
The True Cost of an Expensive Medication - adamnemecek
http://www.theatlantic.com/health/archive/2015/09/an-expensive-medications-human-cost/407299/?single_page=true
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WalterBright
On the other hand, what was the suffering before Sovaldi was developed?
Undoubtedly, the high cost that could be charged for treatment was a
motivating factor for investors to invest the money to develop it. Sovaldi was
not developed in countries that have price controls on drugs. Isn't it better
to have a cure at a high price than no cure?

Be very careful when proposing price controls on new drugs. You may wind up
with no new drugs.

A better solution would be to address the drivers of high cost in new drug
development, and reduce regulations that grant monopolies on older drugs out
of patent.

~~~
themartorana
This old trope about "no new drugs" is silly. Most drug companies spend more
on marketing than R&D.

Add to that, profit margins are insane - they are the highest in almost any
business, equal to that of banks. [0] Pfizer saw a 42% profit margin in 2013.

This industry is insanely profitable, despite spending a ton on R&D, and more
on marketing. Multi-billion dollar fines are just part of doing business.

Nature abhors a vacuum, especially such a profitable one. There's no shortage
of companies willing to make that margin on billions in revenue.

Drugs are vastly overpriced, and the old line about how it's necessary to
recover costs (along with long, exclusive patent rights) is false.

[0]
[http://www.bbc.com/news/business-28212223](http://www.bbc.com/news/business-28212223)

~~~
refurb
_This old trope about "no new drugs" is silly. Most drug companies spend more
on marketing than R&D._

I'm not sure what you're getting at. The idea with marketing is to spend $X to
get $X+Y in sales, otherwise you wouldn't do any marketing.

So if drug companies stopped marketing, they'd have less money than they do
now.

And as for "the most profitable industry". Do you know how many biotechs go
under because their drug fails? How many banks does that happen to? You can't
just look at the ones that succeed and say "that's typical". It's called
survivorship bias.

And as for Pfizer's 42% profit, you're cherrypicking. Note that in your
source, most companies have a profit of 10-20%. Which is pretty decent
considering the risk involved with R&D. Pfizer had a profit of 42% because it
spun off it's animal health division in Nov 2014. It was a one-time windfall.

~~~
0x0
_> So if drug companies stopped marketing, they'd have less money than they do
now._

Do you really need much marketing to sell a life saving drug? You'd think it'd
kinda sell itself...?

~~~
brandonmenc
> Do you really need much marketing to sell a life saving drug?

Didn't we just read an article here about how doctors don't/can't keep up on
all the research?

In that environment, it makes sense to spend money to get the drug in front of
doctors (drug salespeople) and their patients (TV ads.)

~~~
ploxiln
Unless that is exactly what has overwhelmed their ability to make sense of
what's available: they ignore new drugs as a protection mechanism against
marketing-driven information which is less correlated with efficacy and more
correlated with money.

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FrankenPC
Heck, I'd be OK with a sliding scale regulation. If someone can afford the
full cost without bankrupting them, then fine. If they have no money, the the
cost is radically reduced and IDEALLY payed through public medical support
systems.

Call it the "We actually care about human life price control" or something.
They can use it as marketing ammo as well. Proving they actually care is good
for business.

~~~
7Figures2Commas
We should do the same thing for software development. If an entrepreneur can
afford the full cost of a top development shop, then fine. If he or she has no
money, the shop's hourly rate would be radically reduced by law and ideally
paid through programs designed to promote new business creation.

See how this works?

~~~
takeda
That's a terrible simplification. When a developer does not receive adequate
salary s/he can look for work at another place, that might pay better. This
makes companies try to have competitive salaries to retain their employees.
The whole thing self regulates.

When you have a disease that might cripple or kill you you bet you are willing
to bankrupt yourself to cure it. The regulations are absolutely necessary.
Currently companies are utilizing this and charge significant amount of money
for a cure. On top of that they prefer medication that doesn't treat the
sickness and instead just keeps it under control, because that way they make
more money.

It is easy to sympathize with pharmaceutical companies unless you have to get
one of those diseases.

~~~
7Figures2Commas
I had a family member who nearly died from end-stage liver disease caused by
Hepatitis C. He received a life-saving liver transplant with probably only
days left to live.

From the article:

 _There’s a drug called Sovaldi that works astonishingly well to cure people
with the liver disease Hepatitis C. The rub? It costs $1,000 per day for all
12 weeks of treatment._

12 x 7 x $1,000 = $84,000

I saw the bill for my family member's liver transplant. The total cost for the
transplant was over $500,000 and that doesn't include the pre-transplant and
post-transplant treatments and hospitalizations. At $84,000 for a cure,
Sovaldi is an absolute bargain.

Of course, not everybody has $84,000. That's why we have insurance.
Unfortunately, the payers in this article, state Medicaid programs, are in
many cases heading down a path to insolvency. That's the bigger issue.

In private insurance markets, most drug makers provide significant discounts
to incentivize payers. These discounts often amount to 50% or more. So you
can't address the issue of access to treatment without acknowledging that
insurers, not drug makers, ultimately decide which patients have access.

Gilead has a program that provides Sovaldi free of charge to patients who are
uninsured or have been denied treatment. For those who cannot obtain Sovaldi,
there are a variety of other Hepatitis C treatments available, so it is
unlikely that somebody with a need will go untreated, even if their payer
won't give them access to the treatment they prefer or which may be most
effective.

This is a much more complicated issue than the article here suggests, and it's
easier to find a scapegoat than to honestly address the complexities of this
market.

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hwstar
Force the drug companies to convert to a 'B' or benefit corporation so that
they have to consider the public good in addition to profitability.

