
Big Pharma is using faux generics to keep drug prices high, critics say - airstrike
https://arstechnica.com/science/2019/08/big-pharma-is-using-faux-generics-to-keep-drug-prices-high-critics-say/
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paulintrognon
> ...EpiPen’s original cost of around $50 per injector in 2007. That year,
> Mylan bought the rights to EpiPen and then raised the price more than 400%
> in the years that followed. The authorized generic is essentially triple the
> price of what two injectors used to cost.

This is outrageous. Nothing new, I know, but every time I read about this I'm
outraged. I trully think there should be a law on maximum margins at least for
life saving drugs, or some kind of regulations preventing this phenomenon.

~~~
haroldp
Or maybe we should REMOVE the laws that give companies a monopoly on producing
drugs?

~~~
manjana
But it's a tricky thing because we don't wanna remove the incentive to invent
new drugs.

~~~
lawlessone
>But it's a tricky thing because we don't wanna remove the incentive to invent
new drugs.

What incentive is there to produce new drugs when they are making plenty of
money gouging people on price with the old drugs?

~~~
ImprovedSilence
Right?

Along the same lines, why invent a cure, when you could instead invent a
lifelong treatment?

~~~
replicatorblog
This sentiment drifts dangerously close to a conspiracy theory.

The existence of the vaccine industry demonstrates there is a market for a
cure. As do immunotherapies. Where cures are possible, they are
commercialized.

~~~
throwaway5752
No, it flat out is a conspiracy theory and it's false. It's embarrassing that
it's here and that you're downvoted.

~~~
tripzilch
Honestly can you explain to me, as an outsider, why _this_ particular theory
is a conspiracy and "embarrassing" to even consider, compared to all the other
ridiculous shit going around healthcare in the US?

It wouldn't surprise me one tiny bit, given the US' track record with letting
corporations do whatever the hell they want to, to people.

I'm not saying it's true, but you can't simply dismiss a theory about the
corporate world screwing over the American people with a simple "no way that's
too ridiculous to ever happen", any more. Especially if it's directly in line
with what the free market would demand, as well as it not happening being
contingent on a corporation being "nice" from the good of its "heart".

Please tell me instead that it's false because there is regulation in place,
or there is some strong market force making them take the other route.

Because your implied argument would be "that is inhumane and corporations
wouldn't do that"\--now THAT is embarrassing.

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sharemywin
I just kind put together why this isn't free market.

There's no incentive for anyone to push back on price. There's plenty of money
to be made doctors make the same either way. People don't notice because they
just want the best healthcare available regardless of cost. Pharmacy make more
money with gouging. Drug companies do. Insurance companies make more with
higher prices. Companies just pay what they have to show it as a benefit.

Who in the entire system looks out for costs?

~~~
Akinato
One thing that's always bothered me is that companies can make a ton of
medications, such as those that treat depression and anxiety, that are
incredibly difficult to get off of once you start with the medication. None of
these companies are required to make any lower doses to help people "taper
off" what's supposed to be a temporary medication. Most of the time your only
option is to quit "cold turkey" which is straight up awful with brain zaps,
nausea, trouble focusing, and often a complete spike in your previous symptoms
from 0 to 100. Oftentimes quitting this way can make you feel like you _need_
the drug to survive.

I get it is not profitable to make doses that are only used temporarily when
people quit your product, but this is definitely harmful to the consumer.

I was stuck with one and I tried everything to find a lower dose. I had tried
quitting cold turkey 3 separate times and I ended up a sobbing mess each time.
Given that was just not working, I tried different pharmacies, I talked to
them about liquid suspension ($200+ not covered) and more. I was fed up.
Eventually, against the advice of my doctors, I just started cutting my pills
into 1/4s and taking a 1/4 less every 2-4 weeks until I was off it. Doing it
this way was utterly painless and I was able to continue working throughout.
After that I didn't need it anymore. But this is a terrible practice, and
won't work with all drugs -- especially delayed ones.

This is why I think so many people are on these types of drugs. They are
amazing short term and can help people work through some really difficult
issues to get to a better place mentally -- but not everyone needs them long
term. However when faced with the withdrawal symptoms, many people start to
think they can't survive without it.

Im not claiming some conspiracy, but the current strategy isn't the best for
patients, that's for sure.

~~~
ekianjo
> companies are required to make any lower doses to help people "taper off"

pharmacists are trained, allowed and encouraged to prepare different doses of
drugs when needed for the specific needs of their individual patients. Not
sure why you expect pharma companies to take on their role here.

~~~
Akinato
Evidentially these often aren't covered under insurance plans. Maybe the med I
was on was just particularly difficult, but it was going to cost me quite a
bit of money to do the liquid suspension.

I don't expect pharma companies to take any role, as I understand their
position. I was hoping that I had made that clear. I simply believe it as a
current short fall of the system.

I don't attribute any blame, it's just something that could possibly be
improved. Honestly, the change would likely have to be more on an insurance /
governmental level. It shouldn't be an ordeal to get a lower dose -- it should
be just as easy and cost-effective as the original medication.

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sehugg
_critics say_

Uh, so does the DOJ: [https://www.justice.gov/usao-ma/pr/mylan-agrees-
pay-465-mill...](https://www.justice.gov/usao-ma/pr/mylan-agrees-
pay-465-million-resolve-false-claims-act-liability)

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radicalbyte
Something about this article doesn't add up. According to the article:

    
    
      1. Brands charge a premium of 10x-20x compared to generics.
      2. Brands are offering non-brand versions at about 50% of branded price.
      3. Brands pay 50% kickbacks to middle men (so cut =  revenue neutral).
      4. Offering the cheaper version kills real generic competition.
    

How can 4 be true when brands haven't done anything to their net margin and
the generics are still a factor cheaper than the non-branded "brand" version?

It just sounds like a bit of trickery to shut the politicians up more than
something designed to hurt their competitors.

~~~
inlined
I think the point is that they use an in-house generic, priced at their normal
revenue, to get a 180d monopoly and establish a second brand. This is all on
top of their existing monopoly from the original patent.

~~~
Sacho
That's quite scummy, but presumably the examples in the article have already
lost their competitive edge? The EpiPen authorized generic was launched
roughly 3 years ago.

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zaroth
So the manufacturer is getting paid the same amount, these “authorized
generics” are just screwing over the PBMs?

Or is the “negotiated” price of the brand name basically equal to the list
price of the first-party generic?

I am missing some piece to arrive at “this is not taking money out of the
system”.

I can see how the pharma company perhaps could make out the same in the end...
but is the consumer actually paying less?

One very interesting thing is that my insurance company has _not_ tried to
switch my kids’ Humalog for the equivalent sold as “Lispro” which was very
curious to me, implying it doesn’t save _them_ any money. I’m long past the
out-of-pocket maximum anyway, so I pay $0 at this point in any case.

~~~
s1artibartfast
The authorized generics are just screwing over the PBMs who are state
mandated, do nothing, middle men with profits equal to the manufacturers.

Regarding you anecdote. One potential reason is that the ACA limits the profit
margin of insurance to 20% percent of medical spending. This incentivises them
to maximize healthcare costs. Switching to Lispro would hurt their bottom line
instead of increase it.

[https://www.healthinsurance.org/obamacare/billions-in-aca-
re...](https://www.healthinsurance.org/obamacare/billions-in-aca-rebates-
show-80-20-rules-impact/)

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hourislate
I wonder if the Government could slowly phase in the import of certain drugs
from a country like Canada like Insulin, etc. This would allow a new industry
to sprout up in Canada without harming their existing pharmaceutical
distribution and supply.

Eventually when everyone can order their medication online with next day
shipping the Pharmaceutical Mafia in the USA will need to compete. Otherwise,
I don't believe the Government regardless of party will change things since
there are billions involved in lobbying.

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stenlix
Highly recommend the book, "An American Sickness," for reading about tactics
like the one described in the article that Big Pharma and other players (e.g.
insurers) in the healthcare ecosystem use to extract money out of said
ecosystem.

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a_imho
Any reason to buy branded when generics are available? So far my takeaway was
the difference goes to marketing budgets resulting in more prime time ads.

~~~
cygaril
Branded medicines are more effective and result in fewer reported side
effects, despite being pharmacologically identical.

Many citations available, eg
[https://www.ncbi.nlm.nih.gov/m/pubmed/23115341/?i=2&from=/26...](https://www.ncbi.nlm.nih.gov/m/pubmed/23115341/?i=2&from=/26462056/related)

~~~
a_imho
_All tablets were placebos._

Isn't this basically measuring placebo effect?

