Medicare price controls- there are consequences

[Threegoofs]

Just wanted to drop this here.

I agree with the Medicare price negotiation that was passed this year- it’s pretty measured and not going to tank the pharma industry- it will just restrict growth over the next decades.

But I hear lots of cheerleading about it, with seemingly no recognition of the consequences and negatives of its implementation. In fact, there’s a broad denial among progressives that there is ANY downside, whereas the Conservatives on the site are pretty much silent (mostly because the bulk remaining here are just idiot trumpsters).

The below article illustrates the consequences. Drug development, especially the riskier, more highly priced compounds for more uncommon diseases and, especially, cancer, will be curtailed. It’s happening right now- years before the law will have an impact, because in the pharma industry, one needs to think 5-10 years down the road.

You won’t ever notice the drugs that aren’t developed to cure your disease. You won’t even know it was potentially an option, because the studies were stopped and the promising compound was shelved. So you can pretend there’s no effect of the law allowing price negotiations.

You also might think it’s a decent trade off- lower health care costs may be worth the stifling of innovation. I tend to agree with this even though my entire career has been devoted to developing medicines.

I’m curious to know how many people knew this was a consequence, and how many weee totally unaware? Because in all the discussion about this, I have never heard this brought up much.

https://www.fiercebiotech.com/biotech/bristol-myers-already-reassessing-portfolio-wake-ira-ceo-tells-ft

 

[Bok Tuklo]

That is a lot of vague.

 

[Mycroft]

Just wanted to drop this here.

I agree with the Medicare price negotiation that was passed this year- it’s pretty measured and not going to tank the pharma industry- it will just restrict growth over the next decades.

But I hear lots of cheerleading about it, with seemingly no recognition of the consequences and negatives of its implementation. In fact, there’s a broad denial among progressives that there is ANY downside, whereas the Conservatives on the site are pretty much silent (mostly because the bulk remaining here are just idiot trumpsters).

The below article illustrates the consequences. Drug development, especially the riskier, more highly priced compounds for more uncommon diseases and, especially, cancer, will be curtailed. It’s happening right now- years before the law will have an impact, because in the pharma industry, one needs to think 5-10 years down the road.

You won’t ever notice the drugs that aren’t developed to cure your disease. You won’t even know it was potentially an option, because the studies were stopped and the promising compound was shelved. So you can pretend there’s no effect of the law allowing price negotiations.

You also might think it’s a decent trade off- lower health care costs may be worth the stifling of innovation. I tend to agree with this even though my entire career has been devoted to developing medicines.

I’m curious to know how many people knew this was a consequence, and how many weee totally unaware? Because in all the discussion about this, I have never heard this brought up much.

https://www.fiercebiotech.com/biotech/bristol-myers-already-reassessing-portfolio-wake-ira-ceo-tells-ft

You characterize this as "Medicare price negotiation", but your article characterizes this as a law that sets prices...in other words, price fixing.

I have no problem with Medicare negotiating prices. Negotiations are a part of business and any agreement that is the result is presumably something that all parties can live with.

But this wasn't a negotiation. Congress passed a law fixing prices at a level that Congress set.

Price fixing is always a bad thing.

 

[ttwtt78640]

That is a lot of vague.

True, but it makes sense. Profits from existing product sales are used to fund R&D efforts for future products. If one sold their (existing) products closer to their cost of production (regardless of the reason for doing so), that would reduce their funds available to conduct R&D for future products.

 

[Bok Tuklo]

True, but it makes sense. Profits from existing product sales are used to fund R&D efforts for future products. If one sold their (existing) products closer to their cost of production (regardless of the reason for doing so), that would reduce their funds available to conduct R&D for future products.

I am less than convinced that raising the price of insulin to obscene levels is necessary to insure continued pharmaceutical research. At drug companies, anyway. Colleges and universities will continue regardless.

 

[ColdHardTruth]

You characterize this as "Medicare price negotiation", but your article characterizes this as a law that sets prices...in other words, price fixing.

I have no problem with Medicare negotiating prices. Negotiations are a part of business and any agreement that is the result is presumably something that all parties can live with.

But this wasn't a negotiation. Congress passed a law fixing prices at a level that Congress set.

Price fixing is always a bad thing.

Big Pharma's greed was a bad thing.

Remember when pharma-bro raised the price of an antiviral for HIV by 5000%?

Pharma's greed has long been out of control and many people have died because of it.

 

[TheParser]

I’m curious to know how many people knew this was a consequence, and how many weee totally unaware?

Now that you mentioned it, I do faintly remember reading that it takes a lot of money to develop new medicines and a lot of time.

And I think that some people say that Big Pharma just uses that excuse to oppose lower prices for consumers.

I guess the truth is somewhere in-between.

 

[ttwtt78640]

I am less than convinced that raising the price of insulin to obscene levels is necessary to insure continued pharmaceutical research. At drug companies, anyway. Colleges and universities will continue regardless.

Raising profit margins to “obscene levels” should be addressed, but that shouldn’t be limited to (targeted at?) any particular product or industry. Generally, when Medicare (or any monopoly) says that they are ‘negotiating’ prices they are actually ‘setting a limit on’ prices.

 

[CimpleMan]

IDK, wouldn't big pharma companies still need to bring new products to the market as patents run out?

If there's a shortfall in R&D couldn't we use some of the savings to encourage R&D?

Don't doubt there could be reduction in R&D to compensate for lost profits, just not sure how significant it would be.

 

[Mr Person]

I'd imagine Pharma companies would be perceived better if there weren't so many instances of bad actors manipulating prices for their own game. "Pharma Bro" and his Daraprim, Vioxx crap, recent insulin manipulation as @Bok_Tukalo notes.

Then even the well-intentioned pricing is muddied by the profit motive. They're also for-profit companies and their shareholders naturally put themselves before overall society.

There's also the question of just how much existing patients who need a given drug should be subsidizing what seems to generally (but not exclusively) be research aimed at smaller and smaller groups of treatment-failure patients. I don't have an answer on this front.



Yes, they absolutely do use revenue to fund future research. But there are profits. There are bad actors. And I daresay much of the world is basically piggy-backing off companies that want to sell in the U.S. market and thus have to comply with FDA's rigors. Profit tends to be a great motivator. Trouble is it motivates bad along with good.

Could another approach do it better? I suspect it'd have been done better if it could have been. But as with everything driven by profit-motive, regulation and the like is needed to counter excess.

 

[Threegoofs]

IDK, wouldn't big pharma companies still need to bring new products to the market as patents run out?

If there's a shortfall in R&D couldn't we use some of the savings to encourage R&D?

Don't doubt there could be reduction in R&D to compensate for lost profits, just not sure how significant would be.

Yes, but the number of products in development will be smaller.

The question is how significant it will be. But I guarantee it will be very significant for the person who has a life threatening illness that cant be treated because the drug that would have worked never got developed. And those people will absolutely exist in the future. I just hope its not you or me.

 

[CimpleMan]

Yes, but the number of products in development will be smaller.

The question is how significant it will be. But I guarantee it will be very significant for the person who has a life threatening illness that cant be treated because the drug that would have worked never got developed. And those people will absolutely exist in the future. I just hope its not you or me.

Can't vouch how accurate this article is or if it has a lean.

Five things to understand about pharmaceutical R&D

In a new blog post, Richard G. Frank and Kathleen Hannick identify five important things to know about pharmaceutical research and development (R&D) and its relationships to drug prices and revenues.

www.brookings.edu

 

[Schism]

I believe life saving drugs should be separated from convenience drugs in regulation, pricing, and R&D.

Big Pharma has become a consumer driven market through advertising not much different than the cosmetics and cosmetic surgery industries. Patients now go to their doctors and demand specific drugs for whatever causes them inconvenience, irritation, or just vain glory.

Everyone wants to look ageless, not be bothered by common ailments, and want to live forever. But the side effects from pharmaceuticals far outweigh the benefits in many circumstances. That's a choice for people willing to pay.

I could care less if people want to pay obscene amounts of money for convenience drugs. Medicines like insulin, antibiotics, blood coagulants and thinners, and the like should be available at or near cost.

 

[ttwtt78640]

I believe life saving drugs should be separated from convenience drugs in regulation, pricing, and R&D.

Big Pharma has become a consumer driven market through advertising not much different than the cosmetics and cosmetic surgery industries. Patients now go to their doctors and demand specific drugs for whatever causes them inconvenience, irritation, or just vain glory.

Everyone wants to look ageless, not be bothered by common ailments, and want to live forever. But the side effects from pharmaceuticals far outweigh the benefits in many circumstances. That's a choice for people willing to pay.

I could care less if people want to pay obscene amounts of money for convenience drugs. Medicines like insulin, antibiotics, blood coagulants and thinners, and the like should be available at or near cost.

That would seem to encourage the development of (more profitable) “convenience drugs” and discourage the development of (less profitable) “life saving (sustaining?) drugs”.

 

[Schism]

That would seem to encourage the development of (more profitable) “convenience drugs” and discourage the development of (less profitable) “life saving (sustaining?) drugs”.

I doubt it. Universities and institutes will always be in the life-saving game. They could potentially contract anyone to actually manufacture the product.

All I'm saying is that Pharma companies, as corporate entities, have moved to a more consumer driven model, like cosmetic companies.

 

[ttwtt78640]

I doubt it. Universities and institutes will always be in the life-saving game. They could potentially contract anyone to actually manufacture the product.

All I'm saying is that Pharma companies, as corporate entities, have moved to a more consumer driven model, like cosmetic companies.

If that (bolded above) was actually true then what’s the problem?

 

[Schism]

If that (bolded above) was actually true then what’s the problem?

The only problem I see is confusing and blurring the lines between life saving drugs and convenience medicines.

Some manufacturers produce food, others make candy. Consumers should be able to buy what they want.

Patients should not be held hostage by candy manufacturers pricing or the demand caused by life threatening conditions. Both the rich and the poor should have access to insulin at or near cost. The manufacturers are free to price their paint jobs and kitchen remodels at the market rate.

 

[Slartibartfast]

I believe life saving drugs should be separated from convenience drugs in regulation, pricing, and R&D.

Big Pharma has become a consumer driven market through advertising not much different than the cosmetics and cosmetic surgery industries. Patients now go to their doctors and demand specific drugs for whatever causes them inconvenience, irritation, or just vain glory.

Everyone wants to look ageless, not be bothered by common ailments, and want to live forever. But the side effects from pharmaceuticals far outweigh the benefits in many circumstances. That's a choice for people willing to pay.

I could care less if people want to pay obscene amounts of money for convenience drugs. Medicines like insulin, antibiotics, blood coagulants and thinners, and the like should be available at or near cost.

That was actually something reasonable coming from you. Good job.

 

[Checkerboard Strangler]

Colleges and universities will continue regardless.

Most pharma R&D is funded by universities.

 

[Threegoofs]

I doubt it. Universities and institutes will always be in the life-saving game. They could potentially contract anyone to actually manufacture the product.

All I'm saying is that Pharma companies, as corporate entities, have moved to a more consumer driven model, like cosmetic companies.

Universities cannot develop drugs.

They just don’t. Period.

They can discover them, they can participate in the research, but they can’t develop a drug to get approved.

 

[Threegoofs]

Most pharma R&D is funded by universities.

Not even remotely true.

The opposite is actually true for many researchers- much of their funding comes from pharma.

 

[Threegoofs]

I'd imagine Pharma companies would be perceived better if there weren't so many instances of bad actors manipulating prices for their own game. "Pharma Bro" and his Daraprim, Vioxx crap, recent insulin manipulation as @Bok_Tukalo notes.

Then even the well-intentioned pricing is muddied by the profit motive. They're also for-profit companies and their shareholders naturally put themselves before overall society.

There's also the question of just how much existing patients who need a given drug should be subsidizing what seems to generally (but not exclusively) be research aimed at smaller and smaller groups of treatment-failure patients. I don't have an answer on this front.



Yes, they absolutely do use revenue to fund future research. But there are profits. There are bad actors. And I daresay much of the world is basically piggy-backing off companies that want to sell in the U.S. market and thus have to comply with FDA's rigors. Profit tends to be a great motivator. Trouble is it motivates bad along with good.

Could another approach do it better? I suspect it'd have been done better if it could have been. But as with everything driven by profit-motive, regulation and the like is needed to counter excess.

The Daraprim fiasco isn’t a pharma thing- the company he ran did little to no R&D. Not sure what you mean by ‘Vioxx crap’, but that was a safety issue which had little to do with the topic. Insulin prices aren’t manipulated- companies have invented better insulins and charge for it, but the insulin that is safe and effective that was cutting edge 25 years ago is still available for $25/vial

 

[Schism]

Universities cannot develop drugs.

They just don’t. Period.

They can discover them, they can participate in the research, but they can’t develop a drug to get approved.

Certainly that could change. There's also a path to non-profit R&D for the betterment of humanity.

Similar to what Gates and others purport to be in favor of.

 

[BirdinHand]

Big pharma has been gobbling up the products of little R&D labs for decades. And they kick money to smaller CROs and universities from time to time - but nothing substantial.

In all actuality, they don’t do much NEW drug research at the big pharma companies. They buy R&D company work and they keep their big money makers on patent. And they manufacture already discovered drugs. No more, no less.


Take Xarelto as an example. If they can come up with a “new” use for Xarelto, they can keep Xarelto a “brand name” drug and not have to allow generic manufactures to compete.

Take a little gander at this history for just that drug.

Xarelto (rivaroxaban) FDA Approval History - Drugs.com

FDA approval history for Xarelto (rivaroxaban) used to treat Deep Vein Thrombosis Prophylaxis after Knee Replacement Surgery, Deep Vein Thrombosis Prophylaxis after Hip Replacement Surgery, Prevention of Thromboembolism in Atrial Fibrillation, Coronary Artery Disease, Peripheral Arterial...

www.drugs.com

This helps explain what I’ve described a bit better:

Drug Patents: Essential Guide to Pharmaceutical Patent Protection

Learn how pharmaceutical patents protect innovation, extend market exclusivity, and impact drug affordability. Explore strategies, timelines, and legal essentials.

www.upcounsel.com

And

Do large pharma companies provide drug development innovation? Our analysis says no

Large pharmaceutical companies say that legislation in Congress to lower the cost of prescription drugs will hinder innovation. But our analysis shows they don't do much innovation.

www.statnews.com

 

[Threegoofs]

Certainly that could change. There's also a path to non-profit R&D for the betterment of humanity.

Similar to what Gates and others purport to be in favor of.

No- it really can’t.

The amount of infrastructure needed is not what universities do.

Who’s going to choose the compound to pursue? Who’s going to set up snd perform the needed MOA, PK snd PD studies? Who coordinates Phase 1? How do you know if you go to phase 2 or 3? Who is the regular liaison with the FDA on all these matters to make sure your submission fufills their requirements? Who prepares the multiple filings? And who pays for it all? It takes about a billion dollars to get from compound to market. And most drugs will fail at some point.

If you do all that, you end up with a company that has ‘university’ in its name.