Price controls and medicine

[Quantum Windbag]

What is wrong with progressives? The author takes about 800 words to describe the problem, recognizes that the inability of manufacturers to respond to spikes in demand by charging higher prices contributes to it, and then dismisses the best solution as being radical.

You don’t have to be a cynical capitalist to see that the long-term solution is to make the production of generic cancer drugs more profitable. Most of Europe, where brand-name drugs are cheaper than in the United States, while generics are slightly more expensive, has no shortage of these cancer drugs. One solution would be to amend the 2003 act to increase the amount Medicare pays for generic cancer drugs to the average selling price plus, say, 30 percent, after the drugs have been generic for three years. This would encourage the initial rapid price drop that makes generics affordable, but would allow for an increase in price and profits to attract more generic producers and the fixing of any manufacturing problems that subsequently arose.
Increasing the price for generic oncology drugs would have a negligible impact on overall health care costs. Total spending on generic injectable cancer drugs was $400 million last year — just 2 percent of cancer drug costs, and less than 0.5 percent of the total cost of cancer care. If we are worried about costs, we could follow Europe and pay for the higher prices by lowering what Medicare pays for the brand-name drugs that extend life by only a few months.
A more radical approach would be to take Medicare out of the generic cancer drug business entirely. Once a drug becomes generic, Medicare should stop paying, and it should be covered by a private pharmacy plan. That way prices can better reflect the market, and market incentives can work to prevent shortages.

http://www.nytimes.com/2011/08/07/opinion/sunday/ezekiel-emanuel-cancer-patients.html?_r=1

 

[waltky]

Novartis suit in India could affect generic drug availability and prices...

Indian Case Could Impact Availability of Generic Drugs
September 10, 2012
NEW DELHI — India’s generic drug industry began to flourish in the 1970s when India disallowed the patenting of medicines, enabling domestic companies, which did not have to invest in research, to make copies of branded drugs at a far lower cost.

In 2005, India allowed patenting, but set the bar higher for patents than other countries. Novartis went to court in 2006 after India turned down a patent for Gleevek - a medicine used to treat leukemia. Indian authorities argue it is not a new medicine, but a modification of an earlier one, and therefore not eligible for a patent under Indian law. The head of the Swiss pharmaceutical company in India, Ranjit Shahani, says the legal challenge is about protecting intellectual property rights. “Novartis is seeking clarity to see how innovation will be valued and protected in India," said Shahani. "Now Gleevek has received patent protection in 40 countries across the world including China, Taiwan and Russia. And truly you know, protecting intellectual property advances the practice of medicines and brings hope to patients.”

The case is being watched closely, because its ramifications will go far beyond a single drug. Groups such as Doctors Without Borders argue that a ruling in favor of Novartis could severely limit the availability of low-priced versions of medicines used to treat life-threatening diseases such as HIV and tuberculosis. In the past 10 years generic drugs have slashed the annual cost of HIV treatment from $10,000 to $150.

Leena Menghaney, a lawyer with Doctors Without Borders, or MSF, in New Delhi, says these affordable drugs brought life-saving medicines within the reach of tens of thousands of people living with HIV across the developing world. That could be impacted by applying more stringent patent standards. “We have got more than 180,000 people living with HIV on Indian made generics. Now if we are unsure about whether we can in the future continue to procure the medicine, then it basically means that AIDS treatment itself for MSF could get heavily affected. It also means that AIDS treatment run by governments in developing countries could be very seriously affected," said Menghaney. "Currently about eight million people are on treatment and you can safely say that a large number of them could get affected. Scaling up AIDS treatment will just be a dream then.”

The hearing of the landmark case is expected to last several weeks. Critics of India’s patent law say it does not meet standards set by the World Trade Organization. Defenders say it leans in favor of public health concerns over private patent rights.

Source

 

[Wiseacre]

Somebody has to pay the price for the development and testing of new drugs and treatments for all the good new stuff AND the failures that led to the successes. Ain't cheap you know, who's gonna pick pick up that tab?

 

[Moonglow]

Somebody has to pay the price for the development and testing of new drugs and treatments for all the good new stuff AND the failures that led to the successes. Ain't cheap you know, who's gonna pick pick up that tab?

Usually the US consumers.Or tax payers.

 

[uscitizen]

Somebody has to pay the price for the development and testing of new drugs and treatments for all the good new stuff AND the failures that led to the successes. Ain't cheap you know, who's gonna pick pick up that tab?

the US government and state universities as they often have in tha past to the profit of private industry.

How much did private industry profit from the govt funded space program?

Big pharma's advertising budget is often larger than it's research budget.

 

[atlasshrugged]

My wife and I just found out she's pregnant. (We're super excited) However, she's been very nauseated and unable to keep anything down, so we had a prescription called in at 4:30 AM and I was able to pick it up. After insurance, it was $1.10 for a two week supply of Zofran. Without insurance, it would have been $40. I thought about how many hours have been spent on this drug (research, testing, publishing results, FDA approval and patenting, advertising, plus the time of the pharmacist who filled the prescription) and I came to one conclusion.

Isn't it great that when my wife is in danger of dehydration that we can get relief for $3 a day without worrying too much about it harming my wife and unborn child?

People complain about how expensive healthcare is, but that's because it takes a lot of hours of intelligent people to design and test these drugs. It's unfortunate that healthcare can be so expensive, but at least it's available.

 

[tjvh]

Somebody has to pay the price for the development and testing of new drugs and treatments for all the good new stuff AND the failures that led to the successes. Ain't cheap you know, who's gonna pick pick up that tab?

Rich people.

 

[Wiseacre]

My wife and I just found out she's pregnant. (We're super excited) However, she's been very nauseated and unable to keep anything down, so we had a prescription called in at 4:30 AM and I was able to pick it up. After insurance, it was $1.10 for a two week supply of Zofran. Without insurance, it would have been $40. I thought about how many hours have been spent on this drug (research, testing, publishing results, FDA approval and patenting, advertising, plus the time of the pharmacist who filled the prescription) and I came to one conclusion.

Isn't it great that when my wife is in danger of dehydration that we can get relief for $3 a day without worrying too much about it harming my wife and unborn child?

People complain about how expensive healthcare is, but that's because it takes a lot of hours of intelligent people to design and test these drugs. It's unfortunate that healthcare can be so expensive, but at least it's available.

Glad your wife is okay, I sincerely hope everything goes well from here on out. Here's the deal in my view: if we want medical advances, new drugs and treatments, somebody's gotta pay for that. Either the taxpayers or the end users, because if we don't then a number of unattractive alternatives make themselves available to the big pharma companies.

One, the range of areas of research and development gets narrowed. The companies will make financial decisions for which drugs and treatments to pursue based on expected profits rather than the expected good it might do. That already happens to some degree, I'm saying it'll get worse. So, 10 or 20 years from now a better drug won't be available because it was deemed not as cost effective or profitable to development and test.

Two, drug companies may move their R&D offshore, say goodbye to some high paying jobs. That's what happens when taxes are too high, regs are too expensive to adhere to, or the gov't puts a price ceiling on what can be charged. So great, now you might be giving your wife a drug that was produced elsewhere, I bet that idea isn't very appealing.

Look, I ain't real crazy about these big corps either, but you gotta face the realities. If you start messing with price controls, there's going to be consequences.

 

[atlasshrugged]

My wife and I just found out she's pregnant. (We're super excited) However, she's been very nauseated and unable to keep anything down, so we had a prescription called in at 4:30 AM and I was able to pick it up. After insurance, it was $1.10 for a two week supply of Zofran. Without insurance, it would have been $40. I thought about how many hours have been spent on this drug (research, testing, publishing results, FDA approval and patenting, advertising, plus the time of the pharmacist who filled the prescription) and I came to one conclusion.

Isn't it great that when my wife is in danger of dehydration that we can get relief for $3 a day without worrying too much about it harming my wife and unborn child?

People complain about how expensive healthcare is, but that's because it takes a lot of hours of intelligent people to design and test these drugs. It's unfortunate that healthcare can be so expensive, but at least it's available.

Glad your wife is okay, I sincerely hope everything goes well from here on out. Here's the deal in my view: if we want medical advances, new drugs and treatments, somebody's gotta pay for that. Either the taxpayers or the end users, because if we don't then a number of unattractive alternatives make themselves available to the big pharma companies.

One, the range of areas of research and development gets narrowed. The companies will make financial decisions for which drugs and treatments to pursue based on expected profits rather than the expected good it might do. That already happens to some degree, I'm saying it'll get worse. So, 10 or 20 years from now a better drug won't be available because it was deemed not as cost effective or profitable to development and test.

Two, drug companies may move their R&D offshore, say goodbye to some high paying jobs. That's what happens when taxes are too high, regs are too expensive to adhere to, or the gov't puts a price ceiling on what can be charged. So great, now you might be giving your wife a drug that was produced elsewhere, I bet that idea isn't very appealing.

Look, I ain't real crazy about these big corps either, but you gotta face the realities. If you start messing with price controls, there's going to be consequences.

It's true that someone has to pick up the tab. If its the buyer who has to pay more, then some useful drugs will not be produced because they aren't profitable. If its the taxpayers who pick up the bill, we will produce too many drugs that aren't very useful to us. There needs to be a fair balance. I just think that before we start demanding that chemical engineers take payouts after spending ten years designing and testing a revolutionary gift to mankind, we should ask ourselves whether we value our health more than our televisions and iPhones.

I know it's a little outside the discussion, but I wish people were happier about how blessed we are to have food, homes, knowledge, and healthy lifespans.

As for the possibility of outsourcing, we have to pick our poison. Either we keep jobs in America and pay higher prices, or we outsource some jobs but our prices and cost of living decrease.

 

[Wiseacre]

My wife and I just found out she's pregnant. (We're super excited) However, she's been very nauseated and unable to keep anything down, so we had a prescription called in at 4:30 AM and I was able to pick it up. After insurance, it was $1.10 for a two week supply of Zofran. Without insurance, it would have been $40. I thought about how many hours have been spent on this drug (research, testing, publishing results, FDA approval and patenting, advertising, plus the time of the pharmacist who filled the prescription) and I came to one conclusion.

Isn't it great that when my wife is in danger of dehydration that we can get relief for $3 a day without worrying too much about it harming my wife and unborn child?

People complain about how expensive healthcare is, but that's because it takes a lot of hours of intelligent people to design and test these drugs. It's unfortunate that healthcare can be so expensive, but at least it's available.

Glad your wife is okay, I sincerely hope everything goes well from here on out. Here's the deal in my view: if we want medical advances, new drugs and treatments, somebody's gotta pay for that. Either the taxpayers or the end users, because if we don't then a number of unattractive alternatives make themselves available to the big pharma companies.

One, the range of areas of research and development gets narrowed. The companies will make financial decisions for which drugs and treatments to pursue based on expected profits rather than the expected good it might do. That already happens to some degree, I'm saying it'll get worse. So, 10 or 20 years from now a better drug won't be available because it was deemed not as cost effective or profitable to development and test.

Two, drug companies may move their R&D offshore, say goodbye to some high paying jobs. That's what happens when taxes are too high, regs are too expensive to adhere to, or the gov't puts a price ceiling on what can be charged. So great, now you might be giving your wife a drug that was produced elsewhere, I bet that idea isn't very appealing.

Look, I ain't real crazy about these big corps either, but you gotta face the realities. If you start messing with price controls, there's going to be consequences.

It's true that someone has to pick up the tab. If its the buyer who has to pay more, then some useful drugs will not be produced because they aren't profitable. If its the taxpayers who pick up the bill, we will produce too many drugs that aren't very useful to us. There needs to be a fair balance. I just think that before we start demanding that chemical engineers take payouts after spending ten years designing and testing a revolutionary gift to mankind, we should ask ourselves whether we value our health more than our televisions and iPhones.

I know it's a little outside the discussion, but I wish people were happier about how blessed we are to have food, homes, knowledge, and healthy lifespans.

As for the possibility of outsourcing, we have to pick our poison. Either we keep jobs in America and pay higher prices, or we outsource some jobs but our prices and cost of living decrease.

I don't want to hijack this thread about supply side economics, but it seems to me we should be looking at every possible advantage we can give to our own entrepeneurs and business people to keep their costs down so their products and services can compete with the foreign stuff coming in. And we have to have some stability in the business environment, we can't have so much uncertainty about what's going to happen next year or the year after. If the situation doesn't change for the better, then any and every recovery will be shallow and short-lived, as we've seen the past 3 years.

 

[Clifford]

After the medication have been common for three years. This would motivate the preliminary fast cost fall that makes generics cost-effective, but would allow for a rise in cost and earnings to entice more common manufacturers and the solving of any production problems that therefore came to exist.