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2,000% price hike for infant seizure drug called 'absurd'

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Re: 2,000% price hike for infant seizure drug called 'absurd'

#21

Post by wamatt »

whistlecrackers wrote: post #7
rm_-rf_slash wrote: post #3

I don't know much about pharmaceutical policy, but I have an idea. I would like to have it torn to shreds if it means we can have an idea of a more equitable process of creating medicine. What if, in a single payer model, a resesrching entity that creates a new treatment which is in turn approved by the government, automatically forfeits any rights to the drug, but is guaranteed royalties for 20 years or so? Manufact…

Yes. A free market is a solution. Naturally regulated markets satisfy customer demands at the lowest cost when compared to the results any other system.

Comcast and Ticketmaster execs would heartily agree with that opinion

Re: 2,000% price hike for infant seizure drug called 'absurd'

#22

Post by dragonwriter »

rtl49 wrote: post #5

Without more information, I think the indignant tone and format of this article are unwarranted. Before we learn anything, we hear about the human toll: innocent babies will die, parents are distraught, and doctors are furious. But we're provided with no clear information on the reason for the price increase. "When Mallinckrodt acquired Questcor in 2014, Synacthen Depot was one of the products in the portfolio. It wa…

> One can object to the fact that the means of pharmaceutical production are privately owned, but given that these are not currently non-profit institutions, the outrage seems misplaced.

The outrage with the outcomes is the only way a society to addressing the question of the appropriateness of the structures which produce the outcomes. That it is a natural outcome of the existing structure doesn't mean that it isn't absurd, though it might mean that if it is absurd, it is only because the structure of which it is a natural consequence is also absurd.

Re: 2,000% price hike for infant seizure drug called 'absurd'

#23

Post by pja »

blucoat wrote: post #9
danielahn wrote: post #4

Earlier quoted context omitted.

There is no patent on the drug.

This is what confuses me, so maybe someone with a better understanding of this market works can elaborate. How is it that the drug is not patented but the manufacturer has the exclusive right to sell it? It blows my mind that one company can overnight make such a huge change and there is no competitor to turn to.

In the US, you still have to get FDA approval to sell drugs that claim to be reformulations of another manufacturer’s product. This isn’t entirely baseless - demonstrating your version’s bioequivalency to the original is part of the process, which doesn’t seem like an unreasonable thing to require.

Unfortunately, the whole approval process still costs in the low $millions at a minimum & so for out of patent drugs that are a pain to manufacture, and/or have small numbers of patients, they just aren’t financially viable once you factor in the approval costs.

Part of what you see when a drug company steps in and jacks up the prices like this is that the new owners know that the FDA approval process combined with their pre-existing manufacturing capability gives them an expensive moat to bridge for other companies that isn’t justified by the size of the market, so if they’re willing to take the reputational hit that the previous owners weren’t then they can jack up the prices enormously since the patients have no-where else to go.

Re: 2,000% price hike for infant seizure drug called 'absurd'

#24

Post by beagle3 »

whistlecrackers wrote: post #7
rm_-rf_slash wrote: post #3

I don't know much about pharmaceutical policy, but I have an idea. I would like to have it torn to shreds if it means we can have an idea of a more equitable process of creating medicine. What if, in a single payer model, a resesrching entity that creates a new treatment which is in turn approved by the government, automatically forfeits any rights to the drug, but is guaranteed royalties for 20 years or so? Manufact…

Yes. A free market is a solution. Naturally regulated markets satisfy customer demands at the lowest cost when compared to the results any other system.

Free markets are good a at lot of things, but staying free is not one of them. (Similarly for a democracy, by the way).

A "naturally" regulated market eventually converges into one all-powerful monopoly player - it's a stable configuration that maximizes the profit for the owners of that monopoly.

So you have to regulate this "freedom" away from disappearing - in the same way that GPL regulates BSD freedom away from disappearing.

Re: 2,000% price hike for infant seizure drug called 'absurd'

#26

Post by digikata »

cma wrote: post #18
rtl49 wrote: post #11

Earlier quoted context omitted.

Well, I certainly wouldn't expect a business executive to invest in a drug he suspects will be unprofitable. That aside, if the drug is unprofitable, and society has established as a general principle that the private sector is the appropriate venue for drug manufacturing, then I don't understand the objection to a price increase in principle. Without more information, we just don't know that this is an instance of p…

I'm going to repost a comment I made elsewhere that may shed some light: Maybe we need a charity that builds a research war chest to threaten companies like this with redevelopment. It costs a lot to replicate a pill and go through the FDA hoops, and once a private company does, the price just gets competed down to the point where it doesn't cover sunk the redevelopment costs--so in some scenarios no one bothers. Ins…

I wonder if insurance companies would have some motivation to at least partially fund such a charity?

Re: 2,000% price hike for infant seizure drug called 'absurd'

#27

Post by forrestthewoods »

What's the answer here? Should the government pay for manufacturing of generic drugs that are non-profitable but "essential"? Let the tax payers eat the cost of such drugs? There's more than a few like that. I believe snake venom antidotes are often on such lists.

(note: I did specify generic drugs. Not drugs still under patent exclusivity windows. Which is a valid but separate discussion.)

Re: 2,000% price hike for infant seizure drug called 'absurd'

#28

Post by beagle3 »

This is pure capitalism in action, and an important datum about what happens in free markets. [see edit below]

Questcor is cornering the market - this has nothing to do with research or availability. In 2012, they acquired the manufacturing of the pig-pituary-gland version of this drug, called "HP Acthar Gel"[0], and hiked the price from $50 to $28,000 per vial. In June 2014, they acquired the synthetic version called "Synacthen Depot" and modestly hiked it by just 2000%. The generic term naming both is ACTH, which is cleverly (?) disguised inside both names.

This is greed, plain and simple - now that Questcor owns the market, they can name any price they want, or the infantile spasm kids suffer greatly (die, or suffer developmental problems of all sorts including retardation). There are other diseases treated with ACTH, and dropping treatment due to cost has effects almost as severe.

Show me the parent who would let their baby die or become retarded because the price was hiked. That's an example of what any completely free market will converge to.

[0] http://www.nytimes.com/2012/12/30/business/questcor-finds-pr...

edit: I stand corrected in my use of "pure capitalism" - government regulation makes it very much not pure capitalism. But the monopolizing of production that we see here is a real-world result of capitalism (pure or impure) - the assumption that "if there's money to be made, some other entity will rise to the challenge" is not supported by evidence in small markets (such as ACTH). If it weren't, there would be no need for antitrust laws.

Re: 2,000% price hike for infant seizure drug called 'absurd'

#29

Post by narrator »

beagle3 wrote: post #28

This is pure capitalism in action, and an important datum about what happens in free markets. [see edit below] Questcor is cornering the market - this has nothing to do with research or availability. In 2012, they acquired the manufacturing of the pig-pituary-gland version of this drug, called "HP Acthar Gel"[0], and hiked the price from $50 to $28,000 per vial. In June 2014, they acquired the synthetic version calle…

This isn't pure capitalism. This is a result of what Mises called "license monopoly". See "The Monopolized Commodity" under https://mises.org/library/monopoly-prices for more discussion of this.

"Under monopoly, a greater part of the specific factors of production concerned will remain unused. The common feature of all instances of monopoly prices is that part of the supply, which under competitive conditions would have been offered on the market, is withheld from the market. The most spectacular and objectionable instance of this withholding is the purposeful destruction of the commodities concerned. It happened mostly with consumers’ goods (e.g., coffee) but sometimes also with factors of production."

There are other sources of this drug, notably foreign production, but they don't have the proper licensing. Thus you get a license monopoly. There are a lot of drugs developed overseas that are effective but they are unknown in the U.S market because they are not approved by the proper license monopoly granter. Under pure capitalism, these products would be allowed on the market and independent rating agencies would ensure their quality.

Re: 2,000% price hike for infant seizure drug called 'absurd'

#30

Post by beagle3 »

rtl49 wrote: post #5

Without more information, I think the indignant tone and format of this article are unwarranted. Before we learn anything, we hear about the human toll: innocent babies will die, parents are distraught, and doctors are furious. But we're provided with no clear information on the reason for the price increase. "When Mallinckrodt acquired Questcor in 2014, Synacthen Depot was one of the products in the portfolio. It wa…

I've posted it as a top level, but -- questcor controls the market for this drug after an 2012 purchase[0]. Here's your "more information". I wouldn't be surprised if Martin Shkreli got the idea for buying and hiking the DataPrim price after reading[0]. Expect a lot more of these things to happen.

[0] http://www.nytimes.com/2012/12/30/business/questcor-finds-pr...

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