I'm not sure drug importation will work though, not because it's a bad policy per se, but I'm not sure that other countries will let the US import their low-cost medicines if US law changes in order to protect their domestic supplies.
There's Canada as an example case. We have ~10x the population of Canada, and California alone could use up all of Canada's medicines. Not sure Canada would go for it.
Think it's worth a shot though. I know there are some trial programs going into place in Colorado and Florida around allowing drug importation. Will be cool to follow and see how they play out.
Cross-border drug buying works well in the EU, where any European country can buy drugs from any other European country, so whoever has the lowest price usually wins the market.
As a private company, your incentive is to maximize profit for shareholders. Since all you have to do is undercut high drug prices a little, what will stop you from the same price gouging that all other US drug companies perform?
On the technical level, we incorporated as a public benefit corporation, so we are judged not only on how profitable we are for shareholders, but how well be maintain our social mission. That is actually in our charter documents and is a legal requirement.
On a practical level, Mark Cuban is our lead investor and his interest is very much focused on helping people and fixing system issues in healthcare. We also did some screening to ensure our other investors are socially minded and prioritize social benefit as well as profits.
My mindset is that we need to be profitable to be sustainable and grow enough to help the overall system, but we won't be extortionate.
Also he got to write his name on it
In the longer term, success in the health space could add prestige to his name, ala the Nobel prize.
> The results show that the average annual price of top-selling cancer drugs in 2006, adjusted for inflation and secular changes in drug prices, have increased by US$154 and US$235 for branded and competitive brand drugs, respectively, following the 2010 ACA; however, generic oncology drug prices showed no significant changes.
Cost of advertising is a serious problem for generic drug makers. There are a lot of drugs where there exists an identical, cheaper, generic version, but the more expensive one gets sold because neither the doctors nor the patients have any idea that it exists. Hence all the "ask your doctor for x" ads, but the problem is that advertising on that scale, especially for low-incidence conditions, is very expensive compared to the amount of money you make, an so will result in just another expensive drug.
A celebrity putting their name on a drug company and then maybe mentioning it a few times publicly in places where normal people hear about it may make people who are facing very expensive drug bills look up the site and see if they make something useful for them.
If it’s the case where there’s an older generic and a newer product still under patent, that’s a discussion with your doctor: Is the newer product worth the money, or should I stick with the older thing?
Couldn't Canadian drug companies increase supply if the demand was there? In the short term, sure, they would not be able to handle our level of demand, but unless there's some constraint I'm not aware of they could always just scale up and make more animal insulin or whatever.
The history is that Canada used to have "compulsory licensing" for patented drugs. Anyone could manufacture a patented drug in Canada and pay a ?6?% or whatever royalty to the patent owner and they just had to deal with it.
Over the years, first 4, then 10 years of exclusivity were provided to the patent owner.
Then the WTO came along, and presently, everyone has agreed to ~20y exclusivity and charge/pay the median price of OECD countries before it's a royalty-free free-for-all.
http://publications.gc.ca/Collection-R/LoPBdP/BP/prb9946-e.h...
Canadian generic drugs today aren't usually cheaper than US generics, except where patent exclusivity mismatches.
Depends on the country. For example India is the largest generic drug manufacturer and has a population of over 1 billion, and they already export their drugs to many countries.
Re-importation shouldn't be illegal, but it shouldn't be necessary - it's really kinda dumb. Other countries have solved this problem by making healthcare universal, and forming a bulk purchasing group which strong-arms providers into charging something the system can bear. The end user doesn't have to care how much that is, because most developed countries simply pay for the drugs people need in the first place.
The ideal way to obsolete this problem is to follow their lead - get Medicare for All to happen and restore Medicare's ability to negotiate the price of drugs directly with manufacturers.
Then nobody has to pay for the drugs directly in the first place.
I doubt the American people (or American industry) would ever allow such a truly free market system to transpire, but I know for a fact it can work.
Labor is cheaper in Tanzania obviously, but even if you adjusted for the more expensive labor, a free market system (vs the crony capitalist system we have now) would probably be 10-100x cheaper.
Also, even controlling for median wage, the drugs are vastly cheaper in Tanzania vs America. A median worker there might make around $5-10 in wage, so most drugs for a month supply would be only a day of work. Median hourly wage in America of $15 would correspond to drug prices between $60-120 dollars, much cheaper than most medications without insurance. In reality, it should be much cheaper, as the marginal cost can be reduced a lot through online pharmacies (remember that $5-10 cost in Tanzania not only factors in product cost and labor cost, but a staggeringly inefficient distribution network).
In short, I don't believe there's any theoretical reason why generic drugs couldn't be dirt cheap and affordable by all in a free market system. After all, capitalism has done a stellar job at reducing the cost of consumer goods over time, and medication should be no different.
If everyone could buy lightly regulated pills from alibaba, it would definitely be a win from a utility standpoint. But of course such a thing would never fly, as maximizing total utility doesn't get people elected. Everyone might win except one guy who died from bad pills and the whole gig would be up, even though the total utility function of every citizen in aggregate was being correctly maximized.
The strong needs of the few always trumps the weak needs of the many. If everyone paid one $1 dollar per day in order to prevent one death, I'm sure some politician would call it a massive win, even though that's an aggregate loss of 100bn dollars annually and the money saved generated more utility than the utility lost by that one guy dying.
Unfortunately, human beings are unable to make correct statistical/utilitarian decisions and support so many policies that are a net negative utility wise.
Aligning prices with purchasing power allows pharmaceutical companies to get _something_ out of the markets they'd get nothing out of. And with large numbers, that something might turn out to be a bit more.
Sure production cost is usually low and that technically allows to sell to poor countries essentially at cost plus a tiny margin.
But that's only half the story. Drugs need to be developed. From idea to market only a tiny fraction of medication makes it. You need studies ovet studies, and most of the time a drug does not make it through that process because it's ineffective or dangerous or both. The few that make it need to compensate for the cost of this process, not just their own but all of those that didn't make it.
So, in "rich" countries, a pill that costs $0.10 to produce can easily cost $1000. That's a necessity to finance the whole process of getting there.
After that is all done and established, sure, you may get that same pill for $1 since it's either that or no sale. But that does not mean the whole system would work for $1 per pill everywhere in the world. Then the pill would not exist in the first place.
Can't or won't?
In effect, it's about 're-importation' of drugs, not so much regular import.
The Government of Ontario negotiates drug prices for it's citizens, as to other entities elsewhere.
By selling to XYZ regime at ABC price, drug companies create a situation wherein 'the resulting price will be the lowest price we sell to any regime' - because of course everyone will want to import from there.
In many cases, the price sold to XYA regime isn't quite a very good measure of net market prices.
Ergo, it's a weird law, but it's rational on a level.
To start - there could be a slew of laws requiring transparency on pricing for everything in the medical domain. That would be a good start.
More challenging - Americans could actually get together and start negotiating hard on prices. This may require some legislation.
So the 're-importation' issue is an artifact of an odd system, not in and of itself the issue.
OHIP negotiates the prices of all drugs on behalf of Ontarians by being the sole purchaser, and then drugs are sold at that rate (cost plus, I believe) in pharmacies. Further, the cost of all services is listed on the OHIP website. [1] Not that anyone needs to worry about that as they are fully covered for everyone - not the drugs (yet, fingers crossed), the procedures.
[1] http://www.health.gov.on.ca/en/pro/programs/ohip/sob/physser...
Almost all expensive drugs end up being on a special permission list, where you must to beg the government for access.
Not any different than dealing with an insurance company, really. At least you can sue an insurer.
However of course consider delays in getting a drug to market aren’t always provincial; Health Canada has their own timelines and schedules for approvals, sometimes it’s faster than in America and sometimes it’s slower.
The difference is frequently you’re forced to sue insurers as they have a profit motive to screw you. The province only cares about getting you healthy within their means.
Ambien is not available in Canada for example.
One of the things about hard negotiations is that sometimes the other side will call the bluff and walk away.
And of course in rationed systems you don't get things that 'the masters' decide you don't need, like Ambien.
In the case of Ambien, I don't care, I question the real medical value of it, but you can see how that could get out of hand with other things.
It would better to solve the 're-import' problem with better regulation - and of course, initiatives such as the the MC Company here.
I think the Cleveland Clinic and some others like it are technically non-profits, there are models that work.
Lot of drugs are manufactured and exported from India.
I've heard the argument that Americans effectively subsidize drugs for everybody else. While it may be true, it still seems like a terrible situation to me, even as a non-american. There's got to be a fairer way to work this out.