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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.
I wonder what's the markup on those drugs.
Are they that costly to produce?
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
Just how many Martin Shkrelis are there in the (supposedly) (legal) drug business?
Pain is merely failure leaving the body
We have a culture built around the concept that human life is worth any amount of money. At the end of our lives we spend and spend to pry out another 2 weeks of lifespan.
Instead maybe we should realize that with 7.5 billions of people, the value of any given human life is very close to zero. It sounds harsh, but it is also the truth. If people want to pay to save themselves, great have a go, but we should not be foisting that cost onto society when there is no rational reason. Spending those sums is absurd.
We don't even treat our pets in that way: we realize that life is finite, and we try to keep them comfortable at the end so they do not suffer, but we are willing to acknowledge that there is a time when it is best to let them go. Ease their passing so they can go in peace and as much comfort as possible. We need to adopt this attitude for people as well.
We're not a scattered band of 10K hunter-gatherers on the brink of extinction any longer. A random human life is simply not valuable.
What's threatening the US health care system is putting profit ahead of lives.
Good luck. You poor saps are going to need a lot of it.
Log in or piss off.
Our society is so corrupt that we do not regulate the costs or profits made by drug producers. There are drugs that are dirt cheap to produce that cost a king's ransom. I suppose that the right wing will consider that as a freedom issue which is nonsense. Do they mean free to die in agony?
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
The cost of Sovaldi and Daklinza (used together) to treat Hepatitis C (which infects 3.5-5 million Americans), is $336,000 for the 24-week course of treatment. $1000 for each pill. The cure rate of Sovaldi and Daklinza is approximately 90%. The same drugs in India cost about $4 per pill.
Hepatitis C currently kills more Americans than any other infectious disease.
https://www.cdc.gov/media/rele...
You are welcome on my lawn.
A little known secret: Most countries' governments arbitrarily set the price of drugs and medical devices during negotiations and force pharma and medical device manufactures to sell it at a loss (or simply not have access to that market). To make up for the R&D and marketing, they have to jack the price up in the US to make up the loss. http://www.ibtimes.com/how-us-...
With the upcoming collapse of Obamacare, the rest of the world should be afraid of the US doing the same to the drug and med device companies. The cost of healthcare for the rest of the world will go up while it goes down for the US. I shudder to think about the hoards of angry folks when NHS starts becoming moderately expensive.
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
We all know these drugs have an insane markup. The drug companies are getting rick because they set astronomical prices for drugs the might help people, even a little. And they get it because insurance is forced to pay for it, not individuals who could never come up with the money on an individual basis. We have created the problem by mandating insurance and then letting the drug companies pilfer it blind.
This is just another facet of the problem that drug companies use U.S. public funding for the research to help develop most of these drugs, then turn around and charge the American taxpayer more for the drugs than they sell them in other countries, both third world countries like the African nations and first world countries like Canada. And, of course, they spend a lot on expensive lobbying to buy politicians to make sure we in America don't get access to those drugs they sell in Canada.
I'm an American. I love this country and the freedoms that we used to have.
Common statin's (for lowering cholesterol) can cost more than $700 for a 30-day prescription if you don't have insurance. I think the cost issue goes well beyond prescription drugs for rare diseases, and in fact, is more detrimental in a broader sense.
But, when we as citizens don't insist our politicians address campaign finance reform, policies favoring corporations will continue to guarantee price gouging will continue. Campaign finance reform should be made the top issue... Every. Single. Election.
The industry doesn't do much research. Not the expensive kind. They do a few clinical trials after the government has done the really expensive stuff (what's called "Basic Research", IIRC).
Also, what you're seeing here with these rare disease drugs is the style of capitalism popularized by Bane Capital: Find something undervalued and buy it up then extract the value for yourself. Usually this takes the form of liquidating the company. But in these cases they're selling life saving medicine. It's literally a matter of life or death (or a life worse than death). These are small markets with a high barrier to entry where the customers depend on the product to live. This is exactly the sort of thing no decent society would leave in the hands of unregulated capitalism. American on the other hand...
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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.
When someone will pay a price for a thing, that is the price of the thing. When that someone doesn't really care about the price, because they can just print more money, there is no downward pressure on the price.
It's math, kids.
There are people living in 'luxury apartments', paying 90% of their income into rent not because they want to live in high class apartments but because thats all that is available and its a choice between that and being homeless. Sometimes people are, literally, forced to pay through the nose for goods and services, are given no choice and have to pay the price that is demanded or face life-changing problems from which they are unlikely to recover (homelessness is a good example).
The downward pressure ultimately becomes massive civil unrest and crime, like when in the UK you'd be hung for stealing a loaf of bread and we have the saying "May as well be hung for a sheep as for a lamb".
In the free world the media isn't government run; the government is media run.
You claim that the current prices of drugs is a reflection of the free market failing to keep prices low. Here's a problem with your assessment, we don't have a free market with drugs.
One thing is that the FDA has declared that any drug sold in the USA must get their approval, and the approval process they have is long and expensive. If you want to see prices go down then we need to see reform in the approval process. What we are talking about here are people with extremely rare diseases that threaten their lives. If the FDA simply opened the floodgates on allowing the testing then we'd have all kinds of drugs getting tested and the cheapest ones would win. As it is now drug companies have to pick and choose which ones to submit for approval for testing placing very high costs on failure, so they will spend a lot of money on R&D. Once a drug is approved for a disease research stops because the profit motive is gone. The market is small, the costs are astronomical, so the ability to profit disappears. For prices to go down people need to be able to compete in these exceedingly small markets. Or, the market needs to grow by, as a possibility, treaties that allow testing in other countries to be recognized more universally.
Along that line of allowing drug tests to cross borders is that the FDA prevents importation of these cheap drugs without their prior approval. My sister has diabetes and was on vacation to India. She needed more insulin while there and she was able to walk into a pharmacy and buy a vial of insulin for something like 25 cents. Why does it cost something like $50 per vial here? I'm sure a lot of that has to do with FDA overhead.
Here's a few other things that drive up drug costs. 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? My sister knows what kind of insulin she needs. Another thing about diabetes treatment, I remember when disposable syringes were sold by the hundred and were just sitting on the shelf at the drug store. You want to see medical costs go down? Then let people buy these things without a government permission slip. I'm not saying that we need to remove all regulation, only that they need to be rolled back to something more reasonable. If people can buy safe and effective insulin for less than a dollar in India but it costs 50 times that in the USA then we are doing something seriously wrong.
More laws will not fix this problem. The problem is too many laws. The drug companies would not be able to price gouge if the market wasn't so close. If you think that there is price fixing then I ask you to prove it. It takes only one drug company to step out of line to ruin the whole deal. If they are all in on the deal then the rules need to be changed to make it easier to start a drug company.
I am armed because I am free. I am free because I am armed.
Check out the net profit margins on many of the big Pharma companies. They're not obscenely high for the most part. Apple for example has had a profit margin of around 20% for the past few years.
Average profit margin in the last 5 years:
GSK=12%
Merck=9%
Abbot Labs=15%
Astrozenica 12%
Eli Lilly 13%
They're good for the most part, but not unbelievably amazing.
Bring back the old version of slashdot.
On the other hand, if it wasn't for those for those paying $50k in the US, there wouldn't be a drug AT ALL. The reason it is $1k in India and $50k in the US is because of that's how it is set up to maximize the return on investment. The drug companies are simply selling the drug at whatever will make them the most money, and because of the way the insurances work in the US, there are a lot of people who can get that drug at $50k. They would make a lot less money if they sold it for $1k in the US (demand won't grow 50x). Yet if they sold it for $2k in India, they would likely sell less than half of what they do at $1k.
But your first statement is correct, it isn't a completely free market. It's a limited free market (within the US), and then limited by law (must have FDA approval), and restricted by patents. I would love to hear about a better way, but I've yet to hear one that would actually work. Most of the great "fixes" aren't well thought out and would fall apart.
Yes. People in the USA are being forced to subsidize the development of drugs for the entire rest of the world.
How can a drug that sells for $800 in one place cost $50,000 in the USA? Because the U.S. federal government makes it illegal to import or re-import that drug, or any prescription drugs. Repeal this ban and the price discrepancies disappear. Drug prices in the USA would fall quickly and dramatically.
The problem isn't with the development model. The problem is government.
With the upcoming collapse of Obamacare
You've been watching too much TrumpNews. The "collapse," if it happens, only refers to there being no providers on the ACA-created health insurance exchange marketplaces. We can use scary words like "explosion" but the fact of the matter is that unless and until there are ZERO policies sold on the exchanges in the ENTIRE country, we're a step ahead of where we were in 2010, and that leaves aside every other reform in the entire act.
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
We build and maintain roads using taxes because it's expensive, has a large benefit to society, and is hard to pay for without destroying those benefits. We should do the same with drugs- all research, production, and distribution done by government. Doing so will eliminate the high risk to corporations (failed drugs=lost money), and ensure our healthcare dollars are only spent on costs not private helicopters.
$89,000/yr for deflazacort? Big Pharm clearly has the US health industry blindfolded, bent over and reamed but good doesn't it? My son has Duchenne's Muscular Dystrophy and is taking deflazacort for it. It hasn't been approved for general prescription here in Canada, but getting approval for it to treat DMD is a straightforward rubber stamp through the exceptional access program. Because it isn't formally approved, we have to pay for it and then get reimbursed for it, Also because it's an EAP drug, we're paying only a little over wholesale. Currently we pay 85$ for a three month supply, or 340/yr. That includes shipping from the pharmacy associated with the research and teaching hospital my son is being treated by.
I need a wheelchair van for my son. Help me get the word out. https://www.gofundme.com/wheelchair-van-for-jj