaceutical. I'm not sure if that had anything to do with it though.

The letter is not about the drug.

It's about the drug delivery device (i.e. the "pen"), and the failure of Pfizer/Meridian (the contract manufacturer of the device) to follow correct design and manufacturing practices.

They don't have a proper CAPA system in place, they don't have proper design control or procedures, the DHFs are missing up to date inputs, risk analysis isn't up to date, etc.

It's pretty damning, but it's not about the pharma aspect of this. Basically the manufacturer lacks a functional quality system, which is table stakes for this stuff.

The FDA won't approve any of them†. There are a number of alternatives in Europe, but they can't legally sell them in the US (except for one and it's under some silly restrictions that keep it from being used more widely.)

†Or sets the cost of approval to be vastly higher than any potential profits, which is effectively the same thing.

How is it a problem to get FDA approval for big pharma like Merck, for instance? How do you prevent collusion between big players in a free market?

Here is an example, they are simply rejected by FDA without explanation how to proceed (until the shitstorm starts): http://www.post-gazette.com/business/healthcare-business/201...

>What exactly is preventing another company for creating an EpiPen clone?

Nothing. It's already done, it's just vanished from the news.

When the senators daughter was put in charge of epi-pen, first it was made mandatory in schools (so they had to buy it) then price was raised to $500 ( https://www.theguardian.com/commentisfree/2016/sep/22/epipen... )

So a 3D printed alternative was created. It costs $50 and can be made at home ( http://fortune.com/2016/09/15/epipen-alernative-cheap/ )

What everyone else said, but also there's something around pharmacists have to fill the prescription as it's written, and cannot substitute generics.

So, if a dr writes "epipen" it needs to be an actual Epipn(TM) that gets handed over.

There's a UI aspect here too. Doctors use software, and if that software presents expensive non-generics first in the drop-down list that's the med that gets selected.

https://twitter.com/drmarkporter/status/765569736423927813

https://twitter.com/drmarkporter/status/765570038048911360

> Q for SystmOne GPs: is there a simple way to ensure default drugs offered when prescribing are cheapest versions most commonly prescribed?

> For context: our default omeprazole version (20mg) is currently 5 times price of one 4 down. Easily repeated costly error when busy.

That's not correct. If a brand name is listed, a generic can (and usually is) substituted. They (the pharmacists) only don't if "DAW" (Dispense As Written) is written as well.

Here is a state-by-state guide on how to write a prescription to ensure the brand name drug is not substituted.[1]

This is all not relevant though, as EpiPen is not considered to have a (non-Mylan) generic equivalent available.

[1] http://beta.aan.com/globals/axon/assets/4698.pdf

Thalidomide.

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