Shkreli, Valeant and Drug Prices

LewisBraham

Worth a read: bloomberg.com/news/articles/2015-12-23/shkreli-wasn-t-the-first-to-hike-drug-prices-and-he-won-t-be-the-last
From the article:
"But while Shkreli is an outlier, mainstream pharmaceutical makers routinely raise prices 10 percent or more a year, much faster than inflation, for drugs aimed at cancer, diabetes, MS, and high cholesterol. Those more modest-seeming increases on widely consumed medications have a vastly greater effect on overall health-care spending than the abrupt inflation of Turing’s drug, used by only a couple thousand patients.

The steady jumps in brand-name drug prices make medicine far more expensive in the U.S. than it is in Canada, Europe, and most of the rest of the developed world, data compiled by Bloomberg and other organizations show. The drug industry has argued—and Shkreli had echoed—that it’s misleading to focus on list prices, because they don’t include discounts companies strike privately with insurers or patient giveaways.

A Dec. 18 Bloomberg News analysis, done with the assistance of research firms SSR Health and IHS, revealed that even when discounts are factored in, prices for top-selling drugs are significantly higher in the U.S. than abroad. The list price of Merck’s diabetes pill Januvia is cut in half on average by discounts, according to SSR Health data. Even so, Merck gets about $169 for a monthly supply of Januvia, more than twice as much as in Canada, the next most costly place to buy it. Drug companies set their own prices in the U.S.; in most developed countries, governments restrict what can be charged."

dicksonL

That's why when I travel abroad, I try to get some supplies of antibiotics( say amoxycylline), BP( atenolol), cold (coldarine), asthma (deryphylline) and diabetes medications and strips, pain killers etc, which may last me for quite some time, as tablets generally have 5 years life though indicated otherwise. Other biggest advantage is all these are OTC, so no need to get prescriptions and save on doctor visits

LewisBraham

@dicksonL From an economic perspective your strategy for dealing with exorbitant U.S. drug prices makes complete sense. Such medical tourism is becoming increasingly common. But there are other factors to consider. One is what recourse would you have if for instance the pharmaceuticals you purchased overseas happened to be tainted, impure, diluted or fake? Also, of course, not everyone is well enough or can afford to travel overseas to purchase medication. But there are definitely advantages to doing it. I also wonder how insurers react to such medical tourism. Some I think now cover it for procedures. Would they do it for drugs, too? For procedures there is the added problem of taking a sick person and transporting him or her to some strange country, away from family and friends and with perhaps little legal or medical recourse if something goes wrong. But I completely understand the rationale for doing so.

msf

I don't believe there is, nor do I expect there to be, a problem with dirt cheap, mass produced drugs like amoxicillin and atenolol. The drugs mentioned in the article cost at least double digits ($13.50, $20) per dose. In contrast, Costco sells 100 capsules of Amoxicillin (500mg) for less than that (twelve bucks), same price for atenolol (regardless of dosage, so if you really want to be cheap, split the pills).

Speaking of pill splitting, I only saw atenolol in 50mg and higher in Europe a couple of years ago (not that I was extensively checking out pharmacies). If you need 25mg, you could spend more on the needed pill splitter (for the 50mg tablets) than you would for the pills themselves.

Under the ACA, you get a "free" PCP visit (preventive care) annually. That should take care of getting prescriptions - many doctors will write maintenance drug prescriptions for a year's supply.

This is not to say that there aren't major problems with drug pricing. Manufacturers have more ability to manipulate prices when the demand isn't as high, since there will be fewer (if any) competitors.

They also play lots of games with patents. For example, look at Lumigan. While still on patent, Allergan retargeted it as a cosmetic, Latisse. More importantly, when it was going off patent last year, Allergan reformulated it at a lower concentration, receiving a new patent. (IMHO the patent is legitimate, and some people can benefit from the reformulation, but that doesn't mean most wouldn't have been able to use the older, now generic, version.)

Then there the types of games played by one of today's favorite whipping boys, Valent/Philidor. Originally offering drugs like Jublia at $0 "copay" (if you had commercial insurance, regardless of whether it covered the drug), I believe it is now offering it for $35 (instead of its list price of hundreds of dollars), still through Philidor.

Got a wart? You can buy salicylic acid OTC (e.g. Compound W), or you can buy a brand name, prescription drug like UltraSal ER, for hundreds of dollars (or $40 via a "special deal" like the Valent/Philidor stuff). As near as I can tell, the only difference is that the brand name is 2/3 more concentrated - sort of like Lumigan, only in reverse (more concentrated, rather than less). I guess Compound W is "the strongest you can buy without a prescription."

All designed to obfuscate and abuse the customer/patient.