
Sneaky deals are keeping cheaper generic medicines off the market - prostoalex
https://www.latimes.com/business/lazarus/la-fi-lazarus-generic-drugs-pay-for-delay-20190627-story.html#nws=mcnewsletter
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rayiner
> The Federal Trade Commission estimates that pay-for-delay deals cost
> American consumers $3.5 billion a year in the form of higher drug prices.

Pay for delay is bad, but let’s put it into perspective. This is 0.1% of
healthcare spending.

That’s the most frustrating thing about the healthcare debate in the US.
Nobody has a clear idea of where all the money is going.

Germany spends 1.56% of GDP on pharmaceuticals. The US spends 2%. If we forced
drug makers to give us discounts to German levels, we’d save $86 billion. To
get our overall healthcare expenditures down to German levels (11% of GDP), we
need to cut $1.4 trillion. Where is the rest coming from?

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tomcam
I get your point. It’s a good one. What about the fact that Americans are
essentially subsidizing world health care via private R&D? Other countries
benefit from our new drugs yet won’t pay market prices for them, and it’s $2
billion to create a new drug these days, minimum. The reason a huge majority
of pharma innovation happens here is because there is an incentive for it.
Honest question: if we further regulate the amount of money pharma companies
can make, who will innovate?

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deogeo
> Other countries benefit from our new drugs yet won’t pay market prices for
> them, and it’s $2 billion to create a new drug these days, minimum.

What makes you think drug prices in other countries aren't 'market' prices? Is
it because they're negotiated on a country-wide level by the governments? I.e.
because the buyer is a larger entity than the seller? But when the buyer is
smaller than the multinational drug company, such as an individual or a
medium-sized insurance company, then the price somehow _is_ a market price?

> What about the fact that Americans are essentially subsidizing world health
> care via private R&D?

This tired argument again. Given that pharmaceutical companies spend more on
just marketing than they do on R&D [1], isn't it more accurate to say that the
US is subsidizing drug ads? How high would drug prices have to get, and how
small the R&D budget, before you'd stop claiming the US is 'subsidizing' R&D?
Or would whoever pays the highest price always be hailed as subsidizing R&D,
to try and guilt everyone else into paying more?

> The reason a huge majority of pharma innovation happens here is because
> there is an incentive for it.

Given that drugs are sold internationally, pharma could continue their
extortionate pricing in the US no matter where the drugs are developed, so the
cost of drugs doesn't act as an incentive for where to conduct innovation.

[1]
[https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...](https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-
pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/)

~~~
rayiner
> This tired argument again. Given that pharmaceutical companies spend more on
> just marketing than they do on R&D [1], isn't it more accurate to say that
> the US is subsidizing drug ads? How high would drug prices have to get, and
> how small the R&D budget, before you'd stop claiming the US is 'subsidizing'
> R&D.

Annual drug R&D spending isn’t “small.” In 2014-2017, pharmaceutical R&D was
about the same size as total VC investment nationwide. (There is some overlap
between the two numbers.)

Additionally, the “marketing expenditure” angle is an ignorant trope. The
pharmaceutical industry is as efficient as other high tech industries in
concerting revenue to R&D. In 2017 US pharma companies spent 20% of revenues
on R&D. That’s at the top of the range compared to companies like Intel,
Facebook, Apple, and Google.
[https://www.theatlas.com/charts/N1Gs8E4v](https://www.theatlas.com/charts/N1Gs8E4v).
Few would deny that Google is a highly innovative, R&D-heavy company, but it's
at 15%.

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typenil
I don't see how this doesn't already violate price fixing laws. This isn't the
market at work, but a calculated distortion of it within the pharmaceutical
oligopoly.

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maxxxxx
It seems everything around heath care billing is sneaky in the US. It's
probably the most rotten, inefficient and corrupt sector of the whole economy.
I am not talking about the actual health care but only about billing
practices.

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idDriven
From the healthcare delivery standpoint there are so many rotten, inefficient
and corrupt practices that many days it feels like you are delivering good
care despite the system. Certainly not because of it. It's kafa-esque and
there is zero incentive for your boss' boss' boss' boss' calling the shots to
improve patient care.

Healthcare providers are also just as mystified as to where all the money
goes, not the workers doing the direct patient care.

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mikece
There's also the practice of the Big Pharma companies either buying the
generics producers or contracting with them __not __to make generics. I think
Big Pharma might be more hated than Congress at this point.

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neonate
[http://archive.is/f4TCi](http://archive.is/f4TCi)

