Why Drug Prices Keep Rising Despite Congress's Efforts
bloomberg.com
bloomberg.com
I fail to see how congress' efforts would do anything but increase prices.
I don't see this as a problem. Even if I were to stipulate that all other first world countries have processes equal in safety requirements to that of the FDA, I still wouldn't see this as a problem. In a scenario without this, pharmaceutical companies would be able to pressure multiple government agencies until it found one willing to reduce its safety requirements. Then they could push all their drugs through that agency, making an end run around the more stringent requirements of the FDA.
I've looked into this. The sunscreens available in Europe are not necessarily better than the ones available in the US. For some people (like me), many of them are strictly worse - it depends on your skin type.
But as for FDA approval, the relevant part of this thread, it's not clear that those should be approved in the US. A number of them have been found to be excreted in breast milk, which the FDA has specifically cited as an issue for approving them, and that is indeed a real problem.
It's sort of hard to fathom writing "despite Congress" in a headline like this.
https://www.propublica.org/article/the-myth-of-drug-expirati...
This continues to be one of the dumbest arguments on this topic. If you want the local price to change, change the intellectual property law that inflates their price in the first place, dont repeal bans that circumvent the intellectual property laws.
The question is more like "if Disney sets avengers to $3 per view in American and $1 in Canada, is it legal to use a VPN to appear Canadian, and pay the Canadian licensing price." If the answer is yes, then why not just let American's pay the Canadian price vs the ruse of streaming the data from another country and pretending the transaction is hunky dory. If impersonating a Canadian to watch Avengers is intellectual property infringement, underpaying the license in your country, the same logic should apply to other intellectual property.
This thread is talking about reimportation of brand-name pharmaceuticals. In many of these cases, it's the same manufacturer producing the same physical goods at the same factory and selling them for two different prices on different sides of the border.
This is not an "intellectual property" issue; it's a trade issue.
Why do you have "ip" in quotes, its literally the single most important thing in this conversation. Trade is a way to circumvent the pricing set, it doesn't address the underlying exclusivity.
The exclusivity isn't what lets them maintain different prices in different countries, which is the problem at hand. Those different prices are only feasible because of artificial trade barriers, as evidenced by the fact that these price differences also occur with generic medications, which are not subject to exclusivity protections.
> Why do you have "ip" in quotes, its literally the single most important thing in this conversation.
Because "intellectual property" is a highly controversial term which conflates three complete unrelated categories of law that each have different origins and underlying justifications.
The ban doesn't circumvent "intellectual property" laws; the ban is what allows enables those laws to be effective at raising prices (which is the entire goal) in the first place.
Reimporting prescription drugs from other OECD countries would be the closest thing we have to a silver bullet for prescription drug pricing problems in the US. (That's not the only problem, but it's a massive one).
> Why would we waste the money importing them when we can just change our intellectual property laws to match their prices.
You're missing the point. Nobody would import anything. The price differences on either side of the border only exist because of the artificial barrier to trade. Allowing drug imports from other countries establishes an upper bound on how much the manufacturers can charge for those same drugs in the US.
This (and the Cuba travel ban as another example) seems outright "unamerican" to me. Where is the land of the free and the brave and personal responsibility?
With zero frictions between the cross-border trade in prescription drugs, a drug manufacturer would have to set a uniform worldwide price for their drugs. Otherwise if they sold to France cheaper than they sold to the US, then US consumers would simply import the drugs from French vendors instead of paying the US list price.
> In the US, we have a ban on re-importing cheaper drugs which our companies produce
> We do not admit competitive medications from other first world countries without full FDA approval.
This second sentence doesn't refer to the first sentence. But a separate practice of requiring full FDA approval for a drug like Tianeptine which has a long history of being an antidepressant in Europe.
But to the point that you made I think it's fair to argue that when you have a monopolistic seller having oligopsonistic buyers is probably closer to a competitive market than just a monopolistic seller.
Besides, steel tariffs just hand the global steel market to china and push companies that use steel out of the US. We should be taking advantage of cheap steel but instead we've decided to hurt every US company that uses steel.
But when governments do it to pharmaceuticals, that's totally harmless and has zero downsides beyond reducing some rich guy's mega-profits somewhere.
That the government doesn't directly negotiate prices there is technically true and sort of beside the point.
Private insurers are free to negotiate prices for Part D drugs on behalf of Medicare, which they do quite aggressively.
Thalidomide. You lose.
"New study finds 45,000 deaths annually linked to lack of health coverage" [1]
It's a balancing act. Bad drugs kill people. Unaffordable drugs kill people too. Is there any evidence that the balance FDA has chosen leads to less deaths than the balance EU regulators have chosen, or a third point entirely?
[0] https://www.cbc.ca/news/health/thalidomide-explainer-1.44347...
[1] https://news.harvard.edu/gazette/story/2009/09/new-study-fin...
> In the United States, Food & Drug Agency pharmacologist Frances Oldham Kelsey M.D. withstood pressure from the Richardson-Merrell Pharmaceuticals Co. and refused [FDA] approval to market thalidomide, saying further studies were needed.
and
> Although thalidomide was never approved for sale in the United States at the time, over 2.5 million tablets had been distributed to over 1,000 physicians during a clinical testing program.
The Fine Article is talking about drug prices. The Thalidomide scandal in the USA was about a large clinical trial. The two are related, but different.
>...The Mutual Recognition Agreement (MRA) between FDA and European Union allows drug inspectors to rely upon information from drug inspections conducted within each other’s borders.
https://www.fda.gov/internationalprograms/agreements/ucm5987...
Approving new drugs without adequate testing will cost lives, being over cautious can also cost lives though. An example of that was the FDA refusing to allow beta-blockers:
>...For example, consider FDA’s incredibly long delay in approving beta-blockers to reduce the risk of second heart attacks. By the mid-1970s this had been documented in clinical trials, and a number of beta-blockers were approved for this use in Europe. But in the U.S., FDA imposed a moratorium on beta-blocker approvals due to the drugs’ carcinogenicity in animals. ... Finally, in 1981 FDA approved the first such drug, boasting that it might save up to 17,000 lives per year. That meant, of course, that as many as 100,000 people may have died waiting for FDA to act —an explosive point, but one that very few journalists pursued
>And really, one can’t blame the drug companies. These are profit-making companies. We can’t expect drug companies to behave differently.
The notion that corporations should only work for the maximization of shareholder value is relatively modern, and leads to companies doing societally destructive things like this all the time, yet the author takes it as an inviolate truth. I would suggest that this is also part of the problem, and an area to look to fix it.
Eh? Not since Adam Smith, at least:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.
Really, he took a quite a dim view of the moral character of businessmen:
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
...and:
To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
With this perspective it's reasonable to expect that a corporation that has every available advantage over the independent worker should serve and improve some common good.
The scale is different, but generally scale alone does not change the ethical or moral designation of an action.
Corporations have diseconomies of scale too. If they didn't ycombinator wouldn't exist.
How did you come to that conclusion? My reading of the market data shows the opposite.
https://www.bakeryandsnacks.com/Article/2018/10/31/Industry-...
Maybe you think retail shops that finish off parbaked goods are actually mom-and-pop shops?
Actually, I’m not sure when this hasn’t been the case. Can you point out any good examples of corporations acting selflessly in the past that wouldn’t occur today?
Edit: I think this is also an argument for unions. If a group of workers all agree to hold firm on an ethical standard and block the talent pool, that has power. Without this layer of organizing power, there will always be someone willing to subvert the ethical standards for a quick buck.
Drug companies can lower prices but it doesn’t help anyone because they aren’t selling directly to consumers at the list prices unless they decide to completely ignore the entire insured population. Which is basically the same as just straight up announcing that they are closing shop. Imagine if Apple tomorrow announced that they where going to stop selling phones to anyone who has a medical insurance in order to provide cheaper phones to those who aren’t insured. Imagine how fast their stock and company would implode.
The drug companies want to reach the uninsured population however so they are pushing for things like selling biosimilars under different price schemes or selling cheap alternatives directly to consumers.
Drug producers do have a social responsibility, but that responsibility has to be seen in the light of reaching the patients. Right now the consumer market in the US is split into insured/uninsured and through the list-price/rebate shenanigans the middlemen are controlling access to both segments. And the structure of the rebates has put them in a situation where they aren’t representing the consumers in negotiations because higher prices allow higher rebates which never get passed on to the consumers.
then they don't need to market directly to consumers.
When you take parts of a quote out of context it changes it's meaning. That's rather bad practice, so please refrain from doing that.
As for the marketing. Do you think Audi should stop marketing its cars to consumers because everyone buys their car through a dealership?
The prescription model exists because drugs are deadly if not precisely administered.
Also, I highlighted a true and non-misleading fragment of your sentence that does not change the meaning. Drugs are not sold directly to consumers. I'm responding specifically to that true statement.
To give a very simple example: I think it's really important for everyone to have access to a smart phone. That doesn't impose an ethical obligation on smart phone makers to release subsidized cell phones for low-income people. Indeed, that would be a bad thing--it would effectively create a cross-subsidy where cell phone buyers are shouldering a special tax to pay for a government welfare service. That is distortionary, and hurts the cell phone market relative to other industries. To achieve the result of universal cell phone access, the government should pay market prices out of general tax dollars.
The drug business should be the same way. It is a high-tech, risky, capital- and talent-intensive business, and should produce profits and returns comparable to similar industries. We shouldn't use ethical obligations as a way to force drug companies to accept a lower return just because they make products that are important to society. That is also bad, because in the long run it drives capital away from this socially important industry into more lucrative, but less important industries.
So while you're right that profit-seeking shouldn't be an excuse for engaging in illegal or immoral conduct, at the same time, holding companies accountable for ethical behavior shouldn't become a tool for extracting hidden concessions and subsidies from industries. And a lot of folks use "ethical behavior" as a cover for demanding exactly that.
That a horrific idea, that destroys the incentive to make low cost cellphones. Smart phones can be sold at a profit for ~20$ No need for any kind of special government intervention.
If you feel people deserve a minimum quality of life then hand them enough money to do so and they will choose a lifestyle. Picking some set of goods as some god given right ends up with a host of horrible incentives.
No one can blame the drug companies for operating as an institution and it's hard to pin that blame on the individuals operating in it, too. You're right that the incentives that form these companies haven't been around forever and we should seek to find ways towards a better solution.
The biggest problems are: we don't properly regulate monopolies, and price signals are broken because we don't properly price in negative & positive spillovers.
As a society, we are MUCH better off having healthy and educated citizens. And as of recently, funding in these areas is being viewed as a cost center, rather than an economic multiplier. At the same time, we're destroying the environment with carbon and subsidizing fossil fuels.
Capitalism only works when price signals work. And price signals won't work without competition, and they'll be inaccurate without spillovers taxed accordingly.
If we reinstate this it would make that “something” be identified and other than just money.
I'd like to see Social Purpose Corporations become the default but sadly it's non-obvious how to go about creating one. Stripe's Atlas defaults to the monster. Can we get an anti-Atlas that makes it easy to bootstrap ethical corps?
It's the same concept as natural selection. It'd be great if organisms didn't struggle all the time to maximize their reproductive fitness. But any organism that falls behind will be out-competed. Even if every current organism decides to "play fair", it won't be long until a hyper-competitive mutant takes advantage of the lull to destroy his counterparts.
Maybe the pharma giants simply played themselves, greedily focusing on exorbitant short term profits and naively assuming R&D would always deliver something at their existing levels of funding while ignoring the long term effects this would have on their business model. Maybe we've simply reached "peak pharma", running out of easy discoveries that are best treated by applying a chemical and entering a world where biotech and immunotherapy will drive the future of healthcare. Either way, the patent cliff looms and we are rapidly approaching the threshold where enough profitable drugs go generic that the industry can no longer afford to buy out, bribe, and cheat their way to maintain their position.
they can also rehabilitate their older drugs by making facile new combinations in which drugs A and B which treat condition Z are combined into the same pill which is now rebranded as drug C. this technique is beneficial because if A and B were first-line treatments before, C is guaranteed to be a first-line treatment with a minimal amount of time in the wild.
then there's the old side effect shuffle in which older drugs with acceptable but unpleasant side effects are reformulated or otherwise tweaked to offer marginally better patient experiences, most frequently in a single small patient demographic. marginal improvements win the market if the drug's target demographic is already suffering a lot from their condition or their treatments.
in conclusion, the pharmas can create the appearance of innovation and modest new revenues nearly indefinitely even when their pipelines are in actuality quite sparse and breakthrough innovation is absent. this ability to churn old stuff buys them time to create new stuff to put into the pipeline using more complex therapeutics like immunotherapies, etc.
I agree with everything you said in that post but I think we disagree on the inevitability of the pipelines running dry. The mere fact that such strategies have become common industry practice points toward a structural decline in novel drug discovery. While such strategies buy time for new blockbuster drugs to be discovered, they simply are not being uncovered at a rate commiserate with the expectations of the existing pharma business model. What you are describing are what I consider to be patches on the hull of a sinking ship. When today's big pharma business model relies on $X profits and all the profitable drugs are going off patent and being replaced by tweaks and new indications, eventually $X becomes $X-25%+. Once that happens, all these enormously expensive shenanigans are no longer affordable.
Of course, this all comes at the cost of some potential drugs discoveries that could have been made if the business model was kept honest but that's the future we're left dealing with.
How many medical breakthroughs are on the verge of discovery, of only someone had complete access to data that's currently spread in silos across multiple companies?
As for opening up data, as soon as the data becomes valuable to share companies do share it, but quite naturally they charge for it to recoup the costs of creating that same data. And when one company abandons a druf, they don’t just dump it in the ocean, they sell it of to other companies again to recoup some of the costs.
"The PBMs negotiate discounts from drug companies and then help determine patient access to drugs. In theory, that is supposed to encourage PBMs to drive prices down on the drugs. But drug companies have very cleverly turned the system on its head. Before they give a discount to the PBMs, they raise the price each year. It is like a department store raising prices before a sale so that the sale price looks more appealing. Then the PBM can claim to have negotiated a great deal, and will pocket the rebates. In return, the drug companies want the PBM to make sure their competitors are disadvantaged."
And once again, the patent system is being abused to no end. The patent office, swimming in money, just rubber stamps the same old patents over and over again: "78 percent of the drugs associated with new patents are not new drugs. They are existing ones. Instead of innovation, we are seeing secondary protections piled onto old drugs over and over again. They make minor medical modifications by adjusting the dosage or the delivery system." Someone seriously needs to sue the patent system for the enormous amount of financial damage they've caused to this country.
100x this. Much of the breakdown of trust in our society is due to existing laws and crimes being enforced extremely unevenly. Simple crimes committed by lower class individuals are prosecuted relentlessly, even when they are ultimately victimless or otherwise overly harsh. Meanwhile huge scale crimes committed en masse by companies are rarely pursued, and in the rare cases they are it basically results in civil slap-on-the-wrist fine that comes out of one quarter's profits.
Law in general only works when it proactively deters bad behavior. Corporate counsel should be pointing out that such setups fit the shape of fraud, and advising the CEO/board that they'll personally be facing down prison terms. But rather than discouraging they enable - advising how to complexify the scheme to prefortify future defenses. The deviance has been so normalized that wider society just shrugs it off as them maximizing shareholder value.
I have no idea how this can actually be remedied. The screws of demanding justice keep being turned up based on a desire to punish those who escape, yet those with the resources continue to insulate themselves just fine. We're effectively headed towards anarcho-capitalism for those at the top, and totalitarianism for those at the bottom.
The drug companies now control and manipulate the market. One law here or there won't fix it.
I think the larger question is if congress wants to effectively break the market and if the politicians want to take on the task of rewriting a lot of law / taking on the drug companies.
This singular problem point was completely ignored by the rest of the article and in the proposed solutions.
It seems like no matter what drug companies charge, our government MUST pay it. And citizens not covered by the government MUST buy health insurance. The ACA says it is illegal for you not to buy coverage; if you don't there is a fine. If you to not pay this fine (individual responsibility tax), you go to jail.
The case of Nelene Fox shows that HMOs MUST pay for anything, even unreasonable procedures for terminally ill patients.
How can the market function when you MUST PAY?
I'd like to challenge this. Yes, the patent system allows for a time-limited monopoly for the inventor of a drug - but it does not, to my knowledge, in any way "dictate prices" for that drug. That is up to the owner of the patent, who rationally will optimize for profit.
Optimizing for profit does not mean "charging as much as possible", either; it means "charging the amount resulting in the highest net profit". There is the supply and demand curve to take into account here.
Each invention or each venture needs resources. Where do you get those from? One can say, people give something and out of this pot you support something bigger (taxes? charity? venture capital?) , and those who have the idea, the skill, the howto, they go for them. And everyone of them has to support their own families too. So all in all, society gets a profit by having people creating treatment, workers get their profit (time+skill for money), investors get a profit and owners maybe get an overproportial share of, what is being paid for it.
I do not understand how this is a pessmistic view. I just see a lot of people being productive?
But i admit, it is an ideal. In generally i also only hear all the bad stories.
America's lucrative drug market funds research which allows the rest of the world to benefit at no cost to them.
Edit: seem to be getting downvoted because people think I’m saying drug companies do this out of benevolence. Not my intention. I’m saying that wrenching maximum dollars out of America but having little ability to capture returns elsewhere is a mechanism by which new drugs are created and later manufactured as foreign generics
But we have pretty effective medical insurance - after paying initial yearly sum, insurance kicks in and covers 90% of the costs. No massive incomprehensible bureaucracy and fooling around with various charges. It doesn't matter what your employer is, you pay it yourself, it covers you no matter the age, status or existing state.
It can still be costly to encounter something serious, some other countries cover 100% of the costs (but question is the quality and speed of treatment, because if its free, old people with tons of mostly incurable ailments can easily flood the system). If it can properly ruin you, social system steps in.
That's a nice and heartwarming story. But I don't believe it for a second. When those companies want to fund research, they raise money from third parties. Or get it from the government in the form of grants.
No, all that money goes to someone's pocket, and mostly stays there.
Not the big companies. R&D is funded through the sales of current products.
Disclaimer: I work in big pharma, though in discovery research, nowhere near pricing and business decisions. Of course, in my position, it would be great if all pharma invested more in R&D
Indian companies can’t just manufacture patented drugs without a license. There is a judicial process to follow beginning with negotiations with the original patent holder. Only if the patent holder refuses to grant a license and the local manufacturer aspirant can prove there will be a public health crisis without the drug will the courts grant permission to bypass the patent.
http://www.mondaq.com/india/x/772644/Patent/Compulsory+Licen...
https://undark.org/article/hepatitis-c-sub-sofosbuvir-india/
It’s probably better for the world if they lean even further from patents.
I think it’s more likely that it funds higher profits for the companies and all the middlemen. This is just self serving propaganda by the pharmaceutical companies.
The insurer makes a profit as a % of money spent on healthcare, the doctor needs to pay the million-dollar student loan (his education cost a million dollars because the student loan underwriters know his patients will pay), the hospital makes a profit as revenues - expenses - it's not like patient can price-shop.
Pointing fingers at the supply of doctors ignores the other five elephants in the room.
Markets simply don't work when the person who has to pay can't price shop. Please, come to your senses, and either make healthcare an actual free market, or, more sensibly, single-payer.
> Bloomberg News has an unusual practice of paying some of its reporters explicitly for publishing "market-moving" stories.
So, yeah.
You get some Bloomberg stuff that just seems like really low effort spam / blog stuff.
Editors titling stories without input from writers is an old practice, but pay-by-page-load has moved it from a way to have consistent tone to a horrible runaway optimization. It doesn't even matter that much if you read the article, as long as the title is click-worthy enough to trigger those impressions.
I assume Bloomberg is probably just slapping bad titles on stories, but I know Mic has been specifically accused of doing it the other way, like you mention; they'd hand a clickbait title to a writer and ask them to a fill in a relevant-enough-to-publish story under it.
> RF: It is the way the system operates now. And really, one can’t blame the drug companies. These are profit-making companies. We can’t expect drug companies to behave differently. Imagine if a CEO went to his board and said, “I have decided to lower prices and reduce our profits. It’s the right thing to do.” That CEO would be fired.
But there is a PR price to be paid when the public finds out that the company is gouging people who have eczema or whatever the drug treats. Some companies obviously do decide to go that route and either are hoping nobody notices, or are willing to pay the PR price. Others obviously are willing to accept a certain return on their boring drug and leave well enough alone.
And 5-year survival rates with cancer are pretty bleak regardless so it's not hard to imagine simply helping people de-stress might be the best intervention depending on how you value a slightly better chance of full remission vs. keeping people comfortable.
> RF: Yes, 78 percent of the drugs associated with new patents are not new drugs. They are existing ones. Instead of innovation, we are seeing secondary protections piled onto old drugs over and over again. They make minor medical modifications by adjusting the dosage or the delivery system.
The patent system does not allow you to "extend" the protection of an existing invention by making minor changes. Once a product is released into the marketplace, the product itself becomes prior art. You can make improvements to the product, and patent those changes, but the original product is now in the public domain.
So evergreening can't work as a unilateral action from the drug company. It also has to be the case that doctors must be unwilling to prescribe a generic that doesn't have those improvements. And here is where the article buries a lot of complexity in a hand-waving dismissal:
> Here’s the most important point: When a drug company makes a secondary change to a drug, the R&D investment is minimal compared with what’s required for the drug’s initial development. Also, the change may mean little from a therapeutic standpoint.
As a threshold matter, no scientist or engineer (note the author is neither, she is a lawyer) would say that incremental improvements don't count as "innovation." And incremental improvement, though cheaper than building a brand-new drug, is not cheap, just like developing each new iteration of iPhone is not cheap. So what's really doing all the work here is the assertion that a "change may mean little from a therapeutic standpoint."
If the change doesn't actually result in a therapeutic benefit, then doctors shouldn't prescribe the new drug over the generic. For various reasons, doctors have little incentive to do that. The main thing is that neither the doctor nor the patient are paying for the drug. When you're not paying, you have no incentive to prescribe the "older model."
Insulin is a good example of this. The first biosynthetic insulin was released in 1982. It is long out of patent. If you wanted to release that exact same product today, you could. But the newer iterations are at least a little bit better, and who wants to give their kid with Type-1 diabetes anything but the latest and greatest version?
The new patent on Ketamine for depression is an example.
Ketamine is already used to treat depression and it’s a cheap generic drug.
The nasal spray being touted is many times more expensive and is really just a marketing play.
With regard to the Ketamine example, what the drug company is selling is a nasal spray (versus the traditional method of using an IV), and freedom from the stigma of taking a "party drug": https://www.theverge.com/2019/3/11/18260297/esketamine-fda-a....
There was a similar example with anticoagulants where the generic (warfarin) required monthly blood tests, so the drug company developed a version that doesn't require the monthly blood tests, and charges $5k/yr more for it. Is it good public policy to spend $5k/yr per patient to avoid a monthly blood test? We don't have that conversation in the US, and it costs us.
Note that patient doesn't see the $5k/yr increase. They just pay the $35/mo co-pay instead of the $15/mo co-pay. However, the rest of us do pay that cost. Again and again and again.
We already had inhalable insulin in 2006 (Exubera) and again in 2014 (Afrezza), both of these medications were withdrawn from the market for lack of sales. And yet people still get upset when Pharma spends money on marketing...
The "so what" is that the current system prevents people from getting affordable access to drugs.
This may not matter to you, and that is certainly well within your rights, but many people do seem to care about ensuring other humans aren't priced out of medicines that may help.
Ketamine as a generic work and is available in lozenges, IV, and other ways. This nasal spray is being marketed as a breakthrough for depression (even though it isn't), costs more, and because there are no marketing dollars behind the other equally effective method, people will likely end up using this branded version.
>There are lots of marketing plays on existing, well-established technology. That's like half the things Silicon Valley develops. So what?
The "what" is that here, peoples' health is at stake, and simply taking a market-driven approach may not be to the benefit of society.
Yes, that’s exactly what Feldman & the article said. The patent applications for “new” drugs use an existing base drug, modify it in some way that can be called an improvement, and get the drug protected for a 2nd or 3rd time. The point is that the modification is not improving the drug itself the majority of the time, but some secondary component or the delivery mechanism. Do you have any actual evidence that contradicts the idea of evergreening? Here’s a direct link to Feldman’s research: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3061567
> As a threshold matter, no scientist or engineer would say that incremental improvements don’t count as “innovation”.
“Innovation” in this context is referring to research to create brand new drugs, which is what big pharma cites as their reason for needing to charge high prices, and what the patent system requires when filing protections on new drugs. The point is that, despite minor innovations to drugs, they’re not meeting the innovation level that both the companies themselves are claiming they have, and that should be required for patents.
> If the change doesn’t actually result in a therapeutic benefit, then doctors shouldn’t prescribe the new drug over the generic. For various reasons, doctors have little incentive to do that.
Yes, exactly. In theory, generics should easily win when they’re available due to their lower cost. What you’re gently glossing over in your comment is the active incentives big pharma is injecting into the system to secure a place for their higher cost drugs. Some doctors & hospitals & insurance companies are being paid extra, directly and indirectly, to not offer generics.
> But the newer iterations are at least a little bit better, and who wants to give their kid with Type-1 diabetes anything but the latest and greatest version?
Well, that actually depends on the free flow of information. If the new drug is a combination of two existing drugs, you can call it “better”, but in reality it may be 10x the price and no actual therapeutic benefit compared to what was already there. This exists in many drugs, for example existing pain killers being combined with existing anti-nausea drugs, and then a high premium is charged for the combo. The point is that the high premium is completely unnecessary to the patient’s relief.
There's also the issue of additional state regulation for some drugs. For instance: Adderall. The DEA limits production of amphetamines, and of course Shire (the former patent-holder for Adderall) is going to prefer to produce its patent-protected version over the generic version. For long after there were generic version of Adderall available, Adderall XR ("extended release") was still under patent. Supplies of Adderall were low nationwide, and doctors were pressured to prescribe the XR version to limit abuse potential.
Lots of people. FYI, this is the strategy of several generics shops. The challenge is doctors' reluctance to prescribe them.
Maybe there is a business model in advocacy as a service.
Yes, a drug company can make a minor tweak to a drug and patent it. However, unless doctors prescribe it, that strategy will fail.
The golf trips, lunches from drug reps, free samples for poor/indigent patients, and speaking fees paid from drug companies to doctors sure doesn't hurt either.
Economists not surprised.