
Why Is Medicine So Expensive? - objections
https://www.nybooks.com/articles/2019/02/21/why-is-medicine-so-expensive/
======
shermozle
I got this one: because you live in the USA. Everywhere else, not a problem.
Sure it's not cheap but it's not batshit crazy like you have allowed it to
become.

------
awakeasleep
I'm reading a whole lotta mumbo jumbo when the answer is very simple:

Government Granted Monopolies (patents)

Don't let anyone make it too much more complicated than that, or trick you
into thinking you can't understand it.

~~~
mercer
Glad you cleared that up for us!

------
mistrial9
if you ever see the toxicology reports, and the testing that goes into U.S.
prescription medicines drug-discovery, you might be surprised for a moment.
There are many parts to this game. That does not negate the greed part (who
was the snotty Frat guy again?) .. that part is real too.. its just not
simple.

Someone once said that modern pharma is akin to modern banking, in that there
are only a small number of groups that can pass all the hurdles, regulatory
requirements, necessary conditions, etc to start.. then when they do, they go
for the financial jugular.. Oligopoly is a word for this?

The pendulum has swung, from the bad medicines and shortages of just three or
four generations ago, to the new new of high tech, plentiful, and goosed for
money to the maximum...

~~~
gotocake
Unless this magically doesn’t apply to every other developed nation, how do
you explain why it’s only extortionate pricing we find _in the US_
specifically? Even with creative and generous accounting pharmaceutical giants
make a literal and figurative killing, even accepting high R&D costs. What’s
galling is that in plenty of cases the R&D budget is less than the marketing
budget.

Still I’m sure there’s a solid scientific or medical reason why a year’s
supply of something in Canada or Europe costs a fraction of a month’s supply
in the States. I’m voting for “greed” and “systemic forces which allow it.” It
sure as shit isn’t R&D...

~~~
aaavl2821
These days pharma does r&d with the balance sheet through M&A and partnering
deals that don't show up in the r&d line items

Drug prices are lower ex us bc marginal price is still greater than marginal
cost. However if prices weren't high in US, EU and Japan than everywhere else,
the drugs wouldn't be developed in the first place

------
aaavl2821
Most drugs are expensive because it costs a lot to develop them and it's
getting more expensive. It costs a lot to develop them because it's hard to
predict what drugs will work until you test them in humans. It can cost over
$100-200M just to do human proof of concept studies, and almost 70% of drugs
fail at this stage

Most r&d is done by pharma companies, not academia. $200B spent by Pharma in
r&d each year, probably half of that is early stage. NIH spends $30B or so,
and most of that is basic research that will never lead to a new drug. Without
patents there would be zero new drugs developed

r&d productivity is approaching 0% by some estimates (deloitte, McKinsey and a
Novartis analysis). Pharma cannot generate enough new drugs to sustain growth.
So they increase prices. Over 60% of revenue growth of major drugs came from
price hikes the last few years (per 2018 year in rev presentation by atlas
venture)

This is bad. There are many instances of egregious price hikes for drugs that
are quite old. But payers have been fighting this quite effectively of late
and have restricted pricing growth to the rate of inflation the last couple
years

There are 3 PBMs that control most of the market. They extract rebates and
don't pass them along to consumers. Copays for drugs are often more
restrictive than for medical procedures. There's an argument that access, i.e.
High copays, is a bigger challenge than price in some cases (but not all)

There are also just greedy people like Martin shkrei and epipen / Mylan. But
they are outliers exploiting a few FDA loopholes

Over 60% of drugs today are developed by small companies (as opposed to big
pharma). These companies are an order of magnitude more efficient than Pharma
at r&d. The medicines they develop will be expensive but in many cases are
designed to be cost effective at ~$100k / QALY.

There is a certain point where it will no longer be cost effective to develop
new drugs. We are probably approaching that point barring either technological
breakthroughs or a reduction in cost of developing drugs (i.e. Looser FDA)

Drugs are expensive. They are also only 10% of national health expenditure and
like 80% of prescriptions are generic. They are a pretty great tool to fight
disease

It's a really complex issue

------
Bucephalus355
Oh come on.

Because people want to make money.

I understand the impulse, I like money too. But these drug company executives
have got to give ground, just like Amazon had to today.

Also fun fact, Senator Joe Manchin from West Virginia has a daughter who is
CEO of the company that makes the Epipen. Her father is senator from one of
the poorest states and for her to do what she did with the epipen pricing is
so unconscionable I wonder if polite society will be willing to eat in the
same restaurant with her in the years to come. Morals and standards are
changing.

