Originally published at: https://boingboing.net/2017/12/21/strongbridge-biopharma.html
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But I thought the free market was the best health system ever and government is the cause of all inefficiency!?
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That sounds absolutely Shkrelic!
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I don’t know how hard it would be to set up, but it really seems like the US government might want to manufacture some of its own drugs. Maybe I just have no concept of how much it costs to set up an appropriately equipped and certified chem lab, but how many times does medicaid/medicare have to pay 100k for a drug before it’s cheaper to just make it for themselves?
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You’re forgetting the high cost of research…
Researching CEO bonuses
Researching stock buybacks
Researching private jets
Researching political donations
Researching offshore account locations
The costs go on and on.
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The other drug for glaucoma?
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My observational research indicates that marijuana is more likely to cause periodic paralysis than treat it.
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Even if they were doing it out of grandmotherly kindness, it seems like the salient message here is that the system is fucked up operationally. If it costs me $500k to keep a production line open, even if only 5 people need the drug, then that money has to come from somewhere. In a system that essentially blames each individual for their medical costs, that’s going to lead to someone paying crazy prices.
The US model accepts the logic that healthcare costs must be collectivised – which is why you have insurers – but it simultaneously rejects the exact same logic when it implies sharing all costs over the whole population. So you end up with scenarios like, using the example above, I charge 4 patients $0, and then charge the fifth patient’s insurer $500k, which they pass on to their other customers. That doesn’t make sense to a socialist, a Reaganomist, or anyone else; it’s just a broken system, even without predatory behavior.
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Let’s try to unwind the hype here.
This drug was introduced to treat glaucoma. It did a good job. It grew in popularity and the price came down. This is as expected, right? Then other drugs came along that did a better job–treated better, fewer side effects, less severe side effects, etc.–and the use of this drug went down. Because of that, the price went up (there are fixed costs in manufacturing). We good so far?
Eventually, the volume of the drug used in the USA dropped so low that it made no sense to make it here–it was being used elsewhere where it might have still been cheap enough that it competed with the newer medications. But was not used in the USA because better drugs were available even if they were more expenseive. Because, better treatments are worth it even if they cost more, right?
Later, the drug was found to be effective on a very rare condition. At this point, there is no manufacturing of the drug in the USA–any manufacturing has moved abroad. So, anyone who needs in in the USA has to import it. That process will be dependent on the ability of the USA and the manufacturing country to have trade agreements (or at least not import bans, crazy high tarrifs, etc.). So, there may be periods where the drug simply isn’t available in the USA. The price varies a ton as does availability. With me so far?
Now, finally, we have a company which started up manufacturing for the drug in the USA. This has the benefit of ensuring a safe supply of the medication to those who may ened it. The down side is that this drug is used in such small volume that the fixed costs of manufacturing–qualifying the manufacturing facility to Good Manufacturing Practices, employing knowledgable staff, inspections, regulatory compliance, etc.–make the price very high.
Those who need it and don’t have insurance are getting it for free. Those who do have insurance get the drug and the insurance companies pay all the cost. That’s what we want, right? Everyone who needs it get it and those who can pay do.
Sure, the article would like us to believe that the company who makes it can still make it for the low cost that it could back when it was in its heyday, but that’s not the case anymore. Replace ‘drug’ with ‘buggywhip’ and arguement loses a certain degree of rage, doesn’t it?
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Yep. Not to mention, the cost of researching how much lobby $$$$ should be directed to whom.
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When empirical data is so worth the trouble.
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I’m generally with you on this, but you also have to look at each drug on a case-by-case basis not just as broad price shifts from supply and demand. I’d love to know the ACTUAL production costs. You’ve listed the reasons that production costs are high, but how high are they in practice? If someone really was selling it for $0.50 / dose at some point in the past that’s around 6 orders of magnitude different and I doubt the difference in patient count is the same order. Now that assumes that the numbers rattled off in the summary are actually correct and comparable (how many doses in a year? listing the numbers implies 1 and that seems unlikely) and this site isn’t always great about that sort of thing.
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I can assure you that in the absence of FDA regulation, you would be able to buy dichlorphenamide or perhaps more accurately “dichlorphenamide(?)” for a lot less than this, perhaps from some dodgy source in China or India. Not that that wouldn’t have other problems.
There’s definitely a failure of capitalism here, but the market for pharma in general is hardly free enough for the ‘free market’ per se to be at fault.
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Nah man, the free market drug thing is actually genius: That way people could buy their drugs from places with better regulations at “free market” prices.
sigh
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I’d say drug production and sourcing is a matter of national security.
So, I’d say ideally, the government (which pays vast amounts of money to fund R&D of these drugs anyway) should either do the manufacturing of most of them, or simply set price caps for everyone.
And if pharma companies don’t like that, then the government has every right to decertify them and put a clamp on their balls until such a point as they feel like obeying.
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Data on the periodic paralysis is hard to find. One source says 1 in 100K, but says data is unreliable. Generally that means it’s less than that figure. Glaucoma is much more common. The figure I saw was 2M in the USA alone. Approximating 350M people in the USA gives a rate of 571 per 100K. More data shows the company who makes it thinks that it may effect 5000 people in the USA–which is higher than than the 1 in 100K rate–for a rate of 1.43 per 100K. That link also talks about how it’s being produced as an Orphan Drug which puts limits on the company producing it–mostly in that they are required to keep producing it for a specified time. So, they’re on the hook to make it from 2015 until 2022. The flip side is the exclusivity and the resulting price control. Blame the FDA and Congress if you don’t like that.
I can’t find any dosing information for glaucoma vs this paralysis condition. So, I don’t know if you need to take it every day or just when symptoms occur, etc. nor can I find out how much you need to take. Both of those could easily add a factor of 100 in either direction. Sorry, I can’t find enough data to solidly address your concerns.
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Hold on. I get every point you are making here; however, simplify this down.
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used to be free - now costs $109,500/year
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That is some outrageous inflation there regardless of the hoops you have to jump through to come to any “logical” conclusion. The reality is this is a drug that most likely can be produced far below that obscene amount.
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That already happens to some extent: Strategic National Stockpile
Some drugs are developed that way. It’s not all that common, though. When it does happen and a pharma company starts making it and everyone flips their lids about it, they forget the fact that drug discovery is only one small portion of getting a drug to market. The largest portions are manufacturing (oh, gee, you made a few thousandth of a gram in a lab for 10K, now go make a hundred kilos for 10K), testing, packaging, regulatory compliance, distribution, etc.
Not all drugs ‘found’ by government funding and developed by pharma companies ever make it to market, so they’re not some golden ticket to profit that some people would like us to believe.
That 109,500$/y figure is for those who end up paying for it. If you want to get a more accurate figure, look at how many people get it for free and divide. That said, I think there’s enough information here to say that their prices aren’t unreasonable.
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I think your version of the story leaves out the problems. It’s not like the drug is free, the drug is being paid for. It’s just no one is aware of what they are paying for it.
I find that in the US social programs often end up paying the rich instead of the poor. Like when Walmart taught their employees how to get food stamps. Food stamps were supposed to help people in need, not supplement the income of Walmart. This looks the same to me when it comes to the public funding being used to buy a heavily marked up drug.
I also worry when drug companies appear to be declaring war on insurance companies. People looking for healthcare don’t win in that fight.
If they are basically charging a reasonable price when you factor in that they are only charging some of the people, then maybe I’ll applaud them for implementing a reasonable end user fee structure for their drug within the environment. If they are marking it up 10,000% then its bad, even if the end user doesn’t pay directly.
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