This is concerning on so many levels because there are multiple agencies that are supposed to oversea and simply avoid issues like this.
In principle I am opposed to regulation, but in this case, where all other measures have failed, I say regulate away.
I want to call out Heather Bresch, Mylan CEO, by name because she and Martin Shkreli are the problem as well as any investor or board member that doesn't steer them back to being human.
This comes down to life and death for people. The instrument is simple, accessible and cheap. This doesn't make the instrument more valuable, but more necessary. Mylan is simply exploiting its customer base temporarily caught in the middle.
> In principle I am opposed to regulation, but in this case, where all other measures have failed, I say regulate away.
But the article says there would be competition except that it's too hard to get a product to market. Doesn't the author mean it's too hard to compete because of regulation, like from the FDA?
Pardon if this point wasn't clear. I am talking about additional, direct regulation related to this product and this issue.
Normally, I would say the logic doesn't follow that, the answer to failed regulation is more regulation. However, in this case, my opinion is that we should call this out for what it is and do something to counteract it.
This is a ridiculous stance to take. So because one drug/company decided to raise prices 1500% we need to take immediate and specific action.
But those companies who operate at 600% markup in the same industry are perfectly fine.
I can guarantee you the latter are where the actual problem lies - since it's systemic. The outliers that get press are good - but only if people solve the problem vs. kneejerk reactions like specific legislation for a single drug.
My point is that every drug company is doing this. And not a little bit. We shouldn't set some ridiculous threshold before we take action (as long as we're stolen from, it's ok if it's only a small amount right?) - we should fix the problem where it begins. This means adding competition to the market, in which case the usual race to the bottom should occur. You are basically advocating for a tiny measure that "fixes" a fraction of a fraction of a percentage of wasteful drug spending - and simply focusing on manufactured outrage. This is how the industry continues to win.
If we are talking about one company then specific action seems appropriate.
I agree that there are systemic issues. I think that is a larger conversation that will take more time. There are merits to the European systems that are generally more liberal, or at least are characterized as such, and likewise, merits to the US system. We could probably cherry pick examples in each system and perhaps that is how it will continue in that larger conversation.
However, in this instance, which is the context I am focused on we recognize that allowing a monopoly is a failure. It presents special circumstances, so special action to sidestep the bureaucracy seems appropriate to me.
I believe that the proverbial 2x4 to the head (of Mylan, in this instance), would do more to further the larger conversation and the points we agree on, than waiting for the conversation to conclude with a pretty bow. It won't.
Making examples of the most egregious perpetrators has an immediate, albeit incremental impact.
I guess we'll have to agree to disagree. I see negative value in stamping down the outliers. This just sweeps the conversation under the rug and people feel good about "doing something". We then all can rage against the latest scapegoat who is doing exactly what everyone else in their position is - they just got a bit too aggressive and got unlucky on the roll of the PR dice. The rest of the industry laughs and continues to reap 900% margin on generic products, and increases it 15% next year since 15% is totally reasonable. We then repeat the next two minutes of hate every 2-3 years.
We are talking about a price increase from a floor that was already absolutely insane. $300 for a $20 or less to manufacturer device is already being ripped off, and we are only just now talking about it because it went to $600. Why is there a difference in reactions here? Are you the one who gets to judge a $580 profit is ok vs. a $280 profit? Why? They both seem obscene to me - why is this just now becoming a problem? Obviously $300 is an acceptable price - so is $400? $500?
This is just the tip of the iceberg. If you start by clipping the tall poppies you might get some extremely slight downward pressure on prices in the market - but that does nothing to solve your actual problems. It's penny wise and pound foolish and is the approach we've thus far taken with predictable results.
Doing nothing, or a little empty outrage is sweeping it under the rug, or "the approach thus far."
What I am talking about has a practical benefit beyond targeting the worst offenders, which again seems appropriate. Establishing a precedent for what is "too aggressive" frames the conversation going forward. Otherwise, your logic, "Obviously $300 is an acceptable price - so is $400? $500?," is valid. When human lives are at stake I don't think it is. So, establishing a precedent and thereby the beginning of a framework we move the conversation forward rather than just another lap on the rotary.
I also disagree that doing something is the same as doing nothing. I find that practically and logically false. Particularly, in the context of progress in a bureaucracy, it has been the modest incremental changes that have created the opening for larger reform.
I think we generally agree in the outcome we want, just disagree on how to get there.
I'm not proposing doing nothing. I'm stating making targeted efforts to go after this specific case is a silly waste of effort (at best - at worst it's placebo) is all. I would rather see that effort go towards actually reforming the system that allows monopolies to form when they don't make (open) market sense.
Otherwise I do think we agree - the end result is Mylan can't charge $600 Epipen.
I acknowledge and respect your preference for larger reform. I think that would be great.
In the meantime, why is it binary in your mind? Why is it larger reform or nothing?
Because this does have a life and death impact, I don't think it is silly, or a waste. The efforts, at worst have potential to move the larger reform forward, and at best potentially save a life.
Generally, yes. The FDA can block anything for any reason, including usability or safety concerns. The easiest process to move thorough is the 510k, but you can only do that if there are consensus-based standards or existing devices you can use as a predicate. Otherwise your product could be held up by the FDA for years or decades, with no clear path to release.
It seems like cloning the Epipen could be a simple process, but you still have to show substantial equivalence and do a bunch of validation to ensure the product is safe and effective.
I'm not an expert in this, by any means. All my knowledge comes from working in an FDA-regulated industry.
What have she or Martin done that's wrong? They bought the entire market and adjusted the price. Maybe you should be calling out the FDA or someone else for allowing an essential industry to end up like this.
You're basically saying that every businessperson in medicine should never raise prices, look for underperforming companies, etc.
I think they are preying on human lives and I think that is wrong.
In my previous comments I acknowledge the failure of regulations first.
I am not saying that medical related industries or products should not raise prices. In fact, I think competition and profit motivation are essential parts of innovation in medicine, or any field.
"When Mylan bought it, EpiPens cost about $57 each."
I can concur. I have a family member I purchase these for. At first, it was like...okay, $50 after insurance. Now $100 after insurance. The thing is...nobody really seems to care until things spiral out of control. Who the hell is watching our backs in America? Is it the FDA, the FTC, Congress (likely too busy defunding AMA to care), the DoJ? No idea. I wonder if gov't agencies like the DoD who stock tons of epipens pay the same prices that we the public do? Does the DoD purchase from another market to get out of the huge sticker price? I'm curious to see how many people in the gov't get around purchasing these in the US for their own agencies yet didn't raise extreme alarm at the ballooning prices for the American consumers.
Judging by what we recently learned about the Army's finances, well funded government agencies like the DoD probably don't notice or don't care about this kind of thing.
what is really amazing is the epi pen, even for those who need it, is a tiny fraction of our healthcare costs. the gorilla in the room is doctors pay, in which the US purposely keeps low in supply to keep the wages high.
doctors easily make north of 200k after residency(a number almost no engineer will ever come close to), and people complain over hundred dollar epi pens.
absolutely. we pay over a hundred dollars for a single 15 minute (if that) visit, most of which is hidden by insurance. even family care pulls home 200k+, add a specialty and your talking 300k+/year. the high cost of doctors pay limits our face time with them, limits our desire to schedule an appointment even when we are sick, and those costs cascade on us in the future.
even if you dont agree with me, the cost of paying the doctors far exceeds the cost people are paying in epipens, worse on worse is that everyone bears that burden, not just the people who need an emergency pen.
while the commenter above points out they have long hours, thats not uncommon for many professions including engineers who spend their weekends and nights learning new skills, or people on wall street that it is politically correct to envy how much they make, were as you can see on HN the very mention of doctors making too much brings a flurry of down-votes. "hey, he disagrees with me, silence him! hail our new kings and queens with MDs!"
and about those long hours? if we increased the supply of doctors to bring down the costs, those hours would reduce drastically as well.
Interestingly, I find that most of the time I know far more about the inner workings of the body than the docs that "treat" me. Then again, I have a bio/molecular bio/comp bio background...so that might be the cause. Seems the memorization that drives our docs in the USA forward often doesn't translate into understanding the concepts as a whole. I do agree salaries are getting out of control. Look at PhD's they contribute quite a bit to society, have an even harder time getting the PhD than an MD and yet...aren't similarly rewarded. Don't get me started on "oh, well, we have lives in our hands." You know what, so do the programmers, engineers, technicians that make the tools that make medicine possible. So...our incentive system is a bit out of whack in the USA. It wasn't this way a few decades ago, and it won't be that way a few decades from now. For the moment though, there are lots of perverse incentives skewing costs. Chief amongst them is the 3rd party payer system.
Take home pay for physicians represents about 10% of healthcare spending (http://economix.blogs.nytimes.com/2008/11/14/do-doctors-sala...). On top of the cost of 4 years of college, you've got 4 years of medical school (average med student debt is $167k - http://www.cbsnews.com/news/1-million-mistake-becoming-a-doc...). On top of that, you've got 3-7 years of residency where residents barely make $50k/year while working ~80 hours/week (this is a reduction from ~120 hours/week after regulations were passed). Becoming a doctor is expensive, requires massive sacrifices in time, and doctors don't earn their full salaries until almost a decade after most people start their careers. It doesn't seem like physician salaries are a clear cut problem.
engineers barely make more than a doctor in residency. virtually no engineer on earth makes as much as any doctor after residency.
i dont know about you, but i pulled 80+ hour weeks working, studying, and skill training to get myself where I am today. If I am lucky, and If I spend nights reading code interview books, practicing my skills, maybe I'll get a great job at google/facebook after 4 interviews and some connections making 1/3 - 1/2 as much as an average doctor.
I'd be more inclined to buy your argument if you supported it with evidence. Also we're talking about the impact of physician salaries on healthcare spending. Engineer salaries aren't relevant in this discussion.
Who the hell is watching our backs in America? Is it the FDA, the FTC, Congress (likely too busy defunding AMA to care), the DoJ? No idea.
The problem is, we have no price controls on medicines or medical procedures in the US. Prices are set by the makers of drugs or devices. We are the only 1st world country on the planet without price controls. Everything terrible stems from this and that there is no real competitions between medical providers (because prices are not published).
Isnt this a much more simple tale of greed and corruption. the ceo is the daughter of a democrat senator and lobbied big government the jacked hwr salary 600x. Just another shkrelli, maybe even worse because she lobbied for schools to have them.
It would be interesting to hear the other side of the story. So far, as in this piece, there is only the implied or stated theory that the price increases are due to greed, or just because they can.
This whole thing reminds me of the flu vaccine debacle. The original narrative was that flu vaccines cost less in other countries, so why not in the US? Must be due to some greedy capitalists! The truth turned out to be a bit more nuanced.
There's a different epinephrine auto-injector that has generic versions. The generic versions cost $150 for a set of two (http://www.goodrx.com/adrenaclick).
It's reasonable to assume that most of the $350 difference goes to things like marketing, profit and shenanigans to encourage people to utilize their insurance (the rebate cards eliminate copay and some deductible costs and extract money that eventually has to be paid out of premiums...).
If there's an alternative, then what's the issue? Well a quick search shows 2 alternatives have had recalls. So maybe they have QA issues. Adrenaclick says they lack the ability to scale up to more market demand. So perhaps they should raise their prices a bit to build out facilities?
If you twiddle the generic/brand menu (just to the right of the blue "Prescription settings") at my above link, you'll see that their price is already ~$475.
So my above point is more that the generics provide a lot of information about what it costs to have a product on the market (which the comment I replied to was speculating about). When companies price higher than that, they are presumably doing it in a way that tends to maximize profits and are responsible for the choices they make to do that.
"A key reason is a federal agency called the Patented Medicine Prices Review Board, which regulates drug costs to avoid precisely the sort of excesses evident in the United States."
Price controls can work in a monopoly situation, but they don't work otherwise. Has this board managed to bring alternative products to the market? Has this board increased the stability of supply (for example, diversity of supply chain)?
The flu vaccine debacle highlights all of these shortcomings of well intentioned people attempting to do good things but causing unintended side effects. For example, price controls were put in place, but all that did was reduce the 24 suppliers of vaccine down to a very small number, with very predictable results (less stable supply, greatly increased cost).
Speaking of Canada and medicine, we had some new neighbors from there who moved to the US because they couldn't get adequate care north of the border.
>we had some new neighbors from there who moved to the US because they couldn't get adequate care north of the border.
That sounds fishy. There may be long wait times here for some common procedures but waiting a few months versus paying hundreds of thousands of dollars, what's worse?
My dad has COPD and another lung disease along with the usual cardiovascular health problems plus age related problems if he wasn't here he'd have to pay probably $100,000 for drugs each year.
The way I explain it is having access to free healthcare all your life makes for consistent health. It's like brushing your teeth each day keeps them healthy instead of ignoring them then one day pulling out rotten teeth and thinking that solved the problem.
It's unfortunate the NYT story doesn't get into the billings process as part of the dysfunction. It makes me wonder how the pricing is then negotiated with the insurance companies. Did they set the retail price so high because the insurance companies were refusing to pay a workable price? Mylan has already commented that most EpiPens are paid through insurance, and there's the "billed rate" and "paid rate" on claims reports which often shows outrageous retail prices by health providers and then the negotiated rate the insurance company actually paid. Mylan's "quick" offer of a $300 discount to individual payers appears to keep in line with this and potentially not impact the insurance claim issue, but does anyone have any evidence that this theory is mistaken?
If that's the case, then the market equilibrium makes un/underinsured patients collateral damage in a battle between pharmaceutical and insurance companies. That's a massive market failure that's killing its victims.
Here's my capitalist suggestion: figure out how much the pharmaceutical company stands to earn from life saving medication. Then let the government purchase the rights and put them in the public domain. The variable costs of producing these things is so low that we can treat every one for nearly the same price as treating only the rich.
Maybe someone more familiar with the biotech industry will comment, but it's my impression there have been some market success as well. Keeping that incentive to innovate is important.
Ha! Like they've been innovating in antibiotics for 40 years? In case folks have not been paying attention, zero innovation occurred there.
Currently its all about restless legs and secondary asthma relief and snake-oil mixtures of drugs rebranded under goofy names.
The drug companies have largely abdicated their responsibilities. For profit. What remains are money-making shells. Can't we just do without them? They are adding friction at this point.
Antibiotics do provide a good case for increased public research. I suspect medicine will always have parts that are done better publicly and others better in private hands.
For example, a tour guide in one poor country I visited mentioned that he knew guides that were trained doctors. Because good tour guides there make more money than doctors. Coincidentally, they also have a shortage of doctors. Kind of like America having a shortage of teachers when governments set the salary.
I think it would make more sense to simply have a government owned corporation who's sole purpose is to produce generic drugs on which the patent has expired.
Some drugs, like the cure for Hepatitis C, need to be available more widely before the patent runs out. It's a cure and only people that can come up with $84,000 dollars.
Hear, hear! One can argue against this saying Capitalism is the panacea of the market, but one only needs to look at ANY OTHER FIRST WORLD NATION (99% of them have nationalized health care and pay less to get better care than us) to see that we're CLEARLY doing it wrong here.
I would be interested to see how the output of drug companies change after they are nationalised. Like would they focus on simple solutions that solve problems (rather than expensive solutions that hide problems)? And would they struggle at being yet another public service with a huge budget to be cut. Will their best staff move abroad for better salaries? Stuff like that.
I suspect surgery can give us some interesting insights here.
My understanding is that surgery research mostly takes place at university hospitals. I think that, outside medical devices, there isn't the same kind of non-practising science industry behind surgery research - it's all done by surgeons at research hospitals.
Research hospitals tend to be university hospitals and outside (and even inside) the US, university hospitals tend to be loosely government controlled.
So if we want to know what state controlled medical research could look like, I guess we just look to surgery.
This is not a market failure, it's a regulatory failure. The FDA has arbitrarily denied approval to alternative epinephrine delivery mechanisms and in doing so cemented Mylan's pricing monopoly. When the father of Mylan's CEO Heather Bresch is none other than Senator Joe Manchin (D-WV), who had helped along his daughter's career under a string of shady circumstances in the past, is it any wonder that the our market regulstors are being used to deny market competition?
The government created this problem, not the market, and yet people again clamor for more government intervention.
I'm not clear as to why you say that alternative injectors were "arbitrarily denied approval": Auvi-Q was voluntarily recalled because it didn't reliably dispense an accurate dose, Teva's was rightfully rejected AB rating because it was not identical to the EpiPen in use, and the FDA is well within it's regulatory scope in requiring Adamis provide a usability study and stress-testing for their pre-filled syringes.
The lack of competition to the EpiPen (note that there are other injectors, just not a generic to the EpiPen) is, as I see it, a statement that even simple medical devices are a hard problem. The problems that these companies have had are quality and design failures (in the PLM sense) that are on the companies to correct.
What seems to be missing is a more sophisticated understanding of risk and a legal framework that substitutes the risk assessment of individual patients (or parents) for a one-size-fits-all decision by a bureaucracy.
We are hearing stories now of people going with fewer EpiPen's because of the cost. Is that a better situation than Auvi-Q's sometimes in-accurate dose? I don't know but it is a question that comes to mind.
The government apparently requires purchase of two EpiPens to reduce the risk in case a single dosage is insufficient, but this doubles the cost. Now some people purchase two (one package) instead of four (two packages) and perhaps they won't have any EpiPen at all when they need one because they can't have one at home, at school, at camp, at Grandma's house and so on.
Should pharmacists be able to substitute the AdrenaClick with the patients approval? The law prevents that. Perhaps trusting pharmacists (a highly regulated profession already) to make that decision would be better than patients purchasing fewer EpiPens due to cost.
> What seems to be missing is a more sophisticated understanding of risk and a legal framework that substitutes the risk assessment of individual patients (or parents) for a one-size-fits-all decision by a bureaucracy.
I guess I disagree that this understanding is lacking, in fact, I find that medical professionals (including those in regulatory bodies, of which there are many) have an excellent understanding of risk/benefits.
> We are hearing stories now of people going with fewer EpiPen's because of the cost. Is that a better situation than Auvi-Q's sometimes in-accurate dose? I don't know but it is a question that comes to mind.
It is unacceptable to market a device that does not work as designed, especially when the malfunction is unpredictable or results in uncertainty that makes treatment more complicated. Why should Auvi-Q be different?
> The government apparently requires purchase of two EpiPens to reduce the risk in case a single dosage is insufficient, but this doubles the cost.
The government makes no such requirement. NIAID guidelines (http://www.aaaai.org/Aaaai/media/MediaLibrary/PDF%20Document...) recommend that a physician prescribe for two auto-injector doses as a part of first-line treatment. Two doses makes sense, especially with a device like this: as the saying goes, two is one and one is none. A package of two auto-injectors doubles the BOM cost, but that is a small fraction of the average transaction cost or retail cost. Mylan smartly switched to selling in packs of two to capitalize on the updated guidelines, I suspect to make their cost increases more defendable. I don't like their profiteering, but I can't fault their marketing decision.
> Should pharmacists be able to substitute the AdrenaClick with the patients approval? The law prevents that. Perhaps trusting pharmacists (a highly regulated profession already) to make that decision would be better than patients purchasing fewer EpiPens due to cost.
Generally speaking, I think pharmacists in the US should have an enhanced role in patient care, similar to their counterparts overseas. They are highly trained, as you rightfully point out, and they generally have a better understanding of pharmaceuticals and interactions than their MD colleagues. In this case, they are already able to point out to a prescribing physician that alternatives like Adrenaclick exist, they just cannot modify the script on their own. Actually, this might be a case where electronic prescribing systems make things worse by limiting the physician/pharmacist interaction.
> Auvi-Q was voluntarily recalled because it didn't reliably dispense an accurate dose
In 26 unconfirmed cases. Auvi-Q wasn't recalled because of device failure, but because of -potential- device failure. EpiPen is not immune to device failure either: http://adc.bmj.com/content/98/Suppl_1/A42.3
The FDA needs to be maintaining a standard in device quality, but it also needs to make those assessments free of any potential bias and it also needs to be held responsible for denying a fair competitive market to consumers.
If there's shady politics involved in this one then perhaps there are additional solutions needed. For another example, there's the cure for Hep C that costs $84,000.
The Hep C cure is an extremely valuable innovation.
I certainly hope that lots of people receive the cure in a rapid fashion, but I'm not sure that it really falls to the innovator to provide it to them.
(lots of payers (insurance and national healthcare systems) are paying high fees for it because it makes sense for them over the medium term to do so; it represents a cost savings)
As a society we should still probably seek cheaper ways of finding such cures, but it doesn't make a whole lot of sense to bemoan a new, better and cheaper treatment.
The point is to get the innovator payed in a way that justifies their investment AND help everyone that can be helped. I'm not bemoaning or blaming; the point is to design a better system. Right now paying the innovator requires limiting availability for no good reason.
I once saw someone propose an 'X-prize' style system of publicly funded incentive based competitions for medical device and pharma research. Interesting idea.
This is not a market failure, it's a regulatory failure. The FDA has arbitrarily denied approval to alternative epinephrine delivery mechanisms and in doing so cemented Mylan's pricing monopoly. When the father of Mylan's CEO Heather Bresch is none other than Senator Joe Manchin (D-WV), who had helped along his daughter's career under a string of shady circumstances in the past, is it any wonder that the our market regulstors are being used to deny market competition?
The government created this problem, not the market, and yet people again clamor for more government intervention.
It is government regulations and legal prohibitions that have created a situation in which there is no competition. The market didn't create that situation, the government did. It is no surprise the price goes up in a market where competition is effectively prohibited.
There are a few solutions:
* adjust the regulatory framework to allow competition to emerge
* strengthen the regulatory framework and set a price by law
* apply public pressure against the sole provider into modifying their pricing
The last one is arguably the 'market' at work. The first two are just doubling down on a regulatory framework.
In any case, 'regulatory failure' seems like a much better description of the situation than 'market failure'.
I don't agree here. It's both. It's a market failure when the price point (or transparency around the prices) doesn't convince new entrants to persevere through the existing regulatory process. It's market failure when the interests of all stake holders aren't successfully incorporated into the pricing. It's not a regulatory failure that the FDA has higher standards than the offered alternatives - we can't lower standards just to encourage new entrants. But it IS a regulatory failure when the FDA doesn't communicate with the FTC such that unnatural monopolies aren't controlled for, or that the FDA/FTC isn't communicating to the pharma industry that new entrants are required in order to prevent such monopolies from occurring. The FTC should be more "cross-border" effective with the government's own agencies.
> we can't lower standards just to encourage new entrants.
Why the heck not?
Two obvious reform options are:
(1) New rule: any medical device or medicine officially approved for use in any of (large list of countries deemed to have competent regulators) automatically is legal to use in the US as well. Seed the list with all of Europe and Japan, gradually consider adding new countries as seems appropriate.
(2) Make FDA approval optional. If a manufacturer thinks a drug and/or device works and is willing to accept the standard liability risk of selling it they can automatically do so, with the only caveat that it must include a prominent "not yet approved by the FDA" label until the product actually has finished getting approved. This label can also include a paragraph or two of more specific warning text and/or a URL to find more info if the FDA has specific concerns.
(2) is untenable. A company could theoretically widely distribute a drug with unknown effects/consequences, only to find after the fact that it negatively affects >10% of patients causing death and disability in major numbers. File for bankruptcy and disappear with no ability for the sufferors to get lifetime care compensation? Catastrophic, with no recourse.
Why would major numbers of people take an unproven drug with unknown effects/consequences? Seems like a self-limiting problem.
When a drug is unknown and unproven, relatively few people will take it unless they have pretty good reason to think it's really effective or they are really desperate - which are exactly the situations in which you'd want people trying the drug to see if it works. If there's already a known and proven and cost-effective drug that works, people would take that instead.
The FDA alternative is that lots of people go without drugs that - even though they're safe and effective - never get to market because proving them so to the FDA's satisfaction is so expensive and time-consuming as to be not worth doing.
A lack of new drugs causes death and disability too. Me, I'd rather err on the side of too many rather than too few drug options available for people to solve their problems with.
It's an interesting concept to suggest an effective put option for the government, based perhaps on the auditable costs of successful R&D. But this would probably have to work both ways - also including a put option in favor of pharma for R&D that was unsuccessful. R&D spending would become more transparent as a result (inflated, perhaps, to try to hedge against the government intervening on a hugely profitable opportunity), but in any event still entirely recoupable. Different sort of risk/reward algorithm at play, but feasible.
The majority of the comments here are interesting to me because they're talking about the cost of an epi-pen after insurance. The problem doesn't seem to be some mismatch of the interplay between drug price and insurance rebate but just how incredibly expensive an epi-pen is in America because of a lack of collective bargaining on price.
For comparison, here in Australia, the dispensed price for an epi-pen is 96.57AUD which includes everything, even the maximum markup from the pharmacist (as far as I understand the pricing mechanisms). Of course, depending on insurance arrangements and personal circumstances you'll end up paying less with a maximum of 38.30AUD out of pocket but that's a different part of the system.
I don't see how the dysfunction is any of the things mentioned in this article as opposed to the ridiculous prices insurance companies and patients are being charged for it. Many drugs expire quickly, are hard to administer, and are difficult to make. All that means is that we need them done well and we need to pay the least we can.
There are various entities that collectively bargain drug prices in the US. It's just that other groups and individuals may not have access to the prices they achieve.
(several large insurers provide coverage for more people than live in Australia)
It seems the problem in the US is that a patent that "improves" a product ends up creating a new period of exclusivity (it's not clear to me if this is just because the improved version becomes the new standard of care or because people are nuts and demand the very best regardless of whether the difference is particularly significant).
The most interesting thing here would be the lack of competition, but the article, which was pretends to be a "case study", just leaves it at "various reasons". What the hell? It's not like an individual company's responsible for keeping the price sane; it should be kept down by the whole market — and if the market's malfunctioning, government's to blame, not the company.
The World Trade Organization has a provision known as "Compulsory Licensing" which can be used in extraordinary situations such as this. Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner.
A few years ago, India's government authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug because the price charged by Bayer was unaffordable to most of the nation. The US pharmaceutical industry has been up in arms about this, and has been exerting pressure on India to stop this practice. But abuses of the system by Mylan (with EpiPen), Turing (with Daraprim) and others would seem to justify the Indian practice.
In fact the US would do well to copy India's model. Citizens should be able to sue corporations for egregious abuses of the patent system, and courts should be able to provide relief in such cases by granting a compulsory license of a drug patent to a generic maker.
An interesting model, taking advantage of other countries taxpayers and innovation so you never have to fund any research yourself.
I'm sure that will work out well to better humanity as a whole - especially when there's no reason to actually invent anything new because every other country is just waiting to steal it.
I've got a question about price caps, would appreciate a non-trolly/non-sarcastic answer if anyone is informed on the topic.
We know that epi-pens cost under $50 to make, because they're sold profitably in Canada for around $60.
And I recognize that companies are entitled to make a profit, and that drug companies (sometimes) use those profits on R&D for new and better products.
But we see instances of clear cash grabs. Sometimes they're due to circumstances (in this case, a generic alternative failed FDA approval, and a competitor left the market); other times a drug company will buy up competitors and consolidate the market (Turing Pharm).
Why don't we have some sort of market cap of 3-4x or even 10x the cost of manufacturing a drug that is implemented after the R&D has been paid off? I get that companies would bend over backward to inflate that R&D figure, but sooner or later they would have to admit that it was paid for and need to settle into a mode of merely making reasonable profits instead of insane profits.
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[ 3.1 ms ] story [ 131 ms ] threadIn principle I am opposed to regulation, but in this case, where all other measures have failed, I say regulate away.
I want to call out Heather Bresch, Mylan CEO, by name because she and Martin Shkreli are the problem as well as any investor or board member that doesn't steer them back to being human.
This comes down to life and death for people. The instrument is simple, accessible and cheap. This doesn't make the instrument more valuable, but more necessary. Mylan is simply exploiting its customer base temporarily caught in the middle.
But the article says there would be competition except that it's too hard to get a product to market. Doesn't the author mean it's too hard to compete because of regulation, like from the FDA?
Normally, I would say the logic doesn't follow that, the answer to failed regulation is more regulation. However, in this case, my opinion is that we should call this out for what it is and do something to counteract it.
But those companies who operate at 600% markup in the same industry are perfectly fine.
I can guarantee you the latter are where the actual problem lies - since it's systemic. The outliers that get press are good - but only if people solve the problem vs. kneejerk reactions like specific legislation for a single drug.
My point is that every drug company is doing this. And not a little bit. We shouldn't set some ridiculous threshold before we take action (as long as we're stolen from, it's ok if it's only a small amount right?) - we should fix the problem where it begins. This means adding competition to the market, in which case the usual race to the bottom should occur. You are basically advocating for a tiny measure that "fixes" a fraction of a fraction of a percentage of wasteful drug spending - and simply focusing on manufactured outrage. This is how the industry continues to win.
If we are talking about one company then specific action seems appropriate.
I agree that there are systemic issues. I think that is a larger conversation that will take more time. There are merits to the European systems that are generally more liberal, or at least are characterized as such, and likewise, merits to the US system. We could probably cherry pick examples in each system and perhaps that is how it will continue in that larger conversation.
However, in this instance, which is the context I am focused on we recognize that allowing a monopoly is a failure. It presents special circumstances, so special action to sidestep the bureaucracy seems appropriate to me.
I believe that the proverbial 2x4 to the head (of Mylan, in this instance), would do more to further the larger conversation and the points we agree on, than waiting for the conversation to conclude with a pretty bow. It won't.
Making examples of the most egregious perpetrators has an immediate, albeit incremental impact.
We are talking about a price increase from a floor that was already absolutely insane. $300 for a $20 or less to manufacturer device is already being ripped off, and we are only just now talking about it because it went to $600. Why is there a difference in reactions here? Are you the one who gets to judge a $580 profit is ok vs. a $280 profit? Why? They both seem obscene to me - why is this just now becoming a problem? Obviously $300 is an acceptable price - so is $400? $500?
This is just the tip of the iceberg. If you start by clipping the tall poppies you might get some extremely slight downward pressure on prices in the market - but that does nothing to solve your actual problems. It's penny wise and pound foolish and is the approach we've thus far taken with predictable results.
Where we disagree is in practice.
Doing nothing, or a little empty outrage is sweeping it under the rug, or "the approach thus far."
What I am talking about has a practical benefit beyond targeting the worst offenders, which again seems appropriate. Establishing a precedent for what is "too aggressive" frames the conversation going forward. Otherwise, your logic, "Obviously $300 is an acceptable price - so is $400? $500?," is valid. When human lives are at stake I don't think it is. So, establishing a precedent and thereby the beginning of a framework we move the conversation forward rather than just another lap on the rotary.
I also disagree that doing something is the same as doing nothing. I find that practically and logically false. Particularly, in the context of progress in a bureaucracy, it has been the modest incremental changes that have created the opening for larger reform.
I'm not proposing doing nothing. I'm stating making targeted efforts to go after this specific case is a silly waste of effort (at best - at worst it's placebo) is all. I would rather see that effort go towards actually reforming the system that allows monopolies to form when they don't make (open) market sense.
Otherwise I do think we agree - the end result is Mylan can't charge $600 Epipen.
In the meantime, why is it binary in your mind? Why is it larger reform or nothing?
Because this does have a life and death impact, I don't think it is silly, or a waste. The efforts, at worst have potential to move the larger reform forward, and at best potentially save a life.
It seems like cloning the Epipen could be a simple process, but you still have to show substantial equivalence and do a bunch of validation to ensure the product is safe and effective.
I'm not an expert in this, by any means. All my knowledge comes from working in an FDA-regulated industry.
You're basically saying that every businessperson in medicine should never raise prices, look for underperforming companies, etc.
In my previous comments I acknowledge the failure of regulations first.
I am not saying that medical related industries or products should not raise prices. In fact, I think competition and profit motivation are essential parts of innovation in medicine, or any field.
I can concur. I have a family member I purchase these for. At first, it was like...okay, $50 after insurance. Now $100 after insurance. The thing is...nobody really seems to care until things spiral out of control. Who the hell is watching our backs in America? Is it the FDA, the FTC, Congress (likely too busy defunding AMA to care), the DoJ? No idea. I wonder if gov't agencies like the DoD who stock tons of epipens pay the same prices that we the public do? Does the DoD purchase from another market to get out of the huge sticker price? I'm curious to see how many people in the gov't get around purchasing these in the US for their own agencies yet didn't raise extreme alarm at the ballooning prices for the American consumers.
doctors easily make north of 200k after residency(a number almost no engineer will ever come close to), and people complain over hundred dollar epi pens.
even if you dont agree with me, the cost of paying the doctors far exceeds the cost people are paying in epipens, worse on worse is that everyone bears that burden, not just the people who need an emergency pen.
while the commenter above points out they have long hours, thats not uncommon for many professions including engineers who spend their weekends and nights learning new skills, or people on wall street that it is politically correct to envy how much they make, were as you can see on HN the very mention of doctors making too much brings a flurry of down-votes. "hey, he disagrees with me, silence him! hail our new kings and queens with MDs!"
and about those long hours? if we increased the supply of doctors to bring down the costs, those hours would reduce drastically as well.
i dont know about you, but i pulled 80+ hour weeks working, studying, and skill training to get myself where I am today. If I am lucky, and If I spend nights reading code interview books, practicing my skills, maybe I'll get a great job at google/facebook after 4 interviews and some connections making 1/3 - 1/2 as much as an average doctor.
We need to nationalize health care (all drug and insurance). There is no other solution.
The problem is, we have no price controls on medicines or medical procedures in the US. Prices are set by the makers of drugs or devices. We are the only 1st world country on the planet without price controls. Everything terrible stems from this and that there is no real competitions between medical providers (because prices are not published).
This whole thing reminds me of the flu vaccine debacle. The original narrative was that flu vaccines cost less in other countries, so why not in the US? Must be due to some greedy capitalists! The truth turned out to be a bit more nuanced.
http://webcache.googleusercontent.com/search?q=cache:-08YyGE...
It should surprise no one that these kinds of price problems occur in a system with heavy regulation, very little choice, and no transparency.
It's reasonable to assume that most of the $350 difference goes to things like marketing, profit and shenanigans to encourage people to utilize their insurance (the rebate cards eliminate copay and some deductible costs and extract money that eventually has to be paid out of premiums...).
So my above point is more that the generics provide a lot of information about what it costs to have a product on the market (which the comment I replied to was speculating about). When companies price higher than that, they are presumably doing it in a way that tends to maximize profits and are responsible for the choices they make to do that.
https://www.thestar.com/opinion/editorials/2016/08/25/canada...
"A key reason is a federal agency called the Patented Medicine Prices Review Board, which regulates drug costs to avoid precisely the sort of excesses evident in the United States."
The flu vaccine debacle highlights all of these shortcomings of well intentioned people attempting to do good things but causing unintended side effects. For example, price controls were put in place, but all that did was reduce the 24 suppliers of vaccine down to a very small number, with very predictable results (less stable supply, greatly increased cost).
Speaking of Canada and medicine, we had some new neighbors from there who moved to the US because they couldn't get adequate care north of the border.
That sounds fishy. There may be long wait times here for some common procedures but waiting a few months versus paying hundreds of thousands of dollars, what's worse?
My dad has COPD and another lung disease along with the usual cardiovascular health problems plus age related problems if he wasn't here he'd have to pay probably $100,000 for drugs each year.
The way I explain it is having access to free healthcare all your life makes for consistent health. It's like brushing your teeth each day keeps them healthy instead of ignoring them then one day pulling out rotten teeth and thinking that solved the problem.
Here's my capitalist suggestion: figure out how much the pharmaceutical company stands to earn from life saving medication. Then let the government purchase the rights and put them in the public domain. The variable costs of producing these things is so low that we can treat every one for nearly the same price as treating only the rich.
Currently its all about restless legs and secondary asthma relief and snake-oil mixtures of drugs rebranded under goofy names.
The drug companies have largely abdicated their responsibilities. For profit. What remains are money-making shells. Can't we just do without them? They are adding friction at this point.
For example, a tour guide in one poor country I visited mentioned that he knew guides that were trained doctors. Because good tour guides there make more money than doctors. Coincidentally, they also have a shortage of doctors. Kind of like America having a shortage of teachers when governments set the salary.
(The dustup over Martin Shkreli raising the price of Daraprim only happened because there were very few users of the drug)
My understanding is that surgery research mostly takes place at university hospitals. I think that, outside medical devices, there isn't the same kind of non-practising science industry behind surgery research - it's all done by surgeons at research hospitals.
Research hospitals tend to be university hospitals and outside (and even inside) the US, university hospitals tend to be loosely government controlled.
So if we want to know what state controlled medical research could look like, I guess we just look to surgery.
The government created this problem, not the market, and yet people again clamor for more government intervention.
There's a whole bunch of places that have governments heavily involved in pricing Epipens, places that pay a lot less than the US.
The lack of competition to the EpiPen (note that there are other injectors, just not a generic to the EpiPen) is, as I see it, a statement that even simple medical devices are a hard problem. The problems that these companies have had are quality and design failures (in the PLM sense) that are on the companies to correct.
We are hearing stories now of people going with fewer EpiPen's because of the cost. Is that a better situation than Auvi-Q's sometimes in-accurate dose? I don't know but it is a question that comes to mind.
The government apparently requires purchase of two EpiPens to reduce the risk in case a single dosage is insufficient, but this doubles the cost. Now some people purchase two (one package) instead of four (two packages) and perhaps they won't have any EpiPen at all when they need one because they can't have one at home, at school, at camp, at Grandma's house and so on.
Should pharmacists be able to substitute the AdrenaClick with the patients approval? The law prevents that. Perhaps trusting pharmacists (a highly regulated profession already) to make that decision would be better than patients purchasing fewer EpiPens due to cost.
I guess I disagree that this understanding is lacking, in fact, I find that medical professionals (including those in regulatory bodies, of which there are many) have an excellent understanding of risk/benefits.
> We are hearing stories now of people going with fewer EpiPen's because of the cost. Is that a better situation than Auvi-Q's sometimes in-accurate dose? I don't know but it is a question that comes to mind.
It is unacceptable to market a device that does not work as designed, especially when the malfunction is unpredictable or results in uncertainty that makes treatment more complicated. Why should Auvi-Q be different?
> The government apparently requires purchase of two EpiPens to reduce the risk in case a single dosage is insufficient, but this doubles the cost.
The government makes no such requirement. NIAID guidelines (http://www.aaaai.org/Aaaai/media/MediaLibrary/PDF%20Document...) recommend that a physician prescribe for two auto-injector doses as a part of first-line treatment. Two doses makes sense, especially with a device like this: as the saying goes, two is one and one is none. A package of two auto-injectors doubles the BOM cost, but that is a small fraction of the average transaction cost or retail cost. Mylan smartly switched to selling in packs of two to capitalize on the updated guidelines, I suspect to make their cost increases more defendable. I don't like their profiteering, but I can't fault their marketing decision.
> Should pharmacists be able to substitute the AdrenaClick with the patients approval? The law prevents that. Perhaps trusting pharmacists (a highly regulated profession already) to make that decision would be better than patients purchasing fewer EpiPens due to cost.
Generally speaking, I think pharmacists in the US should have an enhanced role in patient care, similar to their counterparts overseas. They are highly trained, as you rightfully point out, and they generally have a better understanding of pharmaceuticals and interactions than their MD colleagues. In this case, they are already able to point out to a prescribing physician that alternatives like Adrenaclick exist, they just cannot modify the script on their own. Actually, this might be a case where electronic prescribing systems make things worse by limiting the physician/pharmacist interaction.
In 26 unconfirmed cases. Auvi-Q wasn't recalled because of device failure, but because of -potential- device failure. EpiPen is not immune to device failure either: http://adc.bmj.com/content/98/Suppl_1/A42.3
The FDA needs to be maintaining a standard in device quality, but it also needs to make those assessments free of any potential bias and it also needs to be held responsible for denying a fair competitive market to consumers.
I certainly hope that lots of people receive the cure in a rapid fashion, but I'm not sure that it really falls to the innovator to provide it to them.
(lots of payers (insurance and national healthcare systems) are paying high fees for it because it makes sense for them over the medium term to do so; it represents a cost savings)
As a society we should still probably seek cheaper ways of finding such cures, but it doesn't make a whole lot of sense to bemoan a new, better and cheaper treatment.
The point is to get the innovator payed in a way that justifies their investment AND help everyone that can be helped. I'm not bemoaning or blaming; the point is to design a better system. Right now paying the innovator requires limiting availability for no good reason.
The government created this problem, not the market, and yet people again clamor for more government intervention.
It is government regulations and legal prohibitions that have created a situation in which there is no competition. The market didn't create that situation, the government did. It is no surprise the price goes up in a market where competition is effectively prohibited.
There are a few solutions: * adjust the regulatory framework to allow competition to emerge * strengthen the regulatory framework and set a price by law * apply public pressure against the sole provider into modifying their pricing
The last one is arguably the 'market' at work. The first two are just doubling down on a regulatory framework.
In any case, 'regulatory failure' seems like a much better description of the situation than 'market failure'.
Why the heck not?
Two obvious reform options are:
(1) New rule: any medical device or medicine officially approved for use in any of (large list of countries deemed to have competent regulators) automatically is legal to use in the US as well. Seed the list with all of Europe and Japan, gradually consider adding new countries as seems appropriate.
(2) Make FDA approval optional. If a manufacturer thinks a drug and/or device works and is willing to accept the standard liability risk of selling it they can automatically do so, with the only caveat that it must include a prominent "not yet approved by the FDA" label until the product actually has finished getting approved. This label can also include a paragraph or two of more specific warning text and/or a URL to find more info if the FDA has specific concerns.
When a drug is unknown and unproven, relatively few people will take it unless they have pretty good reason to think it's really effective or they are really desperate - which are exactly the situations in which you'd want people trying the drug to see if it works. If there's already a known and proven and cost-effective drug that works, people would take that instead.
The FDA alternative is that lots of people go without drugs that - even though they're safe and effective - never get to market because proving them so to the FDA's satisfaction is so expensive and time-consuming as to be not worth doing.
A lack of new drugs causes death and disability too. Me, I'd rather err on the side of too many rather than too few drug options available for people to solve their problems with.
For comparison, here in Australia, the dispensed price for an epi-pen is 96.57AUD which includes everything, even the maximum markup from the pharmacist (as far as I understand the pricing mechanisms). Of course, depending on insurance arrangements and personal circumstances you'll end up paying less with a maximum of 38.30AUD out of pocket but that's a different part of the system.
I don't see how the dysfunction is any of the things mentioned in this article as opposed to the ridiculous prices insurance companies and patients are being charged for it. Many drugs expire quickly, are hard to administer, and are difficult to make. All that means is that we need them done well and we need to pay the least we can.
(several large insurers provide coverage for more people than live in Australia)
It seems the problem in the US is that a patent that "improves" a product ends up creating a new period of exclusivity (it's not clear to me if this is just because the improved version becomes the new standard of care or because people are nuts and demand the very best regardless of whether the difference is particularly significant).
A few years ago, India's government authorized a drug manufacturer to make and sell a generic copy of a patented Bayer cancer drug because the price charged by Bayer was unaffordable to most of the nation. The US pharmaceutical industry has been up in arms about this, and has been exerting pressure on India to stop this practice. But abuses of the system by Mylan (with EpiPen), Turing (with Daraprim) and others would seem to justify the Indian practice.
In fact the US would do well to copy India's model. Citizens should be able to sue corporations for egregious abuses of the patent system, and courts should be able to provide relief in such cases by granting a compulsory license of a drug patent to a generic maker.
Read about compulsory licensing here: https://www.wto.org/english/tratop_e/trips_e/public_health_f...
Read about India granting compulsory license to Bayer cancer drug here: http://www.nytimes.com/2012/03/13/business/global/india-over...
I'm sure that will work out well to better humanity as a whole - especially when there's no reason to actually invent anything new because every other country is just waiting to steal it.
We know that epi-pens cost under $50 to make, because they're sold profitably in Canada for around $60.
And I recognize that companies are entitled to make a profit, and that drug companies (sometimes) use those profits on R&D for new and better products.
But we see instances of clear cash grabs. Sometimes they're due to circumstances (in this case, a generic alternative failed FDA approval, and a competitor left the market); other times a drug company will buy up competitors and consolidate the market (Turing Pharm).
Why don't we have some sort of market cap of 3-4x or even 10x the cost of manufacturing a drug that is implemented after the R&D has been paid off? I get that companies would bend over backward to inflate that R&D figure, but sooner or later they would have to admit that it was paid for and need to settle into a mode of merely making reasonable profits instead of insane profits.