Various improvements to the pen have been patented over the years, the initial patent was granted in 1977 and is expired.
The question becomes, how small an improvement should we look at and decide that it warrants exclusivity?
It's a trickier question for something like the Epipen where there is benefit from widespread understanding of how to properly use it (so a change to the pen that requires different user training becomes a change that removes generics from the market).
I've seen multiple people try to figure out why there is no competition, and some consensus around the fact that while the drug is not patented, the particular delivery device design (or combination of it and the drug) is patented, and due to issues of needing to train people on multiple different delivery devices, there's no room to break into the market with an equivalent that evades the patent concern.
While remotely plausible, this sounds farfetched to me, considering that there would be virtually no R&D budget to deal with, and unlike chemical pharmaceuticals it is easy to test the full life cycle of the device in seconds, thousands of times in a row. Epinephrine is in the public domain, and there is no chance that flaws in the delivery device would take years to discover.
So in comparison to most of what Big Pharma spends money trying to bring to market, an epi pen is (in comparison) extremely easy.
My guess is that even if a patent were successfully filed for a new delivery device, the challenge lies in getting all the sweetheart deals that Mylan was able to get.
People forgoing medically necessary healthcare and medication is where the problem lies with aggressive profit seeking where demand is inelastic.
Now, if the US government would simply allow imports of equivalent medications and devices when this sort of rent seeking occurs (from other first world countries where the price is set through a single payer system), we wouldn't be having this conversation.
Why shouldn't health care be a marketplace? You can live without health care far longer than you can without food, which is, like, the canonical marketplace.
Do you actually believe that kids with peanut allergies should die, or is this some sort of economics game of chicken where you try to stick to the script longer than anyone else?
I think we shouldn't create an incentive structure where making the next Tinder is a better way to make money than making the next Epipen. Talented drug developers aren't born any more charitably-minded than talented app-developers, and if you impose an artificial charity function on drug development you'll just drive talented people to other fields where they can make more money.
Every year a ton of MIT, Stanford, and Harvard graduates go into Silicon Valley or Wall Street instead of getting a PhD in biology or physics because we've got this perverse idea that the more "important" something is the more people who go into that field should be willing to forgo material interests. "Greed is good" if you're building a Pokemon game, but "evil" if you're saving lives or feeding the world. That's backward.
Obviously kids shouldn't die because they can't afford essential medicines. But that means that the government should pay for those at market rates--not that companies doing important things should take on obligations to be quasi charities.
Yeah, I agree that the incentive structure is inverted, but 1) if the government simply buys whatever rate Mylan sets, there can be no "market rate", because the market can then bear anything at all, and 2) we have had a successful (now underfunded) model for getting smart people to innovate -- by funding projects through NSF, ARPA, and the NIH.
There is room to allow Mylan to make a profit, but there is little evidence that they are reinvesting these profits in beneficial work, or attracting research talent for potentially useful projects. Spending government dollars on Mylan's ridiculous prices seems unhelpful when we have proven programs for spending government dollars much more effectively (and again, if you simply don't subsidize these prices, kids die).
> we have had a successful (now underfunded) model for getting smart people to innovate -- by funding projects through NSF, ARPA, and the NIH.
You're cutting out a huge number of top-flight people if you limit the field to those happy making GS scale or whatever you can justify as a government contractor (which isn't much better).
My brother is a recent graduate of an Ivy. Tons of his classmates (who majored in hard science fields, not economics or finance) went to Wall Street and Silicon Valley. It's the rational thing to do. You can go to Netflix and make $300k as a twenty something figuring out how to efficiently deliver the new Voltron remake to viewers, or you can get your PhD in biochemistry, making $40k for years as a post doc before topping out at $150k at NIH. It's a no-brainer.
Companies are neutral. "The company" didn't make this decision. It was the board of directors, flesh and blood people. The board of directors was elected by shareholders. Who are the shareholders?
If the largest shareholder is a mutual fund, then the shareholders so far removed from the actual situation that I think the onus for ethical decision-making falls on the executives and the board of directors. They're the ones with the knowledge and focus to be able understand the consequences of their decisions on the people who rely on their products.
You should probably explain more why you think SITAX and that guy are relevant.
The Vanguard Health Care Fund owns ~$1 billion of Mylan (out of $48.6 billion under management). SITAX manages around $2.7 million.
I don't see why SITAX and the guy that manages it matter to this story at all. The Vanguard fund having a big stake in Mylan certainly means that lots of people have a stake in Mylan though.
Vanguard Health Care is a huge mutual fund (~50 billion under management). It's shares are surely owned by an incredibly large number of people and institutions. How in the world did you drag Staar Investment Trust which appears to be a tiny institution into this?
Staar owns a piece of Vanguard. They are one of many shareholders. Tiny or not, they own stock in a company that owns stock in the company that is selling the epipens. This is the problem. The layers of ownership are used to dilute and avoid responsibility. These companies only respond to shareholders. Realworld people are where you have to start. If I found my grandmother owned shares in a mutual fund that owned a piece of Mylan, I'd start with her.
"At the time it was granted, the award was potentially worth as much as $82 million overall to the company’s top five executives. But it would be worthless if the company—whose star product is the EpiPen—fails to achieve at least 90% of its 2018 earnings target."
And let's not forget that capitalism is people, not faceless, nameless machinery. Five people promised $82m between them had their greed overshadow anything else. This was spurred on by the greed of the board that would do anything to aggressively increase profits - but put the "how" on someone else for plausible deniability.
Greed is the part of capitalism that regulation stands in the way of. Too aggressively rid the system of regulation and greed will consume everything.
True if you mean the thing we call capitalism in the US.
The only reason the price of a $1 piece of plastic can possibly be so high is because of a very noncompetitive situation created by various cronies and abetted by regulators.
Let's call it what it is. It's not capitalism, it's simply a corrupt regulatory system and firms that have learned how to exploit it to their advantage. it's nothing like a market that allows competition, and the regulation is nothing like a fair referee that allows the best player to win.
Under actual capitalism, there would have been price competition and perhaps (gasp) a startup would have started selling epi pens for a reasonable price just as Google started offering massive email storage for a reasonable price, etc.
While I understand the emotional reaction that it is "essential for life" (I have family members who rely upon them), let's blame what is actually at fault, laws that allow firms to do this sort of thing and prevent solutions from emerging.
You're talking about different things. Foodstuffs can and should be regulated to a reasonable degree, and they are regulated, not only by the FDA but also by state departments of agriculture and local departments of health. Whether an early iteration of Soylent should've been legal or not is beside the point.
The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen via a patent for the injection mechanism. That means Mylan is the only company that is legally allowed to manufacture it in the United States. In addition, it takes millions of dollars to bring a treatment through the slow FDA approval process (though it's not clear if this is necessary to compete with EpiPen), so even if someone was somehow able to circumvent and/or license any patents Mylan may hold, it'd still take herculean resources to bring a competitor to market.
That's what the grandparent is talking about. The EpiPen can be so expensive because no one else is legally allowed to sell a substantially similar device without Mylan's permission. When the consumer has only one option, especially for something as crucial as a life-saving medication, things are really bad, whether the economic system that consumer is living under calls itself "capitalism" or something else.
We've got to fix our intellectual property laws, both patent and copyright. A large part of the Fortune 500 is only there because of the excessive legal monopolies that we've granted through intellectual property (which means it'll be basically impossible to fix).
I know that some patents on the device have expired. However, there still seems to be frequent reference to Mylan's current eligibility for patent protection. Here's one such reference from a New York Times editorial, published today [0]:
>Today that same tiny, lifesaving bolus of epinephrine — used mostly to treat severe allergic reactions — is delivered via sometimes elaborate devices called auto-injectors. Though the medicine itself hasn’t changed, the delivery devices have been protected by patents, enabling drug makers to charge ever escalating — sometimes prohibitive — prices for one of the oldest drugs in medical use.
It doesn't say which patents specifically may cover the EpiPen, but as far as I can tell, the consensus is that the device is patent protected. I would love to know if there's definitive evidence either way -- specifically which patents Mylan claims to be protected under, or whether this is in reality just a common assumption/myth.
There was an FDA approved competitor. It got pulled from the market because of fears it wasn't delivering the right dosage, and the company selling the drug wasn't willing to put up with the potential liability.
Perhaps they knew the design was flawed, or perhaps they made a very foolish decision (since they would have profited handsomely if the design could be fixed).
Any potential profit must be balanced against the highly political question of whether the fix (assuming one was needed) would get thru the FDA, and at what cost, how many bribes, or more politically correctly put, campaign contributions would be needed and whether even doing so would be sufficient to make it onto the market with a revised version.
It's not like these decisions are being made purely on a scientific basis.
I have just as many problems with an overly restrictive FDA as the next free market guy, but there isn't really a lot of evidence that the issues are due to political corruption.
In reality the FDA is too conservative due to the incentive structure: people getting hurt from a drug approved too fast are very visible. People that get hurt due to a drug being approved too slowly are not. This is the core issue.
Just because our system falls so far outside the ideology it claims to espouse does not mean it's not capitalism. Just as the reality of communism was far from the ideology, so is our reality of capitalism. I'd argue, however, that this is capitalism. How things should work is a fantasy. They do not work the way you describe in most 'capitalist' systems (US, European countries, China). I'd argue that what you call capitalism doesn't exist and pretending that it does supports and fuels the current system and state of affairs by legitimizing the idea of capitalism when the actuality of capitalism is not so rosy (hundreds of dollars for an EpiPen). The idea of capitalism that you espouse, I'd argue, is mere fantasy and delusion and a rather dangerous one at that just as the idea of communism has been to the world.
Your argument is kinda like pouring brown paint into a can of white paint, pointing to its tan color and then saying that white paint is a fantasy.
Yes there are various degrees of purity in capitalism across the world and one of the interestingly consistent things across history is that prosperity follows relative economic freedom, even if there is no purely free economy.
There's already an FDA-approved, tried-and-tested method for delivering epinephrine: the one that Mylar has a patent on.
It's stupid to force competitors to invent a completely different method to do the same thing, and then have them try to get it through FDA approval, just because Mylar is unwilling to license the patent to competitors at a reasonable rate.
The fact that a company can just flat-out stop an idea from being implemented by anyone else for 20 years is insanity. There needs to be a mechanism that incentivises patents being licensed, rather than withheld and used as an anti-competitive bludgeons. Something like a means of finding a reasonable value for a patent (hopefully via some market mechanism) that takes into account the cost of invention, and then requiring the patent be licensed for that amount to anyone.
If you look at the situation with Microsoft and Android, it's crystal clear: the patents in question are pathetic, and yet they're being used to extort billions of dollars. It's such a massive distortion, and leads to huge duplication of effort and wasteful incompatibilities, and in this case lives at risk.
The patent system is full of tradeoffs. Maybe patents should only last for 3 years, maybe 10, etc.
But for all its tradeoffs, patent protection does create an incentive for massive investment in R&D. It's difficult to imagine a meaningful counterfactual scenario.
Of course, bad patent office execution (leading to patent trolling, etc.) is parasitic and harms the system as a whole.
But what about the FDA? The FDA is notoriously overly risk-averse when it comes to approving new treatments. It simply should not be hard to get a competing delivery mechanism approved. It's easy to test, the test of whether the mechanism works can be repeated at nearly zero cost thousands of times, offering substantially more data than the typical drug approval process yields (when the question is whether a drug is safe long term).
If you are an FDA regulator, the only way you can really lose your job and pension is by approving a drug that should not have been approved. Nobody is keeping score of the suffering and loss of life caused by sluggish approvals.
I would argue that the FDA is that risk adverse because society is that risk adverse.
And while I completely agree that those R&D billions should be compensated, when the go-to strategy for patents is to do a complete parallel re-invention rather than just pay the inventor, my stance is that the trade offs made by the current system are inefficient and damaging.
> of a very noncompetitive situation created by various cronies and abetted by regulators.
Isn't regulatory capture the most efficient and cost-effective way to maximize profits? Companies would have to be stupid not to do it. And not to rely on campaign contribution, lobbying, messing with local, state and national elections.
This is the real capitalism. We are in the middle of it.
> it's nothing like a market that allows competition
That is the market. The market includes the government. There is no such thing as government interfering with the market vs nice companies competing with each other, guided by the Adam Smith's hand. That world doesn't exist. It never will. We might as well be talking about the Star Trek universe here.
I agree with you, I simply call it crony-corporatist capitalism. I agree that there may not be any such thing as the idealized form. However:
- Our system has many biases toward over-centralization, and the idea that we should have one Federal entity completely in charge of drug approvals is pretty absurd. Why not encourage many other groups to make recommendations. Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc.
When we a) combine effectiveness research with b) a public health mandate and c) risk-averse career burocrats, we end up with our current system. If our government weren't in the business of coordinating regulatory capture games, it would simply relinquish control of absolute authority, and allow respected third party institutions to have a voice.
If your doctor prescribes drug x simply because it's FDA approved, that is very much the wrong decision. The side-effect for Vioxx that led to it being pulled was well known to doctors (and applies to all NSAIDs), and so any doctor who let a patent suffer with Vioxx was at somewhat clueless if not negligent.
So yes, the government is yet another corrupt firm with a monopoly on certain things that it abuses for profit, harming all of us in the process.
> This is the real capitalism
Our economy contains some areas that are heavily corrupt and not very competitive, and others that are under the radar and are highly competitive.
> Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc.
That is a pretty good idea. It makes sense.
One instance where this happens is in Common Criteria Certification (the EAL levels). There is a mutual agreement between countries. And for example RedHat is going to Germany to get the EAL-4 certification for RHEL. Doing it in the US was too time consuming and expensive.
Exactly. And for 90% or more of situations, all lists would likely agree.
But if my doctor wants me to take a drug that is whitelisted by only one of the lists and perhaps blacklisted by one, and gray-listed by others, I'd certainly want to dig a bit deeper and fully understand the tradeoffs I was getting into.
Some might say that is too much "work" for me as a patient. I'd certainly welcome the chance to have the chance to think about taking something that wasn't an obvious whitelist choice for all.
I think the desire on the part of many humans to simply put all their trust in one authority figure our institution comes from the same primitive drive that made our ancestors kneel before emperors and makes some wish to kneel before supernatural emperors.
> The economist looks for competitors in cases like this. A firm cannot just willy-nilly raise their prices without a competing firm leaping in to give consumers what they want at a lower price. As it turns out, Mylan has a great friend who keeps would-be competitors out of the market, or at least makes it so difficult for them that they eventually go out of business. That friend is the FDA.
> ...
> Mylan has been repeatedly protected from competition, and it has repeatedly (and predictably) increased the price of EpiPens in response. Allowing all of these companies to compete in producing epinephrine auto-injectors would be the best course for all of the many patients who want a cheaper solution for severe allergic reactions.
> One thing is for sure: capitalism is not to blame. Government regulations have choked this market and many others. What we need is a big dose of freedom.
It's interesting how clear political ties between Mylan and Democratic party are swept under the rug. Also the Mylan CEO was instrumental in ensuring that FDA didn't approve any competing products because more regulation is always good. Warren, Clinton et. al. are all Pharma funded politicians. Don't get me wrong I think Obamacare is great but had this been case related to an oil company, there would have been 20 different Vox, Atlantic articles blaming Republicans.
However this time since it does not fits the optimal political pattern the outrage is far more silent.
If that's so newsworthy, then why hasn't Fox News brought it up? I think it's pretty well known that conflicts of interest are rampant throughout the government across party lines. I don't think there's any liberal conspiracy going on here.
Profits are what caused investors to create these companies in the first place, so without that we wouldn't have EpiPens.
In this particular case, there is an anti-trust argument to be made (after the generic got pulled), but drug development is a side-effect of investors seeking maximum returns. If anyone here thinks there is a better system for drug development, I think we'd all love to hear it.
It's worth noting that the "generic" got pulled, but there have subsequently been several attempts to bring competitive products to the market to compete with api-pens. It's not like they have a natural monopoly. The thing that is keeping competition out of the market is the FDA. This is a product that is not exactly at the cutting edge of science so either all the competition is really incompetent (I find that doubtful) or the FDA is basically creating an artificial monopoly by keeping competition out.
In my opinion, most cases where you see one company able to charge outsized prices for their products, if you scratch the surface you'll find a government created monopoly, or near monopoly (wireless spectrum is an example of this) or regulation created situation that protects one company from competition.
At the very least you will not find a free market. Because in a free market, people will compete if anyone gives them even a small pricing umbrella. Even for things that require very highly refined manufacturing techniques, like drugs and electronics. Look at the cellphone market, nothing is more precisely built than a smart phone yet we have huge numbers of them in a wide variety at low cost, because the market is mostly unregulated.
You're missing the third option: the product isn't rocket science, and the FDA isn't creating an artificial monopoly, but nobody else wants to be in the business of making a product that could kill children if it's not perfect.
True, but the Mylan ones come in a two-pack because so often people screw up administering it or require a larger (or backup) dosage. So the bar seems to be fairly low.
> The company, based in the Netherlands but managed from Canonsburg, Pa., outside Pittsburgh, has grown from a sleepy generic maker to a global player with $9.4 billion in revenue last year. Pay has grown, too. Ms. Bresch, the CEO, earned $18.9 million last year, up from $9 million in 2013. [...] Ms. Bresch was found to have wrongly claimed to have an M.B.A. degree from West Virginia University.
A company based in Netherlands, managed from Pittsburgh, by a person who lied about their credentials, is now modulating the rate of asthma deaths from anaphylaxis of American children. Yap. As Hunter S. Thomson said, "in a democracy you have to be a player". She is a good player...
Yet anyone dare mention nationalized medicine or price controls and that is met with pejoratives like socialism, anti-Americanism, and anti free market. "But you can't do that! You'll upset the free market Gods".
Somehow we manage to keep spending trillions on things like F-35, we manage to build tanks nobody needs (http://www.military.com/daily-news/2015/01/28/pentagon-tells...), send billions in foreign military aid to countries in the ME (Israel $3B+ and Egypt $1B). Yet anyone dare suggesting price controls for EpiPens -- and oh no, socialism will kill us all.
> anyone dare mention nationalized medicine or price controls
Uh, the US medical system is full of price controls on pretty much everything that is a "service" and not a product.
> Somehow we manage to keep spending trillions on things like F-35
Yes, these are a horrible and unconscionable waste of resources and blight upon the world. But the American left is just as much in favor of military excess as the American right.
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[ 2.7 ms ] story [ 117 ms ] threadAnd the drug isn't patented.
The question becomes, how small an improvement should we look at and decide that it warrants exclusivity?
It's a trickier question for something like the Epipen where there is benefit from widespread understanding of how to properly use it (so a change to the pen that requires different user training becomes a change that removes generics from the market).
I've seen multiple people try to figure out why there is no competition, and some consensus around the fact that while the drug is not patented, the particular delivery device design (or combination of it and the drug) is patented, and due to issues of needing to train people on multiple different delivery devices, there's no room to break into the market with an equivalent that evades the patent concern.
So in comparison to most of what Big Pharma spends money trying to bring to market, an epi pen is (in comparison) extremely easy.
My guess is that even if a patent were successfully filed for a new delivery device, the challenge lies in getting all the sweetheart deals that Mylan was able to get.
People forgoing medically necessary healthcare and medication is where the problem lies with aggressive profit seeking where demand is inelastic.
Now, if the US government would simply allow imports of equivalent medications and devices when this sort of rent seeking occurs (from other first world countries where the price is set through a single payer system), we wouldn't be having this conversation.
Every year a ton of MIT, Stanford, and Harvard graduates go into Silicon Valley or Wall Street instead of getting a PhD in biology or physics because we've got this perverse idea that the more "important" something is the more people who go into that field should be willing to forgo material interests. "Greed is good" if you're building a Pokemon game, but "evil" if you're saving lives or feeding the world. That's backward.
Obviously kids shouldn't die because they can't afford essential medicines. But that means that the government should pay for those at market rates--not that companies doing important things should take on obligations to be quasi charities.
There is room to allow Mylan to make a profit, but there is little evidence that they are reinvesting these profits in beneficial work, or attracting research talent for potentially useful projects. Spending government dollars on Mylan's ridiculous prices seems unhelpful when we have proven programs for spending government dollars much more effectively (and again, if you simply don't subsidize these prices, kids die).
You're cutting out a huge number of top-flight people if you limit the field to those happy making GS scale or whatever you can justify as a government contractor (which isn't much better).
My brother is a recent graduate of an Ivy. Tons of his classmates (who majored in hard science fields, not economics or finance) went to Wall Street and Silicon Valley. It's the rational thing to do. You can go to Netflix and make $300k as a twenty something figuring out how to efficiently deliver the new Voltron remake to viewers, or you can get your PhD in biochemistry, making $40k for years as a post doc before topping out at $150k at NIH. It's a no-brainer.
http://investors.morningstar.com/ownership/shareholders-majo...
Largest shareholder: Vanguard Health Care (5%) ... which is in turn owned by STAAR Alternative Catagories.
https://www.zacks.com/funds/mutual-fund/quote/SITAX
And STAAR Alternative Cats is managed by one J Andre Weisbrod.
The Vanguard Health Care Fund owns ~$1 billion of Mylan (out of $48.6 billion under management). SITAX manages around $2.7 million.
I don't see why SITAX and the guy that manages it matter to this story at all. The Vanguard fund having a big stake in Mylan certainly means that lots of people have a stake in Mylan though.
And let's not forget that capitalism is people, not faceless, nameless machinery. Five people promised $82m between them had their greed overshadow anything else. This was spurred on by the greed of the board that would do anything to aggressively increase profits - but put the "how" on someone else for plausible deniability.
Greed is the part of capitalism that regulation stands in the way of. Too aggressively rid the system of regulation and greed will consume everything.
True if you mean the thing we call capitalism in the US.
The only reason the price of a $1 piece of plastic can possibly be so high is because of a very noncompetitive situation created by various cronies and abetted by regulators.
Let's call it what it is. It's not capitalism, it's simply a corrupt regulatory system and firms that have learned how to exploit it to their advantage. it's nothing like a market that allows competition, and the regulation is nothing like a fair referee that allows the best player to win.
Under actual capitalism, there would have been price competition and perhaps (gasp) a startup would have started selling epi pens for a reasonable price just as Google started offering massive email storage for a reasonable price, etc.
While I understand the emotional reaction that it is "essential for life" (I have family members who rely upon them), let's blame what is actually at fault, laws that allow firms to do this sort of thing and prevent solutions from emerging.
The first version of Soylent lacked iron because Rhinehart couldn't be bothered to Google basic nutrition requirements.
We've tried the no regulation medical market. The term "snake oil salesman" exists because of it.
Yet it is legal for someone to subsist only on Doritos. Why not regulate those too.
The point is that, iirc, Mylan has a government-granted monopoly on the EpiPen via a patent for the injection mechanism. That means Mylan is the only company that is legally allowed to manufacture it in the United States. In addition, it takes millions of dollars to bring a treatment through the slow FDA approval process (though it's not clear if this is necessary to compete with EpiPen), so even if someone was somehow able to circumvent and/or license any patents Mylan may hold, it'd still take herculean resources to bring a competitor to market.
That's what the grandparent is talking about. The EpiPen can be so expensive because no one else is legally allowed to sell a substantially similar device without Mylan's permission. When the consumer has only one option, especially for something as crucial as a life-saving medication, things are really bad, whether the economic system that consumer is living under calls itself "capitalism" or something else.
We've got to fix our intellectual property laws, both patent and copyright. A large part of the Fortune 500 is only there because of the excessive legal monopolies that we've granted through intellectual property (which means it'll be basically impossible to fix).
No, they don't. The EpiPen's patent is long expired. https://www.google.com/patents/US4031893
>Today that same tiny, lifesaving bolus of epinephrine — used mostly to treat severe allergic reactions — is delivered via sometimes elaborate devices called auto-injectors. Though the medicine itself hasn’t changed, the delivery devices have been protected by patents, enabling drug makers to charge ever escalating — sometimes prohibitive — prices for one of the oldest drugs in medical use.
It doesn't say which patents specifically may cover the EpiPen, but as far as I can tell, the consensus is that the device is patent protected. I would love to know if there's definitive evidence either way -- specifically which patents Mylan claims to be protected under, or whether this is in reality just a common assumption/myth.
[0] http://www.nytimes.com/2016/09/04/opinion/sunday/the-lesson-...
It's not like these decisions are being made purely on a scientific basis.
In reality the FDA is too conservative due to the incentive structure: people getting hurt from a drug approved too fast are very visible. People that get hurt due to a drug being approved too slowly are not. This is the core issue.
There are also companies making generics for Adrenaclick, they cost ~$140.
Yes there are various degrees of purity in capitalism across the world and one of the interestingly consistent things across history is that prosperity follows relative economic freedom, even if there is no purely free economy.
It's stupid to force competitors to invent a completely different method to do the same thing, and then have them try to get it through FDA approval, just because Mylar is unwilling to license the patent to competitors at a reasonable rate.
The fact that a company can just flat-out stop an idea from being implemented by anyone else for 20 years is insanity. There needs to be a mechanism that incentivises patents being licensed, rather than withheld and used as an anti-competitive bludgeons. Something like a means of finding a reasonable value for a patent (hopefully via some market mechanism) that takes into account the cost of invention, and then requiring the patent be licensed for that amount to anyone.
If you look at the situation with Microsoft and Android, it's crystal clear: the patents in question are pathetic, and yet they're being used to extort billions of dollars. It's such a massive distortion, and leads to huge duplication of effort and wasteful incompatibilities, and in this case lives at risk.
But for all its tradeoffs, patent protection does create an incentive for massive investment in R&D. It's difficult to imagine a meaningful counterfactual scenario.
Of course, bad patent office execution (leading to patent trolling, etc.) is parasitic and harms the system as a whole.
But what about the FDA? The FDA is notoriously overly risk-averse when it comes to approving new treatments. It simply should not be hard to get a competing delivery mechanism approved. It's easy to test, the test of whether the mechanism works can be repeated at nearly zero cost thousands of times, offering substantially more data than the typical drug approval process yields (when the question is whether a drug is safe long term).
If you are an FDA regulator, the only way you can really lose your job and pension is by approving a drug that should not have been approved. Nobody is keeping score of the suffering and loss of life caused by sluggish approvals.
And while I completely agree that those R&D billions should be compensated, when the go-to strategy for patents is to do a complete parallel re-invention rather than just pay the inventor, my stance is that the trade offs made by the current system are inefficient and damaging.
Isn't regulatory capture the most efficient and cost-effective way to maximize profits? Companies would have to be stupid not to do it. And not to rely on campaign contribution, lobbying, messing with local, state and national elections.
This is the real capitalism. We are in the middle of it.
> it's nothing like a market that allows competition
That is the market. The market includes the government. There is no such thing as government interfering with the market vs nice companies competing with each other, guided by the Adam Smith's hand. That world doesn't exist. It never will. We might as well be talking about the Star Trek universe here.
- Our system has many biases toward over-centralization, and the idea that we should have one Federal entity completely in charge of drug approvals is pretty absurd. Why not encourage many other groups to make recommendations. Why can't the FDA have its own list, as well as a list made by the AMA, major HMOs etc. Why not also consider the list used in the UK, etc.
When we a) combine effectiveness research with b) a public health mandate and c) risk-averse career burocrats, we end up with our current system. If our government weren't in the business of coordinating regulatory capture games, it would simply relinquish control of absolute authority, and allow respected third party institutions to have a voice.
If your doctor prescribes drug x simply because it's FDA approved, that is very much the wrong decision. The side-effect for Vioxx that led to it being pulled was well known to doctors (and applies to all NSAIDs), and so any doctor who let a patent suffer with Vioxx was at somewhat clueless if not negligent.
So yes, the government is yet another corrupt firm with a monopoly on certain things that it abuses for profit, harming all of us in the process.
> This is the real capitalism
Our economy contains some areas that are heavily corrupt and not very competitive, and others that are under the radar and are highly competitive.
That is a pretty good idea. It makes sense.
One instance where this happens is in Common Criteria Certification (the EAL levels). There is a mutual agreement between countries. And for example RedHat is going to Germany to get the EAL-4 certification for RHEL. Doing it in the US was too time consuming and expensive.
https://www.redhat.com/en/about/blog/red-hat-enterprise-linu...
But if my doctor wants me to take a drug that is whitelisted by only one of the lists and perhaps blacklisted by one, and gray-listed by others, I'd certainly want to dig a bit deeper and fully understand the tradeoffs I was getting into.
Some might say that is too much "work" for me as a patient. I'd certainly welcome the chance to have the chance to think about taking something that wasn't an obvious whitelist choice for all.
I think the desire on the part of many humans to simply put all their trust in one authority figure our institution comes from the same primitive drive that made our ancestors kneel before emperors and makes some wish to kneel before supernatural emperors.
> ...
> Mylan has been repeatedly protected from competition, and it has repeatedly (and predictably) increased the price of EpiPens in response. Allowing all of these companies to compete in producing epinephrine auto-injectors would be the best course for all of the many patients who want a cheaper solution for severe allergic reactions.
> One thing is for sure: capitalism is not to blame. Government regulations have choked this market and many others. What we need is a big dose of freedom.
src : https://mises.org/blog/lack-epipen-competitors-fdas-fault
However this time since it does not fits the optimal political pattern the outrage is far more silent.
They've been on it since the 23rd and have reported on it nearly every day:
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
Profits are what caused investors to create these companies in the first place, so without that we wouldn't have EpiPens.
In this particular case, there is an anti-trust argument to be made (after the generic got pulled), but drug development is a side-effect of investors seeking maximum returns. If anyone here thinks there is a better system for drug development, I think we'd all love to hear it.
In my opinion, most cases where you see one company able to charge outsized prices for their products, if you scratch the surface you'll find a government created monopoly, or near monopoly (wireless spectrum is an example of this) or regulation created situation that protects one company from competition.
At the very least you will not find a free market. Because in a free market, people will compete if anyone gives them even a small pricing umbrella. Even for things that require very highly refined manufacturing techniques, like drugs and electronics. Look at the cellphone market, nothing is more precisely built than a smart phone yet we have huge numbers of them in a wide variety at low cost, because the market is mostly unregulated.
A company based in Netherlands, managed from Pittsburgh, by a person who lied about their credentials, is now modulating the rate of asthma deaths from anaphylaxis of American children. Yap. As Hunter S. Thomson said, "in a democracy you have to be a player". She is a good player...
Yet anyone dare mention nationalized medicine or price controls and that is met with pejoratives like socialism, anti-Americanism, and anti free market. "But you can't do that! You'll upset the free market Gods".
Somehow we manage to keep spending trillions on things like F-35, we manage to build tanks nobody needs (http://www.military.com/daily-news/2015/01/28/pentagon-tells...), send billions in foreign military aid to countries in the ME (Israel $3B+ and Egypt $1B). Yet anyone dare suggesting price controls for EpiPens -- and oh no, socialism will kill us all.
Uh, the US medical system is full of price controls on pretty much everything that is a "service" and not a product.
> Somehow we manage to keep spending trillions on things like F-35
Yes, these are a horrible and unconscionable waste of resources and blight upon the world. But the American left is just as much in favor of military excess as the American right.