FDA promised a ‘lower-cost option’ to EpiPen, but the price isn’t any lower
statnews.com
statnews.com
So in fact, this drug could be cheaper than the Mylan version, but it looks like they never dug in deeper to find out if it's true.
Second of all, the first generic approved gets 180 days of market exclusivity whereby the FDA will not approve any other generic versions. This is such that the generic manufacturer can recoup the investment prior to widespread competition that drives down prices.
For example, Lipitor went generic and the price dropped only ~10-20%. After the 180 days, multiple generic companies got approval and now the price is 80-90% lower.
Just because you don't pay as much as the sticker price is missing the point a bit, I'd say.
The Mylan version will also probably cost less than list for most people (though Mylan will get their money, just like the generic maker).
Also, you're correct that the price will come down over time. If the FDA had said, "this approval is part of a process that will eventually lower the cost within the next couple of years," then the article would make no sense. That's not what they said when this generic version was released.
The article is not claiming that generic drugs don't reduce prices. It is claiming that the narrative from the FDA, that this approval will reduce costs, is largely false.
However, it drops even more in 180 days.
In fact, several large retailers sell EpiPen for $150 when including a coupon, according to GoodRx.
As for the FDA narrative not being true, how do you know that? The article doesn't actually state the true cost of the Teva product anywhere, which was my original point.
Put another way, if I was working minimum wage without insurance and no other income (12% tax bracket), I'd need to work 13.6 hours to cover the drugs for that one condition, 34% of my take home (roughly, I didn't include state tax, social security, etc.). Where as one person I would have been above the poverty threshold of $12.14k in 2018, now I would effectively be below it.
This is why so many people who don't have steady jobs (e.g., the gig economy) have to choose between drugs and food.
In fact if you don't submit the claim for the medication to your insurance you may be able to reap that $100 of savings yourself in the form of a discount. Until very recently when the law changed to prevent it the contracts insurance companies had with pharmacies prevented your pharmacist from telling you that a drug could be obtained cheaper by not using your insurance.
I thought the patent-holder got exclusivity for 20 years, and then it was public domain. Why do we need a 2nd tier of exclusivity?
If all the generic manufacturers could rush in all at once, the price of the generic would falls to pretty much the cost of production quite quickly.
As a generic manufacturer, are you willing to spend $10M if you aren't sure you'll recoup it? Maybe.
But if you know for certain you'll be the only supplier for 6 months, then you have more certainty to make the investment.
I feel like people use that argument in other contexts but it would apply here too.
Antitrust law needs to reflect the rule of four.
If you want to operate as a pharmaceutical producer / seller in this country, you have to supply this list of emergency medicines at 10% above the price we can import from China / India.”
And be done with it.
Edit: fixed a typo
I worry that requiring a pharma company to provide supplies hurts anyone who wants to start up a new pharma company. It's easier to comply with government regulations once you're a big company and have many plants, but new companies have to be lean or else they'll never make it off the ground.
No amount of well-that-isn't-going-to-work thinking is going to help.
Try something, if that doesn't work try something else.
I believe the fashionable word is iterate.
Like, for example, the decision to increase the price of an Epipen to US$300 in the USA, whereas the same product in Australia costs AU$100
> Society isn't some laboratory where you can run experiments to your heart's delight.
In a way that's what policy and regulation are. Since we can't know the full consequences of policy and regulation until they're implemented and time passes. Sure, most policy and regulation aren't willy-nilly.
Trade-offs I guess. Regulate the sale of some emergency medicines so that those who need them now can afford them at the expense of, what exactly? It's not like regulating the sale of one medicine is going to break a pharmaceutical company?
Why do I feel like I'm trying to defend sensible pricing here? Are people really that allergic to the word regulation?
Why not both? I'm serious. It seems like a good idea to promote competition and put a ceiling on the prices of essential medicines based on the global market. 10% above the lowest price may be a bit aggressive, but something must be done to stop these 10,000% markups we're seeing now.
Of course, they still complain and somehow shoehorn busdev & marketing costs into the R&D bucket anyway.
As before, collusion is sustainable if and only if firms put a sufficient weight on future profits. The critical threshold for the discount factor, δ, now depends on the number of firms: the more competitors there are, and the higher this threshold, meaning that collusion is less and less sustainable. For example, the threshold increases from 1/2 = 0.50 to 1/3 = 0.67 when the number of competitors increases from 2 to 3. This means that if the firms’ discount factor lies around 0.60, say, two “competitors” could in fact maintain the monopoly outcome but three or more competitors would have to price at cost.
[1] http://ec.europa.eu/competition/mergers/studies_reports/the_...
Typically the second generic product brings the largest price reduction [0]. However epipen is a unique scenario. I'm not sure how hard it is to develop a generic epipen, but it is definitely not a straightforward small molecule generic, so presumably there will be fewer generic versions than you see with drugs like lipitor. So it is possible that the market resolves to an oligopoly with 3-5 players that all make decent profits; there is precedent for this (i think the pancreatic enzymes market is an example)
[0] https://www.fda.gov/aboutfda/centersoffices/officeofmedicalp...
See https://spectrum.ieee.org/the-human-os/biomedical/devices/ha....
It is really strange that the FDA is totally fine with diabetics buying vials of insulin and loading their own autoinjectors, but doing the same thing with epinephrine is apparently extremely dangerous and the FDA doesn't want you to do it[1].
[1] https://www.in-pharmatechnologist.com/Article/2016/09/22/US-...
The EpiPen is designed to be used with minimal training. A diabetic who injects themselves regularly with insulin is presumed to have the skill to do it without screwing it up.
Epi is a drug that is a vascodialator in large muscles and a vascoconstrictor in small muscles.
If you inject the right amount of insulin in the wrong place, not much happens. If you inject the right amount of epi in the wrong place like a finger, you could lose that finger.
You could argue a diabetic’s ability to administer during an event is just as bad someone in anaphylaxis all day long... one is passed out and the other is panicking because they are dying...
But epipen’s unique injector is primarily to get the right amount in the right place. Two part problem it solves over the vial.
This is like the fact that TSA searches make another 9/11 less likely, however people driving instead of flying to avoid the hassle is estimated to have killed more people than 9/11 itself did. Risk is a funny thing, and isn't always straightforward to figure out.
Making it personal, in theory my daughter should have 2 epipens close at all times because if she gets stung on the neck, she could need one. Anywhere else is OK, the concern is swelling from her allergy cutting off airflow. That explains one, and the second is in case the first fails to work properly, which sometimes happens.
In practice there is an epipen for her at school, and at her mother's house, but not at my house. We shelled out once. But we're not shelling out over and over again to prevent such an unlikely disaster. (Twice more so that there are the recommended number of pens at school and both places she lives, then more as we lose them since they are supposed to always be on us..soon we're talking about real money!)
That’s cheap and pretty easy to do. The problem is while maybe I’m a superstar with a vile on someone else, I wouldn’t trust I could do it while my throat was literally closing, in all scenarios. The pen makes sense a lot of time, but the vile is good if you know you won’t be the target.
Something you wrote also, 2 pens. If you need one, there is a good chance you’ll need two. Depends on how fast you can get to a hospital and the circumstances with the victim.
So in that case, the vile makes even more sense for you to have at home.
But it's just an example. My point was more that insulin is generally safer than epinephrine.
I'm surprised the author is making the arugment that more competitiion doesn't drive down prices - despite the large body of evidence to the contrary.
It's accepted belief that when competition fails to drive down pricing among pharmaceuticals, it's usually due to regulatory decisions. There are several studies that have been done on this exact topic, one even finds that price regulation actually leads to higher prices by discouraging market forces [1].
1. https://www.regjeringen.no/globalassets/upload/kilde/hod/hdk...
My understanding is that this only applies to Schedule I and II drugs.
The Epipen, along with most other pharmaceutical drugs, do not fall under those categories.
https://www.cleveland.com/metro/index.ssf/2018/11/death_of_h...
> multiple blunt force injuries
Maybe I'm just a conspiracy theorist but I'm curious to learn more
> To date, we aren’t privy to a full account of how Daniel Best sustained his injuries, nor their precise nature, nor any other evidence (such as a suicide note, if one exists) that prompted medical examiners to conclude that he killed himself. But there is clearly nothing contradictory about his having suffered blunt force injuries during the commission of a suicide. Given the facts at hand, there is no reasonable basis for speculation to the contrary.
https://www.snopes.com/fact-check/daniel-best-suicide-foul-p...
Interesting read, but towards the bottom it talks about how "blunt force" can be many things like jumping off a roof and hitting the pavement. I'm still personally curious on the exact details, but maybe his family doesn't want it to be public.
A non-conspiracy possibility is he used the garage door to commit suicide, and the bouncing door is what caused the blunt force injuries
My guess was that he jumped from the roof, and was found by the garage door. That would explain the blunt force trauma.
1. 2 pens cost > $400 usd
2. They have not had any in NYC for over 2 months because of shortages
...<digs pen out>...ok, it is made by "Impax" and labeled "epinephrine injection, USP"
[1] https://www.cvs.com/content/epipen-alternative [2] https://www.fda.gov/drugs/developmentapprovalprocess/howdrug...
kaleo was founded by twin brothers with food allergies and they've worked from day one to improve patient quality of life, unlike other pharmaceutical companies. Sadly, the media has recently criticized them, paradoxically, for their "high prices" that are paid only by the huge insurance plans with the deepest pockets--they do not receive donations, after all, and this strategy helps make their products free for both the underprivileged and middle classes.
https://www.fool.com/investing/2017/10/11/mylan-deals-a-blow...
https://www.beckershospitalreview.com/pharmacy/20-generic-dr...
And also a criminal probe (not sure what the status of these are):
https://www.bloomberg.com/news/articles/2018-04-24/generic-d...
Discussion on HN: https://news.ycombinator.com/item?id=17629436
Here's one of their violation letters, I was told that sanctions were still being considered for the latest inspection.
https://www.fda.gov/iceci/enforcementactions/warningletters/...
https://drive.google.com/drive/folders/1BgduIfkAL4SaYVQu1yyJ...
maybe there are other places costs can be cut, but as you'd expected ( http://www.aei.org/publication/the-public-thinks-the-average... ) they're not wildly more profitable than other companies.
A low profit company, charging a distant lower amount for probably rely on word-of-mouth + news features to some extent.
Also, you can save a lot by not paying shareholders and C-suiters massive amounts.
[0] http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
I'm not linking them here (just because I don't want to get YC/HN in trouble), but there are a number of highly-reputable online pharmacies in India and Vanuatu that sell non-controlled medications and ship to the US. I haven't checked whether or not they sell EpiPens, but I wouldn't be surprised. I'm aware of them because they are very popular in the transgender community due to high barriers to accessing medical care by legitimate means.
If it costs $12.53 to manufacture an EpiPen equivalent, and the market price of the EpiPen is $300, it would make no sense to sell it for any price other then $300.
Why should the market price be $300? If it only costs $12.53 to manufacture, someone could sell epipen equivalents for much less than $300 and capture the whole market.
All of that is before you even take into account how much it costs to re-tool your production line to make something different. Sure, you could lower the barriers to entry until they're barely existent and offer almost no consumer protection, but I'm not really sure we want to make it so easy that a company will spin up a production line to make a drug for 6 months while they think they can undercut the competition.
Then again, I'm a big pharma biologist, so I probably am a bit biased toward safety and large, slow movements.
Critics of this policy say that it would disincentive new drug development. That may be true, but for many people it doesn’t matter because they can’t afford them at current monopoly rates anyways, and our insurance industry is broken for them.
I wonder how you would go about researching a better patent-expiration scheme and the effects it would have.
Edit: maybe I misunderstood you- are you saying even with no patent protection, the barrier to entry is still high enough to disincentivize new entrants because of safety regulation and retooling costs? So patents aren’t the only roadblock, or not even necessarily the main roadblock?
I've never worked in generics, so I'm certainly not an expert, but I am saying both that we need some of the safety and quality controls by the FDA (or some system to replace them without relying on companies' good will) and that there are big hurdles even disregarding the FDA or other regulatory bodies.
But you can’t get at identical prices without communication between parties. Without communication, initial price setting is as if both companies make a bid in a sealed envelope.
It would be highly unlikely that both bids would be identical, and the lowest bidder with a price above $12.53 makes all the profit.
If the historical price is X, but I can charge 4X because people need the drug, let's charge 5X so I can make even more profit because demand is inelastic.
No, it isn't. The default strategy is not collusion. It's lowering the price to capture more of the market.
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
That's a misreading of Smith's point, but it's also irrelevant here, because it's quite a leap to assert that "the default strategy is to engage in blatantly illegal activity".
Collusion is illegal because it harms consumers, not because collusion is the "default strategy".
In fact, collusion is not the default strategy simply because it is not stable in the long term; there's a lot of research which demonstrates this.
for plausible deniability, the two companies typically don't directly talk to each other, but a lot of signalling happens via public statements and marketing channels to indicate a desire not to compete (as a simplistic example: raising prices when the competitor lowers theirs).
Either way, I think there are some hidden forces here that keep these prices so high. Like if the FDA would open the market to competitors from Europe, or even countries like India, I think that "market price" you say would dramatically lower.
I think the U.S. pharmaceuticals market both lacks competition from generics, as well as has some weird laws like "Medicare can't negotiate prices with pharma companies," which only encourages pharma companies to raise their prices as much as possible.
The law I mention is almost solely responsible for all the "drug X increased price by 5,000%" headlines you've seen lately. Pharma companies have figured out they can shamelessly rob taxpayers and nobody will do a thing about it, as long as they donate to the right politicians (from both parties).
That's a common statement, but not really true.
Medicare Part D, which covered prescription drugs, is managed by private insurers who can negotiate for the price of drugs.
In Medicare Part B, which covered physician administered drugs, Medicare pays the average sales price. Which means every time a private insurer gets a lower price, some of that is passed onto Medicare.
So the statement "Medicare can't negotiate drug prices" is technically true, but ignores all the other ways it can get lower drug prices.
(Yes, procedures from doctors aren't the same thing as drugs from manufacturers.)
>"An authorized generic is made under the brand name’s existing new drug application using the same formulation, process and manufacturing facilities that are used by the brand name manufacturer. The labeling or packaging is, however, changed to remove the brand name or other trade dress. In some cases, a company may choose to sell an authorized generic at a lower cost than the brand-name drug product."
While this is different from what common language calls a 'generic drug' [2], in some cases either kind of "generic" could, may, or must be substituted by pharmacists, depending on various circumstances and the particular state's regulatory regime [3].
This interacts with the epinephrine autoinjector market in two ways. First, there is little upside for the manufacturer of the authorized generic to make the list price significantly lower, as the list price is rarely paid by the end-user out of pocket, and frequent mandatory substitution laws cause makers of Authorized Generics to gain marketshare as long as they're slightly cheaper than the brand
Second, Authorized Generics of combination devices are only subsitutable for a corresponding brand, so different devices like Auvi-Q and Adrenaclick are technically a different market entirely: the doctor's prescription will note the exact sort of device. Therefore, while there are other epinephrine autoinjectors, the marketshare among them is decided in doctor's offices and insurance plans, rather than by direct consumer choice through the end-user's own spending.
[1] https://www.fda.gov/newsevents/newsroom/pressannouncements/u... [2] https://www.fda.gov/drugs/developmentapprovalprocess/howdrug... [3] (2008) (for illustration only) https://www.uspharmacist.com/article/generic-substitution-la...
The unique thing about the Drug market is there are no knockoffs. A "Brand Name" drug in the USA has the _exact_ same active ingredients (and sometimes inactive, take inhalers) as the Generic. Even more hilariously, most drug companies will create a "generic" version of their drug as well as a "branded" because they can sell the same exact thing at a higher price point.
If I'm not mistaken, the formulation could be wildly different as long as they match kinetics, yield, and safety profiles set by the FDA, and an individual may have some issue with one formulation over another.
What you're referring to is the ability of a pharmacist to substitute one drug for another, if for instance it wasn't on your insurance's formulary (list of drugs they'll pay for). Drug A may be slightly different than Drug B, but the Drug B your insurance will pay for. Drug B might also _just happen to be_ a generic (because the pharmacist is trying to get your the best deal for your money). There's guidelines from the FDA, DEA, the state insurance commissioner, and state laws the pharmacists must be aware of so it varies greatly between states on what they're allowed to do. Made for a fun rules engine to implement in software.
Doctors can mark a prescription as DAW (Dispense As Written) which then the pharmacist can make 0 substitutions. Insurance companies aren't usually a fan of said doctors.
Sometimes the FDA certifies a dosage of a generic based on a different dosage. This caused a problem not long ago when the dosage they assumed was fine didn't dissolve right, hence the absorbed dosage varied and was sometimes way too low. To add insult to injury, it was a psychotropic drug, so everyone assumed patients complaining were "just imagining things" for a long time.
I've had to use transdermal medication (patches) before, and one of the inactive ingredients that changes is the adhesive, I've noticed that the "brand name" version didn't cause skin breakouts, and the generic did.
I am a parent of two young children with tree nut allergies, and I strongly prefer the Auvi-Q despite them gouging my insurer/employer. I use the generic epi-pen for school and child care since that’s what teachers are familiar with.
List price for Auvi-Q is around $5000 an injector. I carry _four_ of them everywhere I go. It’s utterly ridiculous for a dose of medicine worth less than $2, but when I need to use one I’m glad I’m not using a syringe or more complicated off-brand.
But if you are being serious...
Because $300 dollars for a drug that people rely on to live is too high, and it makes more economical sense to continue to sell alive people a drug at a price they can afford for longer, than keep selling it at $300 for a short time, until they go bankrupt and die.
Reduce extension patents on medications or medical devices to no more than 5 years (same for software).
Make it take an act of congress to change/raise those amounts in the future with a super majority.
It all goes back to the original problem. Even when the FDA gets their act together and let a single competitor compete it still has a ripple effect.
I have not heard of any issues with Auvi-Q since it was reintroduced
https://www.forbes.com/sites/matthewherper/2017/01/19/epipen...
That said, I have it too; it was free to me because I have insurance. But this area really needs proper regulation and cost controls.
BTW epi pens also come with a tester.
(We have insurance so we pay a small copay for epi pens and auvi-q would be free.)
And I wonder when EpiPen started issuing testers. We had them for years (me first, then my daughter) and never got one.
In my experience 99.9% of people I talk to think that Shkreli went to jail for drug overpricing, take some patriotic joy from that fact, and think that one of the results of his jailing is that EpiPens are cheaper. It's like how everybody thought that Saddam did 9/11.
I bought a generic epipen this year for my daughter and the co-pay was $4.
1. https://www.foodallergy.org/sites/default/files/2018-04/FARE...
Every medical topic should have a factsheet, with lots of citations and links to studies, produced for it like this.
It's complicated, to say the least. Also, you can go most of your life with smaller reactions to something before it starts to get bad. (Discovered legume allergy at 40yo)
This means that an epipen is priced at £45 or about $60. Google Lloyds pharmacy epipen - UK only search.
I rather like this approach to healthcare, I am not sure about transnational ability to buy this - but to those that need it I hope you can make it work.
My observation is that the UK approach to healthcare has some advantages in its approach, it is not without faults but value for money [affordability] is embedded in delivery.