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Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

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Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#51

Post by notyourday »

yequalsx wrote: post #39
notyourday wrote: post #25

Earlier quoted context omitted.

It contradicts basic economics. If you raise prices 8000x and I will go into competition with you and raise prices 7999x i.e. do what MCI did to ATT and Vizio did to Samsung.

Not if there is collusion or cartel pricing. There are also regulatory means of limiting competition. The basic economics notion works in a market that is mostly free. I suspect that most things related to the American health care system do not qualify as a free market.

There's no cartel pricing in medicine. If there was there would be a competing cartel as it is the case everywhere.

The reality is that companies that make generics are simply too small to be able to compete with Pfizer, Merc, Glaxo etc and for all big talk our scientists in R&D and FDA are bought and sold like trading cards and their opinions change with the opinions of their owners, which is, for example, why FDA accepts garbage studies from Pfizer and does not from itty bitty company that competes with it.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#52

Post by throwaway2016a »

mtgx wrote: post #45
throwaway2016a wrote: post #43

Earlier quoted context omitted.

Correct, if you were to go purely by the wages, the pill should cost $4 in the US not $400. It is still high, I was just pointing out that there are market differences. And to expand on that, the illness the drug in question is more common in Tanzania (per the article) so I can only presume the drug company can sell an order of magnitude more and might actually be making almost as much profit in aggregate on that $0.…

The article explains why it's so expensive: > Why are prices so different in the U.S.? > "In other countries, there are price control methods. The government steps in to ensure drug prices do not increase by a certain amount," Alpern says. "There are no price control mechanisms in the U.S." > Between 2011 and 2016, mebendazole's price jumped more than 8,000 percent, from $4.50 to $369. So it was indeed $4.5 in the U.…

I'm not sure your conclusion follows from the article. The lack of controls may contribute but the reasoning may have not been greed. There are many market factors in play. It may very well be greed but I don't see much evidence in this article either way.

In other words, the article explains why the price growth was not capped. It does not explain why it grew in the first place.

In general I wish the drug company had taken time to contribute to this article and show their side of the story.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#53

Post by mikeash »

notyourday wrote: post #5
nasmorn wrote: post #3

Earlier quoted context omitted.

I think the FDA will fight to your death for your right to safe medicine.

I'm baffled by the snark. Could someone please attempt to reconcile the following positions for me: 1. We need regulation of drugs/medicine/etc because we do not want some snake oil peddlers peddling arsenic as medicine? 2. Regulations prevent us from getting shit cheap! Baaaaa!

Safety might be a good reason to prohibit imports from a place like Tanzania, but it makes no sense as a reason to prohibit imports from Canada. Canada has some equivalent to the FDA which is about as good as ours, so there should be no safety problem when it comes to importing their medicine.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#54

Post by isoskeles »

FLUX-YOU wrote: post #48
geekamongus wrote: post #29

Earlier quoted context omitted.

The answer is that we buy health insurance, not health care.

The problem is that insurance costs continue to rise for no real reason. They even made costs rise when more people were insured because of ACA. In what world does that make sense?

One where ACA did other things besides just raising the number of insured people?

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#56

Post by edko »

harryh wrote: post #46
gizmo wrote: post #21

Earlier quoted context omitted.

Because there is no price the competitor can charge that the original supplier can't match. There is no profit to be made, unless there is only a single manufacturer. Also, it's difficult to acquire approval needed from the FDA to demonstrate the new drug is safe and equivalent to the already approved because the original producer won't cooperate and provide relevant samples to their competition so they can demonstra…

Because there is no price the competitor can charge that the original supplier can't match. This is a commonly cited reason but I don't buy it. They're selling these things for 4 cents in tanzania so we're talking about something that is practically free to make. There are lots of things that cheap where we see competition in the US: paperclips, reams of paper, chewing gum, whatever. Why is there competition for thes…

Maybe the market in the US isn't big enough to recover the fixed costs. How many pills at 4 cents would they have to sell?

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#57

Post by chmaynard »

From the article: "In the years following albendazole's price hike in 2011, Medicaid spending on the drug went from under $100,000 in 2008 to more than $7.5 million in 2013." To most Congressional Republicans, this is beautiful music begause it means one of their constituents is getting rich by ripping off taxpayers. (Indeed, it may be the only form of music they can appreciate.)

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#58

Post by Retric »

snarf21 wrote: post #18
empath75 wrote: post #4

The answer is that our insurance and medical billing system is a complete tirefire and needs to be burned to the ground and replaced with something sane.

Yes, this is true. There are other things that would change too. We could have these (or other) pills for pennies. However, we can't have a 24 hour drive through pharmacy on every other corner and an Urgent Care on the other AND pills for pennies. Yes, the companies are making tons but a lot of that money pays for people to make it convenient for you to get your pills. And as someone else commented, we are basically…

McDonald's can have 24/7 drive though windows while selling burgers and fries, but most pharmacy's are not open close to 24/7.

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#59

Post by harryh »

edko wrote: post #56
harryh wrote: post #46

Earlier quoted context omitted.

Because there is no price the competitor can charge that the original supplier can't match. This is a commonly cited reason but I don't buy it. They're selling these things for 4 cents in tanzania so we're talking about something that is practically free to make. There are lots of things that cheap where we see competition in the US: paperclips, reams of paper, chewing gum, whatever. Why is there competition for thes…

Maybe the market in the US isn't big enough to recover the fixed costs. How many pills at 4 cents would they have to sell?

Yes, it definitely could be this which is why I said "my gut suspects the arduous FDA approval process." This could be the source of a lot of that fixed cost. I'd be generally curious to see data on what is involved in starting up a new production line for these kinds of pills.

Is there a chemist in the house? :)

Re: Why a Pill That's 4 Cents in Tanzania Costs Up to $400 in the U.S

#60

Post by gizmo »

gaius wrote: post #26
gizmo wrote: post #16

Earlier quoted context omitted.

Albendazole was developed in 1975. The R&D cost has been recouped ages ago.

Presumably there is other R&D to be done on other drugs? Or is the company making $399.96 profit on every pill?

The company typically outsources the actual manufacturing of the pill, as well as the packaging and shipping. Those are real costs.

The largest expenses are marketing and sales. Doctors won't prescribe drugs they don't know exist, so "educating" doctors about the benefits of a drug is a paramount. Contracts have to be negotiated with all insurance companies, and that's expensive too.

How profitable the business of generics actually is, we don't know for sure. The pharmaceutical industry is notoriously vague about how much profit they make, and the numbers they report are questionable. For instance they'll call market research into which drug to buy next "R&D".

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