If you’re on the board of any Big Pharma company, you have to notice that most of the Democratic field is running against you in particular. It’s not hard to imagine unified Democratic control in 2021, either. And maybe you can’t count on the GOP having your back in the Senate, as the filibuster may get nuked.
Yeah… if you’re on a board for Big Pharma, you’re pushing to get ahead of this wave. Cheap insulin is a smart move.
Except… they’re not really doing that so I don’t think it’s gonna play how they want it to.
“If they can’t afford it, they’ll die, and if they die, they can’t pay us.” “Well, let’s halve the price then”.
Humalog was 21$ a vial in 1996 23 years later is is 275$ in 23 years, the price of that drug has increased over 1200%.
It is still overpriced, even as a generic.
You will never convince me that the way our for-profit pharma industry has worked out is anything but nakedly evil.
I’ve spent more than $1,000 from my own pocket on insulin (specifically, Tresiba) in the last couple months. Due to a job loss my health insurance from employer was cancelled. Due to some hiccups I didn’t have insurance in January and in February hadn’t met my deductible yet.
The deductible is met now so it should now be much less expensive (for me, who knows what the insurance company is paying).
That’s free where I live, if you need it. No idea how expensive it is for the state though, but it can’t be that much.
Years(2?) ago I wrote a bunch of long posts with loads of references on how the pharma industry works in the US, where it spends its money, how it created a financial incentive for doctors to always favour certain high priced pharmaceuticals over cheaper ( or generic ) alternatives.
It’s quite clearly evil, and by design.
Entrepreneurs gonna entrepreneur.
https://www.cnn.com/2019/04/30/health/mallinckrodt-whistleblower-lawsuit-acthar/index.html
The effort, the whistleblowers said in a lawsuit against the company, was part of an intentional “multi-tiered strategy” by Questcor Pharmaceuticals, now Mallinckrodt, to boost sales of H.P. Acthar Gel, cheating the government out of millions of dollars.
The price of the drug, best known for treating a rare infant seizure disorder, has increased almost 97,000%, from $40 a vial in 2000 to nearly $39,000 today.
Of course 97000% markup part was fine.
Also I’m sure the drug has no side effects for infants without seizure disorders, so it’s probably fine.
I found this to provide some interesting details on interactions between regulators intentions, company incentives and how the market ends up working:
Is this really how economics works? There’s a medicine that millions of people desperately need? But nobody will produce it because they can’t make a profit? Huh? Isn’t the usual solution to just raise the price? And people will buy it at the higher price, because they need it so badly? And then you will make more profit, and can keep on making the medication? Isn’t “nobody will supply this product, it’s too cheap” just the economics version of “nobody goes there anymore, it’s too crowded”?
First, if you manufacture a drug, the FDA will charge you a fee, but the fee doesn’t scale linearly with how much of the drug you produce. So suppose Martin Shkreli owns a very big Daraprim factory. The FDA might charge him $1 million per year to fund their inspectors. Suppose you are a small businessman who is angry at Martin Shkreli’s fee hike, and you want to open a competing Daraprim factory in your small town, using your small amount of personal savings. Probably your factory will be much smaller than Martin Shkreli’s. But the FDA will still charge you the same $1 million per year.
You get more of what you subsidize and less of what you tax. Unfortunately, the FDA is inadvertently taxing companies for being in the generic drug business. And it’s taxing them more if they’re not a monopolist with economies of scale. That means we get fewer companies in the generics industry, and more monopolists.
So the reason companies aren’t making generic insulin is that the FDA approval process for generic insulin is very onerous, brand name companies have excessive and illegal patents that make the approval process even worse, and companies’ ability to sell what comes out the other end is limited.
The NEJM article mentions that plenty of poorer countries do have cheap biosimilar generic insulins, including such gleaming-high-tech bastions of cutting-edge pharmaceutical excellence as Peru. Which of the following do you think is true?:
Peru has better technology than the US, and so is able to make cheap biosimilar insulin using processes that our own scientists and engineers can’t manage.
Peru has a bigger market than the US, so there’s more money in creating generic insulin to sell to Peruvians than there is selling it to Americans.
Peru has a laxer regulatory environment than the US, and this is enough to make producing biosimilar insulins cheap and easy.
I wonder if the US is especially prone to writing regulations that end up entrenching monopolies.
You forgot
Do you think the question to every decision you make is “how can I make the most money?” rather than “should we?”.
Do you think your country should be a Randian-ian guilded age paradise where you charge as much as you can because you can, because doing so is not only right but just, because the right to charge whatever you want is your reward for having things that people need?
Since most of those things are written by said entrenched interests… maybe.
Mostly because every anti-corruption statute these days is impossible to enforce, even when you catch them red-handed.
A lot of businesses charge as much as they can, but what they can charge ends up being pretty low. Having shortages or sky-high prices for generic medication indicates something seriously busted with the market, and you can trace that to particular regulatory actions (often regulatory actions that the monopolists had a hand in designing).
It would be nice if more of the white collar crimes like corruption landed people in jail.
A man can dream. Instead we put people in prison forever for stealing a Snickers, but if they steal your entire pension, well, time served or whatever, get over it.
Steal a little and they throw you in jail
Steal a lot and they make you king
Bob Dylan
The issue clearly is not that they cannot make money on a medication. As you said, the free market works, and if there is a need for something, people will by definition pay for it.
The issue is, if drug companies don’t have a patent on a medication, there would actually be gasp competition in making that medication, and then they couldn’t set the price at whatever gouging fucking level they want.
So better to have people without helpful medications, than actually face their beloved free market and actual competition.
And it makes sense, too, when you think about it. Business always try to avoid the free market when they can. No one wants to sell commodity products that everyone can produce. Every business is looking, in a way, for some form of monopoly, in that they are always looking for some advantage that other businesses cannot produce (either because of organization, technology, desirable branding, regulations like patent law, etc.). Because it in effect gives them the ability to exclude competitors, and set the price that they want.
In this case, both the drugs under discussion are generics, but the regulations have a similar effect. In the case of the first drug, the inspector funding mechanism discourages small production locations and the FDA happened to shut down production for one of the three big plants. Even though insulin was generic, there were a thicket of still-enforced patents around the production process and proving your insulin is identical to their insulin while using a completely different production process would be very expensive.
Definitely true.