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Why drug prices in America are so high (2016)

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

#151

Post by clarkmoody »

sharemywin wrote: post #143
ancap wrote: post #83

Earlier quoted context omitted.

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.

sure it's natural. why would anyone compete if they could carve up a market and make monopoly profits.

Because in a free market, companies cannot keep out competitors. Only through regulatory capture / cooperating with government are monopolies sustained.

Even the greatest monopoly of all time -- Standard Oil -- which at its peak had 96% market share was whittled down to 64% by competition by the time the "white knight" regulators had it broken up.

And who knows the long-term consequences of empowering the government to determine what is and isn't a monopoly? Well in the case of friendly relationships with well-lobbied corporate interests, there will probably not be any anti-monopoly action forthcoming.

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

#152

Post by _acme »

danans wrote: post #131

Friends in the pharma and medical device development industry have told me that the business case for any drug or medical device is built on top of US sales at currently inflated US prices. According to them, the other developed countries that have negotiated lower rates for drugs serve a different purpose. Those countries have lower requirements around testing of drugs and medical devices, and they are able to move…

Do you have support for the claim that US-developed drugs are generally available sooner in non-US markets? My understanding was that these drugs are generally available first in the US market, but that the developers may use FDA approval to help with EU approval, etc.

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

#153

Post by entee »

maxerickson wrote: post #146
entee wrote: post #137

Earlier quoted context omitted.

You're totally right, this is a hugely complex matter. However, it's not so simple to just relabel the drug, after all to a first approximation a drug is primarily an active ingredient and secondarily a delivery mechanism. You can patent one, the other or both together. There's definitely remixing, reformulation etc. for patent purposes, but it's not always that trivial to do. Re. regulatory capture, I don't know if…

Medicare drug plans do say no. There's even tools to find one that works best for a given patient. https://q1medicare.com/PartD-SearchPDPMedicarePartDDrugFinde...

Those aren't quite the same. Medicare part D plans are actually private insurance plans whose costs are subsidized by the government. It's not the same as the government itself negotiating for drugs, which is essentially what the NHS in England and many other systems in the developed world do.

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

#154

Post by joe_the_user »

entee wrote: post #137
joe_the_user wrote: post #86

Earlier quoted context omitted.

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 regu…

You're totally right, this is a hugely complex matter. However, it's not so simple to just relabel the drug, after all to a first approximation a drug is primarily an active ingredient and secondarily a delivery mechanism. You can patent one, the other or both together. There's definitely remixing, reformulation etc. for patent purposes, but it's not always that trivial to do. Re. regulatory capture, I don't know if…

"Re. regulatory capture, I don't know if the FDA or regulatory capture thereof is that huge an issue. The chief advantage other countries have is the ability to say, "No." Medicare doesn't have that ability..."

Clearly, the influence of private interests is critical for the situation where those interests can set their terms and prices without fetters. Objecting that this isn't regulatory capture but something else seems like a quibble.

Broadly, piecemeal reform is something like black list security. The supposed free market is left to set health care prices and process for a public that is clearly unequipped to bargain like an "informed consumer" (no matter how blithe pamphlet announce this need). Once one particular method of exploitation get a lot of press, regulation or legislation goes after this method, leaving the industry to work out it's next "zero day" against the health care consumer.

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

#155

Post by maxerickson »

entee wrote: post #153
maxerickson wrote: post #146

Earlier quoted context omitted.

Medicare drug plans do say no. There's even tools to find one that works best for a given patient. https://q1medicare.com/PartD-SearchPDPMedicarePartDDrugFinde...

Those aren't quite the same. Medicare part D plans are actually private insurance plans whose costs are subsidized by the government. It's not the same as the government itself negotiating for drugs, which is essentially what the NHS in England and many other systems in the developed world do.

Right. Part D is what people are talking about when they talk about Medicare not being able to negotiate prices.

edit: That's one of the advantages of the privatized system, companies take the heat for having a formulary.

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

#156

Post by entee »

joe_the_user wrote: post #154
entee wrote: post #137

Earlier quoted context omitted.

You're totally right, this is a hugely complex matter. However, it's not so simple to just relabel the drug, after all to a first approximation a drug is primarily an active ingredient and secondarily a delivery mechanism. You can patent one, the other or both together. There's definitely remixing, reformulation etc. for patent purposes, but it's not always that trivial to do. Re. regulatory capture, I don't know if…

"Re. regulatory capture, I don't know if the FDA or regulatory capture thereof is that huge an issue. The chief advantage other countries have is the ability to say, "No." Medicare doesn't have that ability..." Clearly, the influence of private interests is critical for the situation where those interests can set their terms and prices without fetters. Objecting that this isn't regulatory capture but something else s…

I'm not saying there's no regulatory capture, I am saying that an angry citizen calling their congressman is a very different kind of problem then cozy relations between industries and the agencies that regulate them. Both exist, but they have quite different political and policy ramifications, and I would suggest that citizens calling congressman is more fraught than agency/lobbying reform (already difficult in its own right).

You can already see people calling the FDA saying, "let this drug through, it helped me, though it failed its clinical trial." Right now, the FDA has some insulation from political meddling, but that's not a guarantee, and I think that problem gets 10x worse if the government gets involved in direct negotiations and price setting.

For example what happens when if/when Medicare says, "we're not paying more for name brand than generic."? You'll get tons of people calling their congressman saying, "I need NameBrandSuperDrug because GenericSuperDrug doesn't work." Despite the science being quite clear that the generic is virtually always fine.

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

#157

Post by [deleted] »

refurb wrote: post #148
toomuchtodo wrote: post #41

Earlier quoted context omitted.

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, a…

Laser sintering is a known technology. 3D printing drugs is a buzz word and a technology that doesn't even exist. As a chemist I can tell you it's a pipe dream. Chemistry just doesn't work that way.

[deleted]

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

#159

Post by entee »

maxerickson wrote: post #155
entee wrote: post #153

Earlier quoted context omitted.

Those aren't quite the same. Medicare part D plans are actually private insurance plans whose costs are subsidized by the government. It's not the same as the government itself negotiating for drugs, which is essentially what the NHS in England and many other systems in the developed world do.

Right. Part D is what people are talking about when they talk about Medicare not being able to negotiate prices. edit: That's one of the advantages of the privatized system, companies take the heat for having a formulary.

Yes and no, a detailed article covering the terms of the debate is here:

http://healthaffairs.org/blog/2016/09/19/the-politics-of-med...

Most relevant quote:

"One bargaining chip to attract market-oriented Republican votes was the so-called “noninterference clause”—a provision drug manufacturers had a major role in writing and getting through Congress—which banned negotiations between Medicare and pharmaceutical companies on drug prices and prevented the government from developing its own formulary or pricing structure. Instead of CMS negotiating on Part D plans’ behalf, prescription drug plans compete for enrollees and negotiate directly with manufacturers."

Part D (and presumably Part C plans that offer prescription coverage) negotiate with the drug companies individually. CMS cannot negotiate en-bloc for all the Part D plans. Therefore Part D plans have the same leverage as traditional insurers, which is to say some, but not nearly as much as All-Of-Medicare has.

The VA and Medicaid do regulate/negotiate drug prices, but those are much smaller populations. I think something like the VA system might work, but you'd have to have politicians willing to take some political risk or find a way of isolating drug price negotiations from political pressure. I think in this political climate, that's a really tall order. Remember when "If you want to talk to your doc about end of life plans we'll reimburse you for the visit" turned into Death Panels? I suspect we'd see something similar...

EDIT: and yes, private companies with a formulary are a great way to isolate yourself from the political heat, but you then lose the negotiating power government has ;)

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

#160

Post by joe_the_user »

entee wrote: post #156
joe_the_user wrote: post #154

Earlier quoted context omitted.

"Re. regulatory capture, I don't know if the FDA or regulatory capture thereof is that huge an issue. The chief advantage other countries have is the ability to say, "No." Medicare doesn't have that ability..." Clearly, the influence of private interests is critical for the situation where those interests can set their terms and prices without fetters. Objecting that this isn't regulatory capture but something else s…

I'm not saying there's no regulatory capture, I am saying that an angry citizen calling their congressman is a very different kind of problem then cozy relations between industries and the agencies that regulate them. Both exist, but they have quite different political and policy ramifications, and I would suggest that citizens calling congressman is more fraught than agency/lobbying reform (already difficult in its…

"I'm not saying there's no regulatory capture, I am saying that an angry citizen calling their congressman is a very different kind of problem then cozy relations between industries and the agencies that regulate them."

- What I would say has roughly similar results is a cozy relationship between regulated industry and regulator versus a cozy relationship between regulated industry and congressmen they finance - and even patient groups they finance, advertising strategies they follow, etc.,etc. I mean "Cui bono" comes up strongly here.

Your argument seems like an elaborate summary of the tree of the forest of health care corruption-in-a-broad-sense. I'm sure you can find a few more "trees" I didn't know about in this discussion but it seems like your approach still follows the path of ignoring this metaphorical forest for its trees.

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