Why drug prices in America are so high (2016) • Hacker News Board

Re: Why drug prices in America are so high (2016)

#201

Post by allenz » Wed, Mar 29, 2017, 9:32 AM UTC

rlpb wrote: post #194

allenz wrote: post #171

Earlier quoted context omitted.

> Drug prices in US go up because of collusion between Insurance Companies and Drug manufacturers. It's great that you're interested in healthcare policy, but you should be careful about making blanket statements without the evidence. Drugs are 9% of healthcare costs[1] and 14% of insurance costs[2]--hardly the decisive factor in your choice of health insurance. And expensive drugs are expensive primarily because it…

> And expensive drugs are expensive primarily because it really does cost $1B+ to develop a new drug. Nope. More of the cost of a drug goes to marketing than development: https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...

Nope. Development costs $1B+ by itself, as you can see from my source or your link. Marketing spend is on top of the R&D cost.

I agree that we should limit drug advertising, but that Global Data report is off by an order of magnitude. Total advertising for Rx drugs is $15B to physicians and $5.2B to consumers.[1,2] The discrepancy is due to several factors.

First, the Global Data report lists combined sales and marketing. Sales includes essential logistics needed for us to get our drugs, so you can't really say that marketing alone costs more than R&D.

Second, most marketing is for over-the-counter drugs, for obvious reasons. Tylenol, sold by Johnson & Johnson, has an enormous marketing budget, but it's not exactly the kind of drug that forces people to buy insurance.

Third, drugs only account for 40% of J&J sales--their scary marketing budget includes lots of advertising for non-pharmaceutical products.

[1] http://www.pewtrusts.org/en/research-and-analysis/fact-sheet...

[2] https://www.statnews.com/2016/03/09/drug-industry-advertisin...

Re: Why drug prices in America are so high (2016)

#202

Post by allenz » Wed, Mar 29, 2017, 10:18 AM UTC

calvinbhai wrote: post #196

allenz wrote: post #171

Earlier quoted context omitted.

> Drug prices in US go up because of collusion between Insurance Companies and Drug manufacturers. It's great that you're interested in healthcare policy, but you should be careful about making blanket statements without the evidence. Drugs are 9% of healthcare costs[1] and 14% of insurance costs[2]--hardly the decisive factor in your choice of health insurance. And expensive drugs are expensive primarily because it…

I agree its not a major %age of the costs for Insurance company. But here's what I think is happening: Manufacturer MFG could sell a drug X at $1 and sell directly to 10,000 people at $1, make $10,000 revenue But because of perverse insurance incentives, MFG decides to sell the same drug at $100, and there are 100 out of those 10,000 who can afford an insurance plan that covers the cost for that $100 drug X. So, by j…

I still disagree, I don't think costs are high because of collusion. I've seen no evidence of collusion between insurance companies or drug companies, which would be very illegal.

There is no reason for collusion. You say that people fear expensive drugs, but there is no need to manufacture fear. People already fear complicated hospital procedures, which can cost $1 million. Hospital procedures are more expensive than expensive drugs.

I think that you're ignoring the fact that it takes $1+ billion to develop a drug. You want to buy drugs for the price of a movie ticket, even though a drug costs 1000x more than a movie, involves much more risk to develop, and is used by fewer people.

Re: Why drug prices in America are so high (2016)

#203

Post by rlpb » Wed, Mar 29, 2017, 12:37 PM UTC

allenz wrote: post #201

rlpb wrote: post #194

Earlier quoted context omitted.

> And expensive drugs are expensive primarily because it really does cost $1B+ to develop a new drug. Nope. More of the cost of a drug goes to marketing than development: https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...

Nope. Development costs $1B+ by itself, as you can see from my source or your link. Marketing spend is on top of the R&D cost. I agree that we should limit drug advertising, but that Global Data report is off by an order of magnitude. Total advertising for Rx drugs is $15B to physicians and $5.2B to consumers.[1,2] The discrepancy is due to several factors. First, the Global Data report lists combined sales and marke…

> Nope. Development costs $1B+ by itself, as you can see from my source or your link. Marketing spend is on top of the R&D cost.

Irrelevant. You said: "And expensive drugs are expensive primarily because it really does cost $1B+ to develop a new drug" [emphasis mine] and I demonstrated this to be untrue. The data shows that the primary cost is not in R&D.

It doesn't matter what you say about the necessity of that sales and marketing. I didn't comment on that. The primary cost is still not in R&D.

> Third, drugs only account for 40% of J&J sales--their scary marketing budget includes lots of advertising for non-pharmaceutical products.

This may be true and perhaps more data is needed, but I haven't seen any evidence that demonstrates unequivocally that the primary cost of drugs in the US is due to R&D.

Re: Why drug prices in America are so high (2016)

#204

Post by _Wintermute » Wed, Mar 29, 2017, 12:50 PM UTC

toomuchtodo wrote: post #193

_Wintermute wrote: post #188

Earlier quoted context omitted.

You're comparing printing simple metal structures from metal powder to synthesizing complex molecules from scratch? I think you might want to brush up on your chemistry before pinning your hopes on 3D printed drugs.

Why it matters that the FDA just approved the first 3D-printed drug (2015) https://www.washingtonpost.com/news/innovations/wp/2015/08/1... 3D printing of tablets containing multiple drugs with defined release profiles (2015) http://www.sciencedirect.com/science/article/pii/S0378517315... I can Google. You should Google before making a false blanket statement.

That's 3D printing a pill. Nothing to do with synthesizing the active compound, and it not going to allow you cheaply produce drugs.

The issue is creating the active compound, not putting it into pill form.