
Drugmakers hiked prices 1k% in price-fixing scheme, states allege - nerdponx
https://arstechnica.com/science/2019/05/drug-makers-hiked-prices-1000-in-massive-price-fixing-scheme-states-allege/
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throwaway55554
> "We have hard evidence that shows the generic drug industry perpetrated a
> multi-billion dollar fraud on the American people,"...

So, force them to reset prices. Don't slap them on the wrists with easily paid
fines. Make them reset prices.

~~~
otikik
And put some people behind bars as well.

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pnutjam
There is a serious issue with price fixing in pharma. Whether it's generics
colluding, fake patent extensions, or name brand producers paying off generic;
it needs to stop.

The current practice is to mark drugs up sky high and rebate the prices. Maybe
someone can educate me, but it looks very similar to money laundering IMHO.

~~~
mtgx
It certainly helps that the U.S. government _can 't negotiate_ Medicare
prices, too.

~~~
mcv
If there ever was a clear case for a law that should be revoked, it's that
one. The whole point is that you can negotiate prices and make medical care
cheaper for everyone. Banning that is the clearest evidence that the system is
designed to increase corporate profits, not heal people.

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nerdponx
Submission statement of sorts: the NYT article for this was submitted twice in
the last two days but got no attention; the pharmaceutical industry seems to
be a topic of interest here (including some non-mainstream views on characters
like Martin Shkreli), so I'm interested to see HN's take on this.

~~~
refurb
It’s important to note that this case is for generic drugs, not brand name
drugs. The expensive drugs that make the news are generally the branded kind.
Generic drugs are usually very cheap due to the level of competition.

Interestingly, the US has some of the cheapest generic drug prices in the
world due to the level of competition. I had read that for some generic
companies, they make almost 100% of their profit by wining patent cases. Once
competition ramps up, their margin is razor thin.

So based on that, I guess it’s not that surprising companies would collide in
order to improve margins.

~~~
programmertote
Can you please share where you read that "the US has some of the cheapest
generic drug prices"?

My mom, who lives in a southeast asian country, came to visit me in the US
last month and I asked her to buy generic antibiotics; ear drops; artificial
tear drops; generic antihistamines; and they all are much cheaper than what I
would have paid here (and are equally effective in a way that I've been
weathering fine in this allergy season with these drugs). My significant
other, who is from the same country as I, is a medical resident in the US and
she still orders meds from her parents.

~~~
Bartweiss
This is a complicated one: US generics are vastly more expensive than
international generics, but at least part of that is because US manufacturers
sell those drugs abroad at the cost of production, making up their remaining
costs in the US. People in the industry have described it to me as a tactic of
"we help people in need, please don't regulate us".

This isn't the whole story; east Asian manufacturers also produce cheaper
products, for a bunch of reasons from lower costs to lower regulation to lower
profits. And it's notably not the case for non-essential, non-basic medicines
(e.g. most psychiatric meds), expensive new generics not used abroad, and
certain other high-demand generics like insulin. Those are either expensive
_everywhere_ , or more expensive in the US than other wealthy countries and
largely unused in poorer countries. (How all this relates to your story
depends a lot on whether we're talking about Bangladesh or Taiwan.)

But as far as generic antibiotics or antihistamines, it's going to be hard to
separate "US manufacturers overcharge" from "US manufacturers sell cheap
abroad".

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otikik
> US manufacturers sell those drugs abroad at the cost of production

Not everyone agrees with that statement.

First of all, purchasing negotiations are all secret. US manufactures could
very well be saying one thing, and doing another.

Donald Trump said something along those lines some time ago, calling EU
"Freeloaders". There is a Wall Street Journal article echoing his comments.

Here's an answer from EU's Health Commissioner Vytenis Andriukaitis:

[https://sciencebusiness.net/news/drug-prices-row-eu-
health-c...](https://sciencebusiness.net/news/drug-prices-row-eu-health-chief-
hits-back-trump-view-europe-free-loading-us-innovation)

tl;dr: according to him, Trump was just lying.

~~~
Bartweiss
I should have been clearer about "abroad"; I didn't mean Europe. Trump is
referencing the claim that Americans pay for drug development and Europe gets
cheap products from it, which is dubious at best. And I don't think US-
developed medicines are being sold at-cost there, even if they are cheaper.

What I'm talking about is medicines that are donated, sold with differential
pricing, or assigned 'voluntary licenses' to increase medical access in
underdeveloped countries. Voluntary license medicines are required to be
produced with substantially different appearances from their developed-nation
analogues, specifically so that they won't be exported back to undercut those
products.

All of those programs are fundamentally good things which save lives, but they
lead to some pretty strange outcomes and in turn strange reporting. It can be
vastly cheaper to obtain a medicine in an underdeveloped country with supply
shortages than in the first world, and that sometimes also prompts articles
saying that such-and-such a medicine "only costs 10 cents in other countries!"
As far as I know, this is mostly an issue in the US; most other high-
differential-price countries have socialized healthcare or other functional
solutions like Singapore's, but the US has a lot of extremely poor people who
end up paying much higher prices than equally impoverished people abroad.

[https://apps.who.int/medicinedocs/documents/s17815en/s17815e...](https://apps.who.int/medicinedocs/documents/s17815en/s17815en.pdf)

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pcurve
They should levy punitive measures in the hundreds of billions of dollars and
go back to old pricing.

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tolstoshev
Fuck em - just buy overseas knock offs. If they're going to abuse the system I
have no qualms about abusing it as well. China is happy to make generic knock-
offs and sell them at a fair market price.

~~~
deogeo
That a person buying medicine for personal use from abroad could be considered
'abuse', just goes to show how sickeningly skewed in favor of corporations the
system is.

There was recently a story on HN of a journalist's home raided to identify his
source. Perhaps that is the kind of system abuse that is called for - sending
SWAT teams to the homes of each of the CEOs, board-members, and major
shareholders, and ransacking them for any signs of wrongdoing, while holding
the accused in handcuffs.

It happens every day to regular people for non-violent crimes in the US. Why
should the rich have a different law-enforcement system? Yet this call for
_equal treatment_ sounds almost extremist...

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fallingfrog
The whole industry needs to be nationalized, full stop, and the current people
in charge need to all be in jail.

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Rooster61
Yes, put this in the hands of the same bureaucrats that allow this sort of
thing to happen without penalty in the first place. That sounds like a
fantastic idea.

~~~
thatfrenchguy
It’s not like it doesn’t work in other countries (see France).

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momentmaker
So they're taking a playbook page out of pharma bro Shkreli.

