Big Pharma profiteering gone wild: $1,000-a-pill Hepatitis drug in USA sells for less than $10 in Egypt - Galt's Gulch

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Big Pharma profiteering gone wild: $1,000-a-pill Hepatitis drug in USA sells for less than $10 in Egypt

Posted by freedomforall 10 years, 9 months ago to Legislation

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Posted by Robbie53024 10 years, 9 months ago

Is it profiteering or merely trying to recoup costs in any way that they can? Many nations regulate the prices of drugs. It might only cost the pharma company cents to make one pill, but it took untold millions to develop and gain approval for that drug to begin with.

This isn't a situation of monopoly - it is basic business. If your price is regulated, and you can still cover the costs of production, it is a good business decision. BUT that assumes that you can cover your costs of development somehow. The fact that these countries are regulating their prices are what drives the costs in the US so high.

Don't rail against the drug companies, complain about the unfair pricing laws across the world - starting with Canada. I have a hard time with the local purchasing companies that buy drugs from Canada (where prices are regulated) and then import them to the US. They do not pay the costs of development, leaving the rest of us to do so.

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  Posted by freedomforall 10 years, 9 months ago
  
  I do understand your view on costs of R & D, but based on my experience and available data on the results from R & D at pharma companies I have no sympathy with the financial peril of pharma companies at the hands of governments. If it wasn't profitable for the drug companies they would not be selling in those countries. The amount of grey market imports is trivial, so thats not why prices are insanely high in the US. IMO, its insurance (public and private) that make it impossible for a competitive and free market pricing valuation to occur. When there is no direct pricing feedback to the user of the product he does not seek alternatives, and without that competition prices go higher and higher.
  
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    Posted by winterwind 10 years, 9 months ago
    
    Keep in mind, too, the power of that phone and that pen. Not all medical companies make both devices and drugs, but those who produce devices were smacked with a 3.5% tax on their net profit as of the first of the year. The profit on medical devices is 5% - 6%. A 50% tax is not just a tax, it's a message: don't bother to develop new stuff. grrrrr
    
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      Posted by Robbie53024 10 years, 9 months ago
      
      Correctamundo!
      
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    Posted by Robbie53024 10 years, 9 months ago
    
    I won't disagree that insurance has been a big participant, as have medical researchers that have been incentivized to steer their patients to new medicines that are marginally (if at all) better than existing ones - but carry large commissions to the prescriber for making the prescription.
    
    That said, R&D has to be recouped somehow - and for every drug that makes certification there are numerous that didn't make it. When governments legislate that you can only make x% over actual cost of making a specific drug in profit, that doesn't take into account all the costs that will never be recouped due to drug research that didn't pan out.
    
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      Posted by freedomforall 10 years, 9 months ago
      
      An even bigger problem (for the health of humanity) is the lack of financial incentive to use non-patent treatments that are often more effective and have less undesirable side effects.
      Thanks to meddling in legislation by lobbyists and industry groups (e.g., AMA, ADA, etc) many treatments proven over centuries have been made unnacceptable to practioners and mostly unavailable to patients since the insurance will not pay for them. Health costs are immeasurably higher and health outcomes vastly inferior because of this effort to eliminate those non-patentable competitive treatments.
      There needs to be some middle ground that allows these products back in the mainstream.
      
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Posted by freedomforall 10 years, 9 months ago

If you've ever wondered why U.S. health care is so unaffordable and inaccessible -- and why health insurance costs are bankrupting businesses and municipalities across the nation -- this is exactly why. The same drug that sells for $1,000 a pill in the USA -- named "Sovaldi" -- sells for just $10 in Egypt, or 1/100th the USA price.

Drug companies are, of course, granted FDA-enforced monopolies on the treatment of anything considered a "disease." As such, drugs are pushed into the marketplace at monopoly prices. Because if you're the CEO of Gilead Sciences, Inc., makers of the Sovaldi drug to be sold at $1,000 a pill, your job is to maximize revenues by any means necessary. When you're handed a monopoly by the FDA, the strategy for achieving that is simple: Raise the price to whatever you can get away with, then bill the insurance companies, Medicare and Medicaid for $100, $500 or even $1,000 a pill.

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