There is a new bill in Massachusetts which would require pharmaceutical manufacturers to disclose their costs in order to justify high prices on new medications. Hmmmm.... Do you think it would fly? I hope it would.
"An alliance of lawmakers, consumers, and health insurers is pushing for a law that would force biotechnology and pharmaceutical companies to justify their prices by disclosing how much they spend on research, production, and marketing. It also would allow the state’s Health Policy Commission to limit the prices of especially costly drugs, something not done anywhere in the country...."
"The bill cites “substantial public interest” in what goes into the prices of such medicines. Drug makers would be required to disclose, among other things, their development and marketing outlays, how much research was paid for with public funds, their manufacturing costs, and the prices of their drugs in other countries. It would also empower the commission, which is charged with holding down health care costs, to impose cost controls on some high-priced drugs."
Of course the pharma companies are not too happy about this. They claim it would reduce innovation. Okay, I get it. They don't want anyone snooping into their finances. But as far as I am concerned, if they get public funding, they need to be open about their pricing and use of the money.
If they choose not to get public funding, which they all do, then as far as I am concerned, there would need to be a bit more justification for the prices.
For decades, pharma manufacturers have been able to set their prices and the US has not negotiated with them, leaving Americans pinched by high prices. In recent years, new medications have cost tens or hundreds of thousands each year per patient for rare cancers or other ailments.
Someone has to create an onus for the manufacturers to justify their prices instead of just allowing them to ask for what they want. They try to justify it by saying their costs are high and hardly anyone pays the full prices because of insurance coverage or discounts from the manufacturers. That just isn't enough. They need to provide some kind of back up for their requests.
Okay, that's just my 2 cents, as usual.
Showing posts with label medication costs. Show all posts
Showing posts with label medication costs. Show all posts
Feb 20, 2020
Dec 10, 2019
Price gouging
That's the only term for when drug companies hike prices 5000 percent. One drug went from $13.50 to $750 (no I am not missing a decinal point). Thats a big price increase. I could not believe it when I read the article.
"Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”"
And its not just one drug, its several. So what happened to the old justification of the research and development costs are so high? There were no new development costs. Probably just marketing crap, once again.
"Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”"
And its not just one drug, its several. So what happened to the old justification of the research and development costs are so high? There were no new development costs. Probably just marketing crap, once again.
Nov 19, 2019
The Wrong Approach to Pricing
Here is an example of the wrong approach to pricing medications. That really fancy expensive Hepatitis C drug, Sovaldi, is $1,000 per pill and $84,000 for the course of treatment and the price is justified because it saves on the cost of a liver transplant down the road and long term medical costs for the patient. WRONG IDEA!
It has now been revealed that the poor manufacturer, Gilead Sciences, which justified that price on the above reason, grossed $12.4 billion last year for the sales of Sovaldi alone. Sorry Gilead, I have absolutely no sympathy for you because of the revenue generated in the first year.
Yes, I understand the argument that the expensive drugs are justified because of the resulting reduced treatment costs for the patient in the long term and that the costs of and time to developing drugs is high and many possibilities are dumped after years of work. And that these drugs are developed for smaller and smaller potential patient markets for rarer ailments. But $12.4 billion? I think you got your money back and should cut the price significantly, maybe 1/10th of the current price.
So here is my proposal for new drug pricing: Look at your development costs of that drug that made it to market and the costs of the other drugs that eventually lead to the new drug but were dumped on the way and then price it so that your costs are recouped in five years, not one. And completely forget about the patient's long term cost savings in health costs. That is none of your business. Don't you remember HIPPA? Patient health issues are not your problem. You are providing a product that helps recover from it, just like an aspirin would relieve a headache.
Here's an example. Your current pricing method would allow restaurants to charge $3 for the tasty but bad for your juicy, fatty steak or prime rib and $80 for the healthy side salad because of the diner's potential long term health problems from eating the steak and ensuing cholesterol and other ailment costs.
The current pricing model leads to insurance companies deciding who should receive these new medications instead of doctors deciding what is best for their patients - which is the way medicine should be practiced.
Okay, this is all my opinion, to which I am entitled, but I really think pharma companies are doing it wrong.
It has now been revealed that the poor manufacturer, Gilead Sciences, which justified that price on the above reason, grossed $12.4 billion last year for the sales of Sovaldi alone. Sorry Gilead, I have absolutely no sympathy for you because of the revenue generated in the first year.
Yes, I understand the argument that the expensive drugs are justified because of the resulting reduced treatment costs for the patient in the long term and that the costs of and time to developing drugs is high and many possibilities are dumped after years of work. And that these drugs are developed for smaller and smaller potential patient markets for rarer ailments. But $12.4 billion? I think you got your money back and should cut the price significantly, maybe 1/10th of the current price.
So here is my proposal for new drug pricing: Look at your development costs of that drug that made it to market and the costs of the other drugs that eventually lead to the new drug but were dumped on the way and then price it so that your costs are recouped in five years, not one. And completely forget about the patient's long term cost savings in health costs. That is none of your business. Don't you remember HIPPA? Patient health issues are not your problem. You are providing a product that helps recover from it, just like an aspirin would relieve a headache.
Here's an example. Your current pricing method would allow restaurants to charge $3 for the tasty but bad for your juicy, fatty steak or prime rib and $80 for the healthy side salad because of the diner's potential long term health problems from eating the steak and ensuing cholesterol and other ailment costs.
The current pricing model leads to insurance companies deciding who should receive these new medications instead of doctors deciding what is best for their patients - which is the way medicine should be practiced.
Okay, this is all my opinion, to which I am entitled, but I really think pharma companies are doing it wrong.
Sep 3, 2018
Cancer Drug Costs
These prices are out of control. Upwards of $80,000 per patient per year or treatment protocol. Yes insurance companies pay the bulk of the costs but patients are hit with 20-30% out of pocket co-payments. Since the average family income in the US is $52,000, how are we supposed to pay for this? Can you only beat cancer if you are rich? That really creates a chasm between the 'haves' and 'have nots'. And the current insurance system cannot afford them either.
There is a new call by a group of doctors, oncologists, to get a better control of the pricing set by the drug manufacturers. This was announced in a recent issue of Proceedings published by the Mayo Clinic. It was also written about in Time Magazine and there is a petition on Change.org.
They offer a substantive set of arguments for the pricing changes that are definitely worth the read. They also discuss the high costs of developing drugs that are borne by the manufacturers and how that should be changed as well. They are not just firing at the drug manufacturers but providing multiple recommendations:
"Among the recommendations are allowing Medicare to negotiate prices, permitting cancer drug imports for individual patients, and passing laws to keep drug companies from delaying access to generic drugs."
My only complaint on this issue is that they focus on cancer drugs and not on the other high priced drugs out there. In my opinion, the changes should effect all drugs.
Please go read the articles and sign the petition.
There is a new call by a group of doctors, oncologists, to get a better control of the pricing set by the drug manufacturers. This was announced in a recent issue of Proceedings published by the Mayo Clinic. It was also written about in Time Magazine and there is a petition on Change.org.
They offer a substantive set of arguments for the pricing changes that are definitely worth the read. They also discuss the high costs of developing drugs that are borne by the manufacturers and how that should be changed as well. They are not just firing at the drug manufacturers but providing multiple recommendations:
"Among the recommendations are allowing Medicare to negotiate prices, permitting cancer drug imports for individual patients, and passing laws to keep drug companies from delaying access to generic drugs."
My only complaint on this issue is that they focus on cancer drugs and not on the other high priced drugs out there. In my opinion, the changes should effect all drugs.
Please go read the articles and sign the petition.
Jul 2, 2018
Oh, the poor man!
As I have said before, this is not a political blog. But I do occasionally blog about political issues. Martin Shkreli, the idiot man who raised the price of a medication 4000%, is upset with Bernie Sanders. He donated $2700 to Bernie's campaign and hoped to get a meeting with Bernie to explain why drug manufacturers set their prices.
"Shkreli made the contribution, he said, partly because he supports some of Sanders’ proposals — just not the ones about drug prices. But mainly, he said, he donated to get the senator’s attention in the hopes that he could get a private meeting to explain why drug companies set prices the way they do."
Bernie gave away his money and won't meet with him. Martin isn't happy.
"Shkreli is “furious” that Sanders is using him as a punching bag without giving him a chance to give his side. “I think it’s cheap to use one person’s action as a platform without kind of talking to that person,” Shkreli said in the interview. “He’ll take my money, but he won’t engage with me for five minutes to understand this issue better.”"
Personally, I think I catch a hint of whininess here.... I'm with Bernie on this. I don't think I would take a donation from Martin either. I think Martin should start trying to explain to the rest of us about his pricing justification instead of just waiting for a call from Bernie.
"Shkreli made the contribution, he said, partly because he supports some of Sanders’ proposals — just not the ones about drug prices. But mainly, he said, he donated to get the senator’s attention in the hopes that he could get a private meeting to explain why drug companies set prices the way they do."
Bernie gave away his money and won't meet with him. Martin isn't happy.
"Shkreli is “furious” that Sanders is using him as a punching bag without giving him a chance to give his side. “I think it’s cheap to use one person’s action as a platform without kind of talking to that person,” Shkreli said in the interview. “He’ll take my money, but he won’t engage with me for five minutes to understand this issue better.”"
Personally, I think I catch a hint of whininess here.... I'm with Bernie on this. I don't think I would take a donation from Martin either. I think Martin should start trying to explain to the rest of us about his pricing justification instead of just waiting for a call from Bernie.
Jan 22, 2018
Going for the big bucks instead of focusing on benefits to patients
Here's another thought that the pharmaceutical industry are going after the big bucks and not looking after the interests of the patients. A new study proposes that companies are focusing on developing late stage cancer drugs because the time to market (and financial return) is shorter than in developing preventive or early stage cancer drugs. I found this little tidbit online:
'Pharmaceutical companies are overlooking drugs to prevent cancer and treat early-stage tumors because they take longer and cost more to develop than drugs for late-stage cancers, according to a new MIT study.
“There’s dramatically more investments in the late-stage treatments than there is in stage one or stage two,” said Benjamin Roin, a professor at MIT and a co-author of the study. “There’s shockingly little investment in prevention.”
The study, published in American Economic Review, found that low investment in early-stage cancer drugs accounted for a loss of 890,000 life-years — additional years cancer patients would have lived — in just 2003.
The culprit, the authors say, is how regulators treat the vital exclusivity periods for new drugs. Because the exclusivity period begins when the patent is filed — not when it hits the market — drugs that take less time in clinical trials become more valuable, Roin said. Trials for cancer drugs targeting early-stage tumors and prevention can take significantly longer to show results, he said.
“It creates incentives to focus on the drugs you can get on the market quickly, as opposed to drugs that take longer to develop,” Roin said. “The patent system is penalizing companies if they take longer to develop stuff and providing bigger rewards if they develop stuff that gets to the market fast.”'
Perhaps they need to look at their business model instead of their shareholders. I mean aren't pharmaceutical companies supposed to be developing medications to help people stay alive and feel good? No wait, they must be out to make big bucks because if they wait for people to be sick and dependent on their meds, then they can rake in the billions. And they can charge more for these 'life extending' drugs. That way their shareholders will be happy. (I am really sick of shareholders after working for publicly traded companies.) Insert cynicism here please.
This is taken from the beginning of the study itself (Download pdf of study results here.):
"Over the last five years, eight new drugs have been approved to treat lung cancer, the leading cause of US cancer deaths.1 All eight drugs targeted patients with the most advanced form of lung cancer, and were approved on the basis of evidence that the drugs generated incremental improvements in survival. A well-known example is Genentech’s drug Avastin, which was estimated to extend the life of late-stage lung cancer patients from 10.3 months to 12.3 months.2 In contrast, no drug has ever been approved to prevent lung cancer, and only six drugs have ever been approved to prevent any type of cancer. While this pattern could solely reflect market demand or scientific challenges, in this paper we investigate an alternative hypothesis: private firms may invest more in late-stage cancer drugs—and too little in early-stage cancer and cancer prevention drugs—because late-stage cancer drugs can be brought to market comparatively quickly, whereas drugs to treat early-stage cancer and to prevent cancer require a much longer time to bring to market. More broadly stated, we investigate whether private firms differentially underinvest in long-term research, by which we mean technologies with long time lags between the initial spark of an idea and the availability of a commercially viable product. We document evidence that such underinvestment is quantitatively significant in an important context—treatments for cancer—and analyze potential policy responses."
'Pharmaceutical companies are overlooking drugs to prevent cancer and treat early-stage tumors because they take longer and cost more to develop than drugs for late-stage cancers, according to a new MIT study.
“There’s dramatically more investments in the late-stage treatments than there is in stage one or stage two,” said Benjamin Roin, a professor at MIT and a co-author of the study. “There’s shockingly little investment in prevention.”
The study, published in American Economic Review, found that low investment in early-stage cancer drugs accounted for a loss of 890,000 life-years — additional years cancer patients would have lived — in just 2003.
The culprit, the authors say, is how regulators treat the vital exclusivity periods for new drugs. Because the exclusivity period begins when the patent is filed — not when it hits the market — drugs that take less time in clinical trials become more valuable, Roin said. Trials for cancer drugs targeting early-stage tumors and prevention can take significantly longer to show results, he said.
“It creates incentives to focus on the drugs you can get on the market quickly, as opposed to drugs that take longer to develop,” Roin said. “The patent system is penalizing companies if they take longer to develop stuff and providing bigger rewards if they develop stuff that gets to the market fast.”'
Perhaps they need to look at their business model instead of their shareholders. I mean aren't pharmaceutical companies supposed to be developing medications to help people stay alive and feel good? No wait, they must be out to make big bucks because if they wait for people to be sick and dependent on their meds, then they can rake in the billions. And they can charge more for these 'life extending' drugs. That way their shareholders will be happy. (I am really sick of shareholders after working for publicly traded companies.) Insert cynicism here please.
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This is taken from the beginning of the study itself (Download pdf of study results here.):
"Over the last five years, eight new drugs have been approved to treat lung cancer, the leading cause of US cancer deaths.1 All eight drugs targeted patients with the most advanced form of lung cancer, and were approved on the basis of evidence that the drugs generated incremental improvements in survival. A well-known example is Genentech’s drug Avastin, which was estimated to extend the life of late-stage lung cancer patients from 10.3 months to 12.3 months.2 In contrast, no drug has ever been approved to prevent lung cancer, and only six drugs have ever been approved to prevent any type of cancer. While this pattern could solely reflect market demand or scientific challenges, in this paper we investigate an alternative hypothesis: private firms may invest more in late-stage cancer drugs—and too little in early-stage cancer and cancer prevention drugs—because late-stage cancer drugs can be brought to market comparatively quickly, whereas drugs to treat early-stage cancer and to prevent cancer require a much longer time to bring to market. More broadly stated, we investigate whether private firms differentially underinvest in long-term research, by which we mean technologies with long time lags between the initial spark of an idea and the availability of a commercially viable product. We document evidence that such underinvestment is quantitatively significant in an important context—treatments for cancer—and analyze potential policy responses."
Dec 11, 2017
The accountants rule
I have nothing wrong with accountants. They pay attention to the little details in numbers that I some how don't understand. I have an accountant I use to do my taxes and take care of my financial stuff. My husband has an MBA and he can explain all the financial stuff on a level that I need to understand.
I used to work for a company where each year when I had to present my budgets to accountants, they drew straws on who would have to deal with me. Because I wasn't enough of a numbers person for them. I know they are important. But they also can be too focused on numbers and not on people.
Now we have a problem. Big pharma companies are beginning to focus on their profits and not on creating better medications for patients. Why? Because now that the accountants are beginning to rule.
In the last few decades it has not been unusual for pharma companies, and others, to merge, move, and streamline themselves for financial reasons. Have a competitor? Buy him out, problem solved. Some one designed a good product? Buy them out and take advantage of their technology.
But now big pharma companies are taking it a step farther. They are letting their accountants take over and make BIG financial decisions to take better care of their bottom line. First they are moving to countries with lower tax rates. Then they will lose a lot of staff and potentially stifle innovation as they hire new scientists who start over in development, but they will save a lot of money over all. And example of this is Pfizer which is buying Allergan.
"Pfizer is the largest drug maker in the United States, but after striking a deal on Monday to buy Allergan, the company is on the verge of becoming Irish.
For shareholders, this may be their lucky charm. After the merger, Pfizer will be able to shift its legal headquarters from New York to Dublin and pay lower taxes, which should bolster its bottom line.
But in the process, scientists are likely to lose their jobs, innovation may suffer, and consumers could pay more for Pfizer medicines."
To me this deal sounds like only the accountants and share holders will be happy. So I must ask: What about the patients?
Maybe its time for the politicians to step forward and say the US will negotiate with pharmaceutical companies for their medications, only if they are based in the US, paying US taxes, and hiring American citizens to work there? Just an idea.
I used to work for a company where each year when I had to present my budgets to accountants, they drew straws on who would have to deal with me. Because I wasn't enough of a numbers person for them. I know they are important. But they also can be too focused on numbers and not on people.
Now we have a problem. Big pharma companies are beginning to focus on their profits and not on creating better medications for patients. Why? Because now that the accountants are beginning to rule.
In the last few decades it has not been unusual for pharma companies, and others, to merge, move, and streamline themselves for financial reasons. Have a competitor? Buy him out, problem solved. Some one designed a good product? Buy them out and take advantage of their technology.
But now big pharma companies are taking it a step farther. They are letting their accountants take over and make BIG financial decisions to take better care of their bottom line. First they are moving to countries with lower tax rates. Then they will lose a lot of staff and potentially stifle innovation as they hire new scientists who start over in development, but they will save a lot of money over all. And example of this is Pfizer which is buying Allergan.
"Pfizer is the largest drug maker in the United States, but after striking a deal on Monday to buy Allergan, the company is on the verge of becoming Irish.
For shareholders, this may be their lucky charm. After the merger, Pfizer will be able to shift its legal headquarters from New York to Dublin and pay lower taxes, which should bolster its bottom line.
But in the process, scientists are likely to lose their jobs, innovation may suffer, and consumers could pay more for Pfizer medicines."
To me this deal sounds like only the accountants and share holders will be happy. So I must ask: What about the patients?
Maybe its time for the politicians to step forward and say the US will negotiate with pharmaceutical companies for their medications, only if they are based in the US, paying US taxes, and hiring American citizens to work there? Just an idea.
Dec 5, 2017
How Generous!
Back in September, I blogged about the lovely 'gentleman' who bumped up the price of a drug from $3.50 per pill to $750 because they felt like it essentially. Because of a bit of ensuing 'bad press', they then announced they would reduce the price but never said how much.
Now they have finally made a decision on their price decrease. It will be a generous 50%. So since they raised the price somewhere around 5000%, the 50% decrease will really be about 2500% increase from the original price.
"Still, even a 50% discount would only bring the price for hospitals down to $375 per 25 mg pill.
The typical Daraprim dosage is between 50 mg and 75 mg a day for one to three weeks and can be followed by an additional 25 mg a day for four to five weeks if needed, according to the FDA. So even with the discount, a normal course of treatment for toxoplasmosis could cost between $5,200 and $36,700."
I still don't like this guy and don't think he's generous.
Now they have finally made a decision on their price decrease. It will be a generous 50%. So since they raised the price somewhere around 5000%, the 50% decrease will really be about 2500% increase from the original price.
"Still, even a 50% discount would only bring the price for hospitals down to $375 per 25 mg pill.
The typical Daraprim dosage is between 50 mg and 75 mg a day for one to three weeks and can be followed by an additional 25 mg a day for four to five weeks if needed, according to the FDA. So even with the discount, a normal course of treatment for toxoplasmosis could cost between $5,200 and $36,700."
I still don't like this guy and don't think he's generous.
Oct 23, 2017
Please, patients not profits
I know I can sound like a broken record sometimes (a very badly scratched record) but this stuff just really irks me. A new report came out recently that said Gilead, manufacturers of that ultra expensive Hepatitis C drug,
"The 18-month Senate committee investigation reviewed more than 20,000 pages of company documents.
'The documents show it was always Gilead’s plan to max out revenue, and that accessibility and affordability were pretty much an afterthought,' said Senator Ron Wyden, Democrat from Oregon, who co-led the investigation with Senator Charles Grassley, an Iowa Republican, in a press conference.
Its all about the revenue. Their pricing strategy also caused patients in several areas of the country to be limited in their access to the potentially life saving medication because of the cost alone.
In a statement released Tuesday, Gilead disagreed with the conclusions of the report, saying that the price was ‘‘in line with previous standards of care.’’ The company noted that it has programs in place to help uninsured patients and those who need financial assistance to access the treatments. More than 600,000 patients around the world had been treated with Gilead’s hepatitis C drugs since 2013, according to the company."
Of course they were not happy about criticism. And yes they have programs to help uninsured patients and ones in financial need. But maybe they wouldn't need such expansive programs if they hadn't priced it so high in the first place.
"The report suggests that the factors Gilead used to set its price were not based on the research and development needed to bring the drug to market, or on the $11.2 billion it paid for Pharmasset, the company that developed Sovaldi. Instead, Gilead executives looked at what previous treatments had cost and the effect of future waves of competition on the revenue it could bring in.
Instead of using their industry's standard line of the R&D to bring it to market, they decided to get as much money as they could and then set themselves up for future high priced medications.
‘‘Company officials surmised that its drug had a ‘value premium’ because of increased efficacy and tolerability, shorter treatment duration, and its potential to ultimately be part of an all-oral regimen,’’ the report states.
In its statement Tuesday the company said, ‘‘We stand behind the pricing of our therapies because of the benefit they bring to patients and the significant value they represent to payers, providers, and our entire health care system by reducing the long-term costs associated with managing chronic [hepatitis C virus].’’"
Admit nothing, deny everything. And screw the patients.
In its statement Tuesday the company said, ‘‘We stand behind the pricing of our therapies because of the benefit they bring to patients and the significant value they represent to payers, providers, and our entire health care system by reducing the long-term costs associated with managing chronic [hepatitis C virus].’’"
Admit nothing, deny everything. And screw the patients.