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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)

#81

Post by DanBC »

chimeracoder wrote: post #15
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…

> 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…

You're confusing two different things.

When NICE decides not to fund something they have clear evidence that it is worse than current treatment, not just that it is more expensive than current treatment.

See, for example, Abraxane, a chemotherapy for pancreatic cancer.

To be accepted all it has to do is either:

i) Be better than current first line treatment or

ii) Have less side effects, and thus be usable as a second line treatment or

iii) Be much cheaper

It's fantastically expensive, has many side effects, and is less effective than current treatment. So it fails all three. But you wouldn't be able to tell that from the pharma-sponsored advocacy groups. Those groups talk about "2 years of life", when the manufacturer's own data talks of just 3 weeks.

It's incorrect to say that NICE has a profit motive. They very clearly - and this is the point of transparency - don't.

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

#82

Post by throwawaydp535 »

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.

> 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.

Do you have any primary sources you can link to prove this assertion?

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

#83

Post by ancap »

sharemywin wrote: post #42
dustingetz wrote: post #14

Earlier quoted context omitted.

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.

The question therefore is, why does the monopoly exist? You will find that, as _jal has commented, it is not because of some natural phenomenon springing out of a free market.

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

#84

Post by Retric »

mikeash wrote: post #60
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…

I don't know if the R&D argument even works. Just how much are we overpaying for our drugs? It looks like American pharmaceutical R&D is about $60 billion/year, or roughly $200 per capita. Is that really all we're losing to these high prices?

Drugs are 10% of US healthcare spending so the gains are not that huge. However, ~200$ per capita is only part of the costs as profit and advertising also increases drug prices. Further cost is concentrated onto a small fraction of the population. So, while I might not care about 20$/month I would care about a 1% risk of 2,000$ per month.

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

#85

Post by Pigo »

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…

My first job out of college I worked for a company that looked for new ways to get sample vouchers into people's hands. There was so much money in finding gray areas to hand out samples.

The only job I've had that made me feel worse about what I did was insurance, but that didn't last long. I suppose we did innovate, but I didn't get paid enough to out-weigh the damage done to my soul.

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

#86

Post by joe_the_user »

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…

Of course there's no simple fix.

US health reform has been attempted based on series of simple fixes with all the best-seeming ones already exhausted over the twenty or thirty years it's been tried. And the entities profiting (enormously) from US health care have become champions, geniuses at dodging all the simple fixes.

Of course you can't force companies to sell for the same prices elsewhere unless you had no regulation on drug imports and that would discard the whole regulation process effectively, blah, blah. Companies could just label the drugs they sold in different countries differently or even mix them differently (there's already re-mixing for patent and other purposes, etc).

As noted in the article, the countries with lower drug prices do real, good regulation. To do that here, you'd need to take on regulatory capture and so-forth, a not at all simple matter.

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

#87

Post by DanBC »

chimeracoder wrote: post #31
refurb wrote: post #19

Earlier quoted context omitted.

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/

> 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. See also: PrEP. PrEP is available in the US (and covered by almost every private insurer[0] with drug co-pays covered by the manufacturer[1]). And while it's less convenient, there are public…

Sexual health is part of public health, and thus we'd expect PrEP to be funded by Public Health England, not the NHS.

The target of your anger here should be local authorities (who hold responsibility for Public Health), not the NHS.

https://www.england.nhs.uk/2016/11/update-on-prep/

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

#88

Post by godelski »

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…

Well we need competition for that to happen. So somehow you'd have to set something up where you would need to allow for the consumer to buy from other countries. Which sounds pretty difficult.

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

#89

Post by andrewla »

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…

It seems even odder considering that many of the pharmaceutical companies are not US based, so it doesn't seem to make sense even from a protectionist standpoint.

Just as an exercise in cherry-picking, I grabbed the first drug from [1], "Relvar Ellipta", which apparently costs 6.3 times more in the US than the UK. This is despite the fact that the drug is manufactured by GSK [2], which is UK-based. It was developed by Innoviva, though, which is US-based [3]. What this means in terms of price-setting agreements and licensing, though, is not easy to see, and whether research grants would substitute for the expected profits from the pricing discrepencies.

[1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5023951/

[2] https://en.wikipedia.org/wiki/Fluticasone_furoate/vilanterol

[3] http://www.inva.com/contact-us/

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

#90

Post by caseysoftware »

Negotiation is only effective if you can walk away from the deal.

The drug companies can't afford to lose their biggest customer. But since the customer can't go anywhere else, it's not like they would. It's a detente where neither side can really make a move because the other just says "Nope."

I think transparency - as in publicly available pricing - would be the only thing to change the balance here. Even then, it's not a fix..

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