The Best Fix for American Drug Prices Is Already on the Books • Hacker News Board

Re: The Best Fix for American Drug Prices Is Already on the Books

#61

Post by rayiner » Mon, May 14, 2018, 3:38 AM UTC

mikeash wrote: post #50

pg_bot wrote: post #39

Earlier quoted context omitted.

That is around 90 Billion dollars. I'm not sure where you got that number exactly, but phrma member companies list their combined 2016 R&D expenditures at 65.3 billion[0] so it seems plausible. For context that is around the GDP of Slovakia or Sri Lanka. (65th and 66th biggest world economies)[1] [0] https://www.phrma.org/press-release/randd-investment-by-u-s-... [1] https://en.wikipedia.org/wiki/List_of_countries_by…

I don’t understand how comparing it to the GDP of small foreign countries adds context. The important context is what I stated: it’s about $300 per person. That means that it’s a very small portion of our ~$10,000/year per capita health care expenditures. Anyone who knows how much their health insurance costs per year can immediately see how much of that funds their share of pharma R&D. The answer will almost always…

Pharmaceutical expenditures are about $1,000 per capita. Turning $1,000 of revenue into $300 in R&D compares very favorably to other tech industries.

Re: The Best Fix for American Drug Prices Is Already on the Books

#62

Post by rayiner » Mon, May 14, 2018, 3:39 AM UTC

torpfactory wrote: post #37

rayiner wrote: post #31

Earlier quoted context omitted.

> We ought not look at it through our normal understanding of goods in a free market. This is the biggest flaw in how we think about many important issues. Market economics isn’t something you decide to apply or not based on public policy. Instead, its the framework of actions and consequences against which you must determine public policy. If your policy is to have private companies develop and commercialize medicin…

We most certainly do get out of market economics for some things we deem important. Think defense, water and electric utilities, and law enforcement.

We don’t “get out of market economics.” We choose to find those things through government. But we’re still slaves to market forces. E.g. the government prices water too low and thus encourages waste of water resources.

Re: The Best Fix for American Drug Prices Is Already on the Books

#63

Post by maxerickson » Mon, May 14, 2018, 3:44 AM UTC

jerrysievert wrote: post #14

aaavl2821 wrote: post #13

Earlier quoted context omitted.

it costs aver $2.7B to get a drug approved based on the most accepted estimates. biggest cost is cost of failure. r&d is hard, highly regulated and expensive

I'm not arguing that it isn't expensive, but when, for instance Johnson & Johnson spends $8.2B/yr on R&D, and spends $17.5B that same year on marketing those same drugs, it's hard to argue that the cost of R&D is the major issue here. edited to add: especially when you look at the US R&D tax credit, available under section 41 of the tax code.

You're counting ads for baby shampoo and band aids as drug marketing.

I'm sure Johnson & Johnson does spend an awful lot on marketing drugs, but boy do the details hidden in SGA sure get hand waved away.

Re: The Best Fix for American Drug Prices Is Already on the Books

#64

Post by danShumway » Mon, May 14, 2018, 3:58 AM UTC

jandrewrogers wrote: post #51

khazhoux wrote: post #19

Crazy idea: all pharmaceutical research should be publicly funded and publicly-owned. No private ownership of drug patents, period. "But this will disincentive research!" Maybe. Or, tax people more in order to fund the research. The tax revenue would go directly to researcher salary, equipment, expenses. Even a large tax increase can't be worse than today, where people have to pay huge $$$ anyway, of which a large cu…

The reality is that governments have demonstrated limited interest in effective biomedical R&D. Europe does not invest proportional to their population or economy, their governments are happy to outsource it to the US (and Asian) private sector. And there is the longstanding issue that what governments do fund is biased by political fashion and not the areas of research that will maximize benefit. There has been a hu…

Many software developers do take massive pay cuts to make the world a better place. People like Linus Torvalds could be much, much wealthier if they wanted to. Jason Scott is probably the single most important digital archivist alive right now; he's currently running a podcast to help himself get out of debt while he works for a company that doesn't offer a pension plan.

I'm not just talking about fringe developers either[0]. A huge portion of our modern tech industry is built on the backs of people who made a conscious choice to prioritize public good over their own good.

I've nothing against developers who make money, but my takeaway from the tech industry has actually been that pure profit-driven motivations are simply not enough to build sustainable, resilient technology. I really hope it's not naive to expect at least some small portion of the population to be charitable because my experience has been that it's often the charitable people who end up getting crap done.

Pharma research may be different, because that comes with equipment costs. You need access to that equipment. But if that's the case, the software industry is maybe a bad example to compare it to.

Generally agreed on government funding though; maybe I'm too pessimistic but I just can't see the US government investing serious effort into drug research.

[0]: https://arstechnica.com/information-technology/2014/04/tech-...

Re: The Best Fix for American Drug Prices Is Already on the Books

#65

Post by aaavl2821 » Mon, May 14, 2018, 3:59 AM UTC

khazhoux wrote: post #19

Crazy idea: all pharmaceutical research should be publicly funded and publicly-owned. No private ownership of drug patents, period. "But this will disincentive research!" Maybe. Or, tax people more in order to fund the research. The tax revenue would go directly to researcher salary, equipment, expenses. Even a large tax increase can't be worse than today, where people have to pay huge $$$ anyway, of which a large cu…

would you advocate government taking over other industries, or is there something special about biomedical research?

Re: The Best Fix for American Drug Prices Is Already on the Books

#66

Post by refurb » Mon, May 14, 2018, 4:03 AM UTC

disordinary wrote: post #47

tomohawk wrote: post #4

One of the biggest reasons is that the US essentially subsidizes drugs for many other countries, such as Canada, that impose price controls, and threaten to allow other manufacturers to provide the drugs in their countries if the companies don't accept the imposed price. This enables these countries to get access to new medicine without paying the cost of developing the new medicine. Its time to end the trade war on…

That's not true. If the US had a centralised health system like other developed countries they would have the same bargaining power. In NZ we have Pharmac who bulk purchases drugs for the country, they can get good deals because they operate in a free market and can play the pharma companies off each other. Don't blame other countries for your own governments inability to bargain. Pharma companies still have patents…

it's not about negotiation at all. NZ has a population of 5M. The largest private health insurer in the US, United Health, cover 40M people. They can, and do, negotiate drug prices.

Who do you think would get a better deal?

Re: The Best Fix for American Drug Prices Is Already on the Books

#67

Post by aaavl2821 » Mon, May 14, 2018, 4:05 AM UTC

pg_bot wrote: post #27

I would suggest anyone who is interested in reducing drug prices listen to this econtalk episode with Robin Feldman[0]. They discuss her book "Drug Wars how big pharma raises prices and keeps generics off the market"[1] In the episode they discuss all sorts of shenanigans that pharmaceutical companies pull. If you want real reform you need to look at weak patents, eliminating "reverse payments" to generic companies,…

the US actually has more generic drugs as a % of total rx than many OECD countries. Yes pharma companies actively try to protect patents in ways that try to game the system, but it's actually much harder to do than it used to be bc payers are much more aggressive / consolidated. The bigger issue is probably generic drug price inflation and the high cost of developing innovative drugs. Very hard to solve the latter without stifling innovation

http://www.commonwealthfund.org/publications/issue-briefs/20...

Re: The Best Fix for American Drug Prices Is Already on the Books

#68

Post by refurb » Mon, May 14, 2018, 4:06 AM UTC

jancsika wrote: post #38

refurb wrote: post #35

Earlier quoted context omitted.

There is nothing to stop them. The only reason why "evergreening" works is because doctor's write scripts for the "new" drug. Sometimes it's worth it! If you need to take a drug three times a day and the new version is only once, that can improve patient adherence and outcomes. However, sometimes the added value is minuscule. In that case insurance companies should just say "we're not paying for it since the added co…

> Sometimes it's worth it! If you need to take a drug three times a day and the new version is only once, that can improve patient adherence and outcomes. For the moment, let's ignore that case by simply calling the improved drug a new drug. > However, sometimes the added value is minuscule. In that case insurance companies should just say "we're not paying for it since the added cost is not worth it". I'm still lost…

The pharmacist should do that, but they don't.

I've done it before at a doctor. "Here is the latest drug!!". "Can we start with a generic?", "Sure".

My co-pay just went from $50 per month to $5.

I work with a lot of doctors, they don't think it's their job to save patients money. They'll do it if asked though.

Re: The Best Fix for American Drug Prices Is Already on the Books

#69

Post by tracker1 » Mon, May 14, 2018, 4:08 AM UTC

I'd go a step further... you cannot sell a drug unless there is another company prepared to sell a generic version. It's a national security issue. Dual vendor required.

Also, no blocks on re-imports from foreign nations.

Re: The Best Fix for American Drug Prices Is Already on the Books

#70

Post by refurb » Mon, May 14, 2018, 4:11 AM UTC

pg_bot wrote: post #27

I would suggest anyone who is interested in reducing drug prices listen to this econtalk episode with Robin Feldman[0]. They discuss her book "Drug Wars how big pharma raises prices and keeps generics off the market"[1] In the episode they discuss all sorts of shenanigans that pharmaceutical companies pull. If you want real reform you need to look at weak patents, eliminating "reverse payments" to generic companies,…

I'm going to go on a bit of a rant. I agree blocking access to drugs for bioequvalence is bullshit. Drug companies can do it by claiming that the law doesn't allow them, but it's BS.

The reverse payments I see nothing wrong with. Imagine you're a drug company holding a patent. A generic company decides to try and invalidate it. You think there is a 50% chance they'll win. The generic company agrees.

You have two options: 1) spend a ton of lawyers and still possible lose, 2) go to the generic company and agree to let them produce the generic 5 years before patent expiration.

With the 2nd option, you're basically agreeing to split up the pie evenly rather than risking it all.

In every case where reverse payments are made, the drug goes generic earlier then if they went to court and got the patent upheld.

Eliminate reverse payments and what you're doing is making lawyers rich. In many cases the branded drug company would win and block generics for many more years than if a reverse payment was made.