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The Cost of Drugs For Rare Diseases Is Threatening the US Health Care System (hbr.org)
An anonymous reader shares an article: There are 7,000 rare diseases affecting 25 million to 30 million Americans. The average drug approved under the Orphan Drug Act of 1983 (ODA), which governs rare disease approval, costs $118,820 per year. Assuming a similar cost, if a single drug were approved under the ODA for 10% of rare diseases, the total would exceed $350 billion annually -- more than 10 percent of the total amount that America spends on health care and much more than the health care costs attributable to either diabetes or Alzheimer's disease and other forms of dementia. If this seems far-fetched, consider the two drugs for treating Duchenne muscular dystrophy that the FDA approved in the last six months: eteplirsen, which is sold by Sarepta Therapeutics and costs $300,000 annually per patient, and deflazacort, which is sold by Marathon Pharmaceuticals and costs $89,000 annually per patient. However, approval of such costly drugs exposes an uncomfortable truth: scientific discovery has outpaced health care economics. [...] In the United Kingdom, the National Institute for Health and Care Excellence (NICE) determines the cost effectiveness, or value, of newly approved drugs based on their impact on quality-adjusted life years. These determinations inform the National Health System's (NHS) treatment-coverage decisions. In contrast, the FDA is prohibited from considering cost or value in its decision making, and there is no U.S. governmental equivalent of NICE.
It's not a free market. By law, US consumers cannot import drugs from other countries. The $50,000+ dollars for hepatitis drug is under a thousand in India.
love is just extroverted narcissism
Plenty. It's because we allow sociopaths to run companies. Sociopaths should be banned from all management positions, should be outlawed under pain of horrible death from having any power over any finances. They should be permitted, under heavy surveillance, to work flipping burgers at McDonalds or cleaning streets, but they should never ever be put in a position where they can affect a market or a pension fund or any significant transaction, and if they're caught trying to fuck around with their coworkers, they should be removed permanently from society.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Bristol-Meyers Squib has a 75% margin on their drugs. And almost 30% return on equity.
They like to blame R&D but one Summer I worked at one of their research labs. It was a very very nice place. Parts could have been from a country club. The head of the place helicoptered in from NY every morning - which is all considered R&D "costs". The cafeteria food was 5-star but cost as much as a McDonald's meal.
The only sucky part was the animal section.
I miss that place.
The problem is not that we aren't spending enough money. The problem is the combination of the pharmaceutical and insurance industries getting all of the money they can out of anything they have with no limits. Even generic drugs that aren't under patent production are many, many times more expensive in the US than in other countries (one example my wife gave me last night is $0.18 per pill abroad, versus $30 per pill here - for a generic medication). If the pharmaceutical companies are not actively engaged in collusion and price-fixing for generic medications then I would be shocked. Additionally, they spend so much money buying legislators that it is effectively impossible to get any legislation passed which would force a resolution to this issue by capping the price of medications or making it easier for additional companies to manufacture generic medications and compete with the established players. The free market is obviously not working correctly when every company making a certain generic medication sells it for the same amount, or when generic drugs which are readily available in other countries are not available here because they would compete with products from established companies. There is an opportunity there for a competitor to sell it for less and undercut the competition and make money, but for some reason that doesn't happen. If the free market is not allowed to work, and instead there is price gouging going on, then it sounds like legislation is required to correct that issue and bring drug prices down as a matter of law. If anyone thinks that such a thing would limit development or force companies out of business then I would invite those people to look at the P/L statements for the major pharmaceutical companies. A good start may be to outlaw advertising to consumers for pharmaceuticals, followed by a way to cap prices on medication based on metrics similar to those used by NICE.
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
In other words, somebody who will work at a fraction of the price. I'm not an economist, but I suspect that kind of mindset won't attract new talent into that industry. But maybe I'm wrong.
Though I read somewhere that 90% of these (and other) drugs are made in the US, and then sold elsewhere as an afterthought to drive additional revenue. So in other words, European health care systems get a (mostly) free ride.
That said, it would be interesting to watch what happens internationally if the FDA was allowed to negotiate drug prices, and/or if there were price controls on drugs that have any form of market exclusivity in the US.
Could you cite a few examples of where the government proved to be more efficient at producing a product or delivering a service, than a privately-run firm?
The hate towards the drug companies is misplaced — and whether they are sinfully greedy or not is irrelevant. The simple fact is, had they not existed, the drugs would not have existed — unavailable at any price.
If only K of something — anything, from LeBron's sneakers to life-saving medicines — is available despite there being N people desiring it, then whichever way you pick to distribute it:
N-K people will still not receive it — and no amount of "outrage" will help.
The only hope for the rest is that the second method — charging whatever the market will bear — will be chosen, because then the profits (however "obscene") may be used to produce more of the stuff... Incidentally, Capitalism is all about the second method and that is why we tend to enjoy an abundance of most things — to the point, where some people are already talking about "post-scarcity".
In Soviet Washington the swamp drains you.
The various drug companies spend 3 1/2 x as much on advertising and marketing as research, with MOST basic research paid for by governments and sold for pennies or given away for free
Welfare starts at the top
If there is no profit in saving lives then it cannot go on for long. If drug companies cannot profit making drugs then their won't be any drug companies. If a brain surgeon gets paid as much as a truck driver then you aren't going to have many brain surgeons, at least not many that's any better trained than a typical truck driver.
This is not a choice between lives and profit, we can have both.
What a lot of nations chose to do is, out of "compassion", put government in charge of providing medical care. This has been and will always become a disaster. The people that provide care may be the best people at the start but without competition, which requires a profit motive, the quality of care will fade. People need motivation to improve, provide quality care, and profit provides that.
It sucks that labor and materials cost money but that is the world we live in and that cannot be changed. Removing the profit motive to providing quality medical care and people WILL die needlessly.
Even the most compassionate person needs resources to provide medical care to those in need. The best, and perhaps only, means to make sure that the compassionate have those resources is with a free market. A free market means people will profit.
I am armed because I am free. I am free because I am armed.
Here's a problem with your assessment, we don't have a free market with drugs.
I know, that's my point. I said that if the free market was working, then we would see more competition and lower prices. The fact that we don't means that it is not working. The fact that no one is coming in to undercut prices on generic drugs that are not encumbered by patents is indicative of the fact that the free market is not working here. It might be evidence of collusion and price-fixing, or a situation making it impossible for competitors to enter the market.
Prescription rules, if you want even a common drug for a chronic condition you will need a permission slip from a physician. Why? Can't people figure this out on their own?
I understand that problem well. My wife is from Brazil, when we are there she can walk into any pharmacy and get whatever she wants, she can even consult with the people working there. There are certain limitations on what they're allowed to do, but they can sell her any of the drugs they have there. Many of those drugs are not even available in the US even though they do not have patents and are generic drugs. She can't get steroids that she needs for inflammation and other issues, and she can't even get the drug that works to get rid of her headaches without going to Brazil and getting it straight from the pharmacy without ever needing to see a doctor. She feels lied to after coming here and realizing that she cannot get the quality of care that she is used to from living in other countries, and the reason seems to be money, like so many of our other problems. So many people have their hands in the pie and what gets lost is actually providing good quality care to people who need it, even if it only means making drugs readily available like they are in other countries. She knows exactly what she needs, what works and what doesn't, and she simply can't get what she needs here. She feels lied to after hearing how great the US was supposed to be, and then getting here and realizing that it's all about money, and if someone can make money restricting access to health care then that's what they're going to do.
More laws will not fix this problem. The problem is too many laws.
Which laws do you think need to be removed in order to fix these issues?
If you think that there is price fixing then I ask you to prove it.
Really? You want evidence of a price-fixing scheme in a trillion-dollar industry? Well let me just hit Google, I'm sure there are signed documents online that will clear that right up.
"Our two-party system is like a bowl of shit looking at itself in a mirror." - Lewis Black
Quite late in the discussion, but yes. I work as a sysadmin in a big biotech pharma company where we make special treatments for a specific rare disease that will kill the people who have it if they don't get it. It cannot be cured, because it is due to a genetic defect. The only option is to supply the patient with enzymes that their own body doesn't make.
The medicine itself is 'reasonably' easy to make. But not when you have to comply with the regulatory requirements of various countries.
All research, marketing and other costs aside, we have a half a billion dollar plant, with over 500 employees, to make a drug for only 2500 patients worldwide, give or take. You can do the math on that. The reason we need that many employees is because the rules surrounding biotech drugs is incredibly strict. We are audited several times per year by various agencies, and things like change control, exception and deviation management, etc, are gruesome. Top heavy and very labor intensive.