Big Pharma

December 2, 2005 6:27 PM

Pharmaceuticals have many tricks up their sleeves.
posted by reverenddrjice (21 comments total)

Greed Kills..but 340B medication can be a good alternative if one is eligible, which as in the case of this story my guess was she made 'too" much.

Yet another example of failed priorities from this excuse of a Govt.
posted by Mr Bluesky at 6:55 PM on December 2, 2005

I'm shocked big pharma would find a way to appear to be benevolent and yet keep fat profits...

When he makes his pitch to companies, Mr. Kuhn says he emphasizes that they can make money by donating. During a 2003 visit to Genzyme, for instance, he brought along a chart showing how a donation would affect a patient who needs the company's drug, Fabrazyme. Genzyme says the drug typically costs between $175,000 and $200,000 a year. The chart showed that if Genzyme donated $5,400 to cover the patient's premium for a year, it would bring in about $185,000 by getting its drug paid for by the patient's insurance.

When I donate to charity I do it from a feeling good perspective. I only wish I could get a 3400% return on my investment.

But let's not forget...

Drug companies also often take a tax deduction for their donation.

Win win situation for the pharm company! And if they can keep a few people alive with all this charity even better.
posted by birdherder at 7:09 PM on December 2, 2005

Oh grow up. They're gaming the system, so what? The only people they're ripping off are greedy insurance companies who are ripping everyone else off.

In actuality, it's quite smart.
posted by delmoi at 7:21 PM on December 2, 2005

It's cool that folks get drugs, but not cool that they wouldn't without this backhanded tactic.
posted by parallax7d at 7:28 PM on December 2, 2005

am i supposed to pay to read this?
posted by rbs at 8:23 PM on December 2, 2005

am i supposed to pay to read this?

Only if you need a life saving drug.
posted by ryoshu at 8:29 PM on December 2, 2005

The cost of these drugs is staggering. I wonder how much of it goes to marketing, branding, shareholders and exorbitant executive salaries.
posted by disgruntled at 8:44 PM on December 2, 2005

It says she had a "rare type of brain tumor", so presumably the high cost of developing such a medicine isn't being split between many patients.
posted by cillit bang at 9:13 PM on December 2, 2005

My bro works for a company that has a lymphoma treatment which retails at $30K per dose.

The good news it is usually a single dose regimen.

The bad news is that the CEO gave his wife $500 million in cash for Xmas as a tax shelter or something crazy like that. I'm getting the details wrong, which is probably good since I shouldn't publicize whatever it was that went down anyway.

But you get the idea. These people go through Italian sports cars like kleenex.
posted by scarabic at 9:16 PM on December 2, 2005

scarabic, that number does seem inordinately high.
it terrifies me that people don't bother reading if it's not measured in billions of dollars.

drug companies spend more (more wisely, too, in my opinion) on lobbying than anything else. because the truth is, the public can bitch all it likes about deceptive, corrosive, exploitative policies espoused by the drug industry. If the politcos are bought, the drug companies are safe. and there's enough money to afford both sides right now, so ______.

I can pretty easily imagine a new brand of politician who labels the drug companies the new robber-barons, maybe even while pushing for a universal health care system.

the way Medicare is verboten from negotiating lower prices for the drugs it has to buy in vast bulk is a little disingenous. the same people who insisted on this provisions also preach about the benefits of 'free makret'
posted by Busithoth at 9:47 PM on December 2, 2005

Biotech is interesting. The people inside it have absolute confidence in their own essential moral goodness, because they work on treatments for illnesses. It's interesting to see that moral certainty and how it leads people to behave and think, in a money-drenched context.
posted by scarabic at 9:58 PM on December 2, 2005

I've recently been convinced by an econ prof that the solution to the drug pricing problem is for the federal government to purchase the patents for the more useful drugs from the companies (at a fair price, not through eminent domain trickery). Assuming that the price provides them with more or less the same profit that they'd receive otherwise over the life of the patent, their financing and incentives for further research are preserved. At the same time, the drug becomes available for much, much less (the drug basically becomes generic instantly), and the government may even be able to nudge research in the direction of unprofitable but important drugs (the Viagra problem). Unfortunately, Norquist conservatives would never let it happen.
posted by gsteff at 10:05 PM on December 2, 2005

cillit bang writes "It says she had a 'rare type of brain tumor', so presumably the high cost of developing such a medicine isn't being split between many patients."

You are correct, it is being split between the insured.
posted by HyperBlue at 10:11 PM on December 2, 2005

(From a doctor)

I never cease to be amazed by the corrupting influence of the pharmaceutical industry on American medicine. Physicians and patients have been squeezed so hard by the rising costs of health care. All of us pay higher insurance premiums and get less for our money. I just don't understand why it is so hard for the government to start insisting that the pharmaceutical industry step up and take some responsibility for this mess.

I stopped taking drug samples and seeing drug reps in my office after getting hooked up with this group. Every day I have at least one or two senior citizens on medicare tell me how glad they are to have a doctor that resists what the drug companies are doing (this is true). I can't believe that some politician who made this a big issue wouldn't receive a huge amount of popular support.
posted by Slarty Bartfast at 10:32 PM on December 2, 2005

Oh grow up. They're gaming the system, so what? The only people they're ripping off are greedy insurance companies who are ripping everyone else off.

No, the only people they are ripping off are healthy people who pay for their insurance, but rarely need medical care.
posted by b1tr0t at 12:56 AM on December 3, 2005

Their cunning is breathtaking.

I'll never be able to distinguish myself as a supervillain in world full of evil geniuses of this calibre. :-(
posted by -harlequin- at 1:29 AM on December 3, 2005

gsteff:

Another model (that is immensely successful in some countries) is having govt assisted healthcare for a large number of people (eg, maybe everyone, or maybe just something large like US medicare), but that govt agency that subsidises everyone's drug buying doesn't need to subsidise all the brands (when there are more than one companies offering an equivalent), and all the doctors know which is subsidised. Thus, the subsidised drug brand(s) are the only one that gets any sales, because the competiting brand(s) are a hundred times the price to the citizen, who says "yeah RIGHT!"

So basically, the pharmaceutical company either has to get their drug subsidised, or they make near-zero sales.

But to get their drug subsidised, they have to slash their prices more than any other, or the agency just goes to someone who will make a better offer.

Suddenly, you have a working free market, because the agency has the clout to put a real dent in pharmaceutical sales, so they really actually do have to compete on price until their margins are bloody, which is how it should be.

A bazillion insurance companies is not the same thing. It may try to work in the same general direction, just not very well, for reasons I can't be assed going into :)

The downside is that sometimes, a certain drug might not be subsidised, and the nearest equivlant that is might not be as near as desired, so you might have to buy without the negotiating muscle of the agency working for you. However this just means that in the worst case scenario, you're about as bad off as an American in their best case scenario :-/
posted by -harlequin- at 1:47 AM on December 3, 2005

Assuming that the price provides them with more or less the same profit that they'd receive otherwise over the life of the patent, their financing and incentives for further research are preserved.

I'm not sure how this would be any less expensive than just having the government pay for everyone's ("useful") drugs, less some minor co-pay. I'm also not sure how you would figure out what the "fair price" was in advance. How would you know what the profits from Prozac would have been? How about Vioxx?
posted by justkevin at 6:46 AM on December 3, 2005

I've heard speculation of requiring a "Chinese wall" between pharma R&D and the rest of the business. Starting out with a "Bell Labs to AT&T" relationship approach, the pharma R&D could then be set up as a separate corporation.

This R&D corporation would make new innovations for the company, licensing them to their parent (1st choice) or to third parties (2nd choice), in exchange for a blanket operating budget and royalties.

The advantages of this is that the R&D corporation would be less controlled by market forces, and thus be able to also make orphan drugs, which it could license directly to the government. As long as it gave an expected turnover of new pharma to its parent to produce, the rest of the time it could experiment to produce new research and orphans.

The advantages to the parent company is first to break free of a lot of liability issues. Say in the case of vaccine, the parent company would just be a middleman, as long as it maintained proper quality control. The parent company is also freed from the orphan drug production expense, which is not at the scale it is optimized for.

The impetus to do this in the first place must come from government, however. If done as a "friendly" antitrust action, it would stimulate them to split for everybody's benefit.
posted by kablam at 7:54 AM on December 3, 2005

kablam, Drug companies don't really pay for research anyway, that usually NIH grants to universities or companies. A drug company talking about R&D costs isn't talking about research, they are talking about development, specifically the high costs of getting a drug approved.

gsteff, Its a very very bad idea to start buying patents off drug companies, they can always just make the patents stupider & stupider until you paying an arm & a leg. Here are two better ideas:

1) Cut patents back to 5 years from hitting the market, as opposed to 20 years from application, but allow competitors who beat you to market first to keep using it. 5 years on the market is plenty of time to make a killing.

2) Pay universities to develop & test the obvious drugs themselves, via the NIH, and allow any U.S. company to produce the drug.
posted by jeffburdges at 10:02 AM on December 3, 2005

Its just a clever form of insurance fraud, wrapped up in a WSJ article making it look like charity.
posted by jeffburdges at 10:19 AM on December 3, 2005