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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)

#161

Post by dodgedcactii »

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…

lol at "appealing" to DT based on logic, reason, human decency, critical or sustained long-term thinking.

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

#162

Post by dodgedcactii »

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…

Same execs that probably sell you a line about R&D costs, right? Not sure why you'd ever trust them to speak truthfully about delivering good health to Americans.

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

#163

Post by TheCoelacanth »

calvinbhai wrote: post #91

Drug prices in US go up because of collusion between Insurance Companies and Drug manufacturers. Would I buy expensive health insurance if drugs cost me $100 a month? Most probably never. What if the sticker price for my monthly dose of drugs was $10,000 or $50,000? You bet I'd go get an insurance that'd cost $500 a month. With such sticker shock, manufacturer reaps in profits. Insurance companies get to charge highe…

Or even simpler, just allow people to buy the drugs elsewhere and import them into the US. With most products that is allowed, which through market pressure keeps prices from diverging too much between different countries. With drugs it is not allowed, so drug prices can diverge to a much greater extent.

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

#164

Post by mjevans »

refurb wrote: post #147
breatheoften wrote: post #140

Earlier quoted context omitted.

This. It's explicitly capitalistic to be against socializing risk and privatizing profits -- which the is game being played with the current setup of trying to fund drug creation via patent monopolies combined with per unit regulatory pricing games. Academia should be the primary means of drug discovery. Drug manufacturing and distribution _should_ be a commodity business. Anything otherwise and all research on the t…

Academia should be the primary means of drug discovery. Drug manufacturing and distribution _should_ be a commodity business You're missing a big step! The key role drug companies play today: drug development. Discovery is the cheapest step in the process. Running clinical trials is where most of the money goes. I just can't picture academia funding tens of billions of dollars of drug development. Where would that mo…

I don't write contracts but my current day job is "Information Technology 'stuff'" at a company that is related to this field.

While I couldn't talk about and have made no effort to remember the (obviously confidential) details of conversations I've overheard, I have heard enough to know the general trend in this area.

There are two main components to worry about here.

1) Cost of the procedure. Currently medical trials are activities by the 'drug company', except for things that a patient in that position 'should' need anyway. If academia were developing (at testing!) the new medicine/techniques then the 'medical research' system would need to cover it. Obviously this is more likely to work out with a 'single payer' system.

2) Risks. The unknown is risky. It can lead to worse outcomes and increased expenses. Similar to point 1, there would need to be coverage of this built in as well. As a special addition to point 1 it would also involve fixing 'malpractice' lawsuits and the like.

I think that if I were ever to be involved in a malpractice circumstance what I would actually want would be:

  * If the involved practitioners are //at fault// them to be barred from the profession and related fields.
  * If anyone lied or covered up information that would have lead to a better outcome them to go to jail.
  * The absolute best effort at fixing and/or treating the resulting issue to be provided (a single payer system just should).

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

#165

Post by breatheoften »

chimeracoder wrote: post #149
breatheoften wrote: post #140

Earlier quoted context omitted.

This. It's explicitly capitalistic to be against socializing risk and privatizing profits -- which the is game being played with the current setup of trying to fund drug creation via patent monopolies combined with per unit regulatory pricing games. Academia should be the primary means of drug discovery. Drug manufacturing and distribution _should_ be a commodity business. Anything otherwise and all research on the t…

> Academia should be the primary means of drug discovery. Drug manufacturing and distribution _should_ be a commodity business As mentioned below, the discovery is not the biggest driver of costs. But you should also ask yourself: why is this not already the case? Currently, there's nothing stopping other countries from using taxpayer money to fund drug development locally. Except, by and large, they don't - as menti…

I would be surprised if the cost of running clinical trials paid by sponsors is anywhere near the infrastructure cost needed to develop the institutions which perform them. I very much suspect that the price paid to "sponsor funding" for clinical trial research serves more as a barrier to entry to reduce competition in the drug market than it does as a means to cover the cost of running the research (with the enormous infrastructure costs paid via other means that makes running the research possible) ... and if I am right -- us taxpayers pay enormous amounts of money into infrastructure processes that then are used below cost by private companies to capture patent monopolies. Socialized risk, privatized profits.

The solution is the same regardless of the behavior of other countries -- reduce the role of government granted monopolies, redirect public subsidies that go toward funding commercial clinical trials into more public development outfits, and commodities the drug production/distribution (as cost is minimal once the drug is discovered and validated for use).

If we think private drug companies are actually any good at "picking winners" and dealing with risk of unknowns with respect to drug efficacy -- establish a derivatives market where they can gamble about which drugs in the development pipeline are likely to work -- and see if any of them are still around in a few years ...

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

#166

Post by entee »

joe_the_user wrote: post #160
entee wrote: post #156

Earlier quoted context omitted.

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…

Not sure how I'm ignoring the forest, I'm just saying you may need a different chainsaw depending on the trees ;)

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

#167

Post by narrowrail »

_jal wrote: post #56
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)

This is very, very important. The drug market is one of the farthest things we have from a free market in the US outside of military weapons. It is just massively dysfunctional due to a combination of special interest lobbying combined with stepwise path-dependency. A huge part of the health care discussion in the US starts from assuming our current system is somehow natural. It isn't. It is an engineered thing, with…

>why the US is such a special snowflake that what works in various ways in every other first-world country cannot work here.

I don't care for this argument simply because the US was the first country to throw off monarchical rule. Why the need for homogeneity? Shouldn't we have as many different implementations as possible? Personally, I don't care for centralized power (i.e. Facebook).

Didn't Google take a different approach to site ranking than every other search engine? If people want to see what state-level healthcare looks like, check out MA (so-called Romney-care). We had an amendment to the CO state constitution this past election that I voted for, but ultimately failed.

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

#168

Post by narrowrail »

I searched all the comments and saw no mention of hospitals. I believe hospitals[0], pharma companies, and insurance companies have colluded to set prices for all healthcare which prevents the actual 'users' from price discovery.

[0]https://en.wikipedia.org/wiki/American_Hospital_Association

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

#169

Post by mlindner »

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 just price controls and fails for every other reason that price controls fails elsewhere. It puts the cost of drugs well above the market rate for such drugs in that country and opens the door for local producers to simply undercut. The long term effect of is this is that US sellers will essentially become galapagos companies that only sell to the US and you effectively create two markets. The end state is exactly where we're at now but only with the US bearing even more of the cost.

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

#170

Post by spangry »

harryh wrote: post #50
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.

The US spends 17.1% of of its GDP on healthcare.

The 5 countries that are richer than the USA (GDP per capita) pay an average of 7.77%. Excluding Qatar, it's 9.03%.

The top 10 richest countries (excluding the USA) spend an average of 8.03% of their GDP on healthcare, and I'm pretty sure at least a few of these have universal public health insurance.

I really don't think it's a case of either the US being 'rich', or because the US is somehow subsidising the rest of the world. By any rational measure, you're simply getting hosed. These discussions are hilarious because I always hear the same domestic propaganda that's spread around by the pharmaceutical industry repeated verbatim, over and over again.

You're paying more than DOUBLE compared to the 9 other richest countries in the world. You're getting gouged. If you can't even admit that maybe, possibly there's a problem here, it's unlikely anything is going to get solved.

Data from here: http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS?end=2014&...

And here: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... (using IMF GDP figures)

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