2,000% price hike for infant seizure drug called 'absurd' • Hacker News Board

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

#41

Post by brownbat » Mon, Nov 16, 2015, 9:50 PM UTC

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…

> Without more information, I think the indignant tone and format of this article are unwarranted.

Agreed. For me, that "more information" includes things like: whether or not the drug is viable at its former price, the likelihood of this price driving other entrants into the market to find new solutions to address this problem, the ability of other manufacturers to develop substitutes, the amount of the profits that will be returned into development of other drugs that will save other lives, the baseline cost per life saved across the pharmaceutical industry, et. al.

High prices attract attention to existing social problems and are sometimes useful. Other times they're opportunistic and exploitative. It's not trivial to isolate the two.

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

#42

Post by bravo » Mon, Nov 16, 2015, 9:57 PM UTC

eropple wrote: post #15

whistlecrackers wrote: post #7

Earlier quoted context omitted.

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.

And people die needlessly because they can't pay. Are we not better than that?

You could apply that to so many things. It's just an appeal to emotion. People also needlessly lack education because they can't pay, but we'd be fucked if the government jumped to guarantee more loans and grants.

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

#43

Post by bedhead » Mon, Nov 16, 2015, 9:58 PM UTC

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…

The claim of losing money is almost certainly a lie. The marginal cost of a drug like this is usually almost nothing. The manufacturing costs tend to be small, and something like this doesn't need a sales force.

Meanwhile, Questcor and Mallinkodt were/are the poster children for abrupt and unwarranted drug price hikes by orders of magnitude. They are bad actors in an industry where scheming - both legal and otherwise - is so common that no one thinks twice.

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

#44

Post by vonmoltke » Mon, Nov 16, 2015, 10:01 PM UTC

mumumuyou2 wrote: post #31

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…

Yes, the government granting limited rights in 2015 to a naturally occurring chemical discovered in 1933 is "capitalism".

> Yes, the government granting monopoly rights in 2015 to a naturally occurring chemical discovered in 1933 is "capitalism".

Nobody has been granted monopoly rights on anything. The GP's article (from 2012) is referring to a situation where there is only one FDA-approved supplier of a product (naturally-derived ACTH). Nothing except lack of motivation is stopping someone else from entering the market. The OP is discussing a particular brand of synthetic ACTH, which may or may not be in the same situation in Canada (sole approved drug).

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

#45

Post by beagle3 » Mon, Nov 16, 2015, 10:05 PM UTC

mumumuyou2 wrote: post #38

beagle3 wrote: post #24

Earlier quoted context omitted.

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…

Coca Cola has been around for 129 years. How many centuries does this process take?

Coca Cola is a luxury item. If they raise the price too much, no one will buy it, and that puts an upper limit to the price (and makes consolidation less profitable). And it still may happen if not for antitrust - I'm sure a combined RCPepsiCoca Cola company will be more profitable than three independent ones.

The only reason DataPrim price could be hiked was that the people who need it will actually pay for it. Same with ACTH. A captive audience is a wonderful thing -- something Coca Cola would love but doesn't have.

There were ~100 car manufacturers 100 years ago, how many are there now? (And cars are not as essential as ACTH)

There were tens to hundreds of media companies up until the 1980's. Now, there are essentially six[0]. And if antitrust didn't matter, there would probably be less.

Similar things are happening in pharma[0].

It is one aspect of capitalism that's to blame: "free market". If you monopolies are legal (and in a totally free market, they are), then you will get monopolies because they are more effective at extracting rent than competition. we've just seen this happen twice in the pharma market.

[0] https://en.wikipedia.org/wiki/Media_cross-ownership_in_the_U...

[1] http://www.ft.com/cms/s/0/6aad8ebe-e9c0-11e4-b863-00144feab7...

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

#46

Post by JamesBarney » Mon, Nov 16, 2015, 10:07 PM UTC

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.

Healthcare and pharmaceuticals are not even in the ball park of a normal free market.

1. Monopolies - We give monopolies to pharmaceutical companies to incentivize R&D.

2. Principal-Agent problem - Doctors guide, and make decisions about care for consumers. But However consumers of health care have different incentives than doctors.

3. Insurance - Most individuals are relatively shielded from the costs of their healthcare.

4. Public Good - Many people want to live in a society where people do not die from easily treatable conditions.

So yes a free markets is always the optimal solution given a certain set of assumptions. Unfortunately very few of these assumptions are true in healthcare.

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

#47

Post by vonmoltke » Mon, Nov 16, 2015, 10:09 PM UTC

bedhead wrote: post #43

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…

The claim of losing money is almost certainly a lie. The marginal cost of a drug like this is usually almost nothing. The manufacturing costs tend to be small, and something like this doesn't need a sales force. Meanwhile, Questcor and Mallinkodt were/are the poster children for abrupt and unwarranted drug price hikes by orders of magnitude. They are bad actors in an industry where scheming - both legal and otherwise…

> The claim of losing money is almost certainly a lie. The marginal cost of a drug like this is usually almost nothing.

Spoken like someone who has never worked on low-volume production before. Fixed costs that amortize to trivial amounts when producing a few million or billion doses a year get significant when amortized across a few thousand.

I don't buy the article's unsourced assertion that the medication only costs $230/dose to make. Assuming 4,000 doses/year (800 patients * 5 doses/patient [$23,000/dose / "over $100,000 per infant"]), that's a production cost of only $920,000. The cost of regulatory compliance alone is probably greater than that.

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

#48

Post by collyw » Mon, Nov 16, 2015, 10:11 PM UTC

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.

Disproven by privatisation of the UK rail industry. I think it's the most expensive in Europe, certainly close. Oh, and the European healthcare systems.

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

#49

Post by rtl49 » Mon, Nov 16, 2015, 10:12 PM UTC

beagle3 wrote: post #30

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...

If I'm not mistaken in detecting hostility from the scare quotes, I'd like to say that I don't believe it is unreasonable to expect that the journalist who wrote this article to provide that information before making appeals to emotion, rather than depending on commenters on news aggregators to disseminate it.

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

#50

Post by pixl97 » Mon, Nov 16, 2015, 10:13 PM UTC

mumumuyou2 wrote: post #38

beagle3 wrote: post #24

Earlier quoted context omitted.

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…

Coca Cola has been around for 129 years. How many centuries does this process take?

Are you saying Coca Cola is not attempting to get a soft drink monopoly? You should be a convenience store owner and see both the battle between them and Pepsi and the demands they put on their customers for preferred pricing.