The Suddenly $750 Pill

Races for the Senate, U.S. House, etc. and other issues of national importance.
pjbogart
Forum God/Goddess
Posts: 7204
Joined: Thu Sep 04, 2003 4:57 pm

The Suddenly $750 Pill

Postby pjbogart » Tue Sep 22, 2015 8:39 am

As I'm sure most people on earth are now aware, a drug company purchased the exclusive rights to a 62 year-old drug and raised the price 5000% overnight to a staggering $750/pill from less than $15. Obviously, there's pressure on the company to reconsider the price change, but perhaps we need a bit more than that when we're talking about the exclusive right to sell a necessary drug that has no suitable alternatives. Free market be damned, this isn't a widget you can go without.

As a result of the scandalous headlines, Hillary Clinton vowed to fight price gouging by pharmaceutical companies and the mere statement of her intent sent industry stock prices reeling. Now she's saying that there should be new limits under the ACA that force insurers to limit patients' out-of-pocket monthly expenses to $250. But is that really a solution? It doesn't really address price-gouging, it simply shifts the financial burden of the gouging from the individual consumer to insurance policy holders as a group. There is suggestion that government agencies like Medicare would also receive the right to negotiate for lower prices, and that's a good thing, but still does nothing to curb price-gouging.

So what's to be done about pharmaceutical companies and the unreasonable leverage they have to extort exorbitant prices from insurers and patients? Free market Republicans (which would be all of them) pretty much have their hands tied and even if they wanted changes, "tweaking" the ACA is politically untenable. How do you limit price-gouging without invoking complaints about the heavy hand of big government? For companies that receive government aid or contracts, limiting prices could be tied to actual production costs (at the expense of R&D), limiting marketing expenses to a percentage of R&D (I think that's reasonable), but for companies that don't receive government assistance you're on pretty shaky ground as to the constitutionality of any governmental price-fixing.

I'm very curious to see how this all plays out, assuming that it's more than a blip on the radar.

gargantua
Forum God/Goddess
Posts: 8143
Joined: Sat Apr 13, 2002 1:30 pm
Location: Madison

Re: The Suddenly $750 Pill

Postby gargantua » Tue Sep 22, 2015 10:09 am

I wish I had an answer. I recall from the oil price gouging days in the late 70's that there was talk of an excess profits tax.
So even if government can't limit prices, it can sure as hell tax the profits at whatever level may disincentivize unreasonable pricing.

Galoot
Forum God/Goddess
Posts: 1544
Joined: Thu Jun 14, 2001 1:10 pm
Contact:

Re: The Suddenly $750 Pill

Postby Galoot » Tue Sep 22, 2015 11:02 am

How can this be "exclusive rights" to manufacture a pill that has been around for 62 years? All patents are expired on it. Why can't some other company step in and make the same drug?

cloudy
Forum Addict
Posts: 191
Joined: Fri Jul 25, 2008 3:01 pm
Contact:

Re: The Suddenly $750 Pill

Postby cloudy » Tue Sep 22, 2015 11:26 am

Nationalize the pharmaceutical industry.

Roy
Forum God/Goddess
Posts: 5919
Joined: Sun Jul 17, 2005 11:31 pm

Re: The Suddenly $750 Pill

Postby Roy » Tue Sep 22, 2015 11:27 am

cloudy wrote:Nationalize the pharmaceutical industry.


There ya go. Nothing like true Socialism to fix the economy.
[/sarc]

rabble
Forum God/Goddess
Posts: 9601
Joined: Tue Jun 10, 2008 7:50 pm

Re: The Suddenly $750 Pill

Postby rabble » Tue Sep 22, 2015 11:34 am

Sandi wrote:
cloudy wrote:Nationalize the pharmaceutical industry.


There ya go. Nothing like true Socialism to fix the economy.
[/sarc]

We must not react to the problem. Trying to solve it in any way will release the attack demons from the Socialist Hell, and they will kill us all!

Authoritarians, unite! Save us all from fair prices!

Bland
Forum God/Goddess
Posts: 2152
Joined: Wed Sep 03, 2008 1:46 am

Re: The Suddenly $750 Pill

Postby Bland » Tue Sep 22, 2015 11:40 am

Sandi wrote:
cloudy wrote:Nationalize the pharmaceutical industry.


There ya go. Nothing like true Socialism to fix the economy.
[/sarc]

Nothing like a selfish asshole to add nothing to a conversation.

snoqueen
Forum God/Goddess
Posts: 14475
Joined: Fri Feb 14, 2003 10:42 pm

Re: The Suddenly $750 Pill

Postby snoqueen » Tue Sep 22, 2015 11:48 am

Galoot wrote:How can this be "exclusive rights" to manufacture a pill that has been around for 62 years? All patents are expired on it. Why can't some other company step in and make the same drug?


Somewhere in the answer to that question might be the solution to the immediate problem of this drug. But the larger question is where does society draw the line between the mandate of a corporation to make money for its shareholders (or the right of a privately held company to be run as its owners and board see fit) and the need for society in general to have healthy, able citizens who can participate as fully as possible? If people are sick and unable to contribute, in time overall prosperity decreases. For that reason, limiting optimal health to fewer and fewer citizens is counterproductive and will ultimately make the nation as a whole less competitive in international terms.

This is not, then, a trivial or even minor issue.

Ideally, in an environment without competition for this drug, shareholders would take their money elsewhere and cut down the company's ability to compete for financial support. We all know that'll never happen in this time of not only personal greed but diluted scrutiny where most investors are not individuals but mutual funds, retirement funds, and the like.

rabble
Forum God/Goddess
Posts: 9601
Joined: Tue Jun 10, 2008 7:50 pm

Re: The Suddenly $750 Pill

Postby rabble » Tue Sep 22, 2015 12:20 pm

Bland wrote:
Sandi wrote:
cloudy wrote:Nationalize the pharmaceutical industry.


There ya go. Nothing like true Socialism to fix the economy.
[/sarc]

Nothing like a selfish asshole to add nothing to a conversation.

I respectfully disagree. Sandi has made it known that a segment of the population would rather pay 750 dollars a pill (more specifically, believe they will never need that pill and therefore don't give a damn about those who do) than be associated with anything that can be connected, in any form or context, to the word "social."

This adds to the total sum of knowledge produced by the conversation and gives us a standard, a reference point we can use to gauge the difficulty of the problem and a bit of insight into the necessary tactics to combat it.

In this case, "really fucking difficult" and "drag em over by their feet kicking and screaming."

pjbogart
Forum God/Goddess
Posts: 7204
Joined: Thu Sep 04, 2003 4:57 pm

Re: The Suddenly $750 Pill

Postby pjbogart » Tue Sep 22, 2015 1:36 pm

Galoot wrote:How can this be "exclusive rights" to manufacture a pill that has been around for 62 years? All patents are expired on it. Why can't some other company step in and make the same drug?


I can't tell you the history or specifics of this particular drug, but pharmaceutical companies have a stable full of methods for extending patents. Minor tweaks in formula, perhaps switching from a twice-a-day to once-a-day extended release, new testing to establish different illnesses the drug might treat, etc. And it might just be that no other manufacturers are bothering with this drug (which would certainly change if the margins are high enough).

I agree, it makes no sense that a 62 year-old drug still has patent protection, and maybe it doesn't. Maybe all that's left is the copyrighted name. There's no enforceable patent protection for ibuprofen, but you can't call your ibuprofen "Advil".

But regardless of the specifics in this case, the broader question still remains: what power does the federal government have to limit price-gouging by pharmaceutical companies? We aren't talking about Swiffers or Oxyclean here, we're talking about drugs necessary to save people's lives. I don't think anyone begrudges a company's right to recoup their R&D and make a profit as well, but there's presumably some line that shouldn't be crossed. In the case of the $750 pill, the company selling it didn't spend anything on R&D, so that rationale flies out the window quickly. But even with brand new, life-saving drugs it seems like there's some limit to how much a company can enrich itself above and beyond recouping the costs of R&D and getting the drug to market.

If I invented a drug that cured ebola or skin cancer in 90% of patients, how much could I ethically charge for it? Does everyone who can't afford my price have to die until the patent expires? The question really goes beyond politics. Even "human decency" doesn't quite do it justice because we're talking about life and death and a whole lot of suffering inbetween.

Galoot
Forum God/Goddess
Posts: 1544
Joined: Thu Jun 14, 2001 1:10 pm
Contact:

Re: The Suddenly $750 Pill

Postby Galoot » Tue Sep 22, 2015 2:47 pm

I'm not certain, but stories I read about this shit-headed guy say that he makes it a practice to buy "patent expired" drug companies or drugs, so I tend to think the patent really is expired.

And PJ and Sno are of course right--the problem needs to be addressed in general, and my idea of just putting out a request for bid, to have this drug manufactured cheaply, might draw attention away from this very important question.

I think price-gouging laws are reasonable. I'm trying to recall the specific situation, some natural disaster or some such, but people who hoarded supplies and then gouged on price where smacked down by legal means.

Henry Vilas
Forum God/Goddess
Posts: 24969
Joined: Wed Sep 04, 2002 8:57 pm
Location: Name sez it all
Contact:

Re: The Suddenly $750 Pill

Postby Henry Vilas » Tue Sep 22, 2015 2:54 pm

Price gouging laws tend to be very limited in scope.

donges
Forum God/Goddess
Posts: 1550
Joined: Fri Aug 31, 2001 1:03 pm
Location: between the lines...
Contact:

Re: The Suddenly $750 Pill

Postby donges » Tue Sep 22, 2015 3:46 pm

From what I have read, this assholes company locks down distribution of the drug so that it is very difficult for competitors to obtain it so as to figure out the formula and create a generic equivalent.
And nobody copied it before he purchased it since the price was then fairly reasonable and the actual number of prescribed uses was relatively small (less than 20,000 per year if I remember correctly).

pjbogart
Forum God/Goddess
Posts: 7204
Joined: Thu Sep 04, 2003 4:57 pm

Re: The Suddenly $750 Pill

Postby pjbogart » Tue Sep 22, 2015 5:42 pm

donges wrote:From what I have read, this assholes company locks down distribution of the drug so that it is very difficult for competitors to obtain it so as to figure out the formula and create a generic equivalent.
And nobody copied it before he purchased it since the price was then fairly reasonable and the actual number of prescribed uses was relatively small (less than 20,000 per year if I remember correctly).


As far as I know you don't need to reverse engineer anything once the patent has expired. You can just go look at the expired patent to get the formula.

grumpybear
Forum Addict
Posts: 123
Joined: Tue Nov 06, 2012 1:05 am
Location: near east side
Contact:

Re: The Suddenly $750 Pill

Postby grumpybear » Tue Sep 22, 2015 7:19 pm

Capitalism sucks some time. This guy is a prime example.
While it may not be completely ethical, I think we should have the IRS investigate. He is an ex-hedge fund mogul. I would rather use a little vigilante justice to remove an obvious asshole than change the law that might work well in other circumstances. I'm not being facetious. This is an extreme asshole move. He might need to be treated with methods outside the normal channels.
Flame away.


Return to “National Politics & Government”

Who is online

Users browsing this forum: No registered users and 6 guests