India is bigger than the US and Europe combined. I think we can even add in the US again. They are a rapidly developing economy with a strong educational system. Wouldn't we all benefit if the moved up from generics and created new medicines? More drugs, more competition, etc
You mean if india started doing their own research? Well of course, we the general population would benefit. Nobody is stopping them. Except maybe cost.
What's stopping them is the vision of those who are in a position to change things, and a mix of arm-twisting by superpowers into signing laws that make these hard.
Quality. The problem tends to come down to human trials. Very few countries have a combination of the quality of medicine, the proper oversight, and a large enough population to actually make the trials worthwhile. China/India simply don't have the same quality control as that of US/Europe/Japan.
Beyond that, humans aren't all equal. Drug trials in the US make an effort to represent the general US demographics within their studies (which is also representative of Europe). Clinical trials of a 100% Indian population have questionable relevance any other country, and will likely require the entire study to be redone with a population-representative sample.
Yep. I'd have to dig for examples, but many cancer drugs have different efficacies on differing ethnic populations. My father researches genetic markers vs. success rates in different treatments for the same types of cancer. He sees it constantly (Dinner conversation; his big data vs my big data). It's easy enough to assume they do given the different rates of diseases among ethnic groups. From my viewpoint, I would be more shocked if they did actually have the same efficacy.
It could be because the government is not allowed to negotiate drug prices. (Medicare.) They pay whatever the drug companies ask.
Or, maybe because most individuals in the U.S. don't pay the full price. They pay a 'co-pay.' Insurance companies pay the rest. But, they can only make profit as a percentage of revenue. If they lower drug costs significantly, they significantly lower their potential profits. Why would they do that? From a shareholder's perspective, that's a very bad idea.
In the U.S. relatively few people really know how much a drug costs, so why would price be taken into consideration?
Your first statement isn't accurate. I used to work at a startup that dealt with Medicare. They have a process where they put contracts out to bid. In my companies case their allowable reimbursement declined by 90% in a single year. They have plenty of power to put screws to suppliers and use their power effectively.
No cynicism is required. All market prices are determined by demand, which is defined as the desire and ability to obtain a good at a given price. It is tautological to say that higher prices indicate a greater willingness and ability to pay.
That's not cynical, that's exactly the reason. It's basic economics. If it cost thousands of dollars then virtually nobody in India would be able to afford it, whereas insurance companies in the US are willing to pay tens of thousands and don't try to negotiate prices. Medicare is even forbidden from negotiating prices. Rich countries with single-payer healthcare systems will lie somewhere in between. e.g. in the UK, there's an agency (NICE) that negotiates prices for drugs, and decides if they are worth the cost. They'll sometimes agree to pay massive prices if the drug is extremely effective and there are no substitutes, but if it's only a marginal improvement over an existing drug, or even if all it does is extend life by a month or two then they'll just refuse to allow it to be prescribed. Of course as you'd imagine, the prices quoted then have a habit of dropping. This is separate to the normal regulatory approval of drugs.
Well of course, I don't know why people find this surprising. You are not paying for the cost of manufacturing the single individual pill. You are paying for the cost of researching it and testing it, as well as a thousand other drugs that didn't make it to market.
If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
Alternatively India has a lot of smart people and they can develop drugs if US companies don't. How much are US companies subsidized by both money and Indian scientists, and how would one determine this? Frankly I'm not sure where to go to find out the exact facts. I think you are right, but I'm not so sure anymore.
Another example: The French developed Tianeptine[1] and it's as effective as SSRIs as an anti-depressant, with fewer side effects, but it's largely unknown in the U.S.
Point being, even if they did develop great drugs, you'd never hear about them.
Realize that "lung cancer" is simply an umbrella term for many diseases which can be quite different from each other. So which one does this supposedly cure?
> A Phase II trial from 2008 showed lung cancer patients who received the vaccine lived an average of four to six months longer than those who didn’t.
> CimaVax EGF does not prevent or cure lung cancer. It is a therapeutic vaccine which stimulates the patient's body to make an antibody against the epidermal growth factor (EGF), which is a key driver causing lung cancer cells to grow.
Thanks for sharing, I had never heard of this, but to call it a "$1 cure for lung cancer" is a bit misleading.
Well, if blog posts are the currency of credibility one can get away with many things. The allegation may well be correct, but for the purpose of the discussion and level playing field, lets stick to more traditional sources of information and claims.
BTW I see that you got downvoted. Lest you think so, it wasn't me.
After the meth problem in america became rampant (and is still a huge problem in many places) it was hard to get pseudoephedrine so instead there were many drugs that just got me high (in a non fun way) but didn't actually clear my sinuses. Obviously this is anecdote but I think it is not fair to call out other countries without proof.
Medications are not easily ameniable to arbitrage as they are not classified as equivalent goods with regard to customs- special licenses are required (often) to import them.
Plus, there are quality issues with third world drugs (which may or may not be valid) which rear their head when buying sight unseen
It's a matter of market clearing prices. A gross oversimplification, but $4 is the price the market can bear. Charging $5 in the developing world isn't much different than charging $500—they just won't sell.
Arbitrage is attempted, but the FDA is pretty good about stopping imports at port. Also, the primary distribution channels are fastidious about not taking goods from other locales so the market is grey/black and not worth the effort in most cases. The people who would buy drugs from India are probably using means-tested assistance programs and can't pay the huge sums insurers can.
If it did India would just reject the patent. Medicines command a special place in market economics and hence all the confusion. For example, there is whole segment of market in India that buys only Ayurvedic products, and there are big cosmetic companies that ensure their product is categorized as Ayurvedic instead of cosmetic.
> You are paying for the cost of researching it and testing it
More accurately, you are paying higher because pharma can hire congressmen and senators
> If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
One of the oft repeated justification for the absurd levels of IP protection and patent extensions that pharma enjoys is the huge cost of trials. But if huge development costs are the reason for these protections to exist, guess what, these costs will continue to remain huge. Its just self perpetuating.
Patents are primarily a preemptive measure against a hypothetical scenario. The hypothesis is that unless market pressures are cordoned off, innovation will stop. It is a believable hypothesis but not a quantitative one, and this exactly where we need a quantitative one. How many years exactly does one need to subvert the market so that a satisfactory level of innovation is maintained ? Nobody knows an authoritative answer.
In these scenario what we need is a feedback system, and pretty much the only scalable and fair apparatus that we have for such feedback on economic affairs is the market.
So rather than subverting the market, market should be explicitly and actively involved to work out this trade-off. How exactly this is to be done needs to be worked out.
There could be a futures market on patents on drugs undergoing testing: competitors can promise to buy the patent to the (drug,usecase) pair at a particular price (even if its a dud) and if the owner decides not to sell the owner pay a particular compensation. Such measures will spread the risk. There should be mechanisms for a company to raise money for testing in lieu of rights over the product.
The initial period of validity of a patent should be short, like 3~6 years, following which the patent is on the market. Entities can bid to bring the patent to public domain. The owner(s) bids to retain it. Whoever wins gets the balance. Of course the "bring it to public domain" bidders will bid less because profitability is less when its in the public domain, but market decides who gets to own it. If the owner(s) think they can still extract lots of profit from the drug, bid high. We should stop handing out blank checks without a feedback loop, that is just bad design.
FWIW, most pharma patents are short lived. The IP gets filed while the drug is still in development, is often granted before clinical trials start, so by the time the drug goes to market a decade or more might have gone by in what is a 17-year period of exclusivity. So not far off your hypothetical 6 year period.
>More accurately, you are paying higher because pharma can hire congressmen and senators
Corruption might exist, and I agree it should be eliminated. But the patent system is far, far older than this industry. And I doubt it would go away if you eliminated corruption.
>>If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
>Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
I don't think this is that controversial a claim. No one is preventing other countries from developing their own drugs, and some do. It's not like there is a finite number of chemicals or diseases that need treatment. In what way is the existence of US drug companies preventing anyone else from developing drugs?
>But if huge development costs are the reason for these protections to exist, guess what, these costs will continue to remain huge. Its just self perpetuating.
They have every incentive to decrease the costs wherever possible. It's just fundamentally a very expensive process. Especially if you want the very high levels of guaranteed drug safety and effectiveness that the FDA requires.
> Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
Nor has the opposite been tested. Personally, I would rather err on the side of having plentiful drugs. Also, I think the original argument makes sense, but that's an opinion as is yours.
This is the correlation-causation confusion again. Some countries have big pharma companies, others don't. Big pharma companies can spend more on research as well as on lobbying to maintain over-the-top “IP” protections.
The flaw in your reasoning is seeing the presence or absence of IP protection as an independent variable, and level of R&D as a function of that. I think both are dependent on the amount of cash pharma companies have to spend.
Indeed, and that is precisely why I want acceptable mechanisms to test the hypothesis and correct for it, adapt the estimates etc (all mentioned in the comment that you are responding to). The fix seems far from arbitrary blanket protection from market pressures. Just like so many other things the market needs to be actively co-opted into the mix to set the prices right, rather than being cordoned off.
> Nor has the opposite been tested
BTW I did not imply any direction in the test, so "opposite" does not quite apply as an adjective to the tests I have in mind. Perhaps "estimation" would have been a better word
srean: A system where market forces decide the level or duration of patent protection is an excellent idea. Could you share anything you’ve read or written that elaborates on this?
Unfortunately I have neither read nor written anything about it. This would require some thinking and large scale consensus building.
(i) Futures market and (ii) bid to bring to public domain are the two market apparatus I could think of. Individuals with better knowledge in economics and finances would likely be able to come up with other mechanisms.
Your comment is not an argument. You are just stating that you disagree with nothing to back it up. It adds nothing to discussion. And accusing me of "propeganda" is just juvenile and uncalled for.
But if you really believe that, hen why are so many of these drugs developed in America? Why aren't other countries inventing way better drugs?
My comment may not be a persuasive argument, but either is yours. Where are your facts? Your referenced points? You state just as much opinion as I do.
So, let's go through a quick run-down of the 'major' pharmaceutical companies of the world, and where they are headquartered.
Company Revenue (USD) Headquarters
Novartis 53.6 Bn Switzerland
Roche 47.8 Bn Switzerland
Sanofi 36.9 Bn France
GSK 34.9 Bn UK
AstraZeneca 26 Bn UK/Sweden
Bayer 43.4 bn Germany
Baxter 15.3bn US
Pfizer 49 Bn US
Merck 42.23 Bn US
BMS 18.8 bn US
So, 4 of the top 10 pharmaceutical companies by revenue are headquartered in the US.
By Revenue, those 4 account for 125.3 Bn out of a pie of 367.9 Bn; or 34%.
It is not easy to get a list of the number of drugs under clinical trial, or the number of drugs that were recently brought to market by various manufacturers; and, as a side matter, a number of the more innovative drugs brought to market recently were all developed by small pharmaceutical companies (Boceprevir, Telaprevir, Imatinib, Ipilumimab) that were later acquired by the big boys. So a small pharma company did the innovating, usually funded by a university or the product of particuarly profound insights by PhD students; turned into successful drugs; run through to the stage 3 trial stage and then, once all the development costs are done and dusted, acquired for a discount price of the predicted future revenue stream
So tell me, where are all the drugs being developed by america? I would say the rest of the world is more than pulling it's weight. In fact, given rough population parity between the European first world and the United states, it could in fact be argued that the United states is not pulling it's weight.
My comment was actually an argument - that the cost of drugs is necessary to fund their development. Your comment was just stating that you disagree, with no argument.
It's certainly interesting that Europe has more drug companies headquartered there. Though that doesn't necessarily mean all their operations and revenue are in those countries, but whatever.
It's irrelevant because Europe still has a patent system and still sells drugs to the US under our system. It's not like India where any company can manufacture the drug and patents are rarely enforced.
As for university funded research being sold privately, I agree that is sad and should be illegal.
> You are paying for the cost of researching it and testing it, as well as a thousand other drugs that didn't make it to market.
Trying to think of other straightforward instances where a tremendous cost is spent on researching and testing, and directly affect human well being.
One example would be meat farming. As far as I know raising pigs or chicken evolved a lot in our lifetimes, extensive research was done on how to produce mor meat, there's oversight by a public agency and it is consumed by human so there is a decent amount of safety check and oversight.
Yet meat is cheap.
The more research that went into it, the cheaper it got. Provided meat as a product is more stable and less dangerous than drugs, I still think that it doesn't explain why meat would become cheaper while drug price should stay high and pharmatical firms should have extra protection to keep their prices high.
We're not paying for research, we're paying for monopolies.
It's a matter of scale. Tyson and Cargil don't spend several billions of dollars to develop a new cut of bacon, essentially one SKU at the supermarket. However, Pfizer and Sanofi will spend billions to create one new drug.
Also, drugs do get super cheap once the patents expire. In fact, there are massive companies that do nothing but wait for patents to expire so they can make generics—take a look at Teva and Perrigo if you're curious about the model.
Unfortunately there are thousands of type drugs we need, but maybe a dozen or two of different staple meat animals. Plus what you learn from one animal often applies to another.
Thus, I don't think we can analogize meat to pharmaceuticals.
This comparison makes no sense. The vast majority of drugs are super cheap, and we have more choices then ever before. Only ones developed in the last 20 years have patents.
The exact same is true in agriculture. You can patent a gene or a variety that you bred. But the only way to sell it to farmers is if it gives them higher yields than the previous stuff.
Agriculture did benefit a lot from research done by public universities. As did medicine. I'm hugely in favor of increasing public research in both areas. This is not not mutually exclusive with private research. It's not like there are a finite number of things that can be researched or invented.
> This comparison makes no sense. The vast majority of drugs are super cheap, and we have more choices then ever before. Only ones developed in the last 20 years have patents.
If as you say the majority of drugs are cheap, varied and didn't need patents, I'd say it's as good sign as any that we don't need patents for drugs.
I also think we need more research, both public and private. I understand that the current system relies on patent money to sustain itself, but I just don't buy that it has to be this way, or that it wouldn't work otherwise.
For the record I am not comparing industries, just saying that different models exists.
>If as you say the majority of drugs are cheap, varied and didn't need patents, I'd say it's as good sign as any that we don't need patents for drugs.
I think you are confused. Patents only last 15-20 years, not forever. The majority of drugs were developed by companies looking to own the patents. However they are now free to the public.
Without the patent system, they wouldn't exist at all.
I am mostly aware of how bad farming is in regards of how animals are treated or what effect it can have on the surrounding environment. My entry to this rabbit hole was the huge pig shit lakes near some of the most industrialized pig farms. From there there is no illusion that most research would go into more 'humane' treatments, but at the same time there is a strong enough incentive to have balanced medication to keep the animals alive while leaving as few substances in the meat as possible.
I'm not sure that research is moral or goes in the right direction, but I just suppose there is a decent amount of it given the scale of the market.
This is somewhat similar to developing new semiconductor processes or CPU architectures. It costs a ton in R&D but once taped out, the individual cost is relatively small.
However, as in semis, the developer manufacturer will also look at what the market will bear. And things are complicated in pharma by copy-cats and gov'ts who understandably look the other way when a manufacturer undercuts the original manufacturer/license holder... So they, the orig drugmakers, kind of make up this shortfall in economies where the market will bear higher prices, so, in essence, developed countries subsidize the pharma costs of developing economies. And perhaps that's not so bad, given the comparative resources.
Bullshit... marketing budgets outstrip research, development and manufacturing all by very large margins... in most big pharma companies it's over 80-90% of the budget.
>Bullshit... marketing budgets outstrip research, development and manufacturing all by very large margins... in most big pharma companies it's over 80-90% of the budget.
I was pretty skeptical of this claim being true so I had to do a quick internet search.
I'm surprised to find there was some truth to the first half of the comment but the second claim appears to be wrong. [1]
I don't recall seeing any advertisements for this specific drug.
Regardless, I don't see how this disproves my point for drugs in general. If investing in advertisement increases their profit, then logically they should do it. It's not like the advertisements are taking away money that would otherwise go to research. They are increasing the total amount of revenue, some of which will go to even more research.
If they advertised the specific drug, they'd have to list all of the side effects and the ad becomes much less sexy.. Instead they just advertise the condition and let patients decide;
Spend resources on cancer "treatments" that give two more months of survival compared to placebo (with insane side effects though), have marketing budgets twice bigger than their R&D, try to push statins into baby milk (I hope this is sarcastic, for now) and totally abandoned antibiotics.
We also have patent extensions and other nasty tricks.
While the current model is somewhat effective, I think that direct NIH grants to develop drugs with the IP left in the public domain is a better approach. Also that way we can funnel more money into the pockets of the scientists.
It's hard to know exactly how effective a drug like that will be before testing it, at which point most of the development cost will have already been spent, and there's no point holding it back from market. And a large number of these drugs being developed over time has really increased survival rates for various cancers
Marketing budgets aren't really relevant. They wouldn't spend money on marketing if it didn't bring them even more money in return. It's not like that money is being taken from money that would otherwise go to research. If anything it increases the amount of money which can go to research.
> I think that direct NIH grants to develop drugs with the IP left in the public domain is a better approach
I don't think these models are mutually exclusive. You can have government research and private research at the same time. It's not like there is limited amount of research that can be done, and private companies are hogging it all. And there are things like antibiotic research, which you mentioned, that aren't profitable but are necessary.
I remember reading that pharmaceutical companies were that profitable compared to other businesses in other industries. If they weren't, then everyone could just invest in new pharmaceutical companies and make more profit than investing anywhere else.
Regardless, that has nothing to do with anything. I don't understand why HN views someone making a profit as proof that they are committing some evil. It's possible they can make a profit and be a net benefit to the world.
Making a profit in a free market is not evil, but these guys don't play in a free market. Its a comically and extremely protected market where they whine their heart out saying "we need to be protected, because life is hard etc etc" while pocketing one of the highest rates of profits and thinking nothing of spending big of marketing.
From their accounts and their behavior they look far from a group that is worthy of the protection they receive.
Indian person here, in case what I'm about to write is offensive to anyone:
The difference is that the Indian companies are simply stealing intellectual property paid for by American taxpayers. These companies didn't spend years and billions of dollars going through the FDA maze to develop the drugs. They simply stepped in after all the hard work was done, to develop an alternative process for a proven drug.
That's right, India has "process" patents, not "product" patents, for pharmaceuticals. Look it up.
That is incorrect. India changed to product patents about 10 years ago. If you read the article,you would have realized that Gilead licensed the drug for generic production in India and it was not someone "stealing" the IP.
The article mentions, Gilead licensed 11 companies in India to make generics. I don't see how licensing to make generics make it stealing intellectual property.
Besides I am curious how $1000 in USA compares to $4 (about ₹ 265) with the per capita income in perspective, as a measure of affordability of the drug.
the purchasing power of $1000 vs ₹265 is not important; Gilead benefits, because they now have >$0 from each pill whereas otherwise they would have $0.
Identical to software piracy in poor countries: if people are buying DVDs with your software for $2, that's what the market will support. Nobody offers you a choice between $500 and $2, it's between $2 and $0 :) So you'd be smart to go and start selling it yourself for $2.
265 per pill? if you need two pills per day then it is out of reach for i would 80% of Indians it is required for more than a week. Average per day for coolie(low level worker) is around 300 bugs , our maid worker charges Rs 1200 per month for 1 hour work every day with 4 day leaves in a month but she works in another 4/5 house as maid as well for similar pay.
Intellectual property (incl. patents, etc) is a tool that countries use to stimulate innovation.
More practically, there's no market in India for this pill at $1000 and there is at $4. The original manufacturer's most reasonable course of action would be to step in and start competing at $4 per pill, with a slight benefit of the "brand". Then they would have $4 per pill whereas now they have $0.
And, you know, the company & investors planned to recoup the costs and profit based on projected revenues in US/EU markets. If their strategy was, we'll develop this drug, start selling it in India for 1K a pop, ...., profit!, they'd have problems far more serious than this one.
And speaking of fairness, you can hardly argue that using "stolen" knowledge is unethical if, e.g. with cheap antiretrovirals you save tens of millions of people. "Stolen"? who gives a fuck -- the drug developer & investors made a profit in the US, the model works, they'll develop new drugs again. Way more useful than the vast majority of foreign aid.
(And that's not to mention the benefits of economic activity and growth of human capital that wouldn't happen if instead the government was just buying the drugs from outside instead of having domestic companies figure out how to make them).
So, don't get your panties in a bunch :)) Things are going to be fine.
I think making cheap drugs widely available is a way for China and India to improve their soft power in a way that the west can't really match. However, they first need to find a way to counteract the safety fear-mongering with regards to drugs produced outside of western countries.
To be fair, China produced toxic drywall. For my epilepsy, I'm happy paying $1k for drugs produced in the US compared to $10 in China. Even countries like Japan can barely manage human trials. My father is an oncology physician/researcher/consultant. He goes there yearly to tell them to stop chopping out every prostate that walks through their doors.
So why isn't someone smuggling bottles' worth back to the US until the price equilibriates? That's a pretty nice profit margin even for the illegal drug trade, and the US can't even reliably keep things like heroin from being readily shipped on a retail basis.
The primary distribution channels, pharmacies, want nothing to do with grey market suppliers. There's also not a lot of direct price sensitivity. People with 3rd party insurance have relatively inexpensive copays. The poor have access to Medicaid. In neither case are you paying full-freight out of pocket.
So you've got no mass distribution channels and a user base that is shielded from the true cost. People do try, drug co's all have "anti-diversion" strategies, but it's pretty well contained.
Is that really considered smuggling? If the whole 12 week treatment costs $84000 in the US and apparently $336 in India according to the article, you could take a nice vacation to India with your family, get your bottle of 84 pills there, and save $75k to $80k. A smart insurance company would cover it.
One of the biggest problems with the pharmaceutical/insurance hybrid system I experience is the inability to express choice.
My family has an insurance plan in which we pay a set premium cost monthly, and then for some set of health services our insurance promises covers (and thus reduce for us) some of the costs. I think most Americans are in a similar situation.
The insurance company is allowed to reject claims for some services. In particular, they frequently reject claims for drugs for which there is a cheaper "preferred" alternative.
To some extent, this seems reasonable and wise: if there's a cheaper, completely substitutable version of the drug, then let's use it.
The trouble is, things aren't nearly so simple. My grandmother has a strong preference for certain kinds of pain relief medication because some (let's call it Drug A) will knock her out effectively all day, and others (let's call it Drug B) let her function wonderfully and pain-free. However, Drug A is "preferred" to Drug B. As a result, the insurance refuses to cover it.
Every single incentive structure in this system is unproductive:
* My grandmother is left expressing her preference by voting with her dollars, out of pocket -- punishing her for expressing a preference. Because the price gap between Drug A and Drug B is inflated by the effect of the insurance company, this disincentive is so vicious that many people would be unable sustain this at all. Many consumers are effectively unable to express preference in the market because of the synthetically inflated price gap.
* The insurance company feels no pressure whatsoever to cover Drug B, even though the devastating side effects reported by my grandmother are extremely common. There's simply zero incentive for them to behave pro-consumer, or even to bargain the price of Drug B down.
* The drug manufactory feels reduced pressure to change the pricing of Drug B, because unless they drop it to below the price of their current high-seller Drug A, the insurance company will powerfully influence the market away from Drug B, despite the fact that it is in almost all cases superior to Drug A and no more difficult to manufacture.
By completely failing to align incentives to match good outcomes, we've ended up with a system that's pitted against its own progress. Hackers, can we construct a better market?
Establish a government monopoly for purchasing drugs. A painkiller costs maximum X or the government won't subsidise it. A drug to heal a disease costs maximum Y. People will spend everything they have to save their lives, even when it's to the detriment to the rest of society - There's a limited set of medicine available, and it's funnelling society's resources into the pharmaceutical industry because everyone's trying to compete for the best drug. Eventually people will work their whole lives to save up just so their parents can live 2 more years when they're 75, and that's not really good for society. Living out years isn't the end goal, enjoying what time we have is. An appropriate government institution will ensure that happens, while providing sufficient drug supply (but not as much as if everyone spent their life savings on drugs and nothing much else).
That's how it works in many countries outside the U.S.
No, you can't. Any solution you come up with will be illegal in some key respect. You are dealing with one of the three most heavily regulated industries in the United States.
You don't need hackers; you need an army lobbyists of lobbyists powerful enough to overcome entrenched opposition from every corner of the healthcare system.
I did some customer development on these treatment issues.
One interesting anecdote was from a gentleman whose family was predisposed to a given disease which had a treatment pathway consisting of drugs A, then B, then C. Patients were not allowed to progress to B unless A had failed and were not allowed to progress to C unless C had failed.
Prior family members had been treated on this treatment pathway and had found that only drug C 'worked properly' (define that how you will). Therefore this group created their own protocol they shared amongst the family for how to act and what to say to doctors to rapidly progress from drug A to B and finally to C.
With prices like that, seems like insurance companies could arbitrage this by paying their patients to live on a beautiful resort island somewhere near India for the 3 month treatment course. You can afford to bring the patient to the pills instead of the other way 'round.
I've heard some companies have begun looking at medical tourism as an option for some (locally expensive) treatments. Of course a few people are unhappy about this proposition, from medical practitioners to some patients...
So they can offer it as their discounted option. Choose platinum, gold, silver, or the aluminum plan. The aluminum plan is 30% the cost of the silver plan but with low deductibles. Your choice.
Plus, these are not chop shops, they are accredited, vetted, with excellent records, great surgeons, they just happen to be out of country.
The pills in question are self-administering oral pills, so you don't even need to stick around for 3 months. Just fly in and fly out. The FDA allows self-importation of personal use prescription medicine, as long as it's within a 3 months supply. What a wonderful coincidence.
Better yet, you don't even need to fly there. The FDA, along with their UK, Australia, and NZ counterparts[0], allow you to import the drugs by mail, as long as you have a valid prescription and it's within a 3 months supply.
Oops! I can see how what I wrote could be interpreted as dismissive as India as a vacation destination. Not what I intended - I was trying to create the mental image of "beach vacation on an idyllic island" and I usually speak of islands as being "near" or "just off" a country rather than in a country, even when the island is part of that country.
Sorry! I'm sure India has lovely coasts and I look forward to visiting someday soon, although hopefully not seeking Sovaldi :)
There is already "medical tourism" happening in India - there are companies that organize everything, all one has to do is go there, get surgery (or whatever treatment), then go sight seeing before returning to the US and the cost of the entire trip would be less than what the procedure would cost here. Only downside is, it is driving up costs for the locals.
>>Only downside is, it is driving up costs for the locals.
As an India I can attest to this.
Also even by these standards(that appear to cheap to people in western economies), health care is prohibitively expensive to most poor people in India.
Pricing a medicine, like pricing any other product, will have its own complexities.
* You need to fix a price which would cover the cost of your research that went in (and also for unsuccessful researches that you write off for other ailments)
* You have idea about the scale of the ailment but little idea about market acceptance and reaction to your price.
* After market has accepted a price, even if it exceeds your predicted consumption by many fold, you have little incentive to change the price especially if insurance is paying for it.
* In a new market, because you have already recovered what went in to build the medicine, you can price it better.
In fact, insurance itself work very differently in US vs India. In India, in most cases your insurance won't pay for your medicines and medical expenses (diagnostics) if you don't end up hospitalized for at least a day. And that can govern how medicines are priced here because price has a direct implication on adoption.
* You have to finance your highly paid sales staff.
People always claim that pharma companies spend so much money on R&D, but when I look at job ads in the news paper I don't see ads for research positions, but lots of ads for sales positions (from pharma companies).
I'd love to see actual numbers, but I'm pretty sure that sales is at least as costly as research (if not more so)
I believe the sales function is very much incentive driven. As a sales staff, your pay is very much correlated to the sales you do which means the stuff needs to sell. I think of it as, you get money for company and company gives you a small portion of that but in the process company is essentially paying you only when you bring in much more than what you cost.
US tops the list every time - even with discounts negotiated by insurers. The flipside to these exorbitant costs is the accessibility they bring.
It's easy to ignore the fact that US pricing arrangements motivate pharmaceutical companies to market more of these drugs. Keyword: market.
As sad as it feels to say this, a more socialist agenda wouldn't nurture as much drug commercialization - development perhaps, but not marketable products.
Australia's social healthcare, Medicare, is driving down the price of common "molecules" to negligible amounts.
These days, you can really sense apathy on the pharmas' part. Stock outages are frequent because there simply isn't a $ factor to make them care.
On top of being a geek, I'm a pharmacist business manager - knowing how drug pricing economics works is part of my job.
"Discount negotiated by insurers" is the mirage americans live in.
$10 pill is marked up to $100, charged to insurer. your health insurance with a premium of $250 per month, negotiates the price and enables you to buy it for $15, giving you a illusionary savings of "$85".
Same pill, is probably available in India, at a market rate of $5-$7.
People compare market rate of the pill in India $5 with the pre-negotiation sticker price in US of $100.
Q to the Pharmacist Business Manager: Do you think prices of these drugs would remain so high, if health insurance companies didn't exist and everyone paid for medicines and services out of pocket?
There is no market for healthcare and medicines in the US. Its just an illusion.
US runs so much on the whims of the health insurance industry, that $1000 pill justifies a rich/middle class family's $1000 a month insurance premium.
Would the families/individuals pay the same expensive premium every month, if the pill was available for even $100 in US?
I pity the guy who jacked up the price of the pill in US, and got burned online. All he was doing, was to take a bigger chunk from the stinking rich health insurance companies, and providing the product in the US "Market".
I live in US and have spoken many Americans as to why they don't think of going to India for medical reasons. I was expecting some kind of a condescending / patronizing response about quality of service etc. Often, the response is that they have a "sunk cost of expensive monthly premiums", which gives them the illusion that getting treated in US costs lesser.
The blow of a $1000 pill is softened, to those who pay the expensive premiums.
As someone who moved from India to US, I can know market prices of individual tablets /medicines in India, but its way too difficult to know the "market rate" of medicines in US, unless you go by the rates shown by your health insurance company.
India follows the "Sheep Herd" mentality.
The whole country's economy is based on people getting into "Profitable" domains mostly following the success of a pioneer in the field.
The most recent example of this ideology is the "Business Process Outsourcing" industry.
New BPO units are propping up here and there at a dime a dozen leading to a quality deterioration in the final deliverable.
This process will continue till a saturation level is reached and then they will wait till another "Killer" domain picks up momentum.
Till then India will be in a so called "Calm Period" where nothing great and major takes place.
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[ 1419 ms ] story [ 3544 ms ] threadBeyond that, humans aren't all equal. Drug trials in the US make an effort to represent the general US demographics within their studies (which is also representative of Europe). Clinical trials of a 100% Indian population have questionable relevance any other country, and will likely require the entire study to be redone with a population-representative sample.
Or, maybe because most individuals in the U.S. don't pay the full price. They pay a 'co-pay.' Insurance companies pay the rest. But, they can only make profit as a percentage of revenue. If they lower drug costs significantly, they significantly lower their potential profits. Why would they do that? From a shareholder's perspective, that's a very bad idea.
In the U.S. relatively few people really know how much a drug costs, so why would price be taken into consideration?
http://www.nytimes.com/2015/04/28/us/obama-proposes-that-med...
People that can pay more do, those that can't... don't?
If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
http://slatestarcodex.com/2014/08/16/an-iron-curtain-has-des...
Another example: The French developed Tianeptine[1] and it's as effective as SSRIs as an anti-depressant, with fewer side effects, but it's largely unknown in the U.S.
Point being, even if they did develop great drugs, you'd never hear about them.
[1] https://en.wikipedia.org/wiki/Tianeptine
http://www.wakingtimes.com/2015/09/29/cuba-developed-a-1-lun...
http://www.cnn.com/2009/HEALTH/02/19/cuba.cancer.vaccine/ind...
> A Phase II trial from 2008 showed lung cancer patients who received the vaccine lived an average of four to six months longer than those who didn’t.
> CimaVax EGF does not prevent or cure lung cancer. It is a therapeutic vaccine which stimulates the patient's body to make an antibody against the epidermal growth factor (EGF), which is a key driver causing lung cancer cells to grow.
Thanks for sharing, I had never heard of this, but to call it a "$1 cure for lung cancer" is a bit misleading.
BTW I see that you got downvoted. Lest you think so, it wasn't me.
Plus, there are quality issues with third world drugs (which may or may not be valid) which rear their head when buying sight unseen
Arbitrage is attempted, but the FDA is pretty good about stopping imports at port. Also, the primary distribution channels are fastidious about not taking goods from other locales so the market is grey/black and not worth the effort in most cases. The people who would buy drugs from India are probably using means-tested assistance programs and can't pay the huge sums insurers can.
Why are student movie tickets cheaper than general admission? The term for this is 'price discrimination'.
The short answer is because many Indians can't afford to pay $500, and many Americans can afford to pay more than $500.
More accurately, you are paying higher because pharma can hire congressmen and senators
> If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
One of the oft repeated justification for the absurd levels of IP protection and patent extensions that pharma enjoys is the huge cost of trials. But if huge development costs are the reason for these protections to exist, guess what, these costs will continue to remain huge. Its just self perpetuating.
Patents are primarily a preemptive measure against a hypothetical scenario. The hypothesis is that unless market pressures are cordoned off, innovation will stop. It is a believable hypothesis but not a quantitative one, and this exactly where we need a quantitative one. How many years exactly does one need to subvert the market so that a satisfactory level of innovation is maintained ? Nobody knows an authoritative answer.
In these scenario what we need is a feedback system, and pretty much the only scalable and fair apparatus that we have for such feedback on economic affairs is the market.
So rather than subverting the market, market should be explicitly and actively involved to work out this trade-off. How exactly this is to be done needs to be worked out.
There could be a futures market on patents on drugs undergoing testing: competitors can promise to buy the patent to the (drug,usecase) pair at a particular price (even if its a dud) and if the owner decides not to sell the owner pay a particular compensation. Such measures will spread the risk. There should be mechanisms for a company to raise money for testing in lieu of rights over the product.
The initial period of validity of a patent should be short, like 3~6 years, following which the patent is on the market. Entities can bid to bring the patent to public domain. The owner(s) bids to retain it. Whoever wins gets the balance. Of course the "bring it to public domain" bidders will bid less because profitability is less when its in the public domain, but market decides who gets to own it. If the owner(s) think they can still extract lots of profit from the drug, bid high. We should stop handing out blank checks without a feedback loop, that is just bad design.
[p.s. fun to watch the votes go up and down :)]
Corruption might exist, and I agree it should be eliminated. But the patent system is far, far older than this industry. And I doubt it would go away if you eliminated corruption.
>>If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
>Doubt that much, its quite a strong claim and requires strong evidence. My beef is that we have never even come close to testing this hypothesis
I don't think this is that controversial a claim. No one is preventing other countries from developing their own drugs, and some do. It's not like there is a finite number of chemicals or diseases that need treatment. In what way is the existence of US drug companies preventing anyone else from developing drugs?
>But if huge development costs are the reason for these protections to exist, guess what, these costs will continue to remain huge. Its just self perpetuating.
They have every incentive to decrease the costs wherever possible. It's just fundamentally a very expensive process. Especially if you want the very high levels of guaranteed drug safety and effectiveness that the FDA requires.
Nor has the opposite been tested. Personally, I would rather err on the side of having plentiful drugs. Also, I think the original argument makes sense, but that's an opinion as is yours.
The flaw in your reasoning is seeing the presence or absence of IP protection as an independent variable, and level of R&D as a function of that. I think both are dependent on the amount of cash pharma companies have to spend.
Indeed, and that is precisely why I want acceptable mechanisms to test the hypothesis and correct for it, adapt the estimates etc (all mentioned in the comment that you are responding to). The fix seems far from arbitrary blanket protection from market pressures. Just like so many other things the market needs to be actively co-opted into the mix to set the prices right, rather than being cordoned off.
> Nor has the opposite been tested
BTW I did not imply any direction in the test, so "opposite" does not quite apply as an adjective to the tests I have in mind. Perhaps "estimation" would have been a better word
(i) Futures market and (ii) bid to bring to public domain are the two market apparatus I could think of. Individuals with better knowledge in economics and finances would likely be able to come up with other mechanisms.
The modern world of lifesaving pharmaceuticals exists despite the American market's attempts to subvert it, not due to its largesse
But if you really believe that, hen why are so many of these drugs developed in America? Why aren't other countries inventing way better drugs?
So, let's go through a quick run-down of the 'major' pharmaceutical companies of the world, and where they are headquartered.
Company Revenue (USD) Headquarters
Novartis 53.6 Bn Switzerland
Roche 47.8 Bn Switzerland
Sanofi 36.9 Bn France
GSK 34.9 Bn UK
AstraZeneca 26 Bn UK/Sweden
Bayer 43.4 bn Germany
Baxter 15.3bn US
Pfizer 49 Bn US
Merck 42.23 Bn US
BMS 18.8 bn US
So, 4 of the top 10 pharmaceutical companies by revenue are headquartered in the US. By Revenue, those 4 account for 125.3 Bn out of a pie of 367.9 Bn; or 34%.
It is not easy to get a list of the number of drugs under clinical trial, or the number of drugs that were recently brought to market by various manufacturers; and, as a side matter, a number of the more innovative drugs brought to market recently were all developed by small pharmaceutical companies (Boceprevir, Telaprevir, Imatinib, Ipilumimab) that were later acquired by the big boys. So a small pharma company did the innovating, usually funded by a university or the product of particuarly profound insights by PhD students; turned into successful drugs; run through to the stage 3 trial stage and then, once all the development costs are done and dusted, acquired for a discount price of the predicted future revenue stream
So tell me, where are all the drugs being developed by america? I would say the rest of the world is more than pulling it's weight. In fact, given rough population parity between the European first world and the United states, it could in fact be argued that the United states is not pulling it's weight.
I await your reasoned response
It's certainly interesting that Europe has more drug companies headquartered there. Though that doesn't necessarily mean all their operations and revenue are in those countries, but whatever.
It's irrelevant because Europe still has a patent system and still sells drugs to the US under our system. It's not like India where any company can manufacture the drug and patents are rarely enforced.
As for university funded research being sold privately, I agree that is sad and should be illegal.
Trying to think of other straightforward instances where a tremendous cost is spent on researching and testing, and directly affect human well being.
One example would be meat farming. As far as I know raising pigs or chicken evolved a lot in our lifetimes, extensive research was done on how to produce mor meat, there's oversight by a public agency and it is consumed by human so there is a decent amount of safety check and oversight.
Yet meat is cheap.
The more research that went into it, the cheaper it got. Provided meat as a product is more stable and less dangerous than drugs, I still think that it doesn't explain why meat would become cheaper while drug price should stay high and pharmatical firms should have extra protection to keep their prices high.
We're not paying for research, we're paying for monopolies.
Also, drugs do get super cheap once the patents expire. In fact, there are massive companies that do nothing but wait for patents to expire so they can make generics—take a look at Teva and Perrigo if you're curious about the model.
Thus, I don't think we can analogize meat to pharmaceuticals.
The exact same is true in agriculture. You can patent a gene or a variety that you bred. But the only way to sell it to farmers is if it gives them higher yields than the previous stuff.
Agriculture did benefit a lot from research done by public universities. As did medicine. I'm hugely in favor of increasing public research in both areas. This is not not mutually exclusive with private research. It's not like there are a finite number of things that can be researched or invented.
If as you say the majority of drugs are cheap, varied and didn't need patents, I'd say it's as good sign as any that we don't need patents for drugs.
I also think we need more research, both public and private. I understand that the current system relies on patent money to sustain itself, but I just don't buy that it has to be this way, or that it wouldn't work otherwise.
For the record I am not comparing industries, just saying that different models exists.
I think you are confused. Patents only last 15-20 years, not forever. The majority of drugs were developed by companies looking to own the patents. However they are now free to the public.
Without the patent system, they wouldn't exist at all.
i recommend u go through this with an open mind and no bias on the source. the research might not be on what u think it is.
I am mostly aware of how bad farming is in regards of how animals are treated or what effect it can have on the surrounding environment. My entry to this rabbit hole was the huge pig shit lakes near some of the most industrialized pig farms. From there there is no illusion that most research would go into more 'humane' treatments, but at the same time there is a strong enough incentive to have balanced medication to keep the animals alive while leaving as few substances in the meat as possible.
I'm not sure that research is moral or goes in the right direction, but I just suppose there is a decent amount of it given the scale of the market.
However, as in semis, the developer manufacturer will also look at what the market will bear. And things are complicated in pharma by copy-cats and gov'ts who understandably look the other way when a manufacturer undercuts the original manufacturer/license holder... So they, the orig drugmakers, kind of make up this shortfall in economies where the market will bear higher prices, so, in essence, developed countries subsidize the pharma costs of developing economies. And perhaps that's not so bad, given the comparative resources.
I was pretty skeptical of this claim being true so I had to do a quick internet search.
I'm surprised to find there was some truth to the first half of the comment but the second claim appears to be wrong. [1]
[1] http://skeptics.stackexchange.com/questions/16472/do-typical...
Regardless, I don't see how this disproves my point for drugs in general. If investing in advertisement increases their profit, then logically they should do it. It's not like the advertisements are taking away money that would otherwise go to research. They are increasing the total amount of revenue, some of which will go to even more research.
https://www.youtube.com/watch?v=BZOrRItIrYs
Spend resources on cancer "treatments" that give two more months of survival compared to placebo (with insane side effects though), have marketing budgets twice bigger than their R&D, try to push statins into baby milk (I hope this is sarcastic, for now) and totally abandoned antibiotics.
We also have patent extensions and other nasty tricks.
While the current model is somewhat effective, I think that direct NIH grants to develop drugs with the IP left in the public domain is a better approach. Also that way we can funnel more money into the pockets of the scientists.
Marketing budgets aren't really relevant. They wouldn't spend money on marketing if it didn't bring them even more money in return. It's not like that money is being taken from money that would otherwise go to research. If anything it increases the amount of money which can go to research.
> I think that direct NIH grants to develop drugs with the IP left in the public domain is a better approach
I don't think these models are mutually exclusive. You can have government research and private research at the same time. It's not like there is limited amount of research that can be done, and private companies are hogging it all. And there are things like antibiotic research, which you mentioned, that aren't profitable but are necessary.
I think it's easy to see where that price difference is going.
Regardless, that has nothing to do with anything. I don't understand why HN views someone making a profit as proof that they are committing some evil. It's possible they can make a profit and be a net benefit to the world.
From their accounts and their behavior they look far from a group that is worthy of the protection they receive.
It's really easy to see why Americans pay so much for Health care/insurance, medicine, education, etc. etc.
The difference is that the Indian companies are simply stealing intellectual property paid for by American taxpayers. These companies didn't spend years and billions of dollars going through the FDA maze to develop the drugs. They simply stepped in after all the hard work was done, to develop an alternative process for a proven drug.
That's right, India has "process" patents, not "product" patents, for pharmaceuticals. Look it up.
Besides I am curious how $1000 in USA compares to $4 (about ₹ 265) with the per capita income in perspective, as a measure of affordability of the drug.
Identical to software piracy in poor countries: if people are buying DVDs with your software for $2, that's what the market will support. Nobody offers you a choice between $500 and $2, it's between $2 and $0 :) So you'd be smart to go and start selling it yourself for $2.
More practically, there's no market in India for this pill at $1000 and there is at $4. The original manufacturer's most reasonable course of action would be to step in and start competing at $4 per pill, with a slight benefit of the "brand". Then they would have $4 per pill whereas now they have $0.
And, you know, the company & investors planned to recoup the costs and profit based on projected revenues in US/EU markets. If their strategy was, we'll develop this drug, start selling it in India for 1K a pop, ...., profit!, they'd have problems far more serious than this one.
And speaking of fairness, you can hardly argue that using "stolen" knowledge is unethical if, e.g. with cheap antiretrovirals you save tens of millions of people. "Stolen"? who gives a fuck -- the drug developer & investors made a profit in the US, the model works, they'll develop new drugs again. Way more useful than the vast majority of foreign aid.
(And that's not to mention the benefits of economic activity and growth of human capital that wouldn't happen if instead the government was just buying the drugs from outside instead of having domestic companies figure out how to make them).
So, don't get your panties in a bunch :)) Things are going to be fine.
Doctors hate health insurance companies Patients hate health insurance companies
only ones to love health insurance companies, are their share holders.
So you've got no mass distribution channels and a user base that is shielded from the true cost. People do try, drug co's all have "anti-diversion" strategies, but it's pretty well contained.
My family has an insurance plan in which we pay a set premium cost monthly, and then for some set of health services our insurance promises covers (and thus reduce for us) some of the costs. I think most Americans are in a similar situation.
The insurance company is allowed to reject claims for some services. In particular, they frequently reject claims for drugs for which there is a cheaper "preferred" alternative.
To some extent, this seems reasonable and wise: if there's a cheaper, completely substitutable version of the drug, then let's use it.
The trouble is, things aren't nearly so simple. My grandmother has a strong preference for certain kinds of pain relief medication because some (let's call it Drug A) will knock her out effectively all day, and others (let's call it Drug B) let her function wonderfully and pain-free. However, Drug A is "preferred" to Drug B. As a result, the insurance refuses to cover it.
Every single incentive structure in this system is unproductive:
* My grandmother is left expressing her preference by voting with her dollars, out of pocket -- punishing her for expressing a preference. Because the price gap between Drug A and Drug B is inflated by the effect of the insurance company, this disincentive is so vicious that many people would be unable sustain this at all. Many consumers are effectively unable to express preference in the market because of the synthetically inflated price gap.
* The insurance company feels no pressure whatsoever to cover Drug B, even though the devastating side effects reported by my grandmother are extremely common. There's simply zero incentive for them to behave pro-consumer, or even to bargain the price of Drug B down.
* The drug manufactory feels reduced pressure to change the pricing of Drug B, because unless they drop it to below the price of their current high-seller Drug A, the insurance company will powerfully influence the market away from Drug B, despite the fact that it is in almost all cases superior to Drug A and no more difficult to manufacture.
By completely failing to align incentives to match good outcomes, we've ended up with a system that's pitted against its own progress. Hackers, can we construct a better market?
That's how it works in many countries outside the U.S.
For example, https://en.wikipedia.org/wiki/Pharmac
No, you can't. Any solution you come up with will be illegal in some key respect. You are dealing with one of the three most heavily regulated industries in the United States.
You don't need hackers; you need an army lobbyists of lobbyists powerful enough to overcome entrenched opposition from every corner of the healthcare system.
Google, Facebook, and Apple are in front of how many people's faces per day? Sounds like a huge lobbying force to me
One interesting anecdote was from a gentleman whose family was predisposed to a given disease which had a treatment pathway consisting of drugs A, then B, then C. Patients were not allowed to progress to B unless A had failed and were not allowed to progress to C unless C had failed.
Prior family members had been treated on this treatment pathway and had found that only drug C 'worked properly' (define that how you will). Therefore this group created their own protocol they shared amongst the family for how to act and what to say to doctors to rapidly progress from drug A to B and finally to C.
As someone living in the US, I'm looking forward to seeing if Cuba turns out to be a destination for something like this.
Plus, these are not chop shops, they are accredited, vetted, with excellent records, great surgeons, they just happen to be out of country.
Better yet, you don't even need to fly there. The FDA, along with their UK, Australia, and NZ counterparts[0], allow you to import the drugs by mail, as long as you have a valid prescription and it's within a 3 months supply.
[0] http://fixhepc.com/getting-treated/how-to-do-it/worldwide-im...
Sorry! I'm sure India has lovely coasts and I look forward to visiting someday soon, although hopefully not seeking Sovaldi :)
As an India I can attest to this.
Also even by these standards(that appear to cheap to people in western economies), health care is prohibitively expensive to most poor people in India.
India had to impose an export-restriction for these drugs.
* You need to fix a price which would cover the cost of your research that went in (and also for unsuccessful researches that you write off for other ailments) * You have idea about the scale of the ailment but little idea about market acceptance and reaction to your price. * After market has accepted a price, even if it exceeds your predicted consumption by many fold, you have little incentive to change the price especially if insurance is paying for it. * In a new market, because you have already recovered what went in to build the medicine, you can price it better.
In fact, insurance itself work very differently in US vs India. In India, in most cases your insurance won't pay for your medicines and medical expenses (diagnostics) if you don't end up hospitalized for at least a day. And that can govern how medicines are priced here because price has a direct implication on adoption.
* You have to finance your highly paid sales staff.
People always claim that pharma companies spend so much money on R&D, but when I look at job ads in the news paper I don't see ads for research positions, but lots of ads for sales positions (from pharma companies).
I'd love to see actual numbers, but I'm pretty sure that sales is at least as costly as research (if not more so)
US tops the list every time - even with discounts negotiated by insurers. The flipside to these exorbitant costs is the accessibility they bring.
It's easy to ignore the fact that US pricing arrangements motivate pharmaceutical companies to market more of these drugs. Keyword: market.
As sad as it feels to say this, a more socialist agenda wouldn't nurture as much drug commercialization - development perhaps, but not marketable products.
Australia's social healthcare, Medicare, is driving down the price of common "molecules" to negligible amounts.
These days, you can really sense apathy on the pharmas' part. Stock outages are frequent because there simply isn't a $ factor to make them care.
On top of being a geek, I'm a pharmacist business manager - knowing how drug pricing economics works is part of my job.
$10 pill is marked up to $100, charged to insurer. your health insurance with a premium of $250 per month, negotiates the price and enables you to buy it for $15, giving you a illusionary savings of "$85".
Same pill, is probably available in India, at a market rate of $5-$7.
People compare market rate of the pill in India $5 with the pre-negotiation sticker price in US of $100.
Q to the Pharmacist Business Manager: Do you think prices of these drugs would remain so high, if health insurance companies didn't exist and everyone paid for medicines and services out of pocket?
US runs so much on the whims of the health insurance industry, that $1000 pill justifies a rich/middle class family's $1000 a month insurance premium.
Would the families/individuals pay the same expensive premium every month, if the pill was available for even $100 in US?
I pity the guy who jacked up the price of the pill in US, and got burned online. All he was doing, was to take a bigger chunk from the stinking rich health insurance companies, and providing the product in the US "Market".
I live in US and have spoken many Americans as to why they don't think of going to India for medical reasons. I was expecting some kind of a condescending / patronizing response about quality of service etc. Often, the response is that they have a "sunk cost of expensive monthly premiums", which gives them the illusion that getting treated in US costs lesser.
The blow of a $1000 pill is softened, to those who pay the expensive premiums.
As someone who moved from India to US, I can know market prices of individual tablets /medicines in India, but its way too difficult to know the "market rate" of medicines in US, unless you go by the rates shown by your health insurance company.
http://qz.com/519777/why-india-needs-a-new-constitution/