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Fed Up with Drug Companies, Hospitals Decide to Start Their Own

nytimes.com

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Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#181

Post by maxerickson »

pas wrote: post #176
dragonwriter wrote: post #157

Earlier quoted context omitted.

> Contrary to your comment, yes, they generally are; No, they're not. > they're just using Hollywood accounting and referring to their profits as "excess earnings". No, they aren't. Excess earnings are the correct technical term. Non-profit status, even in theory, has nothing to do with whether you earn more in revenue than you expend in costs , it has to do with whether there are stockholders or others who have a cl…

So why aren't for profits the most profitable then? And the simple fact that a non profit can spend 6M USD on compensation to its CEO loudly advertises the healthcare provider market inefficiency.

With revenue in the billions that doesn't represent a significant cost (Say 1% on the higher side).

I'm pretty convinced the market for CEOs in general is broken, but it's also the case that largely eliminating CEO compensation wouldn't move prices much in any business.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#182

Post by steiger »

rtpg wrote: post #125
tacon wrote: post #103

For a fantastic discussion about the Byzantine process for generic drug approval, I recommend a recent episode of EconTalk[0]. The guest wrote a book called "Drug Wars: How Big Pharma Raises Prices and Keeps Generics off the Market"[1]. When up to half a billion dollars of revenue is at stake, the drug companies have incredible incentives to delay or prevent generics coming to market. Believe or not, they often simpl…

Is this a worldwide problem? Or is this really an American failing?

I live in Brazil and generics for drugs which patents are expired are widely available, accounting for 30~40% of all drug market. If I'm not mistaken, we even broke patents in some cases (HIV drugs), which is cool.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#183

Post by telchar »

majormajor wrote: post #31
Thriptic wrote: post #18

Earlier quoted context omitted.

The real root problems with the system are that a tiny minority of very sick patients account for an overwhelming majority of treatment costs; that it's difficult to prevent this from happening; and that the current care structures make it hard to take early action to incentivize these patients to improve. It also is almost impossible to have a real discussion about this fact because it makes people uncomfortable.

There's a lot of moralizing in this, without numbers justifying it. Show me the evidence that an overwhelming majority of costs come from few recalcitrant bad actors vs things like cancers, expensive surgical or drug remedies of rare diseases, or just plain expensive end-of-life care (a somewhat separate discussion from the others, but a conversation that'll have to be had sometime). Without that... the costs will al…

Mostly the expensive people are, as you say, the ones screwed by fortune or those whose health declined in the past for whatever reason and their present behavior is not going to be able to fix things even if it contributed to their present poor health. Still it doesn't make much difference to the hospital when they have to explain why a routine knee replacement is going to cost 20k.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#184

Post by thinkcontext »

shykes wrote: post #86

This article makes it seem like drug companies alone are responsible for predatory pricing in US healthcare, with hospitals being somehow on the consumer's side of the issue. In reality US hospitals are just as guilty of predatory behavior. If they do achieve lower costs through a new generics company, I do not trust them one bit to pass on the savings to patients. Why would they?

Its probably necessary but not sufficient for there to be more competition in this area. That there are nationwide shortages of saline bags and sodium bicarbonate indicates massive market failure, without evening considering more complex drug politics.

You raise a good point about drug companies not being the sole source of predatory pricing in US healthcare. US healthcare is in the neighborhood of $3T whereas drug spending is around $300B, though drug spending is going up faster than health spending overall.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#185

Post by jonlucc »

GeekyBear wrote: post #179
mft_ wrote: post #165

Earlier quoted context omitted.

Assuming you're referring to the general development and supply of all drugs (in particular new drugs, as well as generics) the simple answer is that the process of discovering and developing new drugs is both high-risk and also heinously expensive. As such, whoever approaches it needs to have many billions to spend and --very likely-- lose. The current capitalist Pharma model has developed to suit: investors in Phar…

Research from the Pew Charitable Trusts shows that in 2012 alone 27 Billion dollars was spent by US Pharmaceutical companies to promote their drugs to doctors and patients. http://www.pewtrusts.org/en/research-and-analysis/fact-sheet... This is money that could have been spent on R&D instead of advertising if we moved to a non-profit pharmaceuticals model.

Pharma researcher here (on the early science side, not market research or that kind of thing)

I think people vastly overestimate their physicians' ability to stay on top of newly published research, and that includes new drugs' safety and efficacy profiles. If I want the stuff I work on to reach patients (and I do), then I want doctors to know about it. In the absence of pharma marketing dollars aimed at doctors and patients, I would like if there were some way to bring doctors the new information. Maybe that should be handled by a third party that doesn't have the interests of pharma companies in mind, funded by all of the drug companies at the time of a new drug approval.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#186

Post by sseth »

maxerickson wrote: post #180
rtpg wrote: post #125

Earlier quoted context omitted.

Is this a worldwide problem? Or is this really an American failing?

I think it is worse in the US. India goes as far as waiving patents if a drug is too expensive.

There are companies which have patented drugs in India, but do not make their drugs available in India. The Indian Patent Law allows for compulsory licensing of such drugs to another manufacturer under certain conditions which meet public interest. This is not a free for all - there are significant legal tests that the manufacturer has to meet to get the CL, and i think only one or two cases have been granted. This provision of indian IPR laws has led to having India being put on an IP watchlist in the USA, though India's laws are compliant with the TRIPS agreement.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#187

Post by jonlucc »

pas wrote: post #176
dragonwriter wrote: post #157

Earlier quoted context omitted.

> Contrary to your comment, yes, they generally are; No, they're not. > they're just using Hollywood accounting and referring to their profits as "excess earnings". No, they aren't. Excess earnings are the correct technical term. Non-profit status, even in theory, has nothing to do with whether you earn more in revenue than you expend in costs , it has to do with whether there are stockholders or others who have a cl…

So why aren't for profits the most profitable then? And the simple fact that a non profit can spend 6M USD on compensation to its CEO loudly advertises the healthcare provider market inefficiency.

I have no idea about CEO compensation in general, but I'm curious what would be a reasonable salary/compensation for someone who manages several large facilities and thousands of staff, some of whom make 7 figures for their expertise. $6M plus perks doesn't seem that high to me, but maybe I'm desensitized by seeing so many other executives make gobs of money.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#188

Post by roadnottaken »

steiger wrote: post #182
rtpg wrote: post #125

Earlier quoted context omitted.

Is this a worldwide problem? Or is this really an American failing?

I live in Brazil and generics for drugs which patents are expired are widely available, accounting for 30~40% of all drug market. If I'm not mistaken, we even broke patents in some cases (HIV drugs), which is cool.

Why is that cool? Intellectual property law is necessary for industries like Pharma. No IP, no new drugs.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#189

Post by zerostar07 »

jopsen wrote: post #133
tacon wrote: post #103

For a fantastic discussion about the Byzantine process for generic drug approval, I recommend a recent episode of EconTalk[0]. The guest wrote a book called "Drug Wars: How Big Pharma Raises Prices and Keeps Generics off the Market"[1]. When up to half a billion dollars of revenue is at stake, the drug companies have incredible incentives to delay or prevent generics coming to market. Believe or not, they often simpl…

> The drug companies will contract with a generic company that never, actually gets to production (wink, wink). Sounds like I should setup shop as "generic drug company" and land me one of those contracts where I promise to never reach market :)

Sorry, i have a patent on that.
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