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Big Pharma is using faux generics to keep drug prices high, critics say (arstechnica.com)
260 points by airstrike 12 months ago | hide | past | favorite | 134 comments

> ...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.

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

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

>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?

Case in point: PrEP in the United States. Gilead has a patent on Truvada, which currently is the only drug on the market that can be prescribed for PrEP.

They also have a patent on Descovy, but Descovy is not on the market for PrEP.

Right now, a month's supply of Truvada costs $1800. Six months ago, it cost $1400.

Truvada has a considerable amount of damaging side-effects that prevent many people from taking the medication, and cause harm to those who do take it. Truvada is hard on the kidneys, so much so that patients have their kidney screened every 3 months while taking the drug. Truvada is also hard on people's bones. Brittleness and fractures can happen. The medication can and has damaged people's bodies.

Descovy isn't without side-effects, but the drug doesn't harm the kidneys and bones as much as Truvada.

However, the patent for Truvada doesn't expire until 2020. Gilead has been dragging its feet for years when it comes to introducing Descovy for PrEP. A lawsuit alleges that Gilead is purposely timing their introduction of Descovy for PrEP to line up with Truvada's patent expiration[1].

[1] https://www.marketwatch.com/press-release/mass-tort-alleges-...


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

A cure will:

- Completely destroy competitor's lifelong treatments

- Can be sold at a higher price

- Will help you make best use of your 20 year patent

- If particularly effective, will get you priority on drug testing, grants,... and good publicity.

Hey look over there, there's multiple recent drugs that cure Hep C!

Why would drug companies develop those cures? Because they can market them at quite high prices and still save insurers money (and it is an improvement over the long term treatments that exist, and so on).

> why invent a cure, when you could instead invent a lifelong treatment?

Here’s two reasons:

1. Because consumers will likely prefer a cure to a lifelong treatment

2. Because your lifelong treatment is going to be out of patent before you can collect on a lifetime of purchases.

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.

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

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.

So? Corporations, governments and other people conspire to rip off customers all the time.

Off the top of my head: Planned obsolescence is a thing. Whole companies of people in India calling your house trying to trick you into buying computer-virus protection is a thing. Entire nations conspiring to steal industry secrets from other countries is a thing. Operation Mockingbird was/is a thing. General corruption is a thing and people working together when they have common goals is a thing.

So what's your point in saying that something sounds like a "conspiracy theory" when there are clearly many, many people conspiring to do wrong all the time?

And the existence of the vaccine industry does not prove that cures are always commercialized when possible.

> And the existence of the vaccine industry does not prove that cures are always commercialized when possible.

For once, the health industry works on planning its own obsolescence (as it should, generally), and a major conspiracy theory pops up countering the trend...

Another domain you didn't mention: imagine the crisis in the food and distribution industry if everyone started having a healthy diet overnight... While those sectors may not have started the obesity epidemics deliberately, they now rely on its expansion for growth.

Selling a vaccine for a disease to virtually every person alive can make more money than selling drugs to treat a disease to the few people that actually get that disease.

No it can't. There is crap money in vaccines and they are hard to make. You can literally just open up Glaxo, Sanofi, et al annual reports and confirm this.

Pfizer’s Best-Selling Drug Is Actually a Vaccine


Software developers make $3M per year: https://www.infoworld.com/article/3304439/man-or-myth-the-3-...

To not be glib: first, Prevnar is an outlier (https://www.fiercepharma.com/special-report/5-prevnar-13) and lack of profitability in basic vaccines is a public health problem in terms of investment in R&D and producer concentration https://magazine.jhsph.edu/2002/fall/vaccines.html (dated link but still accurate). They aren't like normal pharma in terms of their margins and R&D profile. You develops something for macular degeneration and it's a one off that can be depreciated. Influenza and some others require international monitoring, forecasting, sample collection and new work every season. It's closer to biologics or genetic therapies in terms of cost of revenue, but priced nowhere near that because of the economies of scale and, frankly, social responsibility of the producers.

It's definitely a different market than drugs with it's own set of challenges, but I'd say the lack of profitability has more to do with the disease state the vaccine is for versus the fact it's a vaccine.

And the global vaccine market is work $32B right now, so there is obviously a lot of profit being made.[1]


Look, I get your point on disease state and I don't think companies are doing it for charity. But I don't think it's helpful to drop revenue figures absent margins. And it would be interest to see comparative global profits broken down along lines like Prevnar/Gardasil vs dtap/mmr. Nothing against the former, but when I consider deaths from preventable diseases like the latter it's kind of staggering the value we get for the money. $32B is the market cap of twitter.

$32B is the market cap of twitter.

You're mixing market cap with annual sales. Twitter's revenue was $2.61B last year.

I'm not conflating them, I'm using it to put it in perspective. It's common rhetorically and I assume the HN audience is smart enough to understand that.

>>The existence of the vaccine industry demonstrates there is a market for a cure

You are confused about terminology. Vaccines don’t cure. They are preventative.

patents only last X years, so the incentive is to take the revenue from drug A and use it develop drug B. otherwise eventually your revenue stream will dry up and you'll go out of business.

That's the theory, but what happens is the companies invent small variations like length of time release and then convince doctors to prescribe the new variations.

that happens sometimes, but I don't think it's true for most generics, historically.

Maybe the rest of the world can spend more on new drug research while america enjoys low prices on existing ones that hordes of people need right now?

the incentive is the ability to gouge even more people, and make even MORE money.

Better way: Have the federal government bare the cost of certification and human testing. Extend this to other products too like wireless devices in electronics to be consistent. Instead of outsourcing to external labs or running own experiments that cost tremendous amount of money, the common trial-and-error type drugs (i.e. not a wildly advanced/theoretical treatment, those can be done the old fashioned way) testing should be fully State funded. This makes it easy for generics/functionally similar drugs to enter the market. New pharma startups would only have to bare R and D manpower and material costs (which according to YC at least, is plunging), the most expensive human testing is fully done by third-party i.e. government. It democratises drug development. There is a serious problem with the pharmaceutical and healthcare industry on the supply side. Shortage of drugs, difficulty of building and approving new hospitals, shortage of residencies and medical school intake restrictions. These all can be dealt with in one sweep if the FDA changes its regulatory process and restructures the healthcare industry. Almost every bio grad I know is going into software and CS. We have people who have spent years studying life sciences only to give up all their knowledge and choosing to do web dev/data science because they see no future in their own industry. It's basically med school (or worse, nursing), pharmaceutical or academia. All with tremendous amount of regulatory capture or extreme shortages. A proteomics PhD's highest calling shouldn't be too fiddle with Webpack configs so that React can interop with Vue. Just as the Soviet apparatchiks are responsible for mass famine due to incompetent central economic planning among other things(despite their economists inventing Linear Programming), modern policy makers need answer as to why a premed student would choose to work in DevOps instead of a wet lab. People complain about cancer drugs not hitting the market or breakthrough research that never seem to be commercialised. It's not the poorly paid scientists you ought to hold responsible, it's the people who set the rules in the first place. Sure YC just released a post on how Biotech investment is going to magically be the next software industry. But biotech has been hyped for years and there has been no real progress on the regulatory side. Only under the current US Presidential administration did the Right to Try become legalised. Unlike aerospace(a similarly bureaucratic domain) where the worst outcome of a long time to market for a plane is a less comfortable/fuel efficient plane, the opportunity cost in medicine and pharmacy is paid in human lives.

"These all can be dealt with in one sweep if FDA changes its regulatory process."

That is not true. For one, the FDA has little influence on the degree of difficulty in building and approving new hospitals. You'll note too that one of the problems is that existing medical facilities are disappearing from poorer and rural areas.

For another, the "shortage of residencies and medical school intake restrictions" is due to the Balanced Budget Act of 1997, which "capped the number of residency slots the federal government would fund ... The shortfall-what is not covered by the Federal government-is paid for by the hospitals where residents train. While it is possible to increase the number of residents they train, to do so, hospitals must fund the entire cost of those training positions." - https://thehill.com/blogs/congress-blog/healthcare/266610-sh... . The FDA has nothing to do with that.

You are correct. The exact detail of my comment is inaccurate, but the point still stands that it is up to the federal government. The buck has to stop somewhere. Continuously blaming the insurance industry for high costs is popular but there are a lot of other factors too which the media conveniently seem to neglect to mention. It helps no one if brilliant minds would rather go work on a "data analytics" healthcare startup (think fancy wearables) using "machine learning" that is purely dry lab (the bio academia preferred term for data science) without a single bit of wet lab physiology research that contributes to drug cures because commercialisation is too difficult, takes too long, too regulated.

"which the media conveniently seem to neglect to mention"

What? No. These are well-known structural problems that are mentioned often. I mentioned one related to funding residency programs.

Another which has come up is the lack of public pricing information. Eg, "how much does it cost to give birth at your hospital if there are no complications?" - https://www.vox.com/2016/5/5/11591592/birth-cost-hospital-bi... . (I believe this information is now required to be public.)

A third is how Medicare is prohibited from negotiating for better drug prices.

The exact details of your comments are important because if you don't know the source of the problems - which in part are due to the same federal government that you pin your hopes on - then you are at a high risk of being manipulated by the same mistaken views that have perpetuated this broken system.

Take your final statement, "takes too long, too regulated".

That is a common talking point pushed by those who want to sell "drugs" that haven't been proven to actually work, and by those who are philosophically opposed to government regulations.

Quite simply, the US isn't the only country developing new drugs. Other countries have their own, different regulations, and if it were a simple matter of the US being "over regulated" then we see companies elsewhere doing significantly better.

Or, look at all the people who, desperate for treatment, go to another country with weaker regulations to seek an experimental treatment which not only doesn't work, but drains them of money, and sometimes makes things worse.

The US is the most powerful nation in the world. At the end of the day, broken or not, it is still the one nation that sets the rules of the game. When its protocols change, others follow on its wake. There has yet to be another that have as much risk-appetite and the population to support a large domestic market for bootstrapping. Germany, Japan, China and pretty much any other country with the same or more population that are equally developed are hardly known for being trailblazers of R and D in the medical field. Sure they may have plenty of manufacturers and produce tons of research but they still implicitly follow American regulations. Legal and political arguments aside, the number of Nobel Laureates in Medicine are still overwhelmingly American; there has only been 1 Chinese winner in the field in recent years despite their supposed superpower status. It is popular and convenient to always blame companies and revolving doors. Just as you won't build a tech headquarters in rural Midwest, you are not going to easily find "advanced treatments" in other countries that are hardly as innovative or has as much money sloshing around. I know big federal governments interfering is an unpopular opinion here on HN but something has failed when funding is incentivized to build web app gimmicks rather than into critical life science research.

There is nothing wrong with the fact that the government keeps drugs that are not proven to work out of people hands, but somebody to bear the cost of doing the tests, if not them, then who? Life sciences have an incredibly high failure rate. Imagine the number of times your code fails to compile properly when you push to CI. Imagine the number of tries it takes for you to get it build successfully and deployed. A single cycle or iteration in computing is measured from anywhere nanoseconds to hours. Machine learning perhaps takes slightly longer. Take your number of tries for code compilation and assume that it takes the same number of tries to get a drug approved. In life sciences a single cycle or iteration is a matter of months and years or in the worst case, decades. Lyme disease continues to plague us thanks to the fact that a readily available vaccine was shut down for political reasons. We have more than enough life science grads to easily triple, quadruple or even increase the number of researchers in the field by an entire magnitude. There is absolutely no shortage of biology majors. You can hairsplit and yak shave the things that I attribute to being the root cause but massive "production level" double blind-type trials aren't the sort of thing that your average researcher can exactly afford. It's easy to be dismissive when your entire day job involves sitting on an Aeron chair in front of a massive monitor and value is generated when you push new code to the cloud. Your git push won't magically bring a molecule into production if the powers that be takes their own sweet time with accreditation and certification and expects you to pay for it (and no in pharmacy, there are no magical AWS grants or credit bonus to help lower the cost your double blind human trials when you send your buddy a referral link)

You mention now "advanced treatments" while earlier you mentioned drug cures. I am sticking with drug cures, and not the broader topic, which I know less about.

The EU has its own rules which are different than the US ones.

Some of the European pharma companies which develop drug cures are Merck, Boehringer-Ingelheim, Bayer, Roche, Novartis, Sanofi, and GlaxoSmithKline. These are as advanced as their US counterparts.

Because of the ease of moving money between countries, that "money sloshing around" also funds research efforts in Europe, and India, and Japan, and elsewhere. If they could be proven to be successful there, under different rules, then there is easily the funding to make it also work in the US.

And, we know that happens. One of the more unethical attempts was Theil's funding of a herpes vaccine https://www.vox.com/science-and-health/2017/1/31/14364090/pe... and reference in several HN posts including https://news.ycombinator.com/item?id=15115263 .

While on a completely different spectrum, Cuba has several vaccines on the international market - despite US power.

I only semi-sarcastically point out that our government doesn’t have the best track record in how it conducts R&D either:


Now find an example less than 50 years old.

It took 40 years for anyone to find out about that one. I'll tell you about the ones starting today 40 years from now.

This is a complicated area but given:

The relative spend on R & D vs Marketing

The fact that the taxpayers already funding a lot of the research (university grants mostly, I believe)

The fact that lifestyle drugs are much more likely to be developed.

It would seem hardly any new antibiotics are being developed (I'm not saying none) despite the so-called superbug crisis

I'm just not sure the current system works for most people.

> The fact that the taxpayers already funding a lot of the research (university grants mostly, I believe)

I see this argument a lot, but most people don't realise the amount of research, work and vast amounts of money that goes into turning an academic finding into an effective drug on the market. Identifying a cellular pathway involved in a disease, or even going as far as presenting a hit compound that targets that pathway in a paper is such a small step towards a useful drug. There are hundreds of things that are yet to be considered and any one of them could result in the entire project being scrapped, and that is of course assuming the work published by academia can actually be replicated.

R&D is costly yet pharmas make margins only second to ad tech industry. Maybe I'm stupid but I can't reconcile the two...

The best Pharma you’re looking at are the ones that are successful, not the ones that go under.

And margins have to be high - what other investor would risk hundreds of millions on a 1:10 bet unless high margins.

Cialis and rogaine (two “lifestyle drugs”) are actually failed heart disease treatments. In the first case, patients asked to stay on it despite lack of efficacy in treating the main condition. I’m the second, female patients complained about the side effects.

Preemptively, I’ll take on the other talking point: “Me too” drugs are actually important. All meds come with side effects, either from the active ingredients or the inactive ingredients. Having options allows patients to choose something that works for them. Multiple treatments also means competition and lower costs.

It can be profitable without being outrageously profitable. This sort of reasoning reads to me like the news articles saying there is "nothing to be done" about all the shootings in the US, even though it's obvious to everyone what could be done. It's excusing bad behaviour because of cargo-cult beliefs without a good practical foundation and it has to stop.

Developing and getting approval for a new drug takes two decades and costs hundreds of millions. Part of that surely is patent cost buy the main parts are testing, animal and human trials and the approval process. The 'innovation' lie in telecomms (that you need high margins to assure innovation and investment) is surely not true but pharmaceuticals really are expensive to get from R&D to market. Companies with a big seller where the patent protection runs out, and that didn't succeedem to get another big drug to market, often sell themselves as they expect to go bankrupt or have to sell off their half-developed portfolio, which amounts to the same thing. Of course all a bit different for the big drug makers.

So maintaining the current system without patents seems difficult. But an option would of course be to shift the system - public investment for research and promising trials and then the result is free to use (or protected only for a short period).

I went to a talk by a VP of development at a prominent pharmaceutical company, and nowadays it's taking around 7 years from basic studies to animal studies to human trials to approval. This is especially true for biologics (antibody drugs), as they can test and find good candidates for human trials quickly.

I'm sure it's still expensive, though, and many companies like you said go bankrupt.

I was once told by someone who owns lots of guns that every time there is a mass shooting in US of A, the sales of weapons go through the roof. Apparently the fear of regulation triggers a buying spree. True or not, I found it interesting and somewhat ironic how these shootings could be helping gun sales.

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

Let universities and government institutions invent them.

Why does everything need to be run by corporations these days?

This is absolutely true -- you don't see drug researchers on yachts. The people actually doing the work aren't rich as avarice, it's the people who turn their work into a "business".

People doing groundbreaking work are motivated to do the work for whatever reason, and it's seldom money. There are more important things to them, whether it's simply doing Good, or status, or it fascinates them, or whatever. The guy who invented insulin sold the patent for a dollar.

New drugs and therapies are often developed outside these big companies anyway, and they just buy them, run them through the certification, and then sell them at incredible markup. The money's not in development, it's in the business side of things.

We've (some of us, at least) so bought into the argument that the world needs to be this way that we totally ignore these things actually get done.

Technically the certification is part of the development and iirc quite expensive and high risk since it can make or break a drug. But I dont think its unreasonable to either loosen standards a bit or simply slow down the development of new drugs (in the US).

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

That's covered by the patent system. The barriers to selling an existing, out-of-patent drug (remember that mention upthread of an "authorized generic"?) are covered by the FDA; they're totally unrelated.

How about saving lives for an incentive? Pharmas don't exactly have a good track record for doing the right thing with the current incentive of becoming filthy rich.

This argument is so worn out it has become a cargo cult parroted response.

How about becoming rich from saving lives, and losing money for failing to do so?

If protection from market is predicated on testing and research being expensive, it pretty much ensures that they will do their best to keep them that way to enjoy the profitable protection.

This is a good argument for nationalizing drug production and research.

How would that help here? These are generic, so there is no monopoly beyond the Hatch-Waxman Amendments, which is only 180 days.

Now, if we got rid of trademarks, which gives a company the monopoly on the trade name, then it would of course be much easier for generics to start selling EpiPen-labeled injectors.

I don't see what getting rid of trademarks will do to help consumers. It's not like people who need an epinephrine auto-injector are confused and think that only Epipens exist in that market. Hell, I don't need one and I'm well aware.

If you want an Advil, I think you should be able to buy Advil. If you want 200mg ibuprofen, you can also shop for that, but if you happen to know that you prefer the outer pill smoothness and taste of genuine Advil, you are harmed by having the generic ibuprofen (without that same outer coating) be able to be advertised as "Advil" (rather than merely as "the same active ingredient as Advil").

The problem with EpiPen is that you can only get an alternative if your doctor prescribees it. epipen is patented on the user interface so patients can't get the alternatives on an EpiPen prescription (which you will recall from Oracle v Google and others is usually not allowed, but pharma gets to do it).

I mean to use EpiPen here in the same generic sense that https://en.wikipedia.org/wiki/Epinephrine_autoinjector uses in sentences like "Teva Pharmaceuticals filed an ANDA to market a generic EpiPen" and "Sandoz submitted an ANDA to sell a generic EpiPen".

Since "The first modern epinephrine autoinjector, the EpiPen, was invented in the mid-1970s at Survival Technology in Bethesda, Maryland by Sheldon Kaplan[10][11] and was first approved for marketing by the FDA in 1987", at least those patents have expired.

And this article is, after all, talking about generics - authorized generics, certainly, but still generics.

However, you are right - the "Epipen" is a trademark for an epinephrine autoinjector. As such, it can be applied to many things, eg, "Sudafed" packages might not contain pseudoephedrine as they once all did.

The generic makers have already got that figured out. The box includes the text “The same active ingredients as X” and “Not manufactured by (maker of X)” is enough to inform consumers while not falling afoul of trademark law.

> 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

This is exactly the opposite of what you want. Investment goes where the margins are. That’s why huge amounts of money gets invested in stuff like Facebook. Making it relatively unprofitable to create lifesaving drugs just ensures that investment won’t flow into that area.

Apple makes about the same profits as the total US pharma industry, and that amounts to a tiny fraction of US healthcare spending. Too much profit is not the problem.

Understandable, but something like an EpiPen and a lot of other very well established things like say, insulin. They're well within the realm of a stable generic that can be managed as to maximize the amount of lifes it improves. Right?

Regarding insulin, we’ve made huge progress in so many ways, and there is still room for improvement. We have different forms of insulin with different lifespans that we can use to create insulin regimens for different kinds of diabetics. For example, we have lantus, which is a long acting insulin that helps give 24 hour coverage. We combine that with short acting insulin lispro at mealtimes. Lantus is a relatively new form of insulin that wasn’t available a few decades ago.

Different bodies also respond very differently to all the different kinds of insulin available. There is room for further improvement as the typical lantus/lispro regimen isn’t perfect for everyone.

The epi-pen auto injector is tricky to do right, so it took a few tries to make a good generic. But they’re on the market now: https://www.consumerreports.org/drugs/epipen-shortage-contin...

Insulin is hard to manufacture. The older versions are now generic, but the new, patented ones have measurable advantages. Because most people have insurance coverage, there is a limited market for the older, generic insulin.

Praise be to the corporations who were so margin-driven as to develop the cure I need, but can't afford.

If only parma had some kind of inherent motivating factor.

All R&D is the same, whether you’re building life saving drugs or web advertising platforms. You throw gobs of investor money at roomfuls of Stanford PHDs and progress comes out the other end. It’s the most effective engine for innovation humanity has ever conceived. The fact that life saving drugs are more important than web advertising platforms isn’t a reason to turn drug development into charity. It’s an even stronger reason not to fuck up the incentive structures.

But the people actually doing the research aren't the ones making a profit.

Many are. Just like in tech, much of the pharma pipeline is startups that are acquired by big cos. And, like in tech, lots of skilled technical workers who don’t become founders are making big salaries.

When I was working in Pharma, the PhDs in the lab were some of the highest paid PhDs in the US. They certainly share in the profit.

Do you mean they held shares in the company, or that they made a high salary?


There's a happy medium between turning drug development into a charity and pushing the profit margins as far as they go.

I'm just asking for recognition that although most people would pay an amount that would bankrupt them for a single dose of a lifesaving drug, doesn't mean that you should routinely charge that much.

Profit margins work when it's consumer goods. For example:

Scenario #1: Sell 10 TVs at $1,000 each. Profit=$10,000.

Scenario #2: Sell 20 TVs at $100 each. Profit=$2,000.

I don't care how many people have TVs, so I'm happy for you to choose scenario #1. However, if instead of TVs, it was a lifesaving drug, Scenario #1 is a huge tragedy, where 10 people die in the process.

Repeat, there must be a happy medium between pure charity and price gouging.

The issue with finding a "happy medium" in one segment of the market is that investment capital will immediately start to flow towards other segments of the market without such constraints.

In your example where TVs are a lifesaving drug, you could argue that we should find a happy medium where TV manufacturers are only making 3-4k in profit. In the short term this would increase the accessibility of TVs, saving lives. In the long term this would cripple future investment in better TVs, reducing lives saved in the future.

Investment is distributed in response to expectation of future returns. If you want more lifesaving drugs you should incentivize their creation, not penalize the field relative to less important pursuits.

Some people will pursue medical research (or invest in it) for its own sake out of an admirable desire to help others. Many more will work for whoever will pay the most, or invest in whatever business has the most potential for profit. You don't have to admire those people, but it's not rational to actively push them away from fields where their work could benefit others.

All I'm asking is for people to consider saving lives as having a non-zero value .


Please be civil. We don't call people names in here and we attack the argument not the person.

To be fair, it's easy to be civil when you're not one of the diabetic people dying due to having to ration insulin because pharma corps value profiteering at the direct cost of human lives.

Those drugs wouldn’t exist without those pharma corps, just like iPhones wouldn’t exist without Apple. More people would die in that scenario.

Insulin was discovered and purification methods developed at a public university 100 years ago.



It seems there are information technology products which are produced outside the corporate-proprietary sphere as well.

Those pharma corps wouldn't exist without the government helping to prop them up or the actual researchers doing their job.

To me, this isn't an argument but an excuse for greed. If a company invents a cure for a disease that could save 1000 people but they charge enough that only 10 people can use it, is it really fair to say this is OK because 'well at least less people are dying'?

And the excuse of drugs being expensive to manufacture doesn't even exist in this case. Insulin isn't expensive and other nations don't pay nearly as much as Americans. So more Americans are dying solely to line the pockets of executives and CEOs. It's frankly amazing how far we'll go to excuse rampant greed while people with insulin are dying as a result of the greed. To value profits over lives is disgusting.

In the hospital discussing hospice with my father and the extreme price of "good insulin", two thing that are not unrelated. I would throw stones but I'm currently unable, and I have much more sympathy for your problem than normal.

That law would be the 'Medicare For All' law. The government could then determine the maximum price for life-saving everything. And the predatory bastards could go find an honest job (if they know what that means).

When confronted with the problem of price gouging, reacting with a planned economy is like swatting a fly with a sledge hammer.

Why don’t we fine the company, class action a settlement, and place a few execs behind bars instead.

"Planned economy" is an incorrect description of the proposal, because planned economies don't just set prices but they also allocate quantities to producers and consumers (something which people would rightly feel unhappy about if you applied such a system to medical supplies).

The system being proposed in the US as part of the M4A bill is how almost every other developed nation except the US handles essential drug prices. The government negotiates the price with the drug companies and they come to an arranged price at which they are sold.

Here in Australia we don't have the same problems you have with run-away drug prices, specifically because our government both covers part of the cost of drugs when purchasing them (as part of Medicare) and negotiates the prices down.

Hair-splitting. Your sibling description sounds defacto planned by these measures.

Tired of the false dichotomy of wild-west anything-goes or heavy government control. We could have a functioning market and also punish bad actors, if it was considered a possibility.

And I'm pretty sure the Aus Gov also agree to purchase a certain amount as part of the negotiation.

I'm not sure if that's the case for drugs, but you're quite right that it's the case for medical devices. The producers are effectively competing for a government contract to be one of the few Medicare-sanction producers for that particular medical device (and being sanctioned for Medicare rebates means that your device will be used by the majority of people who need such a device -- otherwise they won't get coverage for it through Medicare or even private insurance in most cases).

In my country we tried this "government could determine the maximum price for (some category) everything" and it ended up with tons of dead people. Not even Germany with their socialized Healthcare does that, why would the US do?

I call bullshit, give me facts somewhere where I can read about it ( trustworthy source).

Because here in Europe, multiple countries are fine with it.

I don't know a single EU country that would set maximum prices. Can you share which one do you mean? Aren't you confusing it with insurance company tariffs (pre-determined prices for treatments etc), which are set by the insurance companies, not government? https://en.wikipedia.org/wiki/Healthcare_in_Germany

In France: The Economic Committee for Health Products (CEPS) [...] is mainly responsible for setting the prices of medicines and the prices of individual medical devices covered by compulsory health insurance. [0]

And according to the WHO, most European countries set drug prices [1]

[0] https://solidarites-sante.gouv.fr/ministere/acteurs/instance... translated with DeepL

[1] https://www.who.int/medicines/technical_briefing/tbs/TBS2016... slide 23

OK, I was wrong. I will look into links provided, thank you.

Uhm, the Netherlands does? In Dutch [1]. There are a few mechanisms. One is a maximum price based on a basket of comparable countries. Two is a maximum insured price based on comparable medicines with mandatory co-payments above the average. Three is insurers bargaining with apothecaries. Four is government bargaining for orphan medicines. Five is sometimes allowing apothecaries to create licensed medicine by themselves. Many of these are totally opposite the US-system afaik, with Medicare not being allowed to negotiate prices being the most glaring one.

[1] https://www.rijksoverheid.nl/onderwerpen/geneesmiddelen/beta...

Belgium also does this

Setting maximum prices for some goods is a feature of communism/socialism.

Soviet Russia was communist/socialist.

Soviet Russia killed millions of people

Therefore, all men are Socrates—er, I mean, setting maximum prices for some goods kills millions of people.

Do you see the false syllogism here?

It's an argument I see made all the time, and it doesn't hold a drop of water.

People also died precisely because of market manipulation, due to food shortages, housing shortages, and of course healthcare shortages, which were especially catastrophic. I was not talking about the gulags.

And I am not Russian.

And I never said anything about gulags.

I have no idea what your country is, as you didn't mention it; however, I have heard over and over again the argument that Stalin killed millions of people, therefore anything that moves even the slightest bit toward socialism is Evil.

The fact remains that claiming that setting maximum prices for some lifesaving drugs will lead to the situation you saw in your country has no logical basis. At best, it's a slippery slope fallacy.

So what killed these people that weren't in gulags? Some of them were killed by the secret police etc, but the absolute majority of victims of communism and socialism were not killed, they died - because of unavailable food, medicine, healthcare services, housing and so on.

No one is talking about people Stalin killed and you're right it has no logic. The thing that got these people to die was market manipulation, which is why I posted it in a discussion about market manipulation.

Not everyone has to be immediately thinking about Stalin when making an argument about socialism leading to deaths. There are plenty of options. See Venezuela for instance.

Here in Italy, the self-injecting adreanaline same as the Epipen in the US is normally "free" (its cost except maybe a "ticket" of 4 € is paid by the equivalent of the NHS in the UK) if prescribed by an authorized doctor or in the hospital.

But any doctor can prescribe it and the "full" price is around € 80 for the single pack or 140 for the two pack, so it is around 1/4th if the US $600 cited in the article.

BTW here a "normal" adrenaline 0.5 mg vial is around 1 or maybe 2 €, so all the prize must be in the auto-injection mechanism and not in the actual drug.

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?

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.

Don't be so sure. These companies have hidden the addictiveness and side effects of these pills for years: https://www.karger.com/Article/Pdf/501215

In fact, using anti-depressants is more likely to make you relapse after you are off of them, rather than if you got over the depression without drugs: https://www.karger.com/Article/Abstract/110056

There is definitely an interest from these companies to have people be on these drugs pretty much indefinitely. They have a host of side effects which the companies will also benefit from treating (obesity, sexual dysfunction, liver damage, etc...).

It's pretty clear from what's coming out of the opioid trials that these companies conspire on a regular basis to do what's right for their bottom line, not what's right for people...

It's amazing how often folks forget that pharmacists are licensed professionals trained in the algebra of medication -- even doctors neglect this. I recently had a doctor tell me he could only write a prescription for a daily dose of either 15mg or 50mg doses without realizing that one could theoretically take two 15mg doses a day. (He probably did realize this, but it would be significantly more paper work).

Compounding pharmacies are able to remix manufactured dosages into what you desire. I know folks who, with the assistance of their doctor, crafted finely tuned taper schedules.

You bring the drugs, they remix to your prescription.

Yes, cutting pills works for some formats (tablets). Liquid suspension can somewhat be done yourself if you have suitable input medication and buy a mortar and pestle. It's of course harder with capsules or extended-release formats, but rarely are those the _only_ format a drug is available in.

> 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.

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.

The insurance part is the most important. The more things cost, the more value insurance provides, which is especially valuable to insurance providers because they pay for things at a discounted cost. The more value it provides, the more they can charge.

The economically rational consumer is best off getting drugs through insurance, but in doing so, builds a system that makes any alternative less affordable.

I think you assume that the insurance market is competitive. In the U.S. it is not.

I’m not sure how that follows.

As an FYI, this phenomenon is called the third-party payer problem in economics.


Also, there's literally a government regulator that controls entry.

It isn't just patents either, the FDA will grant exclusivity periods for other reasons, and so on, but it then doesn't have much power to examine pricing. It's because our Congress is stupid (I mean, that's the terse summary of it).

They aren't stupid. It's completely on purpose and virtually anyone who has had a lengthy career in congress or the senate has voted in favor of this system many many times. That includes anyone you like.

"I mean, that's the terse summary of it."

You can't paint the entire pharmaceutical market as non-competitive. It really depends on the drug.

Most of the egregious examples of raising prices happens in specific markets - ones where there are significant barriers to competition even in the absence of patent protection. These markets also tend to be on the smaller side - big enough to make a good profit, but not so big that it attracts a ton of competitors.

There are examples of drug prices coming down because of competition. Hepatitis C drugs are a great example. Launched at almost $90K, they now hover around $40K because there are multiple companies competing on price (the drugs are all very effective).

The other thing driving prices down are the insurance companies. Amgen dropped the price of their cholesterol drug Repatha by 60% because insurance companies said "yeah, we're not going to pay for that at that price".[1]


> There are examples of drug prices coming down because of competition. Hepatitis C drugs are a great example. Launched at almost $90K, they now hover around $40K because there are multiple companies competing on price (the drugs are all very effective).

That price is less than $500 in India. Generics in the US are estimated to cost the consumer $200[1].

[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4946692/

That's because the drug is priced based on relative purchasing power.

If the drug cost $500 in the US, it would have been a net loss investment in the first place.

The producers don’t have market access and the middlemen have inverted normal market powers. If a producer lowers price, that means the PBMs percentage cut goes down. So they cut away market access. So the lower the price the less you sell. The higher the price the more you sell...

The people in the middle of this getting shafted are uninsured who are forced to pay imaginary list prices and don’t get any rebates. Now the producers are trying to just sell generics at the post-rebate level, but the media field by lobbyist are calling them out like it’s a bad thing. Because it threatens the con game of the PBM/Insurance/Pharmacy cabal (yes they often end up all owned by the same corporation), while they are pointing fingers at the producers who just want market access and fair competition.

At least in theory insurance companies should look out for price, because they want to be cheaper than other companies.

But, free market just doesn't work for health care. In a life or death situation people would pay anything.

FYI, in the US insurance companies are regulated such that: "No more than 20 percent of premium revenue can be spent on total administrative costs, including profits and salaries."[1]

So the difficult thing is they are incentivized to increase revenue to increase profits, and cutting costs won't result in more profit.

[1] - https://www.verywellhealth.com/health-insurance-companies-un...

Yep. And a lot of big companies are self-insured, so the "insurance company" is actually just an administrator for the big company's insurance pool. Thus reducing the cost incentive even more. Competition could help, but there just aren't a lot of insurance administrators that can run plans for the biggest companies, so there is little competitive pressure on price.

Yep, also I think the barriers to entry for the insurance market are extremely high. Not only is there a huge fixed cost of actually negotiating rates with every individual doctor/hospital, there's also the fixed cost of getting individual employers to consider you for their business. These and some other factors leave the insurance market with just a few insurance providers, who can let prices run away and simply charge higher premiums/deductibles without fear of competition from a "start-up" insurance provider.

That sounds somewhat inelastic. Like gas or basic needs, people will often still use/need healthcare regardless of price, at least as long as it is high quality care. If, say, knocked unconscious in an accident, you'll wake up in the ER regardless of price.

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.

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.

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.

My understanding is that, by taking away the 180d exclusivity window from generic manufacturers, the latter are less likely to risk developing their own version of the product

A risk with 4. is that the fake generic's price could drop from 50% of branded price to much lower to kill off competition or at least make it hard for the competitor to justify all their initial start up costs.

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.

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.


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.

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.

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.

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...

All tablets were placebos.

Isn't this basically measuring placebo effect?

You forgot bribing doctor's to prescribe variants that aren't generic.

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