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Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

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Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#41

Post by matthewmacleod »

notyourday wrote: post #5
nasmorn wrote: post #3

Earlier quoted context omitted.

I think the FDA will fight to your death for your right to safe medicine.

I'm baffled by the snark. Could someone please attempt to reconcile the following positions for me: 1. We need regulation of drugs/medicine/etc because we do not want some snake oil peddlers peddling arsenic as medicine? 2. Regulations prevent us from getting shit cheap! Baaaaa!

In line with the enduring trend of public discourse, all nuance is cast aside.

We self-evidently need regulation of medicines and medical devices, at least until we hit some glorious future utopia of flawless consumer knowledge. Otherwise, people will come along, and they will sell products and devices that will harm people, and they will do it by lying about them and covering up their problems.

On the other hand, it's possible that the relatively slow pace of regulation and medical testing could cause problems bringing potentially beneficial treatments to market. This might represent an excess focus on safety at the expense of the benefits in access to new and innovative treatments.

Naturally the argument should be something along the lines of "I think we should reform medical testing to enhance the availability of innovative treatments" versus "I think that the loosening of medical regulation will result in an increase in the harmful outcomes of dangerous and untested treatments". Both ideas that are totally reasonable to think might be the case, and for which you can imagine undertaking some kind of evidence-based process to establish if reform is needed, and if so what form it might take.

But of course, snark is much easier.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#42

Post by notyourday »

jsjohnst wrote: post #37
notyourday wrote: post #25

Earlier quoted context omitted.

It contradicts basic economics. If you raise prices 8000x and I will go into competition with you and raise prices 7999x i.e. do what MCI did to ATT and Vizio did to Samsung.

In the examples you gave, they were huge markets and they were ripe for disruption. As the article laid out, most of the drugs which have experienced this huge hike are ones with very limited markets. It’s not worth it for a pharmaceutical company to jump into a new drug with almost no market for it.

Medications blow electronics market out the water.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#43

Post by throwaway2016a »

cvsh wrote: post #36
throwaway2016a wrote: post #28

No mention that the average wage in Tanzania is $45 to $50 a month? As a proportion to wage it is actually more comparable than at first glance. As a solution though, I think we need reciprocity between drug regulatory agencies and open up drug sales between countries that have reciprocity. For example, if a drug is approved for sale in Canada it should be purchasable by people in the US and visa versa. It would allo…

The median monthly household income in the U.S. is $4710. The difference is two orders of magnitude.

Correct, if you were to go purely by the wages, the pill should cost $4 in the US not $400. It is still high, I was just pointing out that there are market differences. And to expand on that, the illness the drug in question is more common in Tanzania (per the article) so I can only presume the drug company can sell an order of magnitude more and might actually be making almost as much profit in aggregate on that $0.04 as they do the $400 here.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#44

Post by chapium »

gaius wrote: post #12
empath75 wrote: post #4

The answer is that our insurance and medical billing system is a complete tirefire and needs to be burned to the ground and replaced with something sane.

If the pill retailed for $0.04 in the US could the R&D be recouped? Americans should feel good about high drug prices: that's your aid to the Third World right there. Not the most efficient technique but still better than not doing it at all.

Since the patent has expired, the incentive to R&D the drug has as well.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#45

Post by mtgx »

throwaway2016a wrote: post #43
cvsh wrote: post #36

Earlier quoted context omitted.

The median monthly household income in the U.S. is $4710. The difference is two orders of magnitude.

Correct, if you were to go purely by the wages, the pill should cost $4 in the US not $400. It is still high, I was just pointing out that there are market differences. And to expand on that, the illness the drug in question is more common in Tanzania (per the article) so I can only presume the drug company can sell an order of magnitude more and might actually be making almost as much profit in aggregate on that $0.…

The article explains why it's so expensive:

> Why are prices so different in the U.S.?

> "In other countries, there are price control methods. The government steps in to ensure drug prices do not increase by a certain amount," Alpern says. "There are no price control mechanisms in the U.S."

> Between 2011 and 2016, mebendazole's price jumped more than 8,000 percent, from $4.50 to $369.

So it was indeed $4.5 in the U.S. - until the company decided to get greedy.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#46

Post by harryh »

gizmo wrote: post #21
harryh wrote: post #15

Earlier quoted context omitted.

While in general I agree with you that is not the case here. The drug's patent expired decades ago. The issue is that there is only 1 US manufacturer giving them pricing power. It's unclear to me why another drug manufacturer doesn't come in and undercut the price. This is what happens in most other industries. My gut suspects the arduous FDA approval process, but I have no real evidence for this hypothesis.

Because there is no price the competitor can charge that the original supplier can't match. There is no profit to be made, unless there is only a single manufacturer. Also, it's difficult to acquire approval needed from the FDA to demonstrate the new drug is safe and equivalent to the already approved because the original producer won't cooperate and provide relevant samples to their competition so they can demonstra…

Because there is no price the competitor can charge that the original supplier can't match.

This is a commonly cited reason but I don't buy it. They're selling these things for 4 cents in tanzania so we're talking about something that is practically free to make. There are lots of things that cheap where we see competition in the US: paperclips, reams of paper, chewing gum, whatever.

Why is there competition for these things but not cheap drugs?

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#48

Post by FLUX-YOU »

geekamongus wrote: post #29
empath75 wrote: post #4

The answer is that our insurance and medical billing system is a complete tirefire and needs to be burned to the ground and replaced with something sane.

The answer is that we buy health insurance, not health care.

The problem is that insurance costs continue to rise for no real reason. They even made costs rise when more people were insured because of ACA. In what world does that make sense?

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#49

Post by jonwachob91 »

justin66 wrote: post #31
harryh wrote: post #15

Earlier quoted context omitted.

While in general I agree with you that is not the case here. The drug's patent expired decades ago. The issue is that there is only 1 US manufacturer giving them pricing power. It's unclear to me why another drug manufacturer doesn't come in and undercut the price. This is what happens in most other industries. My gut suspects the arduous FDA approval process, but I have no real evidence for this hypothesis.

> It's unclear to me why another drug manufacturer doesn't come in and undercut the price. From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug. (Some of that is about FDA regulatory approval, but not much sinc…

>>From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug.

The article also says albendazole, the drug in question, can be purchased in the UK for $2. Why can I not start a pharma company that A) imports albendazole (and other rare disease drugs) from the UK and other 1st world country at a reasonable markup or B) orders albendazole, and other rare disease drugs, from the same manufacturer that makes it for the UK, and other 1st world countries, at a reasonable markup?

I'm genuinely curious about the regulatory landscape of that question.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#50

Post by harryh »

justin66 wrote: post #31
harryh wrote: post #15

Earlier quoted context omitted.

While in general I agree with you that is not the case here. The drug's patent expired decades ago. The issue is that there is only 1 US manufacturer giving them pricing power. It's unclear to me why another drug manufacturer doesn't come in and undercut the price. This is what happens in most other industries. My gut suspects the arduous FDA approval process, but I have no real evidence for this hypothesis.

> It's unclear to me why another drug manufacturer doesn't come in and undercut the price. From the sound of things these diseases were until very recently isolated to poorer countries. Even today, with the increased number of cases, there might not be enough money to be made based on a few sick North Americans to justify tooling up to make a new drug. (Some of that is about FDA regulatory approval, but not much sinc…

Ideally the drug company making this thing would just stop being boneheads about pricing.

I think this is silly. We don't expect that companies "stop being boneheads" (by which I assume you mean act more ethically) when it comes to the pricing of televisions, or food, or household goods, or practically anything else. Why should we expect it for these pills? That expectation will be doomed to failure in many instances.

A more ideal scenario would be to examine the underlying reasons that allow the company to charge so much for something that apparently costs so little to make. If we can understand that problem we should be able to implement fixes that lead to proper pricing without the expectation that profit seeking corporations will magically decide to forgo profit just to be nice.

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