Partly tangential. While they are covered by my Medicare Advantage plan for "free," I find it impossible to believe that my OneTouch blood glucose test strips, which I and massive numbers of other people with diabetes use a couple of times a day, cost even a small fraction of the $1 a strip, approximately, that they cost the taxpayer.
How can Americans buy medicines from other countries?
ITs a racket and we all know it. The Drug companies often wait until all the risks are taken, and places like the NIH or the many Universities, with government grants, do the research. If a drug shows great promise the drug companies step in. Often they do pay for the expense of clinical trying and the cost of bringing the drug to market. However a great amount of their money is spent on advertising, especially to doctors(over 24 billion). Many drugs to the same thing with the same results but the advertising tries to hide this. The Congress has the power to change this (example is the low cost of the VA drugs due to forced competitive bids and same result evaluation) but this was not allowed under the ACA plan-the committee ruled it off the table. However, the few millions the drug companies paid the committee members (about 7 million) saved them billions. The drug guys have well over 500 lobbyists working full time to control the high price of drugs. Again, its our Congress that is protecting the drug companies not the citizens.
3
Prescription drug pricing growth in the US is mostly fueled by specialty medications. Sadly, the US lacks a robust pathway for approving generic equivalents for these large molecule drugs. Were such a pathway to exist, the mechanisms that pharmacy benefits managers have in place (tight formularies that pit drug manufacturers of clinically equivalent alternatives against each other on price) would address the price inflation problem.
2
Reference pricing is one way to lower prices. Another would be to provide companies that keep costs down while innovating an incentive by rewarding them with patent protection where the clock starts once the drug is APPROVED.
"A study published in the American Journal of Managed Care found that price reductions ranged from 7 percent to 24 percent."
I would have thought that the prices elsewhere would have been significantly lower than 7-25%.
I would have thought that the prices elsewhere would have been significantly lower than 7-25%.
1
The pharmaceutical industry are monetizers and not researchers today. I think they stopped being R&D organizations back in 2000. The fact that PE firms now own or partially own more and more of these companies will further increase the costs associated with this trend: we will pay ever more for drugs while R&D to discover new/better treatments will slowly die.
This is the exact OPPOSITE what the whole market-based model says the system should be doing. Do you think that maybe the model does not work? Good luck on getting the pundits, eggheads, lobbyists and executives to admit to that.
This is the exact OPPOSITE what the whole market-based model says the system should be doing. Do you think that maybe the model does not work? Good luck on getting the pundits, eggheads, lobbyists and executives to admit to that.
3
Pharma companies seem to embody some of the best and worst of the US ( and international) version of product development and profit taking. Instead of railing about them, there should be come degree of thoughtful control of prices This idea is one possibility. Medicare, and state programs should be "allowed" to negotiate for optimum prices.
What is necessary as well as a corollary is patient education, and a willingness to consider the utility of some drugs. There are times when the cost in dollars and/or quality of life doesn't make sense; we have politically, shied away from this as if there is no price that can be placed on a day of life -- but there always is a cost. It's like the "death panel" business: we don't want to know that all outcomes aren't good; or that there already are limits on treatment related to coverage.
What is necessary as well as a corollary is patient education, and a willingness to consider the utility of some drugs. There are times when the cost in dollars and/or quality of life doesn't make sense; we have politically, shied away from this as if there is no price that can be placed on a day of life -- but there always is a cost. It's like the "death panel" business: we don't want to know that all outcomes aren't good; or that there already are limits on treatment related to coverage.
1
So typical. These ideas are not new - why does it take the US so long to wake up to the rest of the world? And why does it warrant a splash in the NYT? Reference pricing is old news. Peter Bach's idea of pricing by indication isn't new either. For heaven's sake - when will the Americans start to realize that everything isn't smarter, faster, better, or more technologically advanced in this country? In so many ways the US is way, way behind. Banking, ICT, health policy, labor standards, human rights - all utterly arcane. And the outcomes bear this out. Of course the reasons are clear - follow the money
8
Why ?
One word : ideology.
One word : ideology.
4
Capitalism. Profit.
1
"Germany, Spain, Italy and a half dozen other countries have pushed drug prices lower with a system called reference pricing."......When was the last time an innovative new drug came from a pharmaceutical company in Germany, Spain, or Italy? You can have cheap drugs or innovative drugs, but you can't have cheap innovative drugs.
2
This isn't because the drugs are cheap. Many of the most expensive drugs in the US comes from Europe.
4
What nonsense. Plenty of drugs are developed in Europe and elsewhere. And what difference does it make anyway when its a global industry? Of course Americans like to believe they invented everything. Even Gardasil (developed in Australia)
5
The most salient point is not 'some' but few really show substantive advantage with genuinely prolonged survival that is Proven. The latest is not the greatest.
2
Or the GOP could adopt real market leverage and make it legal to negotiate drug prices like the rest of the first world. Some of those savings would far outstrip the 7-24% in the article. Oh, wait single payer makes that work. And the GOP hates single payer. Overdue.
3
A vial of insulin cost $20 to 30 pre Medicare part d. Now European made insulin cost over $200. Why? Because they can.
4
Adverse effects from drugs is a gigantic, but hidden cost. Doctors aren't even required to report bad side effects to the F.D.A. In great part because pharmaceutical companies make the reporting of adverse effects so onerous, only 1% of bad side effects are reported.
Aren't 70% of Americans on some kind of prescription drug? And aren't 25% of the drugs taken used to treat the side effects of a previous drug?
Expert panels set guidelines, but much too often (if not always) the panel members have financial ties to the pharmaceutical industry. See NY Times article http://www.nytimes.com/2013/11/14/opinion/dont-give-more-patients-statin.... Here we see financial ties between pharma and the "expert" panel members from ACC and AHA.
Drugs are a vast business, driven my marketing and bottom line. We immediately believe that VW did evil things, but because our physicians prescribe drugs, we want so much in our hearts to be trusting. That is a mistake.
Read Peter C Gotzsche's Deadly Medicines. Look at https://plus.google.com/102631385922452069974/posts
or http://statinvictims.weebly.com/.
You won't buy a VW diesel: now you might consider being at least equally cautious before taking a medication.
PS. Don't always blame your doctor, because doctors also get adverse effects and sometimes die from drugs. On the other hand, what are all those drug salespeople doing in your doctors' offices?
Aren't 70% of Americans on some kind of prescription drug? And aren't 25% of the drugs taken used to treat the side effects of a previous drug?
Expert panels set guidelines, but much too often (if not always) the panel members have financial ties to the pharmaceutical industry. See NY Times article http://www.nytimes.com/2013/11/14/opinion/dont-give-more-patients-statin.... Here we see financial ties between pharma and the "expert" panel members from ACC and AHA.
Drugs are a vast business, driven my marketing and bottom line. We immediately believe that VW did evil things, but because our physicians prescribe drugs, we want so much in our hearts to be trusting. That is a mistake.
Read Peter C Gotzsche's Deadly Medicines. Look at https://plus.google.com/102631385922452069974/posts
or http://statinvictims.weebly.com/.
You won't buy a VW diesel: now you might consider being at least equally cautious before taking a medication.
PS. Don't always blame your doctor, because doctors also get adverse effects and sometimes die from drugs. On the other hand, what are all those drug salespeople doing in your doctors' offices?
8
The claim that innovation is not hindered by lower pricing dynamics in Europe is weak, to say the least.
It is clear that from a biotechnology innovation standpoint that US remains, by far, dominant relative to Europe. One can make this claim based on a number of metrics - IPOs, capital raised, drug approvals, and number of investors. Even those companies in Europe that are selling innovative drugs (e.g. Roche, Sanofi), are doing so due to US innovation (Genentech via acquisition by Roche, and Regeneron, via partnership by Sanofi).
Significant attractiveness to invest in the US is due to the robust, market based pricing that creates a profit motive in the US. PCSK9 therapies, curative therapy for hepatitis C, immuno-oncology, rare disease breakthroughs, and novel drug modalities like RNAi have been due to US-based innovation (many times with European entrepreneurs) with intentions to commercialize in the US first and foremost. Europe, due to its pricing challenges, is significantly discounted from an economic perspective, in spite of a populace that is larger. The world, and especially Europe, has been a fortunate beneficiary of the incentives that profits can create due to the US system.
The rhetoric around price controls due to a select group of bad actors would be ill-founded. If the US were to adopt a European pricing scenario, the profit motive that has driven innovation and risk taking would take a significant step backwards.
It is clear that from a biotechnology innovation standpoint that US remains, by far, dominant relative to Europe. One can make this claim based on a number of metrics - IPOs, capital raised, drug approvals, and number of investors. Even those companies in Europe that are selling innovative drugs (e.g. Roche, Sanofi), are doing so due to US innovation (Genentech via acquisition by Roche, and Regeneron, via partnership by Sanofi).
Significant attractiveness to invest in the US is due to the robust, market based pricing that creates a profit motive in the US. PCSK9 therapies, curative therapy for hepatitis C, immuno-oncology, rare disease breakthroughs, and novel drug modalities like RNAi have been due to US-based innovation (many times with European entrepreneurs) with intentions to commercialize in the US first and foremost. Europe, due to its pricing challenges, is significantly discounted from an economic perspective, in spite of a populace that is larger. The world, and especially Europe, has been a fortunate beneficiary of the incentives that profits can create due to the US system.
The rhetoric around price controls due to a select group of bad actors would be ill-founded. If the US were to adopt a European pricing scenario, the profit motive that has driven innovation and risk taking would take a significant step backwards.
2
So in other words, US residents are subsidizing the rest of the world by paying above market prices, in order to compensate the below market prices paid by the rest of the world -- all in the name of increasing "innovation"? Wow, that sounds like a great deal for us.
I find it hard to believe that global drug companies would stop trying to innovate just because they started receiving the same prices from us that they happily receive from the rest of the world.
I find it hard to believe that global drug companies would stop trying to innovate just because they started receiving the same prices from us that they happily receive from the rest of the world.
4
Zak456 - I worked in discovery research for a major drug company for nearly 30 years. The drug companies compete for your investment dollar on Wall Street with other companies that make things like movies and soda pop. When the drug companies profits decline they cut back on their research. If you would rather have more movies and soda pop than innovative new drugs, that's your choice, but you should not operate under delusions.
7
Cuts in R&D a a first sign of impending doom for a company that relies on innovation, but they are sometimes made before the drop in return, not after, due to the push to return gains to investors now rather than reinvest.
1
Dare I ask the question if we should pay anything for a drug that extends life by 1 an 1/2 weeks? Or even by 1 month? Should we maybe accept that life is definite and not prolong the suffering which may increase with the side effects of those drugs? Very often patients who are in the last stage of their lifes do not know the truth about the drugs they are taking (or maybe just given) and most probably do not have the strength to find out. To me, the selling of incredibly expensive drugs to people who are dying is an ugly game that the pharma industry plays, counting on that little bit of hope that patients and their families may have left.
22
Yes, but it's actually worse than you describe. Cancer drugs are approved based on a surrogate marker: shrinking the tumor.
Thus some exploitatively expensive drugs:
1. shrink the tumor
2. shorten life span
3. cause huge discomfort/pain.
"The patients may be injured or die while their surrogate improves. Cancer drugs are such a disaster area." Peter C Gotzsche Deadly Medicines page 269
Thus some exploitatively expensive drugs:
1. shrink the tumor
2. shorten life span
3. cause huge discomfort/pain.
"The patients may be injured or die while their surrogate improves. Cancer drugs are such a disaster area." Peter C Gotzsche Deadly Medicines page 269
5
Peter C Gotzsche..... doesn't have cancer.
1
We all have friends and family members who do or have had cancer. What point are you making?
If a drug shortens lifespan and makes that shorter time worse than it otherwise would have been, who would choose to take it?
(But at the levels of profit, some would definitely choose to sell it.)
If a drug shortens lifespan and makes that shorter time worse than it otherwise would have been, who would choose to take it?
(But at the levels of profit, some would definitely choose to sell it.)
1
will never work while the pharmaceutical companies own congress. the will block every attempt to rein in their costs. Case in point. I take a drug called rename for angina. WITH a drug plan this rx sells for $812.46 for a 90 day supply of 180 pills. The generic form is called ranolazine. It is NOT available in the US. I can buy the generic (the EXACT same pill) in Canada for $144.00. Pharma charges what the market will bear. Most countries have limits imposed by the government. The US has none. It will never change until the citizens of this country demand change from their government. Good luck with that. Most people are totally apathetic and don't even bother to vote let alone find out what a candidate stands for.
13
I purchased the generic form of Singulair from Canada long before it was available here in generic form and less than half what I would have paid getting it here in the states. Same with albuterol, far less costly from Canada than here.
6
Hillary will NEVER go against Wall Street, but Bernie Sanders can and does.
Vote for him in the primary in your state so he gets delegates to go to the Democratic convention next summer.
Things WILL change with Bernie.
Vote for him in the primary in your state so he gets delegates to go to the Democratic convention next summer.
Things WILL change with Bernie.
Apropos of the little animation which illustrates this article, I would like to say thank you to the many visual artists which the New York Times employs, and their often amazing work. These pieces are almost always stunning visual communications, and in my view, many have real artistic merit. In a way, it's a pity they are so transient. Thank you so much!
4
Former Labor Secretary Robert Reich stated last night at a talk in Seattle that it is legal for drug companies to pay generic companies to delay sales of a generic replacement for their more expensive drugs. This law happened because of huge lobbyist influence. There is no reason in the world that our drugs should be so much higher than everywhere else, except for the power used to buy politician's influence. Also noted was that 50% of retiring politicians go into lobbying jobs. In Reich's day, it was 4%. Want to change drug costs and a whole lot of other things? It has to be campaign finance reform.
9
One cost of drugs that rarely seems to be factored in is the cost of treatment for the adverse effects from so many medications. For example, a recent NY Times article says that one fourth of people on statins report muscle pain: are we to assume that this muscle pain costs the healthcare system nothing at all? Do none of these people, as would seem quite reasonable, run to their rheumatologists?
Some adverse effects, and certainly a large but unreported number of side effects from statins, are permanent and very costly. See for example: http://statinvictims.weebly.com/
Even in this article "surrogate markers" (like lowering cholesterol) are confused with meaningful markers like less heart disease, longer life, etc. The same is true for cancer drugs, tested to the surrogate marker of shrinking the tumor--ignoring patterns of decreased lifespan and increased pain and discomfort during that shortened time.
Long before trying to lower costs, we need to examine the risk/benefit part of the equation. The new PCSK9 drugs have not been demonstrated to lower the incidence of heart disease or to lengthen lifespan--which are not surrogate goals, but real life goals.
I say this as someone who was actually at below average risk of heart disease, was extremely active, but was put on a statin--which triggered a permanent and progressive neuromuscular disease. Ask around and you'll find many others like me.
Some adverse effects, and certainly a large but unreported number of side effects from statins, are permanent and very costly. See for example: http://statinvictims.weebly.com/
Even in this article "surrogate markers" (like lowering cholesterol) are confused with meaningful markers like less heart disease, longer life, etc. The same is true for cancer drugs, tested to the surrogate marker of shrinking the tumor--ignoring patterns of decreased lifespan and increased pain and discomfort during that shortened time.
Long before trying to lower costs, we need to examine the risk/benefit part of the equation. The new PCSK9 drugs have not been demonstrated to lower the incidence of heart disease or to lengthen lifespan--which are not surrogate goals, but real life goals.
I say this as someone who was actually at below average risk of heart disease, was extremely active, but was put on a statin--which triggered a permanent and progressive neuromuscular disease. Ask around and you'll find many others like me.
4
No matter the benefits of "reference drugs," what amazes me is how long pharmaceutical companies seem to hold on to a patent. I take one drug crucial to my health that's held its patent since 1998. How can that be? While a generic will cost me more in copays (the manufacturer currently subsidizes patients' copays), it costs my insurance a fortune, and that raises rates and deprives me of flexibility in the health plan I choose.
3
" I take one drug crucial to my health that's held its patent since 1998.".....Patents last 20 years. Without patent protection it would be impossible to meet the costs required to develop new drugs. If the drug that is crucial to your health had never been developed, what would you do?
2
Another reason why drug prices are high in the US is that Congress prohibited Medicare from negotiating directly with drug companies in 2003 when it created Part D under then-President George W. Bush.
We need to give Medicare such negotiation authority. Otherwise, with the reference price set too high due to inability to negotiate, consumers will continue to pay high prices.
Also, in a situation where there is only one (or very few) product in a given class of therapeutic drugs, “reference pricing” is meaningless. Reference pricing will not have prevented drug company Tauring from rasing the price of its product Daraprim from $13.5 a tablet to $750 overnight.
We need to give Medicare such negotiation authority. Otherwise, with the reference price set too high due to inability to negotiate, consumers will continue to pay high prices.
Also, in a situation where there is only one (or very few) product in a given class of therapeutic drugs, “reference pricing” is meaningless. Reference pricing will not have prevented drug company Tauring from rasing the price of its product Daraprim from $13.5 a tablet to $750 overnight.
11
Most drugs today treat symptoms, not diseases. I am so grateful that vaccines exist at all. If drug companies had gotten their business model in place earlier, we would have polio treatments rather than a vaccine.
7
How about a vaccine for heart disease or cancer?
The description of drug pricing policies in this article is misleading. Reference price mechanisms are applied only to generic drugs, i.e. those that have a point - or many points - of reference. In some countries the same type of pricing is used for medical appliances, bandages etc.
Different policies are used to control the costs of new products since they are considered to have no point of reference. However, such pricing policies could be considered part indirect reference pricing schemes in that some assess the relative cost-effectiveness of the new substances.
Whatever ... both types of policies work. Drug spending per capita and its share in the overall health care expenditures is much lower than in the US. And lo and behold: drug companies are still making profits and developing new substances that are competitive on world markets.
Different policies are used to control the costs of new products since they are considered to have no point of reference. However, such pricing policies could be considered part indirect reference pricing schemes in that some assess the relative cost-effectiveness of the new substances.
Whatever ... both types of policies work. Drug spending per capita and its share in the overall health care expenditures is much lower than in the US. And lo and behold: drug companies are still making profits and developing new substances that are competitive on world markets.
1
When the great universities and teaching hospitals were ready to break ground in the US our government deeded over huge tracts of public land to them. When the people asked why we should give public land away, we were told because the people would benefit from the knowledge acquired there.
When the government gave hundreds of millions of taxpayer dollars every year to build the buildings and laboratories, we were told the same thing. We would benefit from the research and discoveries that would be made there.
We were supposed to benefit by having cheap drugs and procedures that would be shared by all.
Well, we see how that worked out. Right after they privatized our life expectancy. Along with knowledge, information and government.
When the government gave hundreds of millions of taxpayer dollars every year to build the buildings and laboratories, we were told the same thing. We would benefit from the research and discoveries that would be made there.
We were supposed to benefit by having cheap drugs and procedures that would be shared by all.
Well, we see how that worked out. Right after they privatized our life expectancy. Along with knowledge, information and government.
13
It is not clear what so-called reference pricing would accomplish in the US. The expensive drugs in the US are those without close substitutes, such as newly patented drugs, which is to say drugs with no "reference". Drugs with close substitutes are already available in the US as cheaper generics.
It is amazing how much bile is poured at the pharma and biotech industries while drug spending represents only about 12% of the overall healthcare expense in the country (actually, a higher %% number in Europe that doesn't have $500K a year docs, MRIs on demand and hip replacements for Alzheimer patients). New medicines are expensive here only for the first 10-15 years after their approval - after this the pricing falls off the generic cliff much stiffer than the one anywhere else in the developed world - without tools like Hatch-Waxman law that basically destroys the innovator, European generics are priced only 10-20% or so below the original drug. So, while Euro price may be lower at the start, it is actually much higher than stateside in 15 or 20 years of drug's life - and this is how Pharma makes money elsewhere in the world. More than 80% of prescriptions are now filled by the generics; for the remaining 20% restricting the price now will mean that in 20 years percentage of generics will be 99% - there will simply be no innovation in the field.
3
Unfortunately, to only way to get the pharmaceutical industry to support the Affordable Care Act, the government is not allowed to negotiate drug prices.
As Ed Silverman of Forbes wrote, "in exchange for supporting the Affordable Care Act, the White House struck a bargain with the pharmaceutical industry in which negotiations over prescription drug prices and so-called importation – which would allow Americans to purchase medicines from other countries – were taken off the negotiating table."
There is growing pushback from insurance companies and patients for the outrageous drug prices being charged, It will be interesting to see how long this ban on negotiating drug prices or importing drugs from other countries will last.
As Ed Silverman of Forbes wrote, "in exchange for supporting the Affordable Care Act, the White House struck a bargain with the pharmaceutical industry in which negotiations over prescription drug prices and so-called importation – which would allow Americans to purchase medicines from other countries – were taken off the negotiating table."
There is growing pushback from insurance companies and patients for the outrageous drug prices being charged, It will be interesting to see how long this ban on negotiating drug prices or importing drugs from other countries will last.
6
Sounds like a wonderful working program. yet to get our political policies and medical industry to go along...
Another good reason for Bernie Sanders 2016 President
Another good reason for Bernie Sanders 2016 President
7
This is a nice idea. An even better idea would be just to make the information about therapeutic value public and then to remove all price controls. That way an individual could shop for the best price.
1
I wonder if reference pricing works in Europe BECAUSE it is not in effect in the US? If Europeans get their drug prices reduced by fiat, but Americans pay higher prices, where do you think the money/incentive to develop new drugs comes from? Certainly not from those under-paying Europeans. European (as well as many non-European) countries have their drugs subsidized by the US taxpayer, the same as they have their strategic defense almost entirely paid for by the US taxpayer. Even with all those subsidies many of the benefiting countries are basket cases -- and those that are not, would be if it were not for the US taxpayer.
8
No , Americans have been brainwashed by the healthcare industry in to you thinking that is what is happening. Many major pharmaceutical companies are not located in the U.S. nor is their development. You suckers are just paying way too much and the politicians whose pockets are continually lined by this industry, allow it!
2
To think the United States would actually adopt another country's policy to reduce drug cost for the benefit of people's health and their pocketbooks,is unthinkable. The gap of profit and health is too wide, existentially too wide. The desired benefit from healthcare delivery (to get well) falls less than optimal.C'mon USA,some countries actually have a better idea. I looked at the map.We are an isolated country separated by two huge oceans. Becoming part of the European Union sounds the best way to go.
2
Don't you understand. Members of congress need money to get re-elected, drug companies contribute large sums of money to re-election campaigns. Drug companies want exorbitant prices, drug companies get the prices they want
7
I see a lot of what ifs and this and that in the comments but reference pricing has been in effect in other countries for a while and their health care outcomes have been at least as good if not better than what happens in the U.S. The really noticeable difference is in the profits and wages generated for the healthcare industry much to the detriment of the public purse. I would think that medicare and medicaid would or at the very least should have the power to unilaterally implement reference pricing and that's that.
16
There are potential problems with Reference Pricing, because it grossly oversimplifies the science underlying pharmaceuticals.
PCSK9 inhibitors act completely differently than statins to lower cholesterol. They are antibody based inhibitors of a cofactor (PCSK9) that determine whether LDL receptors are reused or destroyed after they remove LDL-cholesterol from blood, with reuse further lowering blood cholesterol levels. Statins are small molecules that inhibit an enzyme that synthesizes cholesterol (HMG-CoA-reductase) thus affecting its levels. Yet they are equated in this proposal as the same thing. The long term benefits and off-target effects of PCSK9 inhibitors are largely unknown. Will Reference Pricing be regularly adjusted as new data accumulate from experience? What happens to Reference Pricing if the beneficial effects of one class turn out to be due in part to off-target effects? Will statin prices be raised if expensive PCSK9 inhibitors are lumped with them for Reference Pricing?
Will Reference Pricing set Tarceva (an inhibitor of the tyrosine kinase enzyme activity of the EGF receptor) costs differently for every kind of tumor? (ICD-10 redux; not cheap) What if an EGFR inhibitor is later found to act in part by also blocking other tyrosine kinases? (there are many)
Some drugs last in a person much longer than others, e.g. PDE5 inhibitors, and are thus preferred. Is that meaningful for Reference Pricing, or are all PDE5 inhibitors just the same?
Who decides?
PCSK9 inhibitors act completely differently than statins to lower cholesterol. They are antibody based inhibitors of a cofactor (PCSK9) that determine whether LDL receptors are reused or destroyed after they remove LDL-cholesterol from blood, with reuse further lowering blood cholesterol levels. Statins are small molecules that inhibit an enzyme that synthesizes cholesterol (HMG-CoA-reductase) thus affecting its levels. Yet they are equated in this proposal as the same thing. The long term benefits and off-target effects of PCSK9 inhibitors are largely unknown. Will Reference Pricing be regularly adjusted as new data accumulate from experience? What happens to Reference Pricing if the beneficial effects of one class turn out to be due in part to off-target effects? Will statin prices be raised if expensive PCSK9 inhibitors are lumped with them for Reference Pricing?
Will Reference Pricing set Tarceva (an inhibitor of the tyrosine kinase enzyme activity of the EGF receptor) costs differently for every kind of tumor? (ICD-10 redux; not cheap) What if an EGFR inhibitor is later found to act in part by also blocking other tyrosine kinases? (there are many)
Some drugs last in a person much longer than others, e.g. PDE5 inhibitors, and are thus preferred. Is that meaningful for Reference Pricing, or are all PDE5 inhibitors just the same?
Who decides?
3
You're missing the point.
If reference pricing has been tried and works well in other countries, there's no reason why we can't use it here.
Your strategy seems to be to nit-pick the details in the hope of protecting the profits of the drug companies and their ethically-challenged friends.
That's not a particularly admirable approach.
If reference pricing has been tried and works well in other countries, there's no reason why we can't use it here.
Your strategy seems to be to nit-pick the details in the hope of protecting the profits of the drug companies and their ethically-challenged friends.
That's not a particularly admirable approach.
8
spindizzy - no you missed the point. PCSK9 are new, innovative, and because they are antibody based they are much more difficult to develop and make than the statins. What if they or their progeny turn out to be miracle drugs and dramatically reduce the level of heart attacks and strokes? It is too early to know if this is true, but if you or someone else arbitrarily classifies them for pricing with statins, they never would have been developed and we would never no the answer.
Non-active ingredients in some drugs have an impact. I have a friend who takes the name brand version of a common drug, paying the extra cost to do so, because the generic causes a reaction.
6
I believe your friend would still have that option to choose the brand version but she would pay the difference in price.
2
It's always best when Big Brother tells you what is good for you, taxes you heavily to pay for that and refuses to give you something else that is better for you.
3
"It's always best...."
What a complete non sequitur. Unless, of course, by "Big Brother" you meant "Big Pharma," because that's who calls the shots, not some politician or bureaucrat who is literally way more indebted to the industry than to you or me.
What a complete non sequitur. Unless, of course, by "Big Brother" you meant "Big Pharma," because that's who calls the shots, not some politician or bureaucrat who is literally way more indebted to the industry than to you or me.
A key problem is that other countries are being subsidized by the U.S. and its high drug prices and drug usage patterns, which appear to provide nearly all profit world wide. If the U.S. adopts the reference drug approach either prices rise in the rest of the world or private enterprise in the pharmaceutical area ends.
7
The U.S. taxpayer is not subsidizing anyone else. You folks are just being suckered in to paying too much!
1
People keep saying that drugs ae so expensive because research is expensive. The pharmaceutical companies spend far more on advertising than they do on research. Yes, you are paying for those silly ads with two people sitting in bathtubs in places they can't possibly have plumbing. Maybe if the companies spent less money on stupid, silly, and annoying ads, they could reduce the cost of drugs.
42
It's not just the ads....although DTC advertising is when prices really started climbing (who knew that so many of us were subject to embarrassing toenail fungus). It's the huge salesforces....and while MDs certainly need and want to be informed....many more seem to be saying "no" to visits from drug reps....so what does the pharma industry do? Bring on more drug reps. How about strict limits on sampling and MDs have to request a visit from a rep?
4
Claim of marketing expense being higher than R&D is a red herring. For accounting reasons, the value of all the free samples the docs give to their patients (that they get from the sales reps) is counted as marketing expense - for many new drugs there are many more free pills going around than the paid ones.
"devised specifically to reward smarter innovation".
That would be competition - not monopoly. Prescription medication is one of the areas that should be fully socialized. Let government provide free medications to all and let drug development be a non-profit competition with all research hospitals in the mix. Big Pharma is a Big Mistake.
That would be competition - not monopoly. Prescription medication is one of the areas that should be fully socialized. Let government provide free medications to all and let drug development be a non-profit competition with all research hospitals in the mix. Big Pharma is a Big Mistake.
7
Sounds drastic, Eugene. Where are the incentives in your proposal?
1
The non-profit hospitals and universities in the U.S. are the best. Professionals will do their job as best they can because that is what they do. Drug research can work on a professional non-profit basis and drug production can still be done on a for profit cost basis to keep quality high and prices low.
Free medication which has a constant demand based on need would be the best Obamacare replacement and could be fully paid for by eliminating the tax free health care that many workers get.
Free medication which has a constant demand based on need would be the best Obamacare replacement and could be fully paid for by eliminating the tax free health care that many workers get.
1
Beautiful idea. But unworkable.
First we need to clean up the symbiotic relationship between Congress and the pharma industry, e.g. to allow Medicare to go out for competitive bids for drugs which Congress has of course scotched.
And what if your doctor, who gets huge kickbacks for prescribing expensive new drugs, won't give you a prescription for a lower-cost one without kickback? We need a law forcing a fiduciary relationship between doctor and patient, as is becoming more prevalent in finance.
First we need to clean up the symbiotic relationship between Congress and the pharma industry, e.g. to allow Medicare to go out for competitive bids for drugs which Congress has of course scotched.
And what if your doctor, who gets huge kickbacks for prescribing expensive new drugs, won't give you a prescription for a lower-cost one without kickback? We need a law forcing a fiduciary relationship between doctor and patient, as is becoming more prevalent in finance.
9
RM:
I believe what must be strongly considered, in reality, and as well, is the enormous sums of money that the healthcare/pharmaceutical industry spends on advertising, a policy, much of which is banned in other countries especially those with universal care. I suppose, in many respects, when patients look at this constant barrage of advertising, start doing there own diagnosis thus running to their doctor regularly wondering about all these drugs and asking the doctor about them, then I guess in many respects, the doctor has no choice but to respond to his patients, ultimately, resulting in more than his/her usual interaction with the pharmaceutical industry which, as you say, can become problematic.
I cannot help but think back to President Obamas first term when a Senate Finance committee convened to discuss what ultimately resulted in the ACA were the members of that committee, to one degree or another had received in the previous year from the healthcare industry, over TWENTY MILLION dollars in campaign finance money, two and half million of which was paid to the chairman, Max Baucas a democrat. He also had two advisers, whom after the meetings were over, immediately went to work as government lobbyists for the healthcare industry.
Any wonder why the same questions keep being asked, yet, nothing ever changes?
I believe what must be strongly considered, in reality, and as well, is the enormous sums of money that the healthcare/pharmaceutical industry spends on advertising, a policy, much of which is banned in other countries especially those with universal care. I suppose, in many respects, when patients look at this constant barrage of advertising, start doing there own diagnosis thus running to their doctor regularly wondering about all these drugs and asking the doctor about them, then I guess in many respects, the doctor has no choice but to respond to his patients, ultimately, resulting in more than his/her usual interaction with the pharmaceutical industry which, as you say, can become problematic.
I cannot help but think back to President Obamas first term when a Senate Finance committee convened to discuss what ultimately resulted in the ACA were the members of that committee, to one degree or another had received in the previous year from the healthcare industry, over TWENTY MILLION dollars in campaign finance money, two and half million of which was paid to the chairman, Max Baucas a democrat. He also had two advisers, whom after the meetings were over, immediately went to work as government lobbyists for the healthcare industry.
Any wonder why the same questions keep being asked, yet, nothing ever changes?
18
As a recently retired physician who practiced for thirty years, I never received or heard of anyone receive financial compensation for prescribing specific drugs. Your comment begs for some proof of your statement. Barring that, you owe the medical community an apology.
4
Pascual Rodriguez, I am not a doctor and I don't like to contradict anyone's account of their own experience. However, I work in pharmaceutical research and I have heard many first-hand stories from colleagues on the sales and marketing side about incentives (bribes) to physicians to get them to prescribe a particular drug. According to these stories, a good seat at a sporting event can do the trick. The people telling me these stories say that this was the practice in years past and that the ability to offer these bribes has been severely curtailed by federal regulations in recent years; but these things happened a lot less than 30 years ago.
2
To all of those worried about losing our precious innovation in drugs if we abandon a patent system: when is the last time you heard of meningitis, diphtheria, yellow fever, whooping cough, measles or rubella tearing through a community? Well that's because vaccines are really effective. And guess what? They are almost all developed via contracted research that proceeds via bidding system. It is also orders of magnitude cheaper than almost any drug patent. The intellectual property is then made public domain. To boot- you don't get duplicative drug development to creat therapeutically identical drugs (i.e. Cialis / Viagra) just because only one company holds a patent on a specific molecule. The sad fact is that a huge portion of drug research money is wasted on what is essentially drug duplication.
25
An easier way to do this is to tax profits on prescription drugs at 95% above a 30% return on capital.
27
Return on Capital for a drug manufacturer is meaningless.
It is especially meaningless for companies doing research on new and cutting edge treatments.
There is a significant difference between what costs can be capitalized and which ones must be expensed.
All of which is to say that most folks don't really understand the performance of drug companies or their cost structure or their capital structure.
It is especially meaningless for companies doing research on new and cutting edge treatments.
There is a significant difference between what costs can be capitalized and which ones must be expensed.
All of which is to say that most folks don't really understand the performance of drug companies or their cost structure or their capital structure.
1
Look to the VA Health Care System in the USA! they doit
david
david
7
Why do you have a distracting animation with this article? It's difficult to read the material with some pendulum effect going on.
15
When is the Times going to end those obnoxious distracting "Recommended Articles" pop-ups? Are those distractions a plot to extort additional revenue from Times readers by charging them a premium to "opt-out" of those distractions? The Times must start showing respect for its readers' intelligence by letting them choose the particular topics they consider important. The Times should not model itself on China's "Peoples Daily," in which the editors choose what is fit for public consumption and what is not!
7
Great theory, but not sure it will work in reality. United States patients pay for lower costs for patients outside the U.S. Using overseas models suggested in this article might have an impact on specific drug groups, but not all drug groups.
I took a course during my doctoral program at UCSF on medical entrepreneurship that was largely funded and taught by the local venture capital industry that funds early pharma startups and profits off the sale of those companies to Big Pharma.
They made it abundantly clear that the pharmaceutical industry's ability to fund the 10 to 15 year slog to get drug approvals, and the eventual profit margins on the tiny percentage that make it to market, are dependent on the high prices of drugs in the United States. They were pretty blunt about the fact that if the price controls or competitive pricing markets in other parts of the world took root in the U.S., low prices in other parts of the world would disappear very quickly.
I think we need studies and models of what would happen globally to drug pricing if the U.S. market all of sudden became more competitive and/or more price controlled like the rest of the world.
I took a course during my doctoral program at UCSF on medical entrepreneurship that was largely funded and taught by the local venture capital industry that funds early pharma startups and profits off the sale of those companies to Big Pharma.
They made it abundantly clear that the pharmaceutical industry's ability to fund the 10 to 15 year slog to get drug approvals, and the eventual profit margins on the tiny percentage that make it to market, are dependent on the high prices of drugs in the United States. They were pretty blunt about the fact that if the price controls or competitive pricing markets in other parts of the world took root in the U.S., low prices in other parts of the world would disappear very quickly.
I think we need studies and models of what would happen globally to drug pricing if the U.S. market all of sudden became more competitive and/or more price controlled like the rest of the world.
6
Advertising (ask your doctor ads) cost far more money than any research and development. And pharmaceuticals will have to get used to smaller profit margins. I don't think any of them will suffer too greatly nor close down shop.
29
The venture capitalists will always teach and say that. It would not be their interest not to. I'm not saying it's not true, but I would not take it for fact until their is more proof behind it. For example, if that were true, the overall profits of these companies would be very low. I doubt this is true, because they would cut research and development long before they would let the profits slide... They would not dare to enrage their Wall St overlords.
13
Any other business offers bulk discounts . No hospital however large gets one. Canada will only buy in bulk. But the drug companies have made it illegal (although people do) so prevent more people from buying in Canada. Their "concern" is "safety" for the exact same drug from the same company
7
Dr. Frakt and Readers: A type of flexible formulary seems to be the solution proposed in this analysis. Drugs are grouped as fungible commodities with a set price. In order to achieve premium pricing, such drugs must deliver increased marginal values via a measurable increase in patient-life expectancy, as noted, or some other measurable improvement in the quality of the patient's life. Since these same classed drugs are considered fungible, they can be substituted for each other. And, just as substitution of cheaper products for those rising in price lowers monthly measures of the CPI, a similar discounting effect could be achieved within pharmaceutical product categories with this new pricing scheme. With no increase in projected social security (SS) benefits due to zero overall price growth, 70% of beneficiaries will see no increase in their Part B Medicare coverage next year; because these two items are linked for these SS recipients. However, the remaining 30% of SS recipients without this linkage face Medicare premium increases of roughly 50%, due to higher medical costs for these other Part B items. Thus, this 30%, many of whom are higher income and new SS recipients, must cover both their own medical cost increases and help to shoulder the overall Part B cost increase for the other 70%. And, the timely application of this cost reduction strategy to these other medical items covered under Part B, as discussed in the analysis, could be very cost effective. M 10/19 2:04p
5
This article fails to take into account the billions of dollars needed to develop a successful drug. Of course, all pharmaceutical innovation is not valuable. But it's not as if researchers know in advance which drugs will end up being safe and effective. It takes even longer to determine the relative advantage of a new drug over old ones. Obviously, drug companies have to recoup those costs. In which countries is most innovation taking place?
5
There are many older, yet still highly effective drugs which are beyond their patent expiration dates and now in the public domain. However, voracious venture capitalists, such as Martin Shkrelli (sp?), are in the market to acquire them, hike up their prices unconscionably and gouge the consumer for personal profit!
"Reference pricing," allowing the importation of drugs in similar classes from Canada, Europe, India, China and elsewhere are reasonable measures to control price gouging. In the absence of an open market where consumers are free to choose among American and foreign producers, the only remaining alternative may be public ownership of the pharmaceutical industry. The greater public health of Americans may require no less. It would be the perfect complement to a "single payer" health care system, of which Bernie Sanders would approve!
"Reference pricing," allowing the importation of drugs in similar classes from Canada, Europe, India, China and elsewhere are reasonable measures to control price gouging. In the absence of an open market where consumers are free to choose among American and foreign producers, the only remaining alternative may be public ownership of the pharmaceutical industry. The greater public health of Americans may require no less. It would be the perfect complement to a "single payer" health care system, of which Bernie Sanders would approve!
2
Drug innovation is taking place all over the world and much of it is in educational institutions or collaborative efforts among those in different countries. Not everything in the U.S. like the drug companies and Fox news would like you to believe.
2
The costly basic research, which you believe that the drug companies do is done by university researchers paid for by the National Institute of Health (your tax dollars). Most of big the Pharma companies spend more on marketing and lobbying than on research and development....
1
I would venture that there at least a half-dozen different ways to reduce drug costs without stifling innovation.
However, since any one of them would necessarily involve Big Pharma receiving lower profits, the chances of them being enacted into legislation range from zero to none.
However, since any one of them would necessarily involve Big Pharma receiving lower profits, the chances of them being enacted into legislation range from zero to none.
45
Good afternoon,
I am an italian leaving abroad, and I am not sure which drugs is referring in this article, but drugs in Italy are all crazy expensive, unless you are a 70 year old fellow.
The group base prices are all but cheap.
I am an italian leaving abroad, and I am not sure which drugs is referring in this article, but drugs in Italy are all crazy expensive, unless you are a 70 year old fellow.
The group base prices are all but cheap.
2
OK -- Germany, Spain, Italy and six other countries have pushed drug prices lower. That sounds wonderful for consumers. Now I'd like to hear about all of the new drugs that provide a cure from fatal diseases that have come to market in those countries in the last ten years please. Something along the lines of a cure for hepatitis C, such as Gilead Sciences' Sovaldi and Harvoni. Hmmm... Crickets.
10
Crickets yourself. A great deal of public money, much of it in the form of research grants, has gone into the development of both drugs you mentioned and countless others as well.
Much of the initial funding for the research behind Sovaldi (and numerous other innovative but high priced drugs) came in large part from grants by the National Institutes of Health and the Veteran's Administration. The researcher (Raymond Schinazi) created a corporation (Pharmasset Inc) to hold the drug's patent well after he began his publicly funded research. Pharmasset was later acquired by Gilead Sciences, which now holds the patent on Sovaldi.
There is usually a considerable investment of public funds in drugs such as Sovaldi long before the drugs are acquired by various pharmaceutical companies. These companies do invest heavily in the research and marketing of the drugs (lots of money spent on marketing), but the research funding is not at all limited to private funding and the amount of private money at risk in R&D is far less than the companies would have us all believe. The proportion of private risk to private gain is far less than these companies would have people believe when they defend their premium pricing strategies. The inventors and the producing companies are surely entitled to profits from these drugs, but their risk is not sky's-the-limit and their profits should not be sky's-the-limit either.
Much of the initial funding for the research behind Sovaldi (and numerous other innovative but high priced drugs) came in large part from grants by the National Institutes of Health and the Veteran's Administration. The researcher (Raymond Schinazi) created a corporation (Pharmasset Inc) to hold the drug's patent well after he began his publicly funded research. Pharmasset was later acquired by Gilead Sciences, which now holds the patent on Sovaldi.
There is usually a considerable investment of public funds in drugs such as Sovaldi long before the drugs are acquired by various pharmaceutical companies. These companies do invest heavily in the research and marketing of the drugs (lots of money spent on marketing), but the research funding is not at all limited to private funding and the amount of private money at risk in R&D is far less than the companies would have us all believe. The proportion of private risk to private gain is far less than these companies would have people believe when they defend their premium pricing strategies. The inventors and the producing companies are surely entitled to profits from these drugs, but their risk is not sky's-the-limit and their profits should not be sky's-the-limit either.
54
Hmmm. Silly
1
Most new drugs come from outside the U.S.
E.g my wife's anti-rejection drug - Japan.
My home INR tester, obviating the need for phlebotomist home visits - Switzerland.
The most advanced asthma treatment - Germany.
Whom are you trying to kid here?
E.g my wife's anti-rejection drug - Japan.
My home INR tester, obviating the need for phlebotomist home visits - Switzerland.
The most advanced asthma treatment - Germany.
Whom are you trying to kid here?
21
There is no MS drug available that is less than $50K a year. Pharma has been raising prices about 30% a year for drugs that were approved 20 years ago. So now, every new drug that is "better" gets to price itself even higher.
When does innovation become extortion?
When does innovation become extortion?
68
Oh, drug pricing became extortion a long time ago. For example, Abilify's price was jacked up over $900/30 pills this past January...to gouge as much $$$ out of patients as possible before it went off-patent.
This sounds like it could be effective in cost containment for prescription drugs. It will never be enacted here, because big PharMa won't buy it. There is no apparent premium for their excess profits or outrageous greed. Therefore, it's not the American way. Is it?
13
This seems reasonable, but even closely related drugs can have different side effects. What happens if a patient can only tolerate one of the more expensive drugs?
11
This has recently happened to me. The formulary at the Army base where I get my prescriptions, dropped Nasonex and substituted Flonase. I quickly developed dry eye and floaters, using the Flonase. Fortunately, I can get Nasonex via "medical necessity", however the manufacture is not presently making it - hope to be again by the first of Dec. In the meantime, I got my hands on a few samples of Nasonex before Flonase causes still further problems.
Equivalent is not the same thing as identical.
Equivalent is not the same thing as identical.
8
New drugs are low in side effects because side effects only show up when doctors are alert over time. Thalidomide had no sided effects during many years of use in Europe but they finally figured it out. H. Gilbert Welch MD reports in his book that a colleague recommends holding off on a new drug for 7 years.
2
This is particularly true with biologics. Their generics are bio-similar, not the same. Some people react differently to them. In the article's example of statins, a prime reason the new drugs were developed is because a significant minority of people who need statins cannot tolerate them.
It's an interesting idea. To detractors who post here, it looks like it works in Europe, so it it worth a try in the US.
I don't know the business model for pharmaceutical development and manufacturing, but the insurance compensation for the expensive medicines can push the price up. People need the insurance to afford the expensive drugs. It's a positive feedback system that can't control prices very well.
It appears to be a system in which competition doesn't bring down the cost of expensive pharmaceuticals because there is no competition. In this case, a nationalized approach to pharmaceutical manufacturing would control prices, but no one wants that socialistic kind of approach.
In these cases of limited choice, or no choice, capitalism fails nationally because it can't broaden its market enough (it succeeds for those who can pay). There is a monopoly. Any legislation or pricing scheme is an attempt to modify capitalism. In the real capitalism, the market determines the price, and in the case we have now, those with money or good insurance can pay the price. But the "good insurance" has to increase in price in order to accommodate the high pharmaceutical prices.
So it looks like the US needs to look to those countries who have addressed the pricing problem effectively, as Austin Frakt writes. The high margins on pharmaceuticals have to come down. That makes the drug manufacturers unhappy. It seems that they would have to alter their business model.
I don't know the business model for pharmaceutical development and manufacturing, but the insurance compensation for the expensive medicines can push the price up. People need the insurance to afford the expensive drugs. It's a positive feedback system that can't control prices very well.
It appears to be a system in which competition doesn't bring down the cost of expensive pharmaceuticals because there is no competition. In this case, a nationalized approach to pharmaceutical manufacturing would control prices, but no one wants that socialistic kind of approach.
In these cases of limited choice, or no choice, capitalism fails nationally because it can't broaden its market enough (it succeeds for those who can pay). There is a monopoly. Any legislation or pricing scheme is an attempt to modify capitalism. In the real capitalism, the market determines the price, and in the case we have now, those with money or good insurance can pay the price. But the "good insurance" has to increase in price in order to accommodate the high pharmaceutical prices.
So it looks like the US needs to look to those countries who have addressed the pricing problem effectively, as Austin Frakt writes. The high margins on pharmaceuticals have to come down. That makes the drug manufacturers unhappy. It seems that they would have to alter their business model.
5
Not only that but most people do not know that NOBODY (not the biggest hospital)buys directly from a drug company. There are a layer of middlemen who add nothing of value but add to the price. I read an investigative article about this years ago
6
Great article, but good luck getting any traction on this. Big pharma is too powerful to make any common sense changes to the industry like this. I am an administrator in a medical clinic, and we make more from medications than we do seeing patients and doing surgery. We inject some long lasting Marcaine into a wound post-surgery and make almost $1,000 - which is close to what the surgeon gets paid for the procedure in some cases. We collect over $500 for some meds that cost us $10 per bottle. It's awesome.
34
Beware of "the market" rationale. The truth is that a lower price for a larger and better defined market might well produce a higher net to a drug company. A more careful analysis of pricing would most surely produce a higher net to an insurance carrier. And a clear context of both medical and cost features would be good for the consumer. Ironically, many cache products are expensive but not particularly profitable given their sales volume, and pricing drugs beyond their "market" may well be harming more than the patients.
2
What you describe seems to have nothing to do with Big Pharma, but more to do with how your clinic marks up drugs you administer hugely. Isn't that inflating medical costs too?
1
The arguments presented here are reasonable, rational and logical. For these reasons this will not see the light of day in the halls of Congress. This concept flies in the face of the prevailing winds sweeping Congress that the best government is the government that regulates the least. Simply said the consumer be damned. There is a situation currently where one of the leading medications used to treat COPD is no longer covered by a patent however the medication uses a unique system to dispense the medication which the maker has been able to get an extension on the patent. The upshot is the cost of the medication here is about $350 to $400 per month and Europe the same medication is one seventh of that cost.
Yes we do need more free market policies.
Yes we do need more free market policies.
34
Research the availability of your drug overseas. Comparison shop. Pull the trigger. People are doing it all the time for many different types of drugs.
The drug companies currently have built in protection for reference pricing. Any significant change to their pricing in Europe is passed along to the helpless drug buyers in the US.
7
There's always the Dallas Buyers' Club option of a friend in Europe with a postage stamp!
2
No way is this going to happen here in the US.
As Steven Brill observed on the making of Obamacare:
"the only way legislation this big, this important can possibly come out of Washington is if the most important group of special interest lobbyists say that it can."
And as to cost control in the ACA
"It's not a cost-control measure. You look up up and down all the pages of that legislation, and you won't find any cost-control measures. You find a reference to a couple of pilot projects for bundled care and accountable care organizations. Those really can't work the way they're structured."
The ACA was DESIGNED not to lower the cost of drugs. Unless we get European type legislation that outlaws political TV advertising it will stay this way because of the need of politicians to get campaign contributions.
As Steven Brill observed on the making of Obamacare:
"the only way legislation this big, this important can possibly come out of Washington is if the most important group of special interest lobbyists say that it can."
And as to cost control in the ACA
"It's not a cost-control measure. You look up up and down all the pages of that legislation, and you won't find any cost-control measures. You find a reference to a couple of pilot projects for bundled care and accountable care organizations. Those really can't work the way they're structured."
The ACA was DESIGNED not to lower the cost of drugs. Unless we get European type legislation that outlaws political TV advertising it will stay this way because of the need of politicians to get campaign contributions.
28
Regarding Phamaceutical co.s and their U.S. pricing policies -- an incurable pox on all their houses.
Disclaimer: I have excellent Rx insurance and, since all of my current drugs have gone generic, my copays are extremely modest.
Disclaimer: I have excellent Rx insurance and, since all of my current drugs have gone generic, my copays are extremely modest.
8
Once again an economist thinks people think rationally. They don't. Under the system I use generic drugs are free but you have to pay to get them from your local pharmacy and people will not switch to get free drugs.
4
The formulary approach to prescription drugs used by my insurance provider is a step in that direction. It groups drugs with broader categories and lists which are covered and in some cases the special circumstances which will allow others to be covered. Naturally generics are preferred to brand names and the "re-patenting" of older drugs prevents some generics from becoming available -- like when metered dose inhalers switched to non-CFC propellants.
6
I am no fan of the drug companies, but your article shows you are ill-informed about the US market. Reference pricing effectively takes place now when formularies only pay for the most "cost-effective drug" in a population. IN the case of NSAIDs, ibuprofen is dirt cheap now, and people can pay for it or it is cheap as a generic. The problem is aggregating dissimilar populations as you did with the cholesterol drug. If you put all the cholesterol drugs in one basket, you assume that one should be indifferent as to which one is chosen, if prices were the same. In fact, the populations requiring the very potent ones are very different from the ones that most people use, and so all you do is force Managed care to make people either select in an adequate drug or they stil get screwed paying more for the one they need because managed care will say "its not the reference drug".
The idea of aggregating and comparing is fine, but understand that the first step to is to put people into the right pots; by disease state, by severity of disease, and by any other unique and relevant parameter that affects the choice of drug. Just because they all have "heart disease" or "asthma" does not mean they need the same treatment.
The idea of aggregating and comparing is fine, but understand that the first step to is to put people into the right pots; by disease state, by severity of disease, and by any other unique and relevant parameter that affects the choice of drug. Just because they all have "heart disease" or "asthma" does not mean they need the same treatment.
34
You obviously missed the point: it does not say that people are excluded from getting what they need. It is that only the cases where there is a MEDICAL NEED for the higher priced medicine does that medicine get dispensed.
Right now, there is absolutely no rhyme or reason between what something is priced vs. what you get in terms of results. This is like paying Porsche prices for a Toyota when all you need objectively is a Toyota.
Right now, there is absolutely no rhyme or reason between what something is priced vs. what you get in terms of results. This is like paying Porsche prices for a Toyota when all you need objectively is a Toyota.
It seems to me that when a drug is developed that will be used continuously by a large number of people, that the price should be at a reasonable level because the great number of users will provide sufficient profits, independent on its ability to prolong life. We could also explore the possibility of diminishing costs after a given period of time. And finally, shorten the period in which the copyright is effective, thus encouraging generics.
The idea that drug companies will be discouraged from innovation is not tenable. After all, producing drugs, is how they make money.
The idea that drug companies will be discouraged from innovation is not tenable. After all, producing drugs, is how they make money.
19
Point of order: pharms are patented. Not copyrighted.
A handfull of prescription drugs account for most of Medicare prescription drug spending - primarily drugs to treat chronic conditions (such as diabetes, depression, high cholesterol and blood pressure, and dementia). We aren't consistent at addressing chronic conditions: unlike health care reform, which imposes the cost of chronic conditions mostly on beneficiaries (with high deductibles and co-pays), most of the cost of chronic conditions for seniors is imposed on Medicare. Why? For one, political reality: seniors vote, and in large numbers, and politicians respond. But also human nature: younger people underestimate the likelihood of suffering from a chronic condition and, hence, don't expect insurance to be modeled in a way that addresses it. And then there's phishing for phools: yesterday while watching golf on television I saw consecutive commercials, one advertising the blood thinner Xareltro and the next advertising lawyers suing Xareltro for causing internal bleeding. Frakt suggests what we need to do is reward smarter innovation. Like army intelligence, smarter innovation may not be possible.
1
"...one advertising the blood thinner Xareltro and the next advertising lawyers suing Xareltro for causing internal bleeding."
I think that explains a lot about the high prices of drugs in the US. "Why do you charge such high prices?" "So we can pay off all the lawsuits against us!"
In the end, much of the money we spend ends up in the huge fortunes of highly successful trial lawyers. Only in the US do we have trial lawyers with fortunes over $100 million.
I think that explains a lot about the high prices of drugs in the US. "Why do you charge such high prices?" "So we can pay off all the lawsuits against us!"
In the end, much of the money we spend ends up in the huge fortunes of highly successful trial lawyers. Only in the US do we have trial lawyers with fortunes over $100 million.
19
If you can't stand sensible regulation, the only recourse to mistreatment is a law suit. I'd prefer the former, but I ain't holdin' my breath.
6
@Ender - There is no regulatory system that will prevent drugs from having side effects. With these powerful drugs, some people who take them will inevitably have bad outcomes.
Medicare Part D, one of several "gifts" of W Bush, gave us an unfunded, budget busting new insurance program which blocked Medicare from negotiating with drug companies.
Now seniors are learning that there is no free lunch after all with Medicare as many face 50% premium increases, forcing them to pay for continuing fraud and abuse by cardiologists and ophthamalogists who do unnecessary surgeries and charge many times for the same drugs.
Maybe a "deal" to save seniors from premium shock could include changes to Medicare and Medicaid drug pricing policies.
Now seniors are learning that there is no free lunch after all with Medicare as many face 50% premium increases, forcing them to pay for continuing fraud and abuse by cardiologists and ophthamalogists who do unnecessary surgeries and charge many times for the same drugs.
Maybe a "deal" to save seniors from premium shock could include changes to Medicare and Medicaid drug pricing policies.
51
As a part of the Affordable Care Act, did not the Obama administration negotiate a flat payment from Big Pharma in 2009 in exchange for the US government's agreeing not to interfere with their high drug prices? The pharmaceutical companies were reportedly highly pleased with this arrangement, by which the American public continues to subsidize the drugs of Canadians and Europeans.
12
Please explain how the ban on drug price negotiations, which applies to the Medicare Part D drug program, is connected with the discussions currently in the news regarding potential large increases Part B premiums, which cover primarily doctor visits. I see no connection between Part B premiums and drug prices other than they're both problems that have something to do with Medicare.
Dealing with Part B issues has more to do with the quirky formula that ties Social Security increases with Part B premiums. Take a look at Robert Pear's excellent recent Times article on this issue.
Dealing with Part B issues has more to do with the quirky formula that ties Social Security increases with Part B premiums. Take a look at Robert Pear's excellent recent Times article on this issue.
2
I agree with you on Medicare Part D. However, the only Medicare recipients who will face increases anywhere near 50% on their premiums are those with annual incomes > $200,000.
It's a start. But not enough to stop one of the great rip offs of the US tax payer.
Government-funded research has become the research arm of the drug industry. Biotech is based on tax payer's investment. Over and over, we see a biotech company discover NOTHING but use the cash raised through hype to buy a drug in someone else's pipeline and develop it. Then they charge the tax payer another arm and leg for it. Even when the drug extends life span a few months at best. The tax payer is paying again and again Of course they have to so VCs, founders can make m/billions. Enough is enough. Go get 'em Bernie.
Government-funded research has become the research arm of the drug industry. Biotech is based on tax payer's investment. Over and over, we see a biotech company discover NOTHING but use the cash raised through hype to buy a drug in someone else's pipeline and develop it. Then they charge the tax payer another arm and leg for it. Even when the drug extends life span a few months at best. The tax payer is paying again and again Of course they have to so VCs, founders can make m/billions. Enough is enough. Go get 'em Bernie.
72
Utterly absurd. Another theory that grossly fails to see the variability of human physiology. One Pharm can affect different persons in different ways. These cognitive failures could injure .. or kill.