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Old 12-18-2015, 03:06 PM   #21
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His is only one of the many ways that pharma companies extract monopoly profits on the back of a broken regulatory system. Another is called "product hopping"

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In the prescription drug market, a patent holder—usually the brand name drug manufacturer that developed the pioneer drug . . . has time-limited, exclusive rights to market its patented drug, allowing it to realize hefty profits. Upon the patent’s expiration or a finding of its invalidity, market competition replaces the previously lawful monopoly: Manufacturers of generic drugs (generic manufacturers) enter the market, and the incumbent brand name manufacturer may face a steep drop in profits and market share.

Brand name manufacturers anticipating the loss of patent protection may launch strategies to stave off competition from generic manufacturers (“generic competition”) and thereby maintain their high volume of sales. This Note investigates one new tactic, product hopping, that has recently emerged among brand name manufacturers and explores its potential for manipulating the pharmaceutical industry’s regulatory structure while undermining generic competition.

Product hopping brand name manufacturers (“product hoppers”) make a slight alteration to their prescription drug and engage in marketing efforts to shift consumers from the old version to the new. Generic manufacturers must follow the hop to the new version in order to realize and maintain a high volume of sales. The delay to generic manufacturers from developing a new generic equivalent and obtaining FDA approval to market it allows the product hopper to insulate itself from generic competition for several years.
Source: http://columbialawreview.org/wp-cont...08-6-Cheng.pdf

While Shkreli may be particularly loathsome, nobody in big pharma has clean hands.
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Old 12-18-2015, 03:32 PM   #22
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Originally Posted by Gumby View Post
His is only one of the many ways that pharma companies extract monopoly profits on the back of a broken regulatory system. Another is called "product hopping"

Source: http://columbialawreview.org/wp-cont...08-6-Cheng.pdf

While Shkreli may be particularly loathsome, nobody in big pharma has clean hands.
Thanks. The regulatory "stickiness" is a big problem that keeps drug prices high. It is exacerbated by problems with transparency and conflicting incentives in the marketing and supply system. Without these issues, "product hopping" would pose little problem, since patients and doctors/providers would be likely to choose the older (generic) version of the drugs. The "newer" slightly altered (and much more expensive) version would hold little appeal.
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Old 12-18-2015, 04:03 PM   #23
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Hopefully he will make a fellow prison mate a fine little bitch.
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Old 12-18-2015, 04:23 PM   #24
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I don't buy that drug prices are high due to regulations.

The EU countries have much more stringent regulations and they don't have to pay such high prices.

A lot of pharmaceuticals, which are based in the EU, spend a lot lobbying the US govt.

Medicare Part D was written by a pharma lobbyist and includes the provision that prohibits the govt. from trying to negotiate volume pricing. It would have been a kind of single payer for drugs.

Of course, the lobbyists also made it illegal for all those seniors to hop on buses to Canada to buy the same drugs for a fraction of what they're charged in the US.

The politicians have chosen to take money from the drug companies than to look out for the rights of their constituents.
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Old 12-18-2015, 04:29 PM   #25
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I don't buy that drug prices are high due to regulations.
Then . . .
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Originally Posted by explanade View Post
Medicare Part D was written by a pharma lobbyist and includes the provision that prohibits the govt. from trying to negotiate volume pricing.
That's a law/regulation
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Of course, the lobbyists also made it illegal for all those seniors to hop on buses to Canada to buy the same drugs for a fraction of what they're charged in the US.
Nope--the lobbyists can't make anything illegal. Instead, they got others to use the power of the state to deprive Americans of their right to engage in free commerce. . . Through a law/regulation. And they also got the government to forbid the importation of these cheaper goods from Canada to the US. . . through a law/regulation.

So, I think we agree that laws/regulations are driving up prices of pharmaceuticals.
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The politicians have chosen to take money from the drug companies than to look out for the rights of their constituents
Yes, and while nobody has a "right" to inexpensive drugs, we are supposed to have a right to free association and to be free to make our own decisions about our welfare without government interference. If we had those rights in full, we'd have less expensive pharmaceuticals.
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Old 12-18-2015, 04:32 PM   #26
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What is the minimum, maximum sentence he can get if he is found guilty of all the charges? I have a feeling we will see him running another scheme, or company even after this.
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Old 12-18-2015, 04:35 PM   #27
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Yeah but I'm guessing you don't like regulations that require drug trials before they are approved to be sold.

Like I said, other industrialized countries have the same or more stringent regulations for drug approval and they don't have high drug prices.

So you didn't selectively quote that fact did you, since it goes against your claim?
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Old 12-18-2015, 04:43 PM   #28
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Originally Posted by explanade View Post
I don't buy that drug prices are high due to regulations.

The EU countries have much more stringent regulations and they don't have to pay such high prices.
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Originally Posted by samclem View Post
So, we agree that laws/regulations are driving up prices of pharmaceuticals.
Actually, you both may be right. Prices are high because people pay them. Or, insurers pay them and then pass along the high prices. Demand is strong, even at these price levels. In addition, pharmaceutical companies are able to limit competition by exploiting a flawed regulatory system. The two factors together lead to the sky high prices charged in the US.
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Old 12-18-2015, 04:51 PM   #29
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What is the minimum, maximum sentence he can get if he is found guilty of all the charges? I have a feeling we will see him running another scheme, or company even after this.
I think the feds have a new point system now. Those sentenced under those guidelines serve very long, strict sentences even for first-time offenders. Well, long compared to violent criminals IMO. Look up Stanford, Madoff or...even better, A&O Life....

I think Christian Allmendinger is doing 45 years or something. Heck Dave White got 5 years and only worked there 5 months. I think he just got out.

Forbes Welcome

I don't envy this kid. If he's found guilty on any of these charges he's going to the can, probably for a long time.
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Old 12-18-2015, 05:55 PM   #30
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Yeah but I'm guessing you don't like regulations that require drug trials before they are approved to be sold.

Like I said, other industrialized countries have the same or more stringent regulations for drug approval and they don't have high drug prices.

So you didn't selectively quote that fact did you, since it goes against your claim?
I do not think this is true. Gilead markets Harvoni, a cure for Hep C which had no high success cure previously. The USA does pay the most, but other industrialized nations pay a reasonable fraction. I think Japan is paying 80% or so of the USA price.

Places like India pay pennies, but they are essentially third world nations. They also ignore most patent protections if you try to charge more than pennies.

As an investor, I have mixed feelings here. I have invested in Gilead and made a bit of money, but I have lost quite a bit of money in other biotech companies who tried valiantly to bring a drug through the many many phases the FDA requires and ultimately failed. I think there is survivor bias when we look at the few, big successful pharma.

To date, nobody has offered to reimburse me for the money I have lost on biotech companies which spent billions of investor money and ultimately went bankrupt. I have to rely on the higher prices of the few drugs which make it to market to offset these losses.

There is a good reason that most small biotechs are shorted something crazy (sometimes 30% or more of the float short). Funds know most of them are going to fail. The rare ones that do succeed deserve big rewards or there is no incentive to invest in any of them.

Would you buy an index fund if there were only going to be 1 or 2 winners out of 20 to 50 and those winners were going to have their product profit capped by the government? Would anyone buy Apple stock if the government decreed I-phones must be sold for $99 no contract?
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Old 12-18-2015, 06:08 PM   #31
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iPhones aren't priced way out of line compared to other phones. The Samsung phones are nominally priced the same but they often have sales to move them, like instead of paying $199 down, they might let you pay $99 down or even 0 during one of these promotions.

But even iPhone had promotions during this Holiday season.

And all phones have to be FCC certified, not to emit more EMI radiation than allowed.

Now they make $99 or cheaper phones for markets like India but besides lower spec components, do they avoid having to certify devices for the market? Like having things like shielding?
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Old 12-18-2015, 06:25 PM   #32
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iPhones aren't priced way out of line compared to other phones. The Samsung phones are nominally priced the same but they often have sales to move them, like instead of paying $199 down, they might let you pay $99 down or even 0 during one of these promotions.
And Gilead did not price its Hep C cure way out of line compared to other Hep C treatments. They priced it at about $90,000 with a 95% success rate. Other options were about $200,000 for a combo of drugs with horrible side effects and a 10% cure rate or you could live with the disease and eventually get a liver transplant at about $400,000 to $600,000.

They also had promotions where people who could not afford the drug and did not have insurance could still get it.
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Old 12-18-2015, 07:02 PM   #33
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Yeah but I'm guessing you don't like regulations that require drug trials before they are approved to be sold.

Like I said, other industrialized countries have the same or more stringent regulations for drug approval and they don't have high drug prices.

So you didn't selectively quote that fact did you, since it goes against your claim?

The gvmt in other countries pays for the drugs... so THEY negotiate a price with the companies... if there is only one purchaser, it is kinda hard to over price the product... they can just refuse to buy....


Here, there are no alternatives.... the gvmt cannot negotiate BY LAW.... the insurance companies have to pay the going rate if the drug is approved... I had one doc prescribe a cream that was $300... even though insurance was going to pay most of that I called and said I wanted an alternative that was $10... the $10 drug worked just fine....
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Old 12-18-2015, 07:25 PM   #34
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How did it become the law that govt. can't negotiate?

Canada has nationalized insurance but Americans were able to go up and buy drugs at much lower prices.

I believe drug prices are also lower in Mexico and other parts of Latin America.
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Old 12-18-2015, 08:22 PM   #35
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How did it become the law that govt. can't negotiate?

Canada has nationalized insurance but Americans were able to go up and buy drugs at much lower prices.

I believe drug prices are also lower in Mexico and other parts of Latin America.
It's something Congress passed. Medicare is not allowed to negotiate drug prices. That is probably a big contributor to soaring medical costs in the US.

It was part of the 2003 legislation that created Medicare Part D - http://blog.cahealthadvocates.org/20...es-for-part-d/
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Old 12-18-2015, 08:37 PM   #36
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Would anyone buy Apple stock if the government decreed I-phones must be sold for $99 no contract?
One would definitely not die if he/she does not own an iPhone. Enough say?
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Old 12-18-2015, 08:43 PM   #37
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Oh I know, that's my point, pharma lobbying is a big cause of high drug prices in this country, not FDA-required drug trials.
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Old 12-18-2015, 09:30 PM   #38
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Old 12-18-2015, 09:52 PM   #39
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One would definitely not die if he/she does not own an iPhone. Enough say?
The iPhone would never be invented if it could not be sold for a profit.
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Old 12-19-2015, 07:49 AM   #40
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Actually, you both may be right. Prices are high because people pay them. Or, insurers pay them and then pass along the high prices. Demand is strong, even at these price levels. In addition, pharmaceutical companies are able to limit competition by exploiting a flawed regulatory system. The two factors together lead to the sky high prices charged in the US.
Perhaps they should impose limits on drug profitability like they do on health insurers (minimum loss ratio requirement).
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