If big pharma charged ridiculous amounts of money for new drugs, made off-patent drugs dirt cheap, and didn't find new & ridiculous ways to re-patent old drugs, I'd feel better about their business model.
I imagine you’re correct, but could you source ‘re-patent old drugs’?
My understanding was that the drug owner had a 7 year exclusive window before the drug was released to public domain. At which point I would’ve expected the drug to be sold near cost.
If it’s possible to re-patent a drug, then obviously that process would break.
FWIW, 7 years of high prices in exchange for having the drug forever afterward feels like a theoretically good solution to me.
Exhibit A: Vimovo. One pill, consisting of two drugs that have been around for decades, and are available over the counter at any pharmacy. If bought separately, a month’s supply of these drugs would run you maybe $40, at most.
Vimovo, on the other hand, is routinely charged to insurers by pharmacies at prices ranging to over $3,000 for a month’s supply. And somehow insurers are willing to pay for it, to the tune of nearly $500 million a year. More details here from ProPublica: https://www.propublica.org/article/horizon-pharma-vimovo-com...
I suspect that something very fishy is going on between when the money is “paid” by the insurance company to the money that actually makes it to the pharmaceutical company. I suspect most of this money gets rebated back to the insurer in some form or another.
Reading your link it’s actually an interesting story of an absolute fraud designed to thread a perfect path through all the existing regulations and checks & balances.
There have been a lot of fishy dealings with the drugs that came from Valeant.
They would charge outrageous prices for drugs that were just a combination of generics.
They funneled the scripts to a pharmacy they partnered with. Most insurers would not cover the drug, but the pharmacy knew all the tricks. 80% of claims might get rejected, but they made a ton of money off the 20%.
Which is why ACA also instituted marketplaces and insurance standards, so that competition across substitute services keeps premiums competitive.
E.g. Anthem is more than free to double the premium on their bronze plan to increase net profits, but then customers are free to swap in bronze plans from Cigna, Kaiser, or any number of competitors that didn't.
Networks complicate things by reducing demand elasticity.
For example, look at Maricopa County, Arizona. It's like 100km across and includes both a major capital city (Phoenix) and several suburbs with 6-figure populations (Mesa, Chandler, Glendale).
Many of the marketplace health plans* would have networks which focused around central Phoenix. If you wanted to see an in-network doctor or urgent care and lived at the fringes of the county, it was a 30-minute drive or more.
This meant people in the fringes had to pick the few plans that covered nearby facilities, even if there was a significant price difference.
* This was during the first few years of the marketplace. By 2017 or so they were basically down to a single insurer, so even that degree of consumer leverage was gone.
Networks are very important with all kinds of insurance. The thing you notice when you switch from employer-covered insurance to ACA market insurance is all the fiddly choices your employer was making for you. You can say that having to make these choices is a process failure of the ACA, or you can say that having the freedom to make those choices yourself is a benefit of the ACA.
I'm not sure what M4A has to do with this, and, in particular, to relate this story back to the thread, you should be aware that Medicare drug benefit administration is also privatized, and that somewhere between 1/3 to 1/2 of Medicare recipients also get Medicare Advantage, a private insurance rider to Medicare that is largely defined by network restrictions.
Could you formulate a response like this that addresses the point I just made, which is that Medicare also includes, for a huge chunk of its recipients, network restrictions, and for all its prescription drug recipients private insurance?
For now it does. That will not always be the case, or should it be, the regulatory picture will appear very different than it does today.
Those things simply do not add value. They do help to make more money.
When health care is about making money, it is not about making people healthy. And it is not about cost either.
Very large numbers of Americans are both impacted in a negative way, and long past the idea of private insurers being good primary care vehicles. They aren't.
Private insurers should be forced out of primary care. If I had my way, doing that would be illegal.
There is a basic conflict of interest between an insurer making money and what is best for sick people.
I will tell you personally, the hell I have gone through, family members dead, others living with pain, financial damage, homes lost, I am very highly motivated to do all I can to see an end to our current, increasingly cruel and ineffective system. Talk about death panels. Yeah, happened to us. Unnecessary that it did too.
So really your argument has nothing to do with Medicare? You're just using the term "Medicare" as a placeholder for whatever health policy you come up with? I'm not trying to be snarky: this is also what several of the Democratic frontrunners are doing.
For very large numbers of people, the current arrangement simply isn't acceptable. The pain level on that has reached a point where those people are now motivated politically.
Medicare For All is an expansion of Medicare, and an augmentation.
Technically, part of what you said is right: Medicare is being used to reference policy modeled on, but does expand considerably on that which we know as Medicare today.
That's being done because people largely understand and like the part of Medicare being expanded on, and that's the part sans private insurers and the usual mechanics associated with all that.
The Dem front runners are looking to garner those health care votes. They aren't wrong to be doing that as for increasing fractions of those votes, a solid proposal that eliminates the harm potential present in our current system is a litmus test.
Regarding the ACA, as I understand it, there's the 80/20 rule that states insurers must spend 80% of what they make from premiums on providing & improving healthcare. [1]
The problem with that is there's no cap on what premiums should be. So if you charge 10K in premiums, and keep 2K, there's nothing in the ACA that is preventing you from raising your rates to 15K to keep 3K.
Please correct me if I misunderstand how this works.
Except that the ACA also instututes marketplaces and enforces insurance standards, so that consumers can shop and switch between substitute services if one insurer tries to hike premiums.
Except they're ALL hiking premiums... What it comes down to is adding fiduciary responsibility to act on behalf of their clients' interest in negotiating rates, which they don't do and stopped doing.
Where I am, the 2019 marketplace has two providers, but one of them has a very limited network, so I can't do anything in network without driving at least 30 minutes. So, that's really just one provider and I get to pick which metal I like. What I really wanted to know, but couldn't tell is if I hit the out of pocket max, is there any difference in what's covered by plan.
It may be a better marketplace than before, but it's still a pretty shitty marketplace.
Rural US, right? Keep in mind that the providers in your area are also in areas where they compete with others on premium price. Just because you anecdotally don't see it doesn't mean the competition isn't happening.
A few months ago, when I looked at buying private health insurance via the exchange in California, I had never heard of any of the insurance companies & none of them would let me see my own doctor. I was not impressed.
> A few months ago, when I looked at buying private health insurance via the exchange in California, I had never heard of any of the insurance companies
Blue Shield of CA has plans available in the full region for each of CA’s 19 pricing regions, and is the third largest insurer in the state.
Doesn't the same argument apply to the elements making any drug? Carbon, oxygen, etc.. are all pretty cheap. But there is significant value in mixing things properly and getting that mixture tested and through the FDA.
If it's trivial to take these cheap drugs and mix them, then why don't people simply do that?
Check out the propublica piece. Their analogy is more akin to putting pb&j in one jar. As to why it happens? People are likely to do what their doctors say and what their insurance will cover. Pharma has ways to influence both.
Your understanding would be correct, except when there are billions of revenue on the line. Then "the best minds" of the law profession get to work. For example, you cannot make a generic without (legally) having some sample of the drug going off patent. The drug company simply destroys all the expiring patent version of the drug, patents a minor change, and starts the clock all over again. Many other strategies are detailed in this podcast episode.
The biggest thing they do is file multiple patents for different parts of a drug. So they can have a 100 or so patents on a single drug and have the patents staggered over time. (Humira is a good example of this)
If that doesn't work they slightly alter stuff like dosage per pill and re-patent that.
That doesn’t work because the original pill is itself prior art to every patent as of the date it’s released. So you either claim priority to the first batch of patents, or your later patent is defeated by your own prior art. Same thing with changing the dosage. Even if you can show a new discovery that wasn’t obvious from the original patent, that doesn’t prevent anyone from making a pill with the original dosage.
The way this works in practice is that there is a stream of patents on incremental improvements. Doctors continue to prescribe the branded, patented drug (because they have no reason not to) even though the original drug was fine.
Insulin is like this. If there was a substantial market for the 1923 bovine insulin produced by Eli Lilly, it would be cheap. Instead, insurance is willing to cover the high prices of newer, incrementally better versions. Leaving a relatively small market for a worse, but patent free version.
You could, if you were dealing with a new chemical entity and were so inclined, file a new application with human pharmacokinetics claims, and then elect the PK patent for your FDA-assisted patent term extension. An excellent choice, since the PK claim patent will likely have the most recent priority date.
Indeed, there is market for it, and it is actually very cheap ($25 for a vial in Walmart, which typically lasts around a month). The problem with it is that it’s much more inconvenient and difficult to use correctly. The modern analogues are much superior, so most people prefer to go for those instead, despite much greater price.
One small wrinkle: what if there's an old existing compound that seems to work well for an different indication than it was originally approved for? It would be good to run the phase 3 trial (possibly phase 2 as well) but that's gonna cost a ton of money. Maybe the government does it, or maybe we let people extend a patent for a new indication, freeing up government research money for the much trickier problem of understanding fundamental disease mechanisms.
There are of course good arguments against, but there's at least some good arguments to allow limited patent extensions.
Basically anyone can apply to the NIH for a grant to run clinical trials. It's not easy: the funding rate for NIH grants in general is in the teens and you'll need to convince the reviews that a) the trial itself generally makes sense and b) you, specifically, can pull it off, but it can be done.
If you find a new use for an existing drug—and run a trial to prove it—the FDA will give you a period of "marketing exclusivity", wherein you will be the only one allowed to market that drug for that condition. It's not quite a patent, but it's meant to be a similar recompense/reward for doing the research.
big pharma charged ridiculous amounts of money for new drugs, made off-patent drugs dirt cheap
That’s what happens now, for the most part. Drugs that were cutting edge 7-10 years ago are now public domain and damn cheap, like 95-97% discount to the brand name.
Of course there are exceptions, but it’s generally how it pans out.
The insulin of today is not the same insulin from 10 years ago.
The insulin from 30 years ago is available and cheap, but no one wants to use it because the newer insulins make it easier to control your blood sugar.
