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So, many key life saving drugs and medical devices the price keeps going up and up.

Below are the examples of EpiPens and insulin, but we have heard about it with other drugs. I am surprised insurance companies, the consumer protection bureau, health providers, and congress aren't pushing back more.

From the articles:

Mylan has upped EpiPen prices by 400 percent since it bought the decades-old device from Merck in 2007. The company says the moves are justified by “product improvements,” a line that presumably even they couldn’t possibly believe.

What makes this so worrisome is that the big three have simultaneously hiked their prices. From 2010 to 2015, the price of Lantus (made by Sanofi) went up by 168 percent; the price of Levemir (made by Novo Nordisk) rose by 169 percent; and the price of Humulin R U-500 (made by Eli Lilly) soared by 325 percent.

What is going on here?


http://www.nytimes.com/2016/08/24/us/politics/epipen-mylan-congress.html?_r=0

http://www.nytimes.com/2016/02/21/opinion/sunday/break-up-the-insulin-racket.html?_r=0

http://www.slate.com/blogs/moneybox/2016/08/24/the_price_of_yet_another_lifesaving_drug_has_been_skyrocketing.html

http://www.vox.com/2015/9/22/9366721/daraprim-price-shkreli-turing

I actually need epi-pens for my food allergies, so this is very close to home for me. And I'm not happy with how it is going.

Drug companies? Surely you must mean "Drug maffia"? Because I honestly think there is not much difference. IMO, the whole pharmaceutical industry should be nationalised.

 curran12 wrote:
I actually need epi-pens for my food allergies, so this is very close to home for me. And I'm not happy with how it is going.

But she wanted an eighteen million dollar raise, and isn't your life worth an extra house somewhere for someone else?

They do it because they can.

She, and the other two companies' CEOs that make the EpiPen and similar products, should share a cell with Shkreli for price gouging.



I have looked at the face of evil, and it wears shiny, Butterscotch chapstick.

I find this a bit odd... I tried looking into the price catalogue and I'm not seeing any major cost increases.

EpiPens has always been expensive and the insurance companies/government generally provides the consumer some subsidies benefit.

Keep in mind, that many manufacturers TRIED to make competing EpiPen products w/o replicating the patents.

Epi is a really unstable product and the EpiPen manufacturers nailed the delivery method.

Plus, Obamacare slapped an additional tax on it as it's considered a "medical device'.

Interestingly, that Mylan CEO Heather Bresch is the daughter of a Democratic senator, Joe Manchin of West Virginia... so we'll see how long this outrage lasts.

EDIT: I just looked at the insulins... and yup, they're going up. Not sure how to explain that one... and sure does look to be some price gouging.

 Iron_Captain wrote:
Drug companies? Surely you must mean "Drug maffia"? Because I honestly think there is not much difference. IMO, the whole pharmaceutical industry should be nationalised.

You want the industry nationalized? Those wonderful Soviet-era nationalized industries sure were picture of efficiency and innovation, right? How about all those nationalized companies operating down in Venezuela? Can you say failed country? That's not the answer. The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

Here's a nice roundtable discussion I saw this morning on the matter. Enlightening.

http://www.msn.com/en-us/money/companies/after-mylan-uproar-a-generic-epipen-could-hit-the-market-in-2017/ar-BBw3Ebu?li=BBnbfcN&ocid=ASUDHP

 BigWaaagh wrote:

 Iron_Captain wrote:
Drug companies? Surely you must mean "Drug maffia"? Because I honestly think there is not much difference. IMO, the whole pharmaceutical industry should be nationalised.

You want the industry nationalized? Those wonderful Soviet-era nationalized industries sure were picture of efficiency and innovation, right? How about all those nationalized companies operating down in Venezuela? Can you say failed country? That's not the answer. The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

Soviet industry defeated Nazi Germany, gave the US a big scare during the space race and produced submarine technology that wasn't matched until decades later. *shrug*

The "free market" is inherently less efficient because it must siphon money away as profit. Private companies are a very bad idea for anything that matters because their goal is never to cure disease, provide housing or feed people. The goal is always to maximise profit. Quality, laws and dignity are secondary concerns, if they are concerns at all and not viewed as obstacles to profit. Clearly both approaches can be done by people who are competent and incompetent alike but on paper the profit-driven system has the obvious and massive drawback of not just leaking money but being only about money.

Take a look at train infrastructure in the UK.

 BigWaaagh wrote:
The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

I fail to see how crony capitalism or red tape created this situation.

The problem with the free market in medicine is one cannot "vote with their wallet", so to speak, when the choice is pay up or die.

That is why insulin is used as an example of extreme price inelasticity in basic economics classes.

 whembly wrote:
Plus, Obamacare slapped an additional tax on it as it's considered a "medical device'.

Interestingly, that Mylan CEO Heather Bresch is the daughter of a Democratic senator, Joe Manchin of West Virginia... so we'll see how long this outrage lasts.

EDIT: I just looked at the insulins... and yup, they're going up. Not sure how to explain that one... and sure does look to be some price gouging.

October 2007, $100 - Mylan acquires Epipen.
October 2008, $110
September 2009, $125 - ACA introduced in the house.
March 2010, $150 - ACA signed into law.
June 2011, $175
January 2011 $185
July 2012, $210
January 2013, $250
January 2014, $300 - ACA medical device tax of 2.3% is finalized by the IRS
May 2014, $350
January 2015, $450
December 2015, $450 - ACA medical device tax has 2 year moratorium issued.
January 2016, $550
May 2016, $600

Yeah, tell me more about how Obamacare's medical device tax did this.

 Ouze wrote:

 whembly wrote:
Plus, Obamacare slapped an additional tax on it as it's considered a "medical device'.

Interestingly, that Mylan CEO Heather Bresch is the daughter of a Democratic senator, Joe Manchin of West Virginia... so we'll see how long this outrage lasts.

EDIT: I just looked at the insulins... and yup, they're going up. Not sure how to explain that one... and sure does look to be some price gouging.

October 2007, $100 - Mylan acquires Epipen.
October 2008, $110
September 2009, $125 - ACA introduced in the house.
March 2010, $150 - ACA signed into law.
June 2011, $175
January 2011 $185
July 2012, $210
January 2013, $250
January 2014, $300 - ACA medical device tax of 2.3% is finalized by the IRS
May 2014, $350
January 2015, $450
December 2015, $450 - ACA medical device tax has 2 year moratorium issued.
January 2016, $550
May 2016, $600

Yeah, tell me more about how Obamacare's medical device tax did this.

You may be right about that...

I only pointed out the medical device tax, so I can get a free dig at the ACA.

I found out later in my enterprise that we have a contract with the distributors that's cheaper, that's why I "didn't see it in my catalogue".

General question to you and the thread.

Is the outrage simply because this is a life saving drug?

Or, is it that all drug prices is too damn high?

I'm in the camp of the latter.. if, you're in the camp of the former... man, don't look at the prices for cancer/infusion drugs.

Definitely the latter. I want single payer, or at least something close to it - epipens are $100 in Canada and the price hasn't budged in years.

I'd also like to see, much like Canada, stricter controls - nearly a ban, really - on drug advertisements. It's out of control.

The outrage is because countries like the UK and France without the benefit of US style profit based public medical systems manage to issue epipens to people who need them for nominal sums or even for free.

Why should a simple mechanical injector device with a commonly available drug, both invented decades ago, cost $600 to manufacture, when millions are produced each year? /rhetorical.

It's price gouging pure and simple, based on the fact that people who suffer from anaphylactic shock die easily without an epipen.

 feeder wrote:

 BigWaaagh wrote:
The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

I fail to see how crony capitalism or red tape created this situation.

The problem with the free market in medicine is one cannot "vote with their wallet", so to speak, when the choice is pay up or die.

Watch the video. FDA bureaucracy holding up approval of competitors and payoff to competitor to not release their product.

 Ouze wrote:
Definitely the latter. I want single payer, or at least something close to it - epipens are $100 in Canada and the price hasn't budged in years.

I'd also like to see, much like Canada, stricter controls - nearly a ban, really - on drug advertisements. It's out of control.

Aye... exactly.

That's why I don't even accept the swags that Pharmacy rep tries to give me. I know it's a losing battle, but all the gak cost money and it has to come somewhere.

Also, some honest review/re-write of FDA regulations. I don't think the public truly appreciates how a) difficult to get new drugs approved (driving up the final cost) and b) regulations that were tailor made to protect big Pharma.

Oh... and the ridiculous patent laws simple needs to be redone.

Apparently after public outcry, and a loss of $3 billion from investors, Mylan will reduce the price of the EpiPen by 50% after jacking the price up 400%.

Rosebuddy wrote:

 BigWaaagh wrote:

 Iron_Captain wrote:
Drug companies? Surely you must mean "Drug maffia"? Because I honestly think there is not much difference. IMO, the whole pharmaceutical industry should be nationalised.

You want the industry nationalized? Those wonderful Soviet-era nationalized industries sure were picture of efficiency and innovation, right? How about all those nationalized companies operating down in Venezuela? Can you say failed country? That's not the answer. The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

Soviet industry defeated Nazi Germany, gave the US a big scare during the space race and produced submarine technology that wasn't matched until decades later. *shrug*

The "free market" is inherently less efficient because it must siphon money away as profit. Private companies are a very bad idea for anything that matters because their goal is never to cure disease, provide housing or feed people. The goal is always to maximise profit. Quality, laws and dignity are secondary concerns, if they are concerns at all and not viewed as obstacles to profit. Clearly both approaches can be done by people who are competent and incompetent alike but on paper the profit-driven system has the obvious and massive drawback of not just leaking money but being only about money.

Take a look at train infrastructure in the UK.

You're actually trying to defend the "quality" of Soviet Russia's industry? Just please.

Free Market is the most efficient when operating unencumbered in a true environment of open competition. Competition drives improvement, innovation and efficiency, period.

With reasonable regulation BigWaaagh.

EDIT: Also, I found out more why insulin's price is increasing...

The various insulins goes through frequent drug shortages. (I'm saying this, at least in part, may explain why insulins are going up by virtue of supply & demand).

US is an obese country and the number of diagnosed diabetes patients is increasing rapidly.

 whembly wrote:
With reasonable regulation BigWaaagh.

EDIT: Also, I found out more why insulin's price is increasing...

The various insulins goes through frequent drug shortages. (I'm saying this, at least in part, may explain why insulins are going up by virtue of supply & demand).

US is an obese country and the number of diagnosed diabetes patients is increasing rapidly.

True. I can see how my use of "unencumbered" could be construed with the advocation of no oversight or regulation. Both have their necessary place of importance as a check to the system. By "unencumbered" I meant without favoritism by various means that are meant to tilt the tables in favor of one entity vs. the other.

 Ouze wrote:
I'd also like to see, much like Canada, stricter controls - nearly a ban, really - on drug advertisements. It's out of control.

That was a culture shock for me when I moved here - drug adverts everywhere. Followed 6 months after by lawyers saying these drugs are dangerous and you should sue

 BigWaaagh wrote:
The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

You're right that nationalised pharmaceuticals are not the answer. However you've fallen for the old 'free market is perfect' thing. Thing is, there is no economic model for the 'free market', it's a political invention. In economics you will see talk about lots of different models, and it includes the idealised 'perfect market'. However the perfect market is really just a starting point, it is how things would work if everything was, well, perfect. The point then is to acknowledge all the imperfections, and start modelling how things work when under various degrees of imperfection.

This naturally leads to the kinds of government laws you need to move things closer to a perfect market. Where an information asymmetry means consumers can be duped in to buying unnecessary or even dangerous products, you introduce consumer safety laws. Where a monopoly or oligopoly is allowing price fixing, you either review pricing or bring in anti-trust laws.

It is quite an unfortunate thing that 'free market' rhetoric has led many people to believe that the most efficient markets are ones with no regulation. Actually the only way to move to closer to perfect market situations is with regulation. This doesn't mean all regulation is good, as much regulation is simply for special interests and will not benefit the consumer at all, and in other cases well-intentioned but poorly executed legislation will produce negative results.

So while legislation should be carefully applied, it is completely wrong to run with the idealisation of a free market, that regulation can only harm.

 kronk wrote:

I have looked at the face of evil, and it wears shiny, Butterscotch chapstick.

That is an impressive amount of transparent spin.

 sebster wrote:

 BigWaaagh wrote:
The free market is always the answer. "Free Market", however, can often become polluted by crony-capitalism, government bureaucracy, etc. and you end up with this situation.

You're right that nationalised pharmaceuticals are not the answer. However you've fallen for the old 'free market is perfect' thing. Thing is, there is no economic model for the 'free market', it's a political invention. In economics you will see talk about lots of different models, and it includes the idealised 'perfect market'. However the perfect market is really just a starting point, it is how things would work if everything was, well, perfect. The point then is to acknowledge all the imperfections, and start modelling how things work when under various degrees of imperfection.

This naturally leads to the kinds of government laws you need to move things closer to a perfect market. Where an information asymmetry means consumers can be duped in to buying unnecessary or even dangerous products, you introduce consumer safety laws. Where a monopoly or oligopoly is allowing price fixing, you either review pricing or bring in anti-trust laws.

It is quite an unfortunate thing that 'free market' rhetoric has led many people to believe that the most efficient markets are ones with no regulation. Actually the only way to move to closer to perfect market situations is with regulation. This doesn't mean all regulation is good, as much regulation is simply for special interests and will not benefit the consumer at all, and in other cases well-intentioned but poorly executed legislation will produce negative results.

So while legislation should be carefully applied, it is completely wrong to run with the idealisation of a free market, that regulation can only harm.

I think in my posts that I made it clear that intelligent regulation has it's place and is necessary.
The Free Market I speak of is one with a level playing field. No bias, no cronyism, no favoritism, no protectionism, etc., etc. True economic Darwinism. Capitalism as it should be.
The fact that it's not perfect...nothing is and that is also something I didn't come even close to stating...is a function of reality meeting theory and the introduction of manipulation and abuse to that playing field. Even so, it's head and shoulders the best system I've seen in my half century of existence. There's not even a close second.

 whembly wrote:

US is an obese country and the number of diagnosed diabetes patients is increasing rapidly.

That is true worldwide, and is the result of better global healthcare; though not necessarily access to medication.

I was in the car today and they were talking about the EpiPen price hike. They explained that here in Australia an exclusive deal with the local subsidiary of Mylan has the device selling for about $100. That's about $70 USD.

 BigWaaagh wrote:
The Free Market I speak of is one with a level playing field. No bias, no cronyism, no favoritism, no protectionism, etc., etc. True economic Darwinism. Capitalism as it should be.
The fact that it's not perfect...nothing is and that is also something I didn't come even close to stating...is a function of reality meeting theory and the introduction of manipulation and abuse to that playing field. Even so, it's head and shoulders the best system I've seen in my half century of existence. There's not even a close second.

You misunderstand my post. I am not talking about what would be perfect. I am talking about the actual economic concept of the perfect market, which is a real thing with properly defined assumptions and mechanisms, and is basically, to use your phrase, 'capitalism as it should be'. And the thing about the perfect market is that it is impossible to get anywhere near it without a lot of government regulation. The closest thing we've ever gotten to a perfect market is the stock market, and that thing is about as heavily regulated as any market.

The statement 'free market' is a meaningless bit of gibberish. It means nothing more than whatever the current user wants it to mean. This is why the term is frequently used by politicians. As such, the concept 'free market' tells us nothing about what regulation we should have and what we should avoid. All 'free market' basically says is that capitalism is better than a completely state planned economy... which, you know, duh.

 feeder wrote:
The problem with the free market in medicine is one cannot "vote with their wallet", so to speak, when the choice is pay up or die.

But why they can't vote? Are there laws in place ensuring there's only one private supplier? If so then that's not actually free market.

On free market there would be multiple options so if one company price gauges there would be another company that sees market chance to sell stuff for cheaper and compensate smaller sale price with higher sale count.

It's when there's only one source for the stuff where price gauging happens. But that's not really free market then...

So either there's some laws keeping up prices or it's not financially viable for anybody to start selling for less which begs question is it price gauging or not...

 sebster wrote:
In economics you will see talk about lots of different models, and it includes the idealised 'perfect market'. However the perfect market is really just a starting point, it is how things would work if everything was, well, perfect. The point then is to acknowledge all the imperfections, and start modelling how things work when under various degrees of imperfection.

Is the first imperfection; 'will involve human beings'?

tneva82 wrote:
But why they can't vote? Are there laws in place ensuring there's only one private supplier? If so then that's not actually free market.

On free market there would be multiple options so if one company price gauges there would be another company that sees market chance to sell stuff for cheaper and compensate smaller sale price with higher sale count.

It's when there's only one source for the stuff where price gauging happens. But that's not really free market then...

Once again, 'free market' is not a thing. It means nothing.

Second up, it's all good and well to say that other companies should be able to make the product, but patent laws exist for a reason. Without them you'd have one company sink a few hundred million in to developing a new drug, only to find the day after approval there's 50 companies selling copycat generics at a fraction of the price. No-one would ever bother to develop a new drug ever again.

We need to allow (temporary) monopolies in order to reward the development of new drugs. However the use of those monopolies needs to be closely monitored to avoid price gouging, and perhaps most importantly we need to look at how long we allow those monopolies to exist.

 sebster wrote:

tneva82 wrote:
But why they can't vote? Are there laws in place ensuring there's only one private supplier? If so then that's not actually free market.

On free market there would be multiple options so if one company price gauges there would be another company that sees market chance to sell stuff for cheaper and compensate smaller sale price with higher sale count.

It's when there's only one source for the stuff where price gauging happens. But that's not really free market then...

Once again, 'free market' is not a thing. It means nothing.

Second up, it's all good and well to say that other companies should be able to make the product, but patent laws exist for a reason. Without them you'd have one company sink a few hundred million in to developing a new drug, only to find the day after approval there's 50 companies selling copycat generics at a fraction of the price. No-one would ever bother to develop a new drug ever again.

We need to allow (temporary) monopolies in order to reward the development of new drugs. However the use of those monopolies needs to be closely monitored to avoid price gouging, and perhaps most importantly we need to look at how long we allow those monopolies to exist.

Yeah so it's not free but monopolized. Monopoly everywhere is always bad and will result in customer getting worse deal. If you switch monopoly to other party you just switch the one screwing customers.