Hacker News Reader

Comment by toohotatopic | Hacker News Reader

There is no need to nationalise at all. The solution is not reduced competition but increased competition.

The power of the pharmaceutical industry comes from artificial monopolies in the form of patents, approvals and import restrictions. Since the public funds the initial research anyway, those limitations can be reduced until competition exists and medicine is once again affordable.

View on HN

The pharmaceutical industry is getting really good at gaming the patent system. My sons inhaler was pretty cheap for a long time until all of a sudden it jumped in price. Like, from $30 to $300.

Turns out, all they did was change the delivery mechanism--slightly--and the next thing you know it's somehow covered under a different patent. The medication stayed exactly the same.

Assuming the previous patent expired, can't someone else just make the medicine according to the original formula, and sell it for $30?

If there’s a profit, yes. But try explaining “sorry we have the ability to treat you but you’re going to die because the medicine isn’t profitable enough for a company to produce”.

That's the other argument for nationalizing the pharmaceutical industry: broadening the supply chain. When Hurricane Maria destroyed Puerto Rico there was a shortage of saline in the US, because margin is so low that the market can only support very few manufacturers, many of which were on Puerto Rico.

Right now we are looking at another rash of shortages. The Indian government has banned export of certain medications and pharmaceutical intermediates because India is worried about the coronavirus outbreak and domestic shortages.

Someone still has to pay workers to make the drug at the end of the day. They don't work for free any more than doctors

If workers aren't getting paid directly, they would be paid by tax dollars.

The only questions are: 1) can nationalized companies make drugs cheaper? 2) If yes, are there second order effects, like reduced drug innovation.

Many schools of economics teach that the proper place for the government to step in is when something serves the public good but has a low chance for profit. Public transportation, libraries, schools, roads, parks. These wouldn’t be profitable ventures for a commercial operator, but the public needs these things. So the government provides.

I wholeheartedly agree, but that doesn't mean that government employees build all the roads, schools, and parks. This is often done by for-profit companies and payed for with tax dollars

I think the usual issue is that when a patent expires, a competing product still has to pass extensive (and expensive) safety tests before it can be sold. this is how you end up with pathological cases of price gouging on low volume generic drugs.

this might be a good place for a government agency to step in and manufacture out of patent drugs and delivery devices at a reasonable price. it would at least be interesting to see the difference between the "reasonable price" and the actual cost to produce.

Another trick is to patent a new delivery method or some such nonsense. You can protect a single drug or treatment with a large variety of different patents to extend protection. Old drugs in fact comprise a vast majority of new patents.

I've been talked at about this problem for ~hundreds of hours. It's really a depressing situation.

Doctors also have a duty to prescribe the best available drug, which is why you dont see people who cant afford modern insulin prescribed "last gen insulin."

Do you have a source for that? This doctor disagrees: https://www.statnews.com/2018/04/03/doctors-cost-prescribing...

PMID: 25785977

>What’s surprising is that the trailing edge of old insulin products did not generate a market for generic competition but rather became a set of obsolete products that were promptly removed from the U.S. market. Pork and beef insulins are not merely underutilized, they are unavailable for human use in the United States. Even when practitioners prescribe NPH and R insulin in place of insulin glargine and insulin aspart, these cheaper prescriptions are filled with newer recombinant products sold under brand names. And yet on the whole, it’s hard to say that contemporary patients who cannot afford their insulin (let alone the patent-protected glucometers and test strips required to adjust the dose) are well served by having as their only option an agent that is marginally more effective than those that could have been generically available 50 or 30 or 10 years ago, had generics manufacturers introduced cheaper versions when patents expired.

I shouldnt blame the doctors, my comment was a little facetious.

Some "low cost" versions did come out in 2019, but it feels more like the diamond industry selling both natural and lab made diamonds at different price points.

Back to my original point, Doctors seem to agree that analog insulin is preferable to older formulas. - https://www.healthline.com/diabetesmine/why-not-more-afforda...

>Since we’re talking about cheaper insulin, Novo Nordisk’s Novolin ReliOn brand deserves a mention here. Sold for just $25 a vial without a prescription at Walmart, ReliOn includes “Regular” (short-acting), NPH (longer-acting), and 70/30 (biphasic insulin), a combination of the other two. These ReliOn products are not generics or biosimilars, but rather older “human” insulins — as opposed to the newer “analog” versions being produced today. Many patients and doctors agree that these older formulations clearly don’t provide the same level of blood glucose management as newer insulins. But if you’re forced to choose between using them and doing without or rationing insulin, these older insulins are certainly preferable.

The risk is real. https://www.usatoday.com/story/news/nation/2019/08/09/man-di...

Do they sell that inhaler, or the older and cheaper version, for much less outside the country? Plane tickets are cheap these days; it might be worth it to take a foreign vacation and stock up on inhalers.

That's pretty much a US-only problem. The same drug companies are active in most parts of the world, where they somehow manage to behave. What is it about the US that seems to turn them into money grabbers?

Regulatory capture

To clarify: are you talking about equitable policies used by other countries (not the US)?

Agreed. I noted elsewhere here about Civica Rx, a nonprofit seeking to help things. (https://duckduckgo.com/?q=civica+rx&ia=web https://en.wikipedia.org/wiki/Civica_Rx ).

They are a buyers' consortium, not a manufacturer of anything. Since they do not own production capacity for generics they can merely shift the problem elsewhere through concentrated buying power, but they cannot alleviate it.

No, it looks from the wikipedia page like they have contracted with producers so they are causing new production. Also planning to add their own capacity.

Edit: adding the wkp quote: "By the end of 2019 Civica had 18 medications (28 SKUs) in production, and plans to bring over 100 medications to market in five years through various manufacturing approaches such as partnerships, developing ANDAs, and building its own manufacturing capability."

Plus the fact that it is about a concept. In vague terms, I'm thinking it is better to act (doing, producing, finding alternatives, maybe and using monopoly laws?), than to try to restrict what someone else does.

Did they bring new production capacity on-line or do they just rent space from a contract manufacturer? They don't say, but it seem it's the latter.

One problem with the US healthcare system is the lack of spare capacity. It increases profits when everything is well, but if there's a pandemic or mass casualty incident there's shortages. Economists know how to handle inelastic supply and sudden demand shocks, but the message hasn't gotten through to public health. Perhaps that's intentional.

Either way, the seemingly (and prospective) increased actual production is what impresses me, as an illustration of a private-sector solution.

There are of course insane cases of abuse but there is also tricky part where the cost of the medicine in total will be very high because the population suffering from it is small and the medicine is very complex to develop.

Even IF the healthcare company did not spend tons on money on commercials there will be those drugs that if you want to develop them they will cost a lot of money for the one paying (government, insurance company or individual) if the company wants to get back it's money and ideally make some kind of profit (even if it is very average/low).

Reply on news.ycombinator.com