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Congress asks if developing slightly fewer medicines is OK if it lowers prices

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Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#41

Post by ghostwriter »

zbyte64 wrote: post #37
ghostwriter wrote: post #35

Healthcare and medicine is a commodity service, similar to airway transportation and food supply, and the more abundance is there on all levels of it, the lower the prices get across time. Artificial caps on the cost of medicine creates unhealthy bureaucratic incentives like this one instance within NHS in the UK https://eu.usatoday.com/story/opinion/2019/06/15/trump-criti...

Medicine is still a commodity even if another entity collectively bargains for it (ie NHS). Why doesn't the parent just by the medicine directly? Surely the NHS doesn't prevent that from happening. Oh, right, it is too expensive to purchase for most people without collectively bargaining. But I guess even that kind of bureaucracy isn't tolerable to an absolutist.

The entity may and should collectively bargain 90% discount, as long as the parents of those who need the unavailable medicine right now can withdraw from contributing their taxes to NHS and use the freed funds for direct purchases of the otherwise unavailable drug. I’m not sure it’s possible at the moment.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#42

Post by zbyte64 »

ghostwriter wrote: post #41
zbyte64 wrote: post #37

Earlier quoted context omitted.

Medicine is still a commodity even if another entity collectively bargains for it (ie NHS). Why doesn't the parent just by the medicine directly? Surely the NHS doesn't prevent that from happening. Oh, right, it is too expensive to purchase for most people without collectively bargaining. But I guess even that kind of bureaucracy isn't tolerable to an absolutist.

The entity may and should collectively bargain 90% discount, as long as the parents of those who need the unavailable medicine right now can withdraw from contributing their taxes to NHS and use the freed funds for direct purchases of the otherwise unavailable drug. I’m not sure it’s possible at the moment.

I get that sounds "fair" but when you consider the family can suffer from any number of ailments that is rather cruel to say "your son requires special medicine, to afford that you must withdraw from public health care and you are on your own if you break your arm or back"

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#43

Post by AnthonyMouse »

jeffdavis wrote: post #34
elil17 wrote: post #22

Earlier quoted context omitted.

But the current system is not okay for people who need medications that exist and are cheap to manufacture (eg insulin) but can’t afford rates being charged

There is no patent protection on regular insulin, so it's some kind of ordinary monopoly problem, it appears. I suspect a better set of regulations around generics would solve the problem with ordinary market forces. Probably there are quite a few policies that protect the existing drug companies that don't make any sense for generics.

IIRC the issue with insulin is that while "regular" insulin is not under patent, there are better insulin products on the market that are, and those are what everybody prefers.

Then, because most people do actually have insurance, the insurance pays for the more expensive version and so that's the only one anybody makes. The market for "regular" insulin is limited to people without insurance, which isn't a big enough market to justify all the regulatory work needed to manufacture it.

What's really needed there is to make it easier for generics manufacturers to get regulatory approval.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#44

Post by ghostwriter »

zbyte64 wrote: post #42
ghostwriter wrote: post #41

Earlier quoted context omitted.

The entity may and should collectively bargain 90% discount, as long as the parents of those who need the unavailable medicine right now can withdraw from contributing their taxes to NHS and use the freed funds for direct purchases of the otherwise unavailable drug. I’m not sure it’s possible at the moment.

I get that sounds "fair" but when you consider the family can suffer from any number of ailments that is rather cruel to say "your son requires special medicine, to afford that you must withdraw from public health care and you are on your own if you break your arm or back"

That’s why I mentioned that abundance of options on all levels of the service of “providing healthcare” is crucially important for reducing costs over time. I can imagine different plans for different people of different healthcare needs (young and old, employed and unemployed etc), covered by more than one healthcare provider, in the same manner it is currently done in airway transportation.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#45

Post by bluGill »

zbyte64 wrote: post #33
__s wrote: post #30

Surprised by the comments in this thread US drug prices are not because of R&D. This title presents a false dichotomy Drug companies have enough capital at this point that they don't need old drugs to fund new drugs. They can charge a high price for new drugs to recoup their development costs, & then charge closer to the cost of production once that development has been covered

Also surprised by the lack of mention of reformulating existing drugs to extend their patents. The poster child of this practice is insulin, where Americans pay absurdly higher amounts for something where generics are abundant.

To be fair, reformulation isn't exactly cheap (though compared to a new drug it is), and often they are better than the generic. Generic insulin still exists, but the reformulations are better - or so the diabetics I've heard from have said.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#46

Post by AnthonyMouse »

__s wrote: post #30

Surprised by the comments in this thread US drug prices are not because of R&D. This title presents a false dichotomy Drug companies have enough capital at this point that they don't need old drugs to fund new drugs. They can charge a high price for new drugs to recoup their development costs, & then charge closer to the cost of production once that development has been covered

> They can charge a high price for new drugs to recoup their development costs, & then charge closer to the cost of production once that development has been covered

You have just described the patent system. They get a period of patent protection to charge high prices, then anyone can make the drug and competition lowers prices.

There are some places where this falls down, i.e. there are some generic drugs that have high prices due to a lack of competition, but that's not the common case. Have a look at the price of Ibuprofen to see how unpatented generics ought to work.

What really causes the failures is the amount of bureaucratic overhead which deters other companies from entering the generics market. When the market for a drug isn't very large, the return from selling a generic is less than the regulatory cost required to enter the market, so nobody does. Lower the compliance costs and that doesn't happen as much.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#47

Post by bluGill »

adrianmonk wrote: post #5

Well, that depends on specifically which drugs you subtract out of the set. Some new drugs are not that critical to have. Others might be. Given that we don't / can't know which drugs will be developed in the future, it's kind of impossible to answer with certainty.

The problem is we don't really know. Drugs that are almost out will probably still come out. However we are most likely to lose ones that are in the here are 100 things we could try at high cost - we know from experience than 1 in 1000 of these ideas is useful. If the cost recovery is high enough you try all 100 ideas to see if they lead anywhere, and then find another list of 100... If cost recovery isn't high enough you don't try any, and we don't really know what we lost because we don't know which of the ideas before actually will turn out to work.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#48

Post by vonmoltke »

zbyte64 wrote: post #33
__s wrote: post #30

Surprised by the comments in this thread US drug prices are not because of R&D. This title presents a false dichotomy Drug companies have enough capital at this point that they don't need old drugs to fund new drugs. They can charge a high price for new drugs to recoup their development costs, & then charge closer to the cost of production once that development has been covered

Also surprised by the lack of mention of reformulating existing drugs to extend their patents. The poster child of this practice is insulin, where Americans pay absurdly higher amounts for something where generics are abundant.

> Also surprised by the lack of mention of reformulating existing drugs to extend their patents.

Reformulation does not extend patents, it creates a new patent on the new substance. The substance in the existing patent can be manufactured as a generic after the existing patent expires.

The wrinkle is that the new and existing substances are not equivalent, and thus cannot be substituted for one another. Thus, if a doctor prescribes the new one, that is what needs to be dispensed.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#49

Post by AnthonyMouse »

Jyaif wrote: post #36
zallarak wrote: post #3

The compound effect of lost progress might become more significant over time.

The money saved would be used for something else, e.g. education. That effect would also compound over time.

That's assuming the alternative thing actually benefits from the money. You mention education, but we've already seen that education spending has a threshold past which spending more money no longer improves outcomes (it just inflates prices), and we're already above that level of education spending.

And even if we weren't, it doesn't follow that moving resources from one place to the other is the right choice. When you have two things that both produce benefits exceeding their costs, you're better off to do both of them.

Re: Congress asks if developing slightly fewer medicines is OK if it lowers prices

#50

Post by bluGill »

LargeWu wrote: post #18
aantix wrote: post #6

[flagged]

The "less capable" Keep in mind, we're not all born with the same socio-economic advantages. The idea that you're more capable because you're successful is merely confirmation bias. Furthermore, your comment necessarily implies that anyone not as "capable", whatever that means, is therefore deserving of poverty and hardship. That's a moral stance I cannot support.

While I believe there is a range of capabilities, there is plenty of research showing that for most people the limit is practice (ie 10,000 hours), not something fundamental in the person. There are very few places where science has found something that makes on person objectivity better at a task once trained.

There are those who are clearly less able. Downs syndrome, blind, are a few of the obvious limits that mean someone is unable accomplish anything. However these are a minority and can be ignored in this discussion (though we will have to circle back to figure out what to do about them).

Or to put it a different way: I believe in equality of opportunity NOT outcome. You get the results of what you work for. Yes there is some luck, but luck is the difference between rich and upper middle class, not poor and middle class.

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