I do not understand this price difference

[marko]

This thread is under "Health" but should we consider Big Pharma a "buy" in the Stock Picking section?

 

[gstillson]

Ads for drugs in the USA account for 50% of the costs of drug "development".

But it boosts sales by many mulitiples so that is more profit. And the drug companies get to explain drugs are expensive to "develop"

The problem is this is not really true, or at least not counting survivor bias.

There are so many drug developers who go bankrupt while trying to bring a drug through all of the trials and never even get to the point of spending a dime on advertising. How do we get people to invest billions of dollars in these smaller companies if there is no carrot for the few drugs that even make it to market?

I am trying to think of an analogy. I guess it would be something like would you invest in Ford if 99 out of every 100 trucks they made failed, but the one truck they designed that worked, they were forced to sell for $10,000?

 

[MRG]

Groceries:
SNAP, farm subsidies
Housing:
Section 8, rent control
Appliances: The vast majority of appliances in rental units are supplied by the landlord. At some level, many appliances are convenience items, almost luxury items. Think: dishwasher, toaster, microwave.

And in all these cases, there is a free market-prices are open and occasionally negotiable.

There is no "free market" when it comes to pharmaceuticals or anything in medicine. The company makes a small change in the medication or delivery system and gets to charge a fortune for many years. Just like there is no free market in medicine. If you have a heart attack or cancer, you can't shop for the cheapest doctor, procedure, hospital, medication, or imaging facility, because no one tells you the price up front. Heck, they don't even know the price! It's hidden from the providers by layers of and insurance company and health care system contracts.

+1000

Look at the price for Fiorinal! It was developed almost 100 years ago. Contains aspirin, caffeine, codeine and butalbital. It will cost $3-$4 a pill. Maybe it was really expensive to develop.

 

[gstillson]

A pricing law?

Something... something... free market...

Why limit this to pharmaceuticals? How about groceries? Housing? Appliances?

Agree here. Housing can be considered life or death as there are quite a few homeless people who die of exposure, yet we allow houses in some markets to sell for millions of dollars. Some of that money goes to advertising the house.

It is criminal! We should have a set price for the sale of a home based on square footage across the USA so the average person can afford a home anywhere.

 

[ShokWaveRider]

Agree here. Housing can be considered life or death as there are quite a few homeless people who die of exposure, yet we allow houses in some markets to sell for millions of dollars. Some of that money goes to advertising the house.

It is criminal! We should have a set price for the sale of a home based on square footage across the USA so the average person can afford a home anywhere.

If one did that, homes in Po Dunk [Name Your State] would never sell and the coastal communities & Other places where folk actually want to live would be even more crowded than they are.

 

[MichaelB]

Agree here. Housing can be considered life or death as there are quite a few homeless people who die of exposure, yet we allow houses in some markets to sell for millions of dollars. Some of that money goes to advertising the house.

It is criminal! We should have a set price for the sale of a home based on square footage across the USA so the average person can afford a home anywhere.

If one did that, homes in Po Dunk [Name Your State] would never sell and the coastal communities & Other places where folk actually want to live would be even more crowded than they are.

I think his post was sarcastic, which usually is not a good idea on an Internet forum, as it is hard to detect.

 

[gstillson]

Here is a drug company Pulmatrix (PULM), which has gone from $180 a share in 2014 to $1 a share today, while trying to bring their inhaler drug to market (and failing).

So I am Joe Shmoe investor. Am I going to take this kind of risk if the reward is removed?

I think something around $2B of investor money has been lost so far in Pulmatrix and not a dime of that has been spent advertising any drug.

 

[JoeWras]

A good friend of mine lost their job when the company shut down because their drug failed phase III testing. 300 jobs. It literally happened overnight. Small pharma failure.

Did anyone catch this in the article?

Right now, insulin isn't available as a generic drug in the U.S., because pharmaceutical companies have made small improvements to insulin over the years to keep it under patent.

THIS is the killer part. My dad got caught in this trap with nemenda. Small tweaks that may or may not 'improve' the drug and it keeps it off generic. This is the thing I don't understand.

 

[MichaelB]

THIS is the killer part. My dad got caught in this trap with nemenda. Small tweaks that may or may not 'improve' the drug and it keeps it off generic. This is the thing I don't understand.

When Namenda reached end of patent protection, Actavis introduced a new dosage with an extended release version, which was given new patent protection. While still under the original patent protection they instructed physicians to rewrite the prescriptions to the new formulary and dosage. When generic production became available, the old dose was no longer being prescribed. The new dosage recommendations are not multiples of the old, so patients cannot buy the generic and cut them up.

A physician described this to me in terms that were quite unflattering.

I’m confident the US marketplace subsidizes other countries (something I didn’t believe 5 years ago). There’s also no doubt some people ruthlessly exploit the healthcare marketplace for personal gain with no concern or regard to impact on others. Epipens and insulin are good examples.

 

[JoeWras]

When Namenda reached end of patent protection, Actavis introduced a new dosage with an extended release version, which was given new patent protection. While still under the original patent protection they instructed physicians to rewrite the prescriptions to the new formulary and dosage. When generic production became available, the old dose was no longer being prescribed. The new dosage recommendations are not multiples of the old, so patients cannot buy the generic and cut them up.

A physician described this to me in terms that were quite unflattering.

Exactly! And during the switchover, there were shortages too.

I understand how the drug companies are doing this. What I don't understand is why we* are letting this happen.

* - The people, Congress, etc.

 

[gstillson]

When Namenda reached end of patent protection, Actavis introduced a new dosage with an extended release version, which was given new patent protection. While still under the original patent protection they instructed physicians to rewrite the prescriptions to the new formulary and dosage. When generic production became available, the old dose was no longer being prescribed. The new dosage recommendations are not multiples of the old, so patients cannot buy the generic and cut them up.

A physician described this to me in terms that were quite unflattering.

I’m confident the US marketplace subsidizes other countries (something I didn’t believe 5 years ago). There’s also no doubt some people ruthlessly exploit the healthcare marketplace for personal gain with no concern or regard to impact on others. Epipens and insulin are good examples.

These ARE good examples of behavior and policies that do need to be changed instead of doing a massive across the board socializing of the drug industry.

People exploit the marketplace in finance and we try (sometimes unsuccessfully) to change the laws and bring them back in line (home mortgage lending) but we have not nationalized the banking industry.

 

[MRG]

This really isn't news for many. I talk with folks in the UK about certain meds. We pay 5x more for the same medication.

Pretty good article:

https://www.jhsph.edu/news/news-rel...ing-could-save-medicare-tens-of-billions.html

A new study by researchers at the Johns Hopkins Bloomberg School of Public Health found that prices for brand-name prescription drugs averaged 3.2 to 4.1 times higher in the U.S. when compared with prices in the United Kingdom, Japan and the Canadian province of Ontario. The study also found that the longer the brand-name prescription drug was on the market, the greater the price*differential.
If the Medicare program used the same prices as these other countries, the estimated savings to Medicare Part D would have been almost $73 billion in 2018 alone, the study found. Medicare Part D is an optional prescription drug benefit, available to Medicare beneficiaries for a premium and administered by private insurance*companies.

 

[copyright1997reloaded]

These ARE good examples of behavior and policies that do need to be changed instead of doing a massive across the board socializing of the drug industry.

People exploit the marketplace in finance and we try (sometimes unsuccessfully) to change the laws and bring them back in line (home mortgage lending) but we have not nationalized the banking industry.

I think your point (and I can't believe I am typing this but also joeea's comment "Why limit this to pharmaceuticals? How about groceries? Housing? Appliances?" ) is right on the money.

It's always interesting to see people wanting price controls on goods they deem while not wanting controls on their own wages and returns.

Like financial aid for schools, insurance causes higher drug costs. In a similar fashion, regulations on what drugs are subject to prescription and how they can be acquired (e.g. no mail order importation) impacts the supply. The net result is much much higher drug costs.

 

[Chuckanut]

I recently found an effective medicine that is much cheaper in Europe than here. While not as tragic a situation as the price of insulin, it shows how silly things can get in the USA.

A few years ago in Italy I developed a very stiff, painful back muscle that was severely limiting my ability to walk anywhere. I took some large doses of ibuprofen, which helped but also upset my stomach. (Who wants an upset stomach in Italy of all places?)

On the advice of an American ex-pat, I went to the local Farmacia and explained the problem in my pathetic Italian. The pharmacists pointed to a shelf full of medicine on my side of the counter. It was Voltaren, a topical NSAID, sold OTC. I bought a small tube, rubbed it on and got enough relief to continue enjoying my trip, and no stomach problems.

Back in the USA, I found that this same medicine is available by prescription only at what must be at least 5x the price. On a recent trip to Poland my knee started to act up badly and I bought a big tube -150g - for about $20. Besides working well, it is far less stressful to the stomach, kidneys and heart, since only about 5% gets into the blood stream and affects other organs.

So, I can flood my body with oral OTC ibuprofen to the point that my stomach is upset, my kidneys are overworked and my heart may be suffering, but I can't use a topical NASID like Voltaren, which is much less toxic to the body overall, unless I get an Rx and pay 5 to 10 times as much.

 

[gstillson]

There are a lot of drugs that are available without a prescription in other countries which require a prescription in the USA. Perhaps that would be a good change too, cutting out the middle man of having to go to the doctor, which would save $100 or more.

If I want to take antibiotics for my flu, I should damn well be able to!

 

[Chuckanut]

There are so many drug developers who go bankrupt while trying to bring a drug through all of the trials and never even get to the point of spending a dime on advertising. How do we get people to invest billions of dollars in these smaller companies if there is no carrot for the few drugs that even make it to market?

I think the issue here is that Americans seem to be paying a much higher share of the costs of developing these drugs than those in other 1st world countries like the UK, Canada, Germany, France, etc. Maybe it's time for these other countries to cough up their share of the billions it takes to develop a new drug.

FWIW, many drugs are now made in China, India and other low cost countries. And, alas, they are not always safe. (Note recent recalls of BP meds.) So, it's not like we are getting fully potent, safe, American made drugs for our huge expense.

 

[sengsational]

Easy Solution

Just make it completely legit to source your prescription from any country you choose. Boom. Done. Supply and demand.

 

[gstillson]

Just make it completely legit to source your prescription from any country you choose. Boom. Done. Supply and demand.

But again, why not also cut out the need for a prescription? If I know what drug I need, why do I have to pay a doctor to get a prescription? Seems like an unnecessary expense and a monopoly.

 

[JoeWras]

But again, why not also cut out the need for a prescription? If I know what drug I need, why do I have to pay a doctor to get a prescription? Seems like an unnecessary expense and a monopoly.

Some countries allow pharmacists to do so.

And maybe that's the problem here in the USA. There are controls in place already, and many times they seem to be working against the consumer when it comes to cost. The example of the "patent tweaking" which affects the way doctors can write Rx's seems to be an example of it.

 

[ShokWaveRider]

Perhaps pharma does it because they know they can get away with it as there are no real controls, or will there ever be in the near future. Again all talk and no action.

 

[joeea]

The point that pb4 was making is that there already is a law, passed by Congress, that specifically stops Medicare from using the free market to negotiate their drug prices.

Was that actually the point? I re-read pb4's post and don't see any mention of Medicare in it.

 

[joeea]

I think his post was sarcastic, which usually is not a good idea on an Internet forum, as it is hard to detect.

I disagree that it was hard to detect.

 

[bigreader]

A pricing law?

Something... something... free market...

Why limit this to pharmaceuticals? How about groceries? Housing? Appliances?

Free Market?

Pharmaceuticals rely on patents which create monopolies by design. One big issue we have is the way that that pharma extends patents based on fancy footwork and leveraging existing customers during product transitions. Limiting or regulating the abusive practices of a monopolist supports a free market!
This is fundamentally different from groceries, housing and appliances which didn't get started with a legal monopoly and are more subject to market dynamics.


BR

 

[ckelly78z]

I just got off of the phone with ELIQUIS getting approved for a $10 discount co-pay card that I will need to present to the Pharmacist when I refill. Up to this point, I have been paying a $65 co-pay for this one drug, while only paying less that $5 for my other ones. I finally asked the prescribing doctor if anything could be done about the $65 payout every month, and they sent me home with this info.

I'm all about saving $55 a month, but why have to ask for it, and what is the standard, non-insurance price for this ?

 

[Chuckanut]

Some countries allow pharmacists to do so.

And maybe that's the problem here in the USA. There are controls in place already, and many times they seem to be working against the consumer when it comes to cost. The example of the "patent tweaking" which affects the way doctors can write Rx's seems to be an example of it.

Another story in the Injuries in Italy story.

I had cut myself rather badly and went to La Farmacia to get a tube of OTC antibiotic. The pharmacist offered a tube of antibiotic cream and then told me I needed it, I could also get pills to take orally. I refused the pills, but was a bit amazed that I could get a oral antibiotic without an Rx.