Just wanted to say thanks for writing this piece, Doc. I've shared it with a few friends - also insulin dependent - and it's really, really heartening to have an MD weigh in on this unjust morass, when so many are content to just stay the fuck out of it. Bravo, and thanks again.
You fail to consider foreign markets. Many countries have price controls which make it impossible for the drug maker to make any money there. Instead of refusing to supply the drug, they make up the loss where there are no price controls. We are subsidizing foreign consumers.
The lobbying chart, like a lot of online article chart is incomprehensible. He says $390,000,000 but the chart doesn't total anything close. I have medicare and don't pay anything, and could afford more but there is no mechanism to shift costs by income levels. All discoveries we have, the ones who saved our lives come from Pharma. We have built our civilizations with oil and gas yet are constantly in their business saying they make "obscene" profits. No one attacks Apple, Microsoft, etc. for making the same kind of profits. It's as if oil and Pharma companies owe us something because they fill such base needs. They don't owe us anything. We owe them for the lives we had. This is a lifetime of listening to Dems scaring seniors and others about "big Pharma," and "Big Oil," and blaming them for our problems. These are self inflicted. The Oil and Pharma companies need to plan long term to operate. The government should make sane patent laws and make these people friends not demons.
With that all said, we should be able to get our prices down. But our leverage would be better if we honored these companies for the good they do, then work with them to bring down prices.
Don't believe your lying eyes! Biden has told god and everyone that he has signed legislation that dramatically cut the cost of drugs! Maybe he was just referring to the rock bottom prices for fentanyl?
What exactly are all the policy "wins" that morally depraved, treasonous democrats are always prattling on about?!
The government caused the problem and letting them negotiate prices makes it even more expensive for those not on government aid. US Pharma isn't allowed to pass on R&D costs to foreign markets, so the US consumer has to bear a disproportionate burden.
Dr. Hollander, free markets also produce better private institutions to ensure the efficacy and safety of products and services. Have you heard of Underwriters Laboratory, Consumer Reports, Angie's List and other free market companies rating businesses or putting their stamp of approval on products. In a free market they'd exist because there's a demand for them. Instead, we have the government doing it. It's not Big Pharma ripping off customers, it's the government restricting competition that allows Big Pharma to charge higher prices. Service at Walmart is better than at the DMV or IRS.
Politicians are selling interference with free markets, so they can pick winners and losers. If they weren't selling such favors and instead defending free markets, we'd have better medical care at lower prices.
You are shockingly uninformed about the back end of pharma distribution and pricing. Taking your example of Pradaxa generics - they have only just been commercialized in the last few months so competitive pricing hasn't shaken out yet. The price point you refer to may be a "list" price - but that is not what the companies are selling them to wholesale for. I can absolutely assure you that the prices being sold to wholesale are at least 70% off AWP - but none of that is being passed on to insurance or cash patients. I'm in the business and dealing with this currently - generic launched at huge discount from list - wholesale selling to pharmacies at WAC and pharmacies will lose money on every rx if they fill it. This has nothing to do with pharma pricing and everything to do with the middlemen pbm's and wholesalers. The biggest problem is CVS and the lack of government oversight into continued intertwining acquisitions.
Regarding comment below. Pharma SAYS they must have high prices to innovate. But lets be honest, a lot of "innovation" is some new (expensive patented) drug that may not be better than an older drug. They know how to manipulate clinical trials to give the new drug every possible chance it needs to squeeze past the finish line in the trial. The trials focus on efficacy and accurate risk/benefit analysis is not done, especially since the risk is often long term side effects, which are not studied. Amazingly many drugs still don't succeed in spite of the trials being designed with a thumb on the scale.
Another example, which has nothing to do with innovation and research. I live half the year in France. I have on going lyme and fatigue issues. So every few years my French doctor prescribes an extensive blood panel with thyroid panel , vitamin D, ferritin, and about 6 other metrics. It costs about $60. Recently, feeling very tired while in USA, I got a very similar blood work done. It cost over $500! What the hell? This has nothing to do with USA innovation. ITs simply that somehow these companies have worked it out with insurance that they are allowed to charge that much so they do!
Dr Hollander is correct that a single payer system with aggressive negotiation could bring our prices down to European levels. There would still be a lot of crappy drugs that don't do much, but at least they would be cheaper.
I live in Florida, but I'm guessing it's the same everywhere. There are two types of doctors: Those that treat you like a number, and those that treat you like a human being. If I were to guess, I'd say the former group outnumbers the latter group by a ten-to-one margin. And one of the most distressing parts about being treated like a number is that it seems to go hand-in-hand with giving you drugs for whatever condition you have, without even making a scintilla of an effort to find another way to help you.
I agree that we need to change our intellectual property regime, but I don't think that we need a bigger role for government in regulation. In fact, I happen to be personally familiar with one instance where the government regulator is directly responsible for giving the pharmaceutical companies an opportunity to exploit patent law for the purpose of predatory pricing.
I lived in China for four years, and I found that while living in China, I would have periodic problems with wheezing from a relatively uncomplicated case of asthma. I had lived in Los Angeles for over a decade before moving to Beijing and had gone years at a time without using a rescue inhaler. In Beijing, the pollution was so bad, much worse than American cities in the seventies, that in especially bad times of the year, I'd need a rescue inhaler several times a day. Fortunately, albuterol inhalers were available over-the-counter for the equivalent of three dollars. When I returned to America, I moved a few times before settling in Texas where the allergens cause me some seasonal difficulties with my asthma, and as a result, I need an inhaler several times a week during some parts of the season. I finally exhausted my supply of inhalers from China near the beginning of the epidemic and had to get a prescription online for a new albuterol inhaler. When I went to fill the prescription, which as I recall from before living in China might run around fifteen dollars because of the difference in purchasing power parity, I was told that the inhaler now costs seventy dollars.
Albuterol is an old medication, so I started looking into the problem. A simple Google search told the story. Apparently, when the government decided to ban CFCs, despite international agreement to permit excluding CFCs used as propellants in small delivery systems for medicines, devices like inhalers, a bureaucrat outlawed them at the urging of the pharmaceutical companies. Apparently, the pharmaceutical companies knew that the patent system would allow them to protect the old medication when qualified by the FDA to be used in a package with a new propellant, and the government move pushed the cost of a simple, commonplace asthma drug to ridiculous levels. That's your government at work. Some nimrod in D.C. decides with the stroke of a pen and completely at the bureaucrat's discretion to outlaw the generic market in a certain class of drugs. Would changes to patent law really be enough to curb this kind of stupidity when the industry has the ear and favor of the bureaucrats? The bureaucrats could end this misery around asthma drugs right now if they were so inclined, so I hope that you can understand why I don't place much confidence in the bureaucrats. They refuse to fix what's already in their power to fix.
Regulatory capture will reliably work to ensure that regulations benefit the big players in any industry and allow them to engage in some kind of rent-seeking behavior like gaming the patent system or swamping the makers of generics with unreasonable paperwork burdens effectively driving them from the market or making their products noncompetitive.
The persistence of high drug prices in the US springs from what one might call the original sin of drug development: the US subsidizes the rest of the world in the search for new and improved drugs. There are a lot of historical reasons for this situation, but it has never made sense and doesn't make sense today, which is why the industry is so bad at defending it. It's indefensible. But it's the only system we've got. Reduce US prices to where they are for national health systems in the rest of the developed world and you can kiss new drugs for all but the most common illnesses goodbye.
How about prohibiting consumer advertising? Those costs get passed along just as lobbying does. The pharmaceutical cost trend and the medical cost trend increased precipitously when consumer advertising took off in the 90s. How about, you want a pill go the expletive doctor. Just saying.
Hey Doc, only way to get the world’s best scientists to work on miracle cures is to pay them. The rest can find meaningless employment in academia and government.
Just wanted to say thanks for writing this piece, Doc. I've shared it with a few friends - also insulin dependent - and it's really, really heartening to have an MD weigh in on this unjust morass, when so many are content to just stay the fuck out of it. Bravo, and thanks again.
You fail to consider foreign markets. Many countries have price controls which make it impossible for the drug maker to make any money there. Instead of refusing to supply the drug, they make up the loss where there are no price controls. We are subsidizing foreign consumers.
The lobbying chart, like a lot of online article chart is incomprehensible. He says $390,000,000 but the chart doesn't total anything close. I have medicare and don't pay anything, and could afford more but there is no mechanism to shift costs by income levels. All discoveries we have, the ones who saved our lives come from Pharma. We have built our civilizations with oil and gas yet are constantly in their business saying they make "obscene" profits. No one attacks Apple, Microsoft, etc. for making the same kind of profits. It's as if oil and Pharma companies owe us something because they fill such base needs. They don't owe us anything. We owe them for the lives we had. This is a lifetime of listening to Dems scaring seniors and others about "big Pharma," and "Big Oil," and blaming them for our problems. These are self inflicted. The Oil and Pharma companies need to plan long term to operate. The government should make sane patent laws and make these people friends not demons.
With that all said, we should be able to get our prices down. But our leverage would be better if we honored these companies for the good they do, then work with them to bring down prices.
Don't believe your lying eyes! Biden has told god and everyone that he has signed legislation that dramatically cut the cost of drugs! Maybe he was just referring to the rock bottom prices for fentanyl?
What exactly are all the policy "wins" that morally depraved, treasonous democrats are always prattling on about?!
VOTE OUT ALL DEMOCRATS!!!!!!!!!!!!!!
The government caused the problem and letting them negotiate prices makes it even more expensive for those not on government aid. US Pharma isn't allowed to pass on R&D costs to foreign markets, so the US consumer has to bear a disproportionate burden.
Dr. Hollander, free markets also produce better private institutions to ensure the efficacy and safety of products and services. Have you heard of Underwriters Laboratory, Consumer Reports, Angie's List and other free market companies rating businesses or putting their stamp of approval on products. In a free market they'd exist because there's a demand for them. Instead, we have the government doing it. It's not Big Pharma ripping off customers, it's the government restricting competition that allows Big Pharma to charge higher prices. Service at Walmart is better than at the DMV or IRS.
Politicians are selling interference with free markets, so they can pick winners and losers. If they weren't selling such favors and instead defending free markets, we'd have better medical care at lower prices.
You can take away their power..... stop buying their shit.
You are shockingly uninformed about the back end of pharma distribution and pricing. Taking your example of Pradaxa generics - they have only just been commercialized in the last few months so competitive pricing hasn't shaken out yet. The price point you refer to may be a "list" price - but that is not what the companies are selling them to wholesale for. I can absolutely assure you that the prices being sold to wholesale are at least 70% off AWP - but none of that is being passed on to insurance or cash patients. I'm in the business and dealing with this currently - generic launched at huge discount from list - wholesale selling to pharmacies at WAC and pharmacies will lose money on every rx if they fill it. This has nothing to do with pharma pricing and everything to do with the middlemen pbm's and wholesalers. The biggest problem is CVS and the lack of government oversight into continued intertwining acquisitions.
Regarding comment below. Pharma SAYS they must have high prices to innovate. But lets be honest, a lot of "innovation" is some new (expensive patented) drug that may not be better than an older drug. They know how to manipulate clinical trials to give the new drug every possible chance it needs to squeeze past the finish line in the trial. The trials focus on efficacy and accurate risk/benefit analysis is not done, especially since the risk is often long term side effects, which are not studied. Amazingly many drugs still don't succeed in spite of the trials being designed with a thumb on the scale.
Another example, which has nothing to do with innovation and research. I live half the year in France. I have on going lyme and fatigue issues. So every few years my French doctor prescribes an extensive blood panel with thyroid panel , vitamin D, ferritin, and about 6 other metrics. It costs about $60. Recently, feeling very tired while in USA, I got a very similar blood work done. It cost over $500! What the hell? This has nothing to do with USA innovation. ITs simply that somehow these companies have worked it out with insurance that they are allowed to charge that much so they do!
Dr Hollander is correct that a single payer system with aggressive negotiation could bring our prices down to European levels. There would still be a lot of crappy drugs that don't do much, but at least they would be cheaper.
"But those coordinated price hikes are symptomatic of a system untethered to the forces of competition."
No, it's symptomatic of large corporations choosing to collude rather than compete.
I live in Florida, but I'm guessing it's the same everywhere. There are two types of doctors: Those that treat you like a number, and those that treat you like a human being. If I were to guess, I'd say the former group outnumbers the latter group by a ten-to-one margin. And one of the most distressing parts about being treated like a number is that it seems to go hand-in-hand with giving you drugs for whatever condition you have, without even making a scintilla of an effort to find another way to help you.
I agree that we need to change our intellectual property regime, but I don't think that we need a bigger role for government in regulation. In fact, I happen to be personally familiar with one instance where the government regulator is directly responsible for giving the pharmaceutical companies an opportunity to exploit patent law for the purpose of predatory pricing.
I lived in China for four years, and I found that while living in China, I would have periodic problems with wheezing from a relatively uncomplicated case of asthma. I had lived in Los Angeles for over a decade before moving to Beijing and had gone years at a time without using a rescue inhaler. In Beijing, the pollution was so bad, much worse than American cities in the seventies, that in especially bad times of the year, I'd need a rescue inhaler several times a day. Fortunately, albuterol inhalers were available over-the-counter for the equivalent of three dollars. When I returned to America, I moved a few times before settling in Texas where the allergens cause me some seasonal difficulties with my asthma, and as a result, I need an inhaler several times a week during some parts of the season. I finally exhausted my supply of inhalers from China near the beginning of the epidemic and had to get a prescription online for a new albuterol inhaler. When I went to fill the prescription, which as I recall from before living in China might run around fifteen dollars because of the difference in purchasing power parity, I was told that the inhaler now costs seventy dollars.
Albuterol is an old medication, so I started looking into the problem. A simple Google search told the story. Apparently, when the government decided to ban CFCs, despite international agreement to permit excluding CFCs used as propellants in small delivery systems for medicines, devices like inhalers, a bureaucrat outlawed them at the urging of the pharmaceutical companies. Apparently, the pharmaceutical companies knew that the patent system would allow them to protect the old medication when qualified by the FDA to be used in a package with a new propellant, and the government move pushed the cost of a simple, commonplace asthma drug to ridiculous levels. That's your government at work. Some nimrod in D.C. decides with the stroke of a pen and completely at the bureaucrat's discretion to outlaw the generic market in a certain class of drugs. Would changes to patent law really be enough to curb this kind of stupidity when the industry has the ear and favor of the bureaucrats? The bureaucrats could end this misery around asthma drugs right now if they were so inclined, so I hope that you can understand why I don't place much confidence in the bureaucrats. They refuse to fix what's already in their power to fix.
Regulatory capture will reliably work to ensure that regulations benefit the big players in any industry and allow them to engage in some kind of rent-seeking behavior like gaming the patent system or swamping the makers of generics with unreasonable paperwork burdens effectively driving them from the market or making their products noncompetitive.
https://www.nytimes.com/2013/10/13/us/the-soaring-cost-of-a-simple-breath.html
The persistence of high drug prices in the US springs from what one might call the original sin of drug development: the US subsidizes the rest of the world in the search for new and improved drugs. There are a lot of historical reasons for this situation, but it has never made sense and doesn't make sense today, which is why the industry is so bad at defending it. It's indefensible. But it's the only system we've got. Reduce US prices to where they are for national health systems in the rest of the developed world and you can kiss new drugs for all but the most common illnesses goodbye.
How about prohibiting consumer advertising? Those costs get passed along just as lobbying does. The pharmaceutical cost trend and the medical cost trend increased precipitously when consumer advertising took off in the 90s. How about, you want a pill go the expletive doctor. Just saying.
Hey Doc, only way to get the world’s best scientists to work on miracle cures is to pay them. The rest can find meaningless employment in academia and government.