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

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

#91

Post by AnthonyMouse »

disordinary wrote: post #52
AnthonyMouse wrote: post #17

Earlier quoted context omitted.

> the last numbers I saw, 2015, showed marketing budgets for medicine to be often times twice what was being spent on R&D in the US. The marketing expense isn't necessarily avoidable. Suppose it costs $50M to research a drug and patients will pay $1000 for a course of treatment. If you do no marketing then you get forty thousand customers and can't recover your R&D. If you spend $100M on marketing then you get two hu…

Surely though the best marketing is the effectiveness of the product, if it's a good product then doctors will prescribe it. I don't know if it's true or not, but looking at US movies/tv shows it seems like everyones taking medication which I doubt they actually need. Here I don't know very many people who actively take regular medication, I know that people who move here complain at how doctors are stingy with presc…

> Surely though the best marketing is the effectiveness of the product, if it's a good product then doctors will prescribe it.

Let's take this from the other side. Suppose we prohibit the marketing.

Now you have to amortize $50M in R&D over 40,000 patients instead of 200,000. So a course of treatment can't cost $1000, it has to be more than that.

Cutting out the marketing expense makes the price per patient go up.

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

#92

Post by AnthonyMouse »

peterashford wrote: post #36
AnthonyMouse wrote: post #25

Earlier quoted context omitted.

> If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling. It is very much like many other products. If you don't have food you will die of starvation, if you don't have shelter you will die of exposure, etc. The real issue is drug patents. Nobody is complaining about the price of ibuprofen any more than they com…

But drugs are produced in other countries, too, and they manage to do so without charging what US companies do.

> But drugs are produced in other countries, too, and they manage to do so without charging what US companies do.

It's a global market. Companies can develop drugs in other countries and recover a sizable chunk of their investment by selling in the US market.

In other words, the other countries aren't paying their fair share of the research costs, and that is causing a global underinvestment in medical research.

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

#93

Post by disordinary »

AnthonyMouse wrote: post #91
disordinary wrote: post #52

Earlier quoted context omitted.

Surely though the best marketing is the effectiveness of the product, if it's a good product then doctors will prescribe it. I don't know if it's true or not, but looking at US movies/tv shows it seems like everyones taking medication which I doubt they actually need. Here I don't know very many people who actively take regular medication, I know that people who move here complain at how doctors are stingy with presc…

> Surely though the best marketing is the effectiveness of the product, if it's a good product then doctors will prescribe it. Let's take this from the other side. Suppose we prohibit the marketing. Now you have to amortize $50M in R&D over 40,000 patients instead of 200,000. So a course of treatment can't cost $1000, it has to be more than that. Cutting out the marketing expense makes the price per patient go up .

But then those 160,000 other patients are either getting medication that they don't need or are getting medication which is inferior to something else which they should have gotten but has inferior advertising. I'd rather pay more and either only use the medication when I need it, or get the most effective medication.

One of the reasons why the US spends so much more than the rest of the world is because of the share amount of prescription drugs that people have. Here it's extremely hard to convince a Dr that anything other than paracetamol and rest is required for most ailments, yet life expectancy is higher than in the US.

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

#94

Post by AnthonyMouse »

kirubakaran wrote: post #87
rayiner wrote: post #61

Earlier quoted context omitted.

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.

According to https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... it is close to $10k, not $1k.

That is total healthcare expenditures including things like doctor/nurse/lab tech salaries, medical devices, administrative overhead, etc. The amount spent on pharma is ~$1K per capita.

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

#95

Post by carlmr »

torpfactory wrote: post #7

Here’s the rub with developing something as important as a medicine. If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling. We ought not look at it through our normal understanding of goods in a free market. Take, for example, Sovaldi, a drug which cures Hepatits C. After discovering this drug and confirming it…

>Gilead Sciences is charging $84,000 for a course of treatment and there isn’t enough money to treat every patient. Gilead offers the same treatment in Egypt for $900. (https://www.reuters.com/article/us-hepatitis-egypt-gilead-sc...)

The free market solution would be to send your patients to Egypt to get treated. Ecnonomy class flight + drugs = $2000 (maybe $3000 from Hawaii).

The biggest issue with American health care is if you have something acute that needs immediate treatment. Then you're f*ed. But for 95% of non-acute cases, travel to Latin America, travel to Europe, travel to North Africa, or Asia and get the drugs + plane ticket at out of pocket prices lower than your co-pay.

I know this is ecologically terrible in terms of CO2, but it's what I would be doing in that case.

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

#96

Post by AnthonyMouse »

disordinary wrote: post #93
AnthonyMouse wrote: post #91

Earlier quoted context omitted.

> Surely though the best marketing is the effectiveness of the product, if it's a good product then doctors will prescribe it. Let's take this from the other side. Suppose we prohibit the marketing. Now you have to amortize $50M in R&D over 40,000 patients instead of 200,000. So a course of treatment can't cost $1000, it has to be more than that. Cutting out the marketing expense makes the price per patient go up .

But then those 160,000 other patients are either getting medication that they don't need or are getting medication which is inferior to something else which they should have gotten but has inferior advertising. I'd rather pay more and either only use the medication when I need it, or get the most effective medication. One of the reasons why the US spends so much more than the rest of the world is because of the share…

> But then those 160,000 other patients are either getting medication that they don't need or are getting medication which is inferior to something else which they should have gotten but has inferior advertising.

Yes, if the advertising is total bullocks that is what happens. But getting rid of the advertising still doesn't make the price of the drug go down for the people who actually need it.

And it's at least theoretically possible for the advertising to help patients who otherwise wouldn't have known about the drug, e.g. because they asked a doctor about it years ago and there was no treatment then even though there is one now.

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

#97

Post by TomK32 »

koolba wrote: post #22
torpfactory wrote: post #7

Here’s the rub with developing something as important as a medicine. If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling. We ought not look at it through our normal understanding of goods in a free market. Take, for example, Sovaldi, a drug which cures Hepatits C. After discovering this drug and confirming it…

Medicaid should consider medical tourism. Sure it’s absurd to have to ship patients halfway around the world to literally take some medicine but it would be cost effective... https://en.m.wikipedia.org/wiki/Medical_tourism

English patients in the south-west are already taking the trip across the channel for much quicker operation appointments that they'd get with the NHS. For the near future that won't come at an extra cost for the patients.

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

#98

Post by dagw »

peterashford wrote: post #36
AnthonyMouse wrote: post #25

Earlier quoted context omitted.

> If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling. It is very much like many other products. If you don't have food you will die of starvation, if you don't have shelter you will die of exposure, etc. The real issue is drug patents. Nobody is complaining about the price of ibuprofen any more than they com…

But drugs are produced in other countries, too, and they manage to do so without charging what US companies do.

Those companies charge exactly the same as the US companies when selling to the US. Much like US companies charge the same as European companies when selling to Europe.

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

#99

Post by dagw »

carlmr wrote: post #95
torpfactory wrote: post #7

Here’s the rub with developing something as important as a medicine. If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling. We ought not look at it through our normal understanding of goods in a free market. Take, for example, Sovaldi, a drug which cures Hepatits C. After discovering this drug and confirming it…

>Gilead Sciences is charging $84,000 for a course of treatment and there isn’t enough money to treat every patient. Gilead offers the same treatment in Egypt for $900. ( https://www.reuters.com/article/us-hepatitis-egypt-gilead-sc... ) The free market solution would be to send your patients to Egypt to get treated. Ecnonomy class flight + drugs = $2000 (maybe $3000 from Hawaii). The biggest issue with American health…

Of course the only reason Gilead feels comfortable charging $900 to Egypt is that they believe they have the market fairly well segmented. If that market segmentation where to disintegrate then the prices in Egypt would rapidly rise (and prices in the US would no doubt fall).

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

#100

Post by omegaham »

carlmr wrote: post #95
torpfactory wrote: post #7

Here’s the rub with developing something as important as a medicine. If it works, people often _need_ it to prolong their life or improve their health. What drug companies are selling... isn’t like what other companies are selling. We ought not look at it through our normal understanding of goods in a free market. Take, for example, Sovaldi, a drug which cures Hepatits C. After discovering this drug and confirming it…

>Gilead Sciences is charging $84,000 for a course of treatment and there isn’t enough money to treat every patient. Gilead offers the same treatment in Egypt for $900. ( https://www.reuters.com/article/us-hepatitis-egypt-gilead-sc... ) The free market solution would be to send your patients to Egypt to get treated. Ecnonomy class flight + drugs = $2000 (maybe $3000 from Hawaii). The biggest issue with American health…

I spent several years stationed in Yuma, AZ, and a lot of people would come to Yuma to do just that. They can't afford a procedure in the US, or they're waitlisted to oblivion in Canada, so they fly into Yuma, take a shuttle across the border, and have it done in Algodones.

As always, you need to be smart, but people are willing to take the risk of complications if it means the difference between a modest expense and facing a medical bankruptcy.

The same thing applies with dental work. All of my wife's root canals were done in Mexico.

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