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Why drug prices in America are so high (2016)

economist.com

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Re: Why drug prices in America are so high (2016)

#41

Post by toomuchtodo »

harryh wrote: post #36
toomuchtodo wrote: post #26

Earlier quoted context omitted.

That's how you get your patent broken.

Has the US ever disallowed a patent because the company holding it refused to sell a product to the government at the price the government wanted? It's hard to imagine SCOTUS allowing that sort of thing. The US gov't is subject to its own laws.

Has the US ever fought hard to institute a travel ban in order to prevent people of a certain religion from entering the country, despite judicial intervention.

That's the thing about governments: they can do whatever they want. And your recourse is to deal with it or spend years fighting against it (or die in the streets fighting it, lest we forget that option).

Disclaimer: I'm for breaking patents when necessary, although 3D printing drugs is around the corner making it a moot point.

EDIT: @refurb:

I love coming to HN and having people say "its too hard, it'll never be done". ;)

I can run the laser sintering machine in my garage and build metal parts from a fine powder, parts that are aircraft grade, but I won't be able to 3D print drugs at home? No imagination.

Re: Why drug prices in America are so high (2016)

#42

Post by sharemywin »

dustingetz wrote: post #14
ThomPete wrote: post #2

"The simple answer is because they can. European governments control prices in various ways—Britain has the strictest system, refusing to pay for medicines that fail to meet a threshold of cost-effectiveness. But in America companies set whatever official price they like."

That quote seems to me to be missing a really important bit, which is that there doesn't seem to be a functioning free market which is a necessary condition to determine the price. (This comment is not aimed at you, it is aimed at the article for supplying such a broken explanation)

if a company has a monopoly there isn't by definition a functioning free market.

Re: Why drug prices in America are so high (2016)

#43

Post by Symmetry »

doktrin wrote: post #20

> These high prices support innovation, they argue—not just for America, but for the world. I suspect this is in fact somewhat true, but how is it a coherent argument in favor of higher prices? The American people / American elderly (obviously) don't have some unspoken moral obligation to subsidize pharmaceutical R&D for the whole world. Governments around the world are able to negotiate affordable rates for their ci…

Milton Freidman's solution was to allow re-importation of drugs from countries where they were less expensive. Either the drug companies could raise prices abroad, accept lower prices domestically, not sell abroad, or some combination of all of the above.

Re: Why drug prices in America are so high (2016)

#45

Post by chimeracoder »

sharemywin wrote: post #30
chimeracoder wrote: post #15

Earlier quoted context omitted.

> It's one of the things that we Brits should be extremely proud of (although pharma-sponsored sob story campaigns in tabloid newspapers may suggest otherwise). They consider everything in a wider context of opportunity cost of adopting a new treatment and budget constraints. For context, this is literally what risk-bearing entities in the US already do (both insurers and at-risk providers). I could get behind the st…

At the end of the day if you don't have the money to pay for a treatment yourself then someone else is making a cost to benefit analysis.

> At the end of the day if you don't have the money to pay for a treatment yourself then someone else is making a cost to benefit analysis.

Exactly, that's the point. You can label it however you want, and set up whatever system you want to allocate the resources, but that doesn't change the fact that this decision has to be made.

Re: Why drug prices in America are so high (2016)

#46

Post by harryh »

vowelless wrote: post #3

> And it is illegal for Medicare to negotiate with drug companies Why is this the case ? Also, this is from September 2016.

Because Medicare has, in a sense, too much market power and could unreasonably distort the market in favor of the short term incentive of getting the best possible price (the marginal cost of production) and against the long term goal of profitable drug companies that produce new drugs in the future.

Now, there are plenty of people that don't find this reason compelling and thing that the US gov't should do otherwise. But that's the reason.

Re: Why drug prices in America are so high (2016)

#47

Post by crack-the-code »

RcouF1uZ4gsC wrote: post #25

This has a very simple fix, and is a fix that would appeal to Donald Trump: Require that pharmaceutical companies do not charge Americans any more for their drugs than what they charge any developed country. This lets other countries do the dirty work of negotiating prices while reaping the benefits for the US. In addition, it goes along with his whole America is getting screwed narrative - ie that other companies ar…

What about the edge cases? If I understood you correctly, the poorest developed countries dictate the pricing.

Re: Why drug prices in America are so high (2016)

#48

Post by Apfel »

refurb wrote: post #19
Apfel wrote: post #6

Earlier quoted context omitted.

If anyone's interested, England's system of health technology assessment (HTA) for the NHS is extremely transparent and world-leading. It's one of the things that we Brits should be extremely proud of (although pharma-sponsored sob story campaigns in tabloid newspapers may suggest otherwise). All new technologies are investigated in terms of incremental quality of life gain (vs current treatment norms) and changes in…

I would argue HTA is not without it's problems. That's why the UK has a cancer drug fund. NICE has said "no" to those drugs, yet the public still clammers for them. So a separate funding mechanism was created to pay for them.[1] [1] https://www.england.nhs.uk/cancer/cdf/

The cancer drugs fund is an absolute travesty, and a direct transfer of wealth from the UK taxpayer to the pharmaceutical industry.

The lobbyist who devised the value proposition to Cameron's government must be very proud of him/herself.

The only reason the public clamours for these drugs is because opportunity cost of treatment is very hard to distill into a newspaper headline.

The cancer drugs fund, at base principles, implies that cancer patients lives are more valuable than the rest of the public.

Re: Why drug prices in America are so high (2016)

#49

Post by dv_dt »

frgtpsswrdlame wrote: post #40
RcouF1uZ4gsC wrote: post #25

This has a very simple fix, and is a fix that would appeal to Donald Trump: Require that pharmaceutical companies do not charge Americans any more for their drugs than what they charge any developed country. This lets other countries do the dirty work of negotiating prices while reaping the benefits for the US. In addition, it goes along with his whole America is getting screwed narrative - ie that other companies ar…

Why would that appeal to Donald Trump? It would hurt the profits of the drug industry in America which will cost jobs, pharma execs will tell him how bad this is for America and how harmful it is to drug R&D, etc etc. Donald Trump may have campaigned as a negotiator for the common man but he identifies with CEOs, anything that hurts them is not something that appeals to him.

The high price of medical care costs lives as well as jobs in other industries...

Re: Why drug prices in America are so high (2016)

#50

Post by harryh »

RcouF1uZ4gsC wrote: post #25

This has a very simple fix, and is a fix that would appeal to Donald Trump: Require that pharmaceutical companies do not charge Americans any more for their drugs than what they charge any developed country. This lets other countries do the dirty work of negotiating prices while reaping the benefits for the US. In addition, it goes along with his whole America is getting screwed narrative - ie that other companies ar…

This is not a great fix. Almost all companies (not just drug companies) routinely find ways to segment the market into different groups with different abilities to pay and then charge different prices for very similar products. That is the profit (or future research budget) maximizing strategy.

The US is richer. It should be paying more. How much more is debatable.

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