Epi-Pen Cost

jazzman said:

...Price gauging on a life-saving product that has few, if any, cheaper alternatives, or no alternatives that work as well under the circumstances for which it is designed, is...what's the technical term? Icky.

And market forces don't work so well if Apple or Gillette pays off Congress to create a market that favors iPhones or battery-operated 20-blade cartridges, particularly where the CEO has a family connection. Again, icky.

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I am in favor of market forces and transparent pricing instead of 3rd parties hiding of costs, but as you allude to here but not strongly enough - it appears that FDA foot dragging and cronyism may have helped Mylan keep its "monopoly" and thus monopoly like pricing for now.

Interesting intersection of politics going on with this medication (not here on B&B but in congress and presidential races). The Mylan CEO is not a sympathetic person but I think she makes some interesting points today on CNBC that need to be considered in the holistic approach to healthcare.

Alacrity59 said:

Yeah LUXURY!


The price of this medication/delivery system has been pretty stable in the rest of the world if my understanding is correct. In the US the price has been steadily increasing. I guess it was not news worthy at a 100% increase. 200% . . . oh no problem my insurance plan covers it. 300% hey that's bad . . . good thing I don't have an allergy so I won't have to pay that. 400% yawn . . . old news go away. 500% . . .

Americans speak English, as do we Canadians, Australians, the Brits. There do exist some huge cultural differences though. Attitudes toward healthcare is certainly one huge difference. There have been several comments in this thread basically saying "Duh . . . healthcare is a for profit industry" I admit that is a hard thing for me to grasp . . . I think for much of the rest of the world healthcare is considered more like infrastructure . . . I.e. we need roads, towns, cities, airports, etc.

When I say this it is clear in my mind and probably what I just said is understood in the way I intend it outside of the US. I wish I could communicate far better than I do to folk in the US.

Health care costs are massive in Canada . . . we worry, for good reason, at the cost. Yet we spend 1/2 the cost per capita as you do in the US. 1/2 the cost per individual . . . and we cover 100% of individuals . . . Not perfect. Never will be. We still have to get the balance right but the health care system in the US is at best kinda Harsh at best for a whole lot of people.

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+1

When I hear all these stories of people who have been bankrupted by their medical expenses, just because they where unlucky enough to get sick, I shake my head.

Alacrity59 said:

....There have been several comments in this thread basically saying "Duh . . . healthcare is a for profit industry" I admit that is a hard thing for me to grasp . . . I think for much of the rest of the world healthcare is considered more like infrastructure . . . I.e. we need roads, towns, cities, airports, etc.

When I say this it is clear in my mind and probably what I just said is understood in the way I intend it outside of the US. I wish I could communicate far better than I do to folk in the US.

Health care costs are massive in Canada . . . we worry, for good reason, at the cost. Yet we spend 1/2 the cost per capita as you do in the US. 1/2 the cost per individual . . . and we cover 100% of individuals . . . Not perfect. Never will be. We still have to get the balance right but the health care system in the US is at best kinda Harsh at best for a whole lot of people.

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Infrastructure is built by companies paying good wages and making a profit. If there was no profit motive for healthcare or any other industry then there would not be armies of people trying to build things at less cost. Much like if there was no profit motive for Apple to build an iPhone as compared to the old standard cell phone would they have invested all that time and energy?

A different example from the medical industry is how Theranos attempted to come out with better and less intrusive blood testing mechanism, something that would have made big dollars for the company since it was cheaper to make that the competitors tests, but would have put extra dollars in their pockets. Turns out the FDA thought it was a scam or insufficient at best so it did not get improved. But the bottom line is that if there is no profit motive then there is no motivation to improve and undercut the existing process which it turn will reduce prices for everyone over time. Much like it has been with tech over the past 30+ years.

I do not understand Canadian healthcare enough to comment, but the third party payment system in US for past decades has helped cover up the true costs and raise prices IMO.

Alacrity59 said:

Yeah LUXURY!


The price of this medication/delivery system has been pretty stable in the rest of the world if my understanding is correct. In the US the price has been steadily increasing. I guess it was not news worthy at a 100% increase. 200% . . . oh no problem my insurance plan covers it. 300% hey that's bad . . . good thing I don't have an allergy so I won't have to pay that. 400% yawn . . . old news go away. 500% . . .

Americans speak English, as do we Canadians, Australians, the Brits. There do exist some huge cultural differences though. Attitudes toward healthcare is certainly one huge difference. There have been several comments in this thread basically saying "Duh . . . healthcare is a for profit industry" I admit that is a hard thing for me to grasp . . . I think for much of the rest of the world healthcare is considered more like infrastructure . . . I.e. we need roads, towns, cities, airports, etc.

When I say this it is clear in my mind and probably what I just said is understood in the way I intend it outside of the US. I wish I could communicate far better than I do to folk in the US.

Health care costs are massive in Canada . . . we worry, for good reason, at the cost. Yet we spend 1/2 the cost per capita as you do in the US. 1/2 the cost per individual . . . and we cover 100% of individuals . . . Not perfect. Never will be. We still have to get the balance right but the health care system in the US is at best kinda Harsh at best for a whole lot of people.

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Read The Shock Dictrine- it sums up US "capitalism" very well

StillShaving said:

Infrastructure is built by companies paying good wages and making a profit. If there was no profit motive for healthcare or any other industry then there would not be armies of people trying to build things at less cost. Much like if there was no profit motive for Apple to build an iPhone as compared to the old standard cell phone would they have invested all that time and energy?

A different example from the medical industry is how Theranos attempted to come out with better and less intrusive blood testing mechanism, something that would have made big dollars for the company since it was cheaper to make that the competitors tests, but would have put extra dollars in their pockets. Turns out the FDA thought it was a scam or insufficient at best so it did not get improved. But the bottom line is that if there is no profit motive then there is no motivation to improve and undercut the existing process which it turn will reduce prices for everyone over time. Much like it has been with tech over the past 30+ years.

I do not understand Canadian healthcare enough to comment, but the third party payment system in US for past decades has helped cover up the true costs and raise prices IMO.

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I don't believe this has to be true.

Cuba, despite being a fairly poor country, has one of the best healthcare systems in the world. That is because their government sees it as a priority and invests in it. When you put something like healthcare in the hands of big business, of course it becomes a profit making exercise. That is what big business is about, making money. And that's it. All other considerations are secondary to maximising profits.

Healthcare is, or should be, a human right. Priority should be given to the needs of the patient. The patient should not be seen as a cow to milk by everyone involved in making what it takes to fix them.

StillShaving said:

Infrastructure is built by companies paying good wages and making a profit. If there was no profit motive for healthcare or any other industry then there would not be armies of people trying to build things at less cost. Much like if there was no profit motive for Apple to build an iPhone as compared to the old standard cell phone would they have invested all that time and energy?

A different example from the medical industry is how Theranos attempted to come out with better and less intrusive blood testing mechanism, something that would have made big dollars for the company since it was cheaper to make that the competitors tests, but would have put extra dollars in their pockets. Turns out the FDA thought it was a scam or insufficient at best so it did not get improved. But the bottom line is that if there is no profit motive then there is no motivation to improve and undercut the existing process which it turn will reduce prices for everyone over time. Much like it has been with tech over the past 30+ years.

I do not understand Canadian healthcare enough to comment, but the third party payment system in US for past decades has helped cover up the true costs and raise prices IMO.

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That depends on whether a particular country sees healthcare as primarily a private good, or primarily a public good. In the UK and many other countries, a hybrid model is operated in which there is a healthcare system essentially free at the point of delivery and funded by a tax levy of some sort, supplemented by private care providers.

The advantages of this system are that access to healthcare is not dependent on your financial circumstances, and it places much more buying and decision-making power in the hands of healthcare specialists who are motivated by ensuring optimum provision at optimum cost, rather than pure profit (although they have to be careful not to squeeze profit margins so much as to drive private providers out of the industry). That power also allows them to push back against any tendency towards monopolistic or oligopolstic pricing that would otherwise occur, such as in the US with the EpiPen.

Disadvantages are that it's paid for by tax and therefore you can't opt out, nor can you get your money back if you're healthy and don't use it much; and it requires a great deal of market intervention. That's something that sends free-marketeers into a blue funk, but not many in the UK. Even the most right-wing free-market post-war governments over here have not tried to dismantle this basic model and make healthcare access a private good.

There are all sorts of social and political reasons why it has developed this way, and other countries' approaches will be different. This model is not easy, it's not without controversy, healthcare is always near the top of the political agenda, and there are always tough priority calls to be made. I have to think it's the least worst solution found so far. My daughter pays no more than $11 for her EpiPen, and I'm entering the time of life where I will have to make many more calls on the NHS than I have had to in the past. I can do that free from worrying about the cost.

I can't offer a detailed critique of the US system, but I did want to make the fundamental point that you can rein in a rampant profit motive and still deliver effective universal healthcare. Ultimately, though, it's a socio-political choice, not an economic one.

StillShaving said:

Infrastructure is built by companies paying good wages and making a profit. If there was no profit motive for healthcare or any other industry then there would not be armies of people trying to build things at less cost. Much like if there was no profit motive for Apple to build an iPhone as compared to the old standard cell phone would they have invested all that time and energy?

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There are other ways of looking at the same thing. The country wants to have successful companies and happy people. Having a healthy workforce available helps companies to grow and be successful. I would argue that it makes sense to put things in place so that people are kept healthy. Now I have a profit motive to address health care and hospitals get built etc. etc.

There used to be an ad on TV. I think it was Fram oil filters. The tag line was something like "You can pay me now, or you can pay me later" From the outside it looks as if there is a large percentage of people who have access only to limited health care and the limited health care results in people getting seriously sick rather than catching things in earlier less expensive stages. So now we have a lot of really sick people who's treatment using the million dollar machines that go bing and they have no money to pay for it so the government pays for it rather than let them die . . .

Maybe their is more than one answer or combination of answers. Public, private, for profit, not for profit. It just seems a little more doing things together and a little less greed could really help.

Every one of my patients want's access to million dollar health care, not a single one wants to pay a million dollars for it.

I'm as free market as they come, but this isn't the free market at work. Congress is bought and paid for by the pharmaceutical companies, and I'm pointing the finger at both parties. Both parties take their campaign money, and I'm sure under the table, both parties are made privy to insider trading information before new groundbreaking medicines are made public. Congress controls the flow of budget money to the FDA, also giving them some leverage on drug pricing, generic drug availability, etc.

I was a drug rep for 10 years and now I am in pharmaceutical distribution. I have a few thoughts here

Cost of drugs - It costs between 800 million and 1.2 billion dollars and 10 to 12 years to come out with a drug. A company has about 7 years left on their patent to recover the costs. The US patients pay for most of the those cost because around the world other countries are unwilling. Since drug companies don't want to write off the other companies they move a lot of cost to the US. Also, the companies have to pay for all of the drugs that they were researching that don't make it to the market. You can't just look at the cost to produce a pill when pricing a drug.

Compliance - Most of this post has been focusing in on Epi-Pens. For sure there are a lot of drugs that are priced way out of line. However, in my new positions working with pharmacies I am involved in a different side of the drug industry. Currently in the us 5% account for 50% of the healthcare spending. Also, we have about 10,000 people a day turning 65 and becoming eligible for Medicare. This is where most of the spending is now shifting. Many of these people are on 5 or more medications, most being generics. Many of the medicare plans out in the market will pay various amount to the pharmacy based on how compliant the pharmacy's patients are in taking their medications. There is a program where pharmacies are paid next to nothing to do a service called MTM. This is where they do a medication review to insure that the patient is taking the right medications. The goal is to insure that patients are taking their medications for chronic diseases like diabetes, cholesterol, high blood pressure. The more compliant the patients the better chance there is to decrease strokes, heart attacks and other issues that really cost a lot of money. When talking with their patients, cost is rarely the reason patients don't take their medication. The main reasons are, I forget to take the medication, I am feeling fine, I refuse to be required to take a pill every day, you changed to a blue bill. Cost comes way down.

Why does a pharmacy change pills. When a drug goes generic there are numerous generic houses that make a drug. Insurance companies pay the same for a script. It doesn't matter if you go to a chain or independent pharmacy. It doesn't matter if you like to blue pill over the green. If a generic house raises their rates to above what the pharmacy is paid, the pharmacy needs to shift manufacturer to be able to make a profit. I won't even go into the situation where no matter what the pharmacy loses money if they fill a script

Lastly, some people have been says that the government should be paying for healthcare. That means you pay for it in higher taxes. Look at the debt to GDP ratios of the countries that "pay" for peoples healthcare. They are some of the highest in the world. I fear this is going to lead to a correction that makes what happened in 2007.

ouch said:

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and we 'ad cholera, typhoid and bubonic plague for breakfast every morning, and without this new fangled "socialized bludy medicine". When we went to 't doctor for our once every 500 year check up, 'e'd take one look at us, give us two aspirin and told to call again at next sightin' of 'alley's comet and we wuz right as rain.

Kyle, what percentages of advertising play into this? I have heard various numbers tossed around up to 80% of the development.

Jim said:

Kyle, what percentages of advertising play into this? I have heard various numbers tossed around up to 80% of the development.

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The numbers I am quoting are for the research and development costs. Advertising is a separate discussion. I have heard too many numbers to be sure. One thing though, in the 10 years that I was a rep, I sold about a dozen drugs. Of those drugs, Abilify and Zyrtec were the only two that had any advertising.

Over the time that I was a rep, access to doctors and clinics was severely restricted. There is a big push on who is going to educate doctors, clinics, government, pharmacists, drug companies, etc. I had several offices that were entirely closed. In many cases advertising is the only way to get information to the doctors. If you want to restrict or eliminate advertising, how then do drug companies get information out.

I think back to a call I received from a doctor that worked at a facility where drug reps were banned. He could get financially penalized for talking with me. He wanted to learn about the drug that I was selling. We met at a Starbucks at 6AM that was no where near he worked. We talked about a patient that he put on my company'new drug. When I found out the patients history, I had to tell the doctor that I was surprised that the patient was still alive because the type of issue that patient was facing was contraindicated for the drug.

Some advertising is bad but there is a need for it.

Jim said:

Kyle, what percentages of advertising play into this? I have heard various numbers tossed around up to 80% of the development.

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Not sure about 80%, but generally companies spend more on advertising than they do on r&d.

https://www.washingtonpost.com/news...spending-far-more-on-marketing-than-research/

Models have shifted recently away from r&d. They'd rather have academics do the research on the NIH dime than do it themselves.

Kyle, I do not believe that a 30 second commercial is a viable way to educate anyone but the consumer.
Not sure what the answer is other than a comprehensive continuing education for the Drs. .. But what you describe is terrible.

kwk285 said:

I think back to a call I received from a doctor that worked at a facility where drug reps were banned. He could get financially penalized for talking with me. He wanted to learn about the drug that I was selling.

Some advertising is bad but there is a need for it.

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At my hospital pharma reps are banned (but orthopedic device reps are everywhere). If we want to get a presentation by the rep, they usually have a dinner meeting with us. We are in no way banned from speaking with drug reps, they just are not allowed in our public hospital.

diverdoug said:

At my hospital pharma reps are banned (but orthopedic device reps are everywhere). If we want to get a presentation by the rep, they usually have a dinner meeting with us. We are in no way banned from speaking with drug reps, they just are not allowed in our public hospital.

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When I was a hospital rep, I had 10 hospitals. 5 banned reps on site and 3 banned their doctors from attending speaker programs.

When I did a speaker program I was lucky to get 5 doctors to attend. Considering the cost benefit I got from them, it was a complete waste of money. I viewed them as a complete waste.

Things like this were one of the many reasons I quite being a drug rep and moved of the the distribution side with independent pharmacies.

My personal experience as a professional television watcher indicates the following-

50% of air time is devoted to ads for pharmaceuticals. The remaining 50% is devoted to law firms dedicated to suing on behalf of those who purchased the aforementioned pharmaceuticals.

ouch said:

My personal experience as a professional television watcher indicates the following-

50% of air time is devoted to ads for pharmaceuticals. The remaining 50% is devoted to law firms dedicated to suing on behalf of those who purchased the aforementioned pharmaceuticals.

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Look at the ads. There are a few disease states that are focused on.