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Comment by refurb | Hacker News Reader

This article hints at it, but this is the list price that nobody actually pays. Manufacturers offer discounts to pharmacies that lower the net price.

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.

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This is one of the major problems with the healthcare industry in the US. There's zero transparency and it's a dark art to figure out how much money anything costs. It's a back and forth war between multiple different parties that all want to extract value out of the system.

Just because you don't pay as much as the sticker price is missing the point a bit, I'd say.

Uh, sure?

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.

The list prices hold up better without this competition. So, the actual price people pay for either drops even when the genric version has a very similar list price.

However, it drops even more in 180 days.

Yes, the article states that the Mylan product can be purchased for under $150 with a discount.

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.

$150 with discount or coupon is still way too expensive. Where I live in Europe (Belgium) pharmacies sell the EpiPen for just $50. No need for a coupon, that's the regular price. It's even cheaper for some patients.

In belgium the government sets the maximum price of drugs. The drug company has to submit a dossier explaining objectively why a particular price that they propose is reasonable.

I think that is what we need in the U.S. When I was in college I survived on a food budget of $100/week during my first year. I have diabetes, and I am supposed to (though not required) test my blood three times a day, 21 times per week, at $1 per strip. My Metformin costs me another $22 per week, and a two other drugs costs me about the same. The result is that a single well-controlled condition costs me $88 per week, $352 per month.

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.

I’m not arguing the price is low, I’m arguing we don’t know the real price of the generic.

The primary issue with having a high list price with large discounts is that discounts off the retail price are typically negotiated by insurance companies and government purchasers (Medicare, Medicaid). That leaves the most vulnerable portion of the population - the uninsured and under-insured - left to pay the full retail price. That's been true for almost all of medical care for a long time now.

Even worse many times the "discount" or part of it is not a reduction in price but a refund from the drug company back to the insurer. So if you haven't met your deductible you may pay $300 for the drug but your insurance company is getting $100 refunded to them that goes into their coffers even though they expended nothing in the transaction.

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.

There's also a tendency to conflate the price paid by the customer with the price paid by the customer+insurer.

This is the real problem. If the consumer price is $50 but the insurer is paying $250 behind the scenes, then we all pay that price with increased premiums.

In many industries list prices don't mean anything at all, because the real prices are created through supplier sheets of terms.

Why does the generic-maker get exclusivity?

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?

For the same reason they give out patents, to incentive generic development.

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.

Isn't there an argument that if you give people an extra $10M, whether in this case or in any random subsidy, that it will be competed away, and thus it's a waste?

I feel like people use that argument in other contexts but it would apply here too.

Well the subsidy has a finite time period and is limited to one company so I’m not sure the benefit could be competed away.

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