
Congress asks if developing slightly fewer medicines is OK if it lowers prices - wiggles_md
https://www.statnews.com/2019/10/28/democrats-new-logic-drug-prices-biomedical-innovation/
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__s
Surprised by the comments in this thread

US drug prices are not because of R&D. This title presents a false dichotomy

Drug companies have enough capital at this point that they don't need old
drugs to fund new drugs. They can charge a high price for new drugs to recoup
their development costs, & then charge closer to the cost of production once
that development has been covered

~~~
zbyte64
Also surprised by the lack of mention of reformulating existing drugs to
extend their patents. The poster child of this practice is insulin, where
Americans pay absurdly higher amounts for something where generics are
abundant.

~~~
vonmoltke
> Also surprised by the lack of mention of reformulating existing drugs to
> extend their patents.

Reformulation does not _extend_ patents, it creates a _new_ patent on the new
substance. The substance in the existing patent can be manufactured as a
generic after the existing patent expires.

The wrinkle is that the new and existing substances are not equivalent, and
thus cannot be substituted for one another. Thus, if a doctor prescribes the
new one, that is what needs to be dispensed.

~~~
eyko
Can't a patient ask a doctor to prescribe a generic, when it exists? It seems
like that would be an easy fix: a law that requires doctors to give you the
alternative name for a generic, and make the sponsored version an optional
upgrade.

I'm European and the whole concept of a doctor prescribing a "brand" sounds
alien to me.

~~~
vonmoltke
> Can't a patient ask a doctor to prescribe a generic, when it exists.

Yes, but it requires the patient (or their pharmacist) to request such.

> It seems like that would be an easy fix: a law that requires doctors to give
> you the alternative name for a generic, and make the sponsored version an
> optional upgrade.

> I'm European and the whole concept of a doctor prescribing a "brand" sounds
> alien to me.

The issue is that the two drugs are not equivalent, and is not about
prescribing a "brand". Occasionally, a doctor insists on the brand for some
reason (seems to be most common with Synthroid for some reason), but generally
the prescription is treated as a prescription for the compound, even if the
doctor uses a brand name.

The trouble with reformulation patents is that there is no generic for the
reformulated compound. It is sufficiently different from the previous that it
cannot be substituted by the pharmacist (otherwise it wouldn't have been
patentable). In that case, the "brand" is the only thing available.

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adrianmonk
Well, that depends on specifically which drugs you subtract out of the set.

Some new drugs are not that critical to have. Others might be. Given that we
don't / can't know which drugs will be developed in the future, it's kind of
impossible to answer with certainty.

~~~
bluGill
The problem is we don't really know. Drugs that are almost out will probably
still come out. However we are most likely to lose ones that are in the here
are 100 things we could try at high cost - we know from experience than 1 in
1000 of these ideas is useful. If the cost recovery is high enough you try all
100 ideas to see if they lead anywhere, and then find another list of 100...
If cost recovery isn't high enough you don't try any, and we don't really know
what we lost because we don't know which of the ideas before actually will
turn out to work.

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wiggles_md
Note that I had to trim the lengthy title: I think this issue is an
interesting and an important one to discuss, and that the discussion doesn’t
benefit from the political framing. I certainly did editorialize however and
would appreciate a better short title if one is offered.

~~~
ars
The current title answers a question, it should instead _raise_ a question.
[Currently: Developing slightly fewer medicines is OK if it means lower
prices]

Suggestion: Congress debates if developing slightly fewer medicines is OK if
it means lower prices

~~~
wiggles_md
I both appreciate the pointer and the suggestion. Thank you.

The suggestion was sadly too long by 6. I’ve gone with “Congress asks if
developing slightly fewer medicines is OK if it lowers prices”.

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zallarak
The compound effect of lost progress might become more significant over time.

~~~
Jyaif
The money saved would be used for something else, e.g. education. That effect
would also compound over time.

~~~
AnthonyMouse
That's assuming the alternative thing actually benefits from the money. You
mention education, but we've already seen that education spending has a
threshold past which spending more money no longer improves outcomes (it just
inflates prices), and we're already above that level of education spending.

And even if we weren't, it doesn't follow that _moving_ resources from one
place to the other is the right choice. When you have two things that both
produce benefits exceeding their costs, you're better off to do both of them.

~~~
Jyaif
> It doesn't follow that moving resources from one place to the other is the
> right choice. When you have two things that both produce benefits exceeding
> their costs, you're better off to do both of them.

Yes, in an imaginary world we can invest in all the good things at the same
time.

In the real world you have a limited amount of resources, so you can't do
everything at the same time without borrowing money. But guess what, borrowing
money is moving resources from one place to an other.

~~~
AnthonyMouse
The world in which you can invest in both drug research and education is not
imaginary. We in actual fact already do both of those things at the same time.

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tpmoney
That’s a pretty privileged view point. On the other hand I have a family
member whose genetic makeup makes it so that they cannot use ~90% of the
medications available for their condition. As a result every new medication in
that area is of extreme interest to them and their doctors because it might be
something they can use.

Given the choice between higher prices or not having treatment at all, I
suspect those whose medications would be culled would gladly choose higher
prices.

~~~
hyperpape
And your point of view is also privileged by that standard. For people who
can't afford the drugs for their conditions, reducing the price is "of extreme
interest to them".

I'm not saying that your position is wrong--medical innovation is really
important. I'm saying you're being reductionist. There are really hard
questions here, and accusing others of privilege does nothing to make this
discussion more productive.

~~~
tpmoney
Sure, being able to afford medications is also a privileged position. But too
often I see these sorts of dismissals of “just a few less new medications a
year” without an acknowledgement of the real human costs that will be paid.
Further I posit that the problem of “some people cannot afford some
medications” should and does have a solution other than “all people will lose
access to otherwise viable medications”

------
StaticRedux
I'm sure it's not ok to the people that need those new medicines

~~~
elil17
But the current system is not okay for people who need medications that exist
and are cheap to manufacture (eg insulin) but can’t afford rates being charged

~~~
jeffdavis
There is no patent protection on regular insulin, so it's some kind of
ordinary monopoly problem, it appears.

I suspect a better set of regulations around generics would solve the problem
with ordinary market forces. Probably there are quite a few policies that
protect the existing drug companies that don't make any sense for generics.

~~~
AnthonyMouse
IIRC the issue with insulin is that while "regular" insulin is not under
patent, there are better insulin products on the market that are, and those
are what everybody prefers.

Then, because most people do actually have insurance, the insurance pays for
the more expensive version and so that's the only one anybody makes. The
market for "regular" insulin is limited to people without insurance, which
isn't a big enough market to justify all the regulatory work needed to
manufacture it.

What's really needed there is to make it easier for generics manufacturers to
get regulatory approval.

~~~
jeffdavis
"What's really needed there is to make it easier for generics manufacturers to
get regulatory approval."

That seems like a sensible solution to the extent the quality/safety itself is
not compromised. For instance maybe there is difficulty importing from other
countries, but there should be no problem importing regular insulin from
Germany, for instance.

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cde-v
NO! This inevitably will end up as slightly fewer medicines with no reduction
in price.

~~~
elil17
Why wouldn’t it lead to a reduction in price? Removing artificial barriers to
competition lowers prices, that’s like the whole idea behind supply/demand in
economics.

~~~
AnthonyMouse
The bill is about about "negotiating prices", i.e. price controls. But if you
legislate lower prices by fiat and the result is fewer drugs, that's _less_
competition -- which can raise prices.

If there are two drugs available for a condition then not covering one because
it's too expensive is more viable. Take one of those companies out of the
market and what does that do to your leverage when you're "negotiating" with
the other one?

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ghostwriter
Healthcare and medicine is a commodity service, similar to airway
transportation and food supply, and the more abundance is there on all levels
of it, the lower the prices get across time. Artificial caps on the cost of
medicine creates unhealthy bureaucratic incentives like this one instance
within NHS in the UK [https://eu.usatoday.com/story/opinion/2019/06/15/trump-
criti...](https://eu.usatoday.com/story/opinion/2019/06/15/trump-criticize-uk-
single-payer-health-care-column/1419339001/)

~~~
zbyte64
Medicine is still a commodity even if another entity collectively bargains for
it (ie NHS). Why doesn't the parent just by the medicine directly? Surely the
NHS doesn't prevent that from happening. Oh, right, it is too expensive to
purchase for most people without collectively bargaining. But I guess even
that kind of bureaucracy isn't tolerable to an absolutist.

~~~
ghostwriter
The entity may and should collectively bargain 90% discount, as long as the
parents of those who need the unavailable medicine right now can withdraw from
contributing their taxes to NHS and use the freed funds for direct purchases
of the otherwise unavailable drug. I’m not sure it’s possible at the moment.

~~~
zbyte64
I get that sounds "fair" but when you consider the family can suffer from any
number of ailments that is rather cruel to say "your son requires special
medicine, to afford that you must withdraw from public health care and you are
on your own if you break your arm or back"

~~~
ghostwriter
That’s why I mentioned that abundance of options on all levels of the service
of “providing healthcare” is crucially important for reducing costs over time.
I can imagine different plans for different people of different healthcare
needs (young and old, employed and unemployed etc), covered by more than one
healthcare provider, in the same manner it is currently done in airway
transportation.

------
mieseratte
Well this is, in essence, the concern of the "ObamaCare Death Panel"!

Only instead of determining by a board of doctors whether you are entitled to
care, a bureaucratic measure to determine whether a company should investigate
cures to what ails you. Better for society, worse for you as an individual.

~~~
nradov
Who is "you"? A public policy change along these lines would be better for
some individuals and worse for others.

~~~
mieseratte
With an insurer, you at least have a backstop of changing insurers.

If the government makes this decision, your backstop becomes "move to a new
polity."

This is the core of the argument, that the government should not have this
power. Say what you will of the sad state of the US health situation, there
are potential solutions not involving this level of "We choose who can have
what."

I'm not one with exotic health problems, the kind that involve going to a
hospital for a week for a batter of tests and analysis, but I know people for
whom this is the case. I suppose those people are the ones this is writing
off.

