I understand the impulse, I like money too. But these drug company executives have got to give ground, just like Amazon had to today.
Also fun fact, Senator Joe Manchin from West Virginia has a daughter who is CEO of the company that makes the Epipen. Her father is senator from one of the poorest states and for her to do what she did with the epipen pricing is so unconscionable I wonder if polite society will be willing to eat in the same restaurant with her in the years to come. Morals and standards are changing.
if you ever see the toxicology reports, and the testing that goes into U.S. prescription medicines drug-discovery, you might be surprised for a moment. There are many parts to this game. That does not negate the greed part (who was the snotty Frat guy again?) .. that part is real too.. its just not simple.
Someone once said that modern pharma is akin to modern banking, in that there are only a small number of groups that can pass all the hurdles, regulatory requirements, necessary conditions, etc to start.. then when they do, they go for the financial jugular.. Oligopoly is a word for this?
The pendulum has swung, from the bad medicines and shortages of just three or four generations ago, to the new new of high tech, plentiful, and goosed for money to the maximum...
Unless this magically doesn’t apply to every other developed nation, how do you explain why it’s only extortionate pricing we find in the US specifically? Even with creative and generous accounting pharmaceutical giants make a literal and figurative killing, even accepting high R&D costs. What’s galling is that in plenty of cases the R&D budget is less than the marketing budget.
Still I’m sure there’s a solid scientific or medical reason why a year’s supply of something in Canada or Europe costs a fraction of a month’s supply in the States. I’m voting for “greed” and “systemic forces which allow it.” It sure as shit isn’t R&D...
you may not be thinking about market systems in the whole in each jurisdiction -- specifically the relationship of insurance and nation-wide health care monies, applied to the costs of medications to consumers, in non-US markets.
These days pharma does r&d with the balance sheet through M&A and partnering deals that don't show up in the r&d line items
Drug prices are lower ex us bc marginal price is still greater than marginal cost. However if prices weren't high in US, EU and Japan than everywhere else, the drugs wouldn't be developed in the first place
I don’t know... it’s not as though we’ve put a stop to people selling snake oil and patent medicines. My drug store sells homeopathic cold medicine for kids right in with the real stuff (such as it is). Maybe it’s just the worst of all worlds. People selling unsafe, ineffective “remedies” can do so cheaply, but anything real costs a fortune to test.
Most drugs are expensive because it costs a lot to develop them and it's getting more expensive. It costs a lot to develop them because it's hard to predict what drugs will work until you test them in humans. It can cost over $100-200M just to do human proof of concept studies, and almost 70% of drugs fail at this stage
Most r&d is done by pharma companies, not academia. $200B spent by Pharma in r&d each year, probably half of that is early stage. NIH spends $30B or so, and most of that is basic research that will never lead to a new drug. Without patents there would be zero new drugs developed
r&d productivity is approaching 0% by some estimates (deloitte, McKinsey and a Novartis analysis). Pharma cannot generate enough new drugs to sustain growth. So they increase prices. Over 60% of revenue growth of major drugs came from price hikes the last few years (per 2018 year in rev presentation by atlas venture)
This is bad. There are many instances of egregious price hikes for drugs that are quite old. But payers have been fighting this quite effectively of late and have restricted pricing growth to the rate of inflation the last couple years
There are 3 PBMs that control most of the market. They extract rebates and don't pass them along to consumers. Copays for drugs are often more restrictive than for medical procedures. There's an argument that access, i.e. High copays, is a bigger challenge than price in some cases (but not all)
There are also just greedy people like Martin shkrei and epipen / Mylan. But they are outliers exploiting a few FDA loopholes
Over 60% of drugs today are developed by small companies (as opposed to big pharma). These companies are an order of magnitude more efficient than Pharma at r&d. The medicines they develop will be expensive but in many cases are designed to be cost effective at ~$100k / QALY.
There is a certain point where it will no longer be cost effective to develop new drugs. We are probably approaching that point barring either technological breakthroughs or a reduction in cost of developing drugs (i.e. Looser FDA)
Drugs are expensive. They are also only 10% of national health expenditure and like 80% of prescriptions are generic. They are a pretty great tool to fight disease
I got this one: because you live in the USA. Everywhere else, not a problem. Sure it's not cheap but it's not batshit crazy like you have allowed it to become.
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[ 2.6 ms ] story [ 32.9 ms ] threadBecause people want to make money.
I understand the impulse, I like money too. But these drug company executives have got to give ground, just like Amazon had to today.
Also fun fact, Senator Joe Manchin from West Virginia has a daughter who is CEO of the company that makes the Epipen. Her father is senator from one of the poorest states and for her to do what she did with the epipen pricing is so unconscionable I wonder if polite society will be willing to eat in the same restaurant with her in the years to come. Morals and standards are changing.
Government Granted Monopolies (patents)
Don't let anyone make it too much more complicated than that, or trick you into thinking you can't understand it.
Someone once said that modern pharma is akin to modern banking, in that there are only a small number of groups that can pass all the hurdles, regulatory requirements, necessary conditions, etc to start.. then when they do, they go for the financial jugular.. Oligopoly is a word for this?
The pendulum has swung, from the bad medicines and shortages of just three or four generations ago, to the new new of high tech, plentiful, and goosed for money to the maximum...
Still I’m sure there’s a solid scientific or medical reason why a year’s supply of something in Canada or Europe costs a fraction of a month’s supply in the States. I’m voting for “greed” and “systemic forces which allow it.” It sure as shit isn’t R&D...
Drug prices are lower ex us bc marginal price is still greater than marginal cost. However if prices weren't high in US, EU and Japan than everywhere else, the drugs wouldn't be developed in the first place
Most r&d is done by pharma companies, not academia. $200B spent by Pharma in r&d each year, probably half of that is early stage. NIH spends $30B or so, and most of that is basic research that will never lead to a new drug. Without patents there would be zero new drugs developed
r&d productivity is approaching 0% by some estimates (deloitte, McKinsey and a Novartis analysis). Pharma cannot generate enough new drugs to sustain growth. So they increase prices. Over 60% of revenue growth of major drugs came from price hikes the last few years (per 2018 year in rev presentation by atlas venture)
This is bad. There are many instances of egregious price hikes for drugs that are quite old. But payers have been fighting this quite effectively of late and have restricted pricing growth to the rate of inflation the last couple years
There are 3 PBMs that control most of the market. They extract rebates and don't pass them along to consumers. Copays for drugs are often more restrictive than for medical procedures. There's an argument that access, i.e. High copays, is a bigger challenge than price in some cases (but not all)
There are also just greedy people like Martin shkrei and epipen / Mylan. But they are outliers exploiting a few FDA loopholes
Over 60% of drugs today are developed by small companies (as opposed to big pharma). These companies are an order of magnitude more efficient than Pharma at r&d. The medicines they develop will be expensive but in many cases are designed to be cost effective at ~$100k / QALY.
There is a certain point where it will no longer be cost effective to develop new drugs. We are probably approaching that point barring either technological breakthroughs or a reduction in cost of developing drugs (i.e. Looser FDA)
Drugs are expensive. They are also only 10% of national health expenditure and like 80% of prescriptions are generic. They are a pretty great tool to fight disease
It's a really complex issue