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A Huge Overnight Increase in a Drug’s Price Raises Protests

nytimes.com

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Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#41

Post by richdougherty »

cjlars wrote: post #21
jonknee wrote: post #3

My first thought was generics since it's so old, but this is simply amazing: > With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing. > The switch from drugstores t…

>“This is still one of the smallest pharmaceutical products in the world” What Turing is doing is exploiting the natural monopoly that has formed for this drug. I was able to find only two global producers of this drug after a quick search (Turing and a generic Alibaba listing), which if true means Turing is the only game in town for a lot of supply channels. In addition, the medical market is relatively unable to ad…

Another way to restrict competition is to stop competitors getting samples of your drug. Without samples of the original, it's impossible to prove a generic is equivalent.

Here's an example where patient safety rules were used to stop competitors getting samples: http://marginalrevolution.com/marginalrevolution/2014/09/co-...

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#42

Post by learc83 »

ikeboy wrote: post #23
pxndx wrote: post #20

Earlier quoted context omitted.

The thing is, the value for these products is infinite. If people don't have them, they'll die.

The value of a human life is not infinite, at least not in health budgets. Insurance companies set a non-infinite value to decide what procedures to cover. In theory, you could calculate the exact value provided by this drug (under the QALY model).

The value of a human life to the individual who's life it belongs cannot be calculated in economic terms (at least for most people) because it is unbounded, i.e., there is not a price that most people will accept for their life. The economic value of a human life to society can be calculated.

Under your theory a fair method to price life saving drugs doesn't exist. The person getting the drugs will effectively extract infinite value while the company will only extract a finite value.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#43

Post by tuna-piano »

The thing that I think many people are ignoring is the positive effect that high drug prices (& profits) leads to in the economy.

Economic resources such as entrepeneurs, capital, equipment and scientists follow the money. If there's money to be made on Wall street, resources go there. If there's money to be made in mobile apps, resources go there.

As mentioned elsewhere in this thread, the price being so high now shows that the people buying it at that price truly value it that much. When it comes down to it, many people are willing to spend almost anything to stay alive and healthy.

The extremely high prices (and therefore profits) for specific drugs simply leads more resources to go into the development of additional similar money-making and life saving drugs.

It would be a shame if we capped drug prices at some artificially low level, as that lowers the incentive for additional resources to develop additional drugs.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#44

Post by jimrandomh »

ithought wrote: post #11
jonknee wrote: post #3

My first thought was generics since it's so old, but this is simply amazing: > With the price now high, other companies could conceivably make generic copies, since patents have long expired. One factor that could discourage that option is that Daraprim’s distribution is now tightly controlled, making it harder for generic companies to get the samples they need for the required testing. > The switch from drugstores t…

If I remember correctly, when Provigil became generic, they bought the company producing the generic form. They also slightly changed the drug and patented a new form as Nuvigil. Last year, I asked my physician's assistant (I have never actually met my personal doctor) for a prescription and he told me that he didn't believe Provigil/Modafinil was even made anymore and tried almost emphatically to get me to take Nuvi…

Generic modafinil has a retail price of around $40/month. Your insurance is getting ripped off.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#45

Post by jkimmel »

It appears Martin Shkreli has tried this a couple times before.

http://blogs.sciencemag.org/pipeline/archives/2015/02/20/mor...

In the past, he actually planned to limit access to the existing drug (ie. the one he increased the price on) to prevent a competitor from creating a new generic formulation and gaining FDA approval. It appears he modeled this heinous approach on a maneuver by Celgene to prevent production of generic thalidomide.

http://blogs.sciencemag.org/pipeline/archives/2014/09/11/the...

It seems to me that the FDA needs sharper teeth in this arena to ensure access to an existing drug is not a limiting factor in the approval of generics.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#46

Post by ohazi »

ikeboy wrote: post #17
powera wrote: post #7

Earlier quoted context omitted.

No, unless you feel that people who use medicine are nothing more than a resource to be exploited. Were it not for a (probably illegal in this case) monopoly, other people would be able to make that same pill for $5 per tablet. And then nobody would pay $50 for the pill. Supply and demand IS NOT the same as "charging everyone as much as they will pay for everything". It's inherently unfair to everyone who has to buy…

The question is, if it costs me X to make a product, and the value to you is 100X, who captures the 99X spread? I could charge 99X, you would pay it since the value is higher, and I'll capture most of it. I could charge 2X, it's still worth it to me to produce it, and you'll capture most of it. What value here is most fair? Why is one value fairer than another? The standard economic answer is "let the market decide",…

"Letting the market decide" requires you to actually have a market. If you have a market of manufacturers that all produce a product for around X, then it doesn't matter if I value the product at 100X or 1,000,000X. I'm still going to be paying around X + epsilon. That's the entire point of having a market.

You only see people asking questions about "well, who captures the extra value? what's fair?" etc when you don't have a market. When you actually have a market, then these questions cease to be relevant, because the price is already set.

The problem has nothing to do with free market concepts breaking down, or disagreements about what's fair. The problem is that we've artificially prevented this market from existing. Fix that and the problem goes away.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#47

Post by foxhill »

tuna-piano wrote: post #43

The thing that I think many people are ignoring is the positive effect that high drug prices (& profits) leads to in the economy. Economic resources such as entrepeneurs, capital, equipment and scientists follow the money. If there's money to be made on Wall street, resources go there. If there's money to be made in mobile apps, resources go there. As mentioned elsewhere in this thread, the price being so high now sh…

i'm sorry, i'm all for market incentives to drive product development, but this is people's lives you're incentivising here. previously affordable treatment will be out of reach for many. there is a human cost to this (i'm sure otherwise sound) decision. this must not be forgotten.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#48

Post by thrownaway2424 »

tuna-piano wrote: post #43

The thing that I think many people are ignoring is the positive effect that high drug prices (& profits) leads to in the economy. Economic resources such as entrepeneurs, capital, equipment and scientists follow the money. If there's money to be made on Wall street, resources go there. If there's money to be made in mobile apps, resources go there. As mentioned elsewhere in this thread, the price being so high now sh…

I can't tell if your post is satire or not. Extorting people over their own deaths is not useful economic activity.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#49

Post by ohazi »

ikeboy wrote: post #24
powera wrote: post #19

Earlier quoted context omitted.

I'm not saying "get rid of the free market". I'm saying that in a monopoly situation, there is no free market. And if there is no free market, claiming "the free market will work" is insanity, so we have no choice but to try something else.

What is that something else? In a monopoly situation, the price tends towards 100X in my example, which is still less than the value provided. Even in a monopoly, nobody's paying more for a product than they receive value from it. Yes, it may still seem unfair, but what else are you proposing? Nobody should sell the product? How is that making anyone better off?

"Something else" is removing the artificial constraints that created the monopoly in the first place.

Re: A Huge Overnight Increase in a Drug’s Price Raises Protests

#50

Post by dijit »

tuna-piano wrote: post #43

The thing that I think many people are ignoring is the positive effect that high drug prices (& profits) leads to in the economy. Economic resources such as entrepeneurs, capital, equipment and scientists follow the money. If there's money to be made on Wall street, resources go there. If there's money to be made in mobile apps, resources go there. As mentioned elsewhere in this thread, the price being so high now sh…

No offence to you, but you're so capitalist it's to the detriment of human health and you should be ashamed.

I'm asthmatic, My life can cease in a pretty painful way if I'm denied access to drugs- my illness is an easily preventable one, so why should I die gasping? You're right I'll pay anything to keep living.. I'll literally starve before I stop paying for my medication. But why would you wish that upon me? Because drug companies can have an extra slice of pie?-- forgive me if I'm wrong but isn't private healthcare mostly about making shareholders rich and -not- about significant R&D on preventable diseases (which would then be a tax on the ill for their life).

I come from a country with social healthcare, I grew up the product of a bottle of whiskey and a bad decision, thus, poor.. I'm currently putting more money into my government through taxes than I ever could have possibly taken out- but given the draconian practises you seem to favour, I would have died as a child because there is no way my mother could have afforded to buy my medication -and- keep me fed.

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