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The Hidden Monopolies That Raise Drug Prices

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Re: The Hidden Monopolies That Raise Drug Prices

#191

Post by jessriedel »

spangry wrote: post #187
jessriedel wrote: post #154

Earlier quoted context omitted.

With all the sarcasm, it's hard to tell how broad of a point you're trying to make. Do dispute the fact that Australia free-rides to a non-trivial extent on US medical R&D?

Yes I do dispute that notion. Actually I dispute the entire idiot notion that the US is somehow subsidising the rest of the worlds' healthcare. In actual fact, pharmaceutical / medical device companies will simply charge whatever the market will bear, and it just so happens the US market will bear almost any price. If some market won't bear a profit making price, pharma companies simply won't sell into it. It makes u…

That's a long rant that doesn't even address the standard econ 101 argument. It's especially weird to quote spending data since that's what one would expect if the US was subsidizing the world.

Re: The Hidden Monopolies That Raise Drug Prices

#192

Post by spangry »

jessriedel wrote: post #191
spangry wrote: post #187

Earlier quoted context omitted.

Yes I do dispute that notion. Actually I dispute the entire idiot notion that the US is somehow subsidising the rest of the worlds' healthcare. In actual fact, pharmaceutical / medical device companies will simply charge whatever the market will bear, and it just so happens the US market will bear almost any price. If some market won't bear a profit making price, pharma companies simply won't sell into it. It makes u…

That's a long rant that doesn't even address the standard econ 101 argument. It's especially weird to quote spending data since that's what one would expect if the US was subsidizing the world.

It's also what one would expect if US consumers are getting horribly gouged on prices. But then I guess you'd also expect to see pharmaceutical companies enjoying super high profit levels... Oh wait...

EDIT: Given I am unable to address the 'econ101 argument', would you care to take a shot?

Re: The Hidden Monopolies That Raise Drug Prices

#193

Post by refurb »

kgwgk wrote: post #188
refurb wrote: post #178

Earlier quoted context omitted.

Yes, access has gotten better, somewhat driven by discounts, but also driven by lawsuits against Medicaid. Where I'm coming from is that there are 3.5M people in the US with HCV. Let's say 10% are in California (350,000). Many of them are on Medicaid. Medicaid estimates it will be spend $1B on these drugs in 2017[1]. Based on that article, it comes out to 14,300 patients. A small fraction of those with HCV. I would i…

I see is no reason to think the increase in numbers treated would have been so large that payers would have spent more dollars than they did, so its not clear that Gilead's revenue (let alone profit) would have been higher.

We agree to disagree!

I think Gilead's pricing scheme left a bad taste in the payer's mouths and probably caused them to be much more restrictive than they otherwise would have.

Yes, payers still would have worried about total budget impact, but a lower price means more value. If a payer can spend another $1M and treat another 50 patients (at $20K) vs. 10 patients (at $100K) I get the sense they would have felt it more worthwhile.

Re: The Hidden Monopolies That Raise Drug Prices

#194

Post by kgwgk »

refurb wrote: post #193
kgwgk wrote: post #188

Earlier quoted context omitted.

I see is no reason to think the increase in numbers treated would have been so large that payers would have spent more dollars than they did, so its not clear that Gilead's revenue (let alone profit) would have been higher.

We agree to disagree! I think Gilead's pricing scheme left a bad taste in the payer's mouths and probably caused them to be much more restrictive than they otherwise would have. Yes, payers still would have worried about total budget impact, but a lower price means more value. If a payer can spend another $1M and treat another 50 patients (at $20K) vs. 10 patients (at $100K) I get the sense they would have felt it mo…

But the price is lower now! They could be spending a bit more (or even the same) to treat many more patients than they did in 2015, but instead they choose to spend much less to treat a few more patients. Of course you are free to imagine that it could have happened differently.

Re: The Hidden Monopolies That Raise Drug Prices

#195

Post by jessriedel »

spangry wrote: post #192
jessriedel wrote: post #191

Earlier quoted context omitted.

That's a long rant that doesn't even address the standard econ 101 argument. It's especially weird to quote spending data since that's what one would expect if the US was subsidizing the world.

It's also what one would expect if US consumers are getting horribly gouged on prices. But then I guess you'd also expect to see pharmaceutical companies enjoying super high profit levels... Oh wait... EDIT: Given I am unable to address the 'econ101 argument', would you care to take a shot?

No, I think your tone is completely inappropriate for HN and is not compatible with a constructive discussion.

Re: The Hidden Monopolies That Raise Drug Prices

#196

Post by spangry »

jessriedel wrote: post #195
spangry wrote: post #192

Earlier quoted context omitted.

It's also what one would expect if US consumers are getting horribly gouged on prices. But then I guess you'd also expect to see pharmaceutical companies enjoying super high profit levels... Oh wait... EDIT: Given I am unable to address the 'econ101 argument', would you care to take a shot?

No, I think your tone is completely inappropriate for HN and is not compatible with a constructive discussion.

Fair enough.

FWIW I do apologise for the sarcastic tone of my posts above. You're right; it's probably not the right way to spark a constructive discussion. To be honest, my tone was a fairly deliberate departure from how I usually post. It's just that I've been in a number of these 'US Healthcare' discussions on HN now and have seen the same points and counterpoints made many times, yet no progress seems to have been made.

I suppose that's a good indication that I should just stay out of these threads until I can maintain a civil tone.

Re: The Hidden Monopolies That Raise Drug Prices

#197

Post by AnthonyMouse »

ch4s3 wrote: post #155
AnthonyMouse wrote: post #58

Earlier quoted context omitted.

> This is really hard to explain to people. It's not that it's hard to explain, it's that it causes people to want to switch from the US system even more , because as soon as you understand it you realize that US patients and taxpayers are being unfairly forced to subsidize more than their share of drug R&D for Canada and Europe.

To quote your sibling comment: >Probably because saying something is "financed" by demand is counter-intuitive. Since Healthcare is in economic terms a superior good, people spend a larger share of income on it as their income rises. And because the US is such a large, wealthy market, demand is sufficient to to pay down R&D costs that other markets could no bear. It's still a shitty deal, but it makes perfect sense t…

That's not it though. Canada and Europe are not poor.

The problem is that drug patents are fundamentally incompatible with single payer. The premise of the patent system is that you get to charge outrageous monopoly rents temporarily in exchange for creating something that didn't exist. If you have a monopsony buyer setting prices then curing cancer isn't as profitable, so companies spend less money on research and long-term more people die.

There is another way to fund medical research. Tax dollars. But if you're paying for it with tax dollars then patents are waste; the research happens regardless because the government is paying for it. Then you lose the "market efficiency" -- people have better incentive to succeed without wasting money when they only get paid for succeeding and the money they waste is their own, than when they get paid either way and are spending someone else's money. And then people die because you spent more money curing fewer diseases.

But for the patent system to work, you need the patient to pay the monopoly price, not the government or a monopsony insurance company. Otherwise they can use their market power to pay less than what the drug is worth. Or worse, pay more than it's worth over alternative treatments because they're spending someone else's money or are victims of regulatory capture (as in the US). Either of which destroy the efficiency the patent system is supposed to bring and make it so that we might as well not have it.

Re: The Hidden Monopolies That Raise Drug Prices

#198

Post by kellanem »

bradleyjg wrote: post #73
kellanem wrote: post #61

Earlier quoted context omitted.

Two things going on with the rebates. 1. I think the article is a little one sided in their explanation of the rebate system, though it certainly more opaque than it should be. (some of which is just healthtech is stuck in the dark ages) 2. The rebates really only apply to the branded meds, which are approximately 20% of the market.

With all due respect, saying the article is a little one sided doesn't tell me much. Can you outline what the other side of the story is?

The story isn't _good_, it's just a bit more complicated.

The pharma company's trade association published this recently which talks about it in depth: http://www.phrma.org/report/commercially-insured-patients-pa...

Re: The Hidden Monopolies That Raise Drug Prices

#199

Post by galdosdi »

tclAmockingbird wrote: post #94
galdosdi wrote: post #65

Earlier quoted context omitted.

FWIW the anecdotal experience of people I know in the health field in the US is that pharma sales reps know nothing about medicine, are hired for their sales / "relationship building" ability, and can't answer any question about the drug they are touting that can't be answered by looking at the brochure. Very disappointing. You can't expect to get unbiased, quality advice from someone with such a strong incentive. Th…

> FWIW the anecdotal experience of people I know in the health field in the US is that pharma sales reps know nothing about medicine, are hired for their sales / "relationship building" ability, and can't answer any question about the drug they are touting that can't be answered by looking at the brochure. Very disappointing. MSLs have advanced degrees in medicine or biomedical research. It's preferred that the tradi…

Well, if the reps I'm talking about had such fancy degrees, they sure didn't show it.
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