Drug Goes From $13.50 a Tablet to $750, Overnight (1 Viewer)

[snellman]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

Tell me then, how can I get a drug for me dog that cost $2.00 per pill, but the same thing for me costs $15 per pill? This is just a generic example, my ex wife worked in the vet business and we saw many examples of this with different drugs.

 

[BigSteelThrill]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

Tell me then, how can I get a drug for me dog that cost $2.00 per pill, but the same thing for me costs $15 per pill? This is just a generic example, my ex wife worked in the vet business and we saw many examples of this with different drugs.

Or OTC item that cost 15$ and a RX for it costing 150$.

 

[Steed]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

Tell me then, how can I get a drug for me dog that cost $2.00 per pill, but the same thing for me costs $15 per pill? This is just a generic example, my ex wife worked in the vet business and we saw many examples of this with different drugs.

Depends on the drug of course, but vet dosages are often different than human ones. Now add in the fact that there probably is a rep in your vet's office promoting this unique dosage, and of course that rep has to get paid. I've seen R&D mentioned often as a primary driver of cost, that's true but you still have to factor in sales and marketing on top of that which obviously drives costs up further. That's another component most generic companies don't have to contend with as the market is already established.But that's not the case here.

 

[huthut]

This is not even a pharma company, it is a hedge fund that is buying up drugs.

 

[The Big Guy]

CEO who raised price of old pill more than $700 calls journalist a ‘moron’ for asking whyhttps://www.washingtonpost.com/news/to-your-health/wp/2015/09/21/ceo-of-company-that-raised-the-price-of-old-pill-hundreds-of-dollars-overnight-calls-journalist-a-moron-for-asking-why/?tid=sm_tw

Have to love the moxie on the guy. Favorite part of article is..(In an interview with The Washington Post on Monday, the company said the pill is actually $18 a tablet so the price increase is 4,100 percent. Media outlets had previously reported that the jump was more than 5,000 percent if based on an original price of $13.50.)

So let's not go crazy here...the price hike was only 4100% afterall. The twitter screenshots at the bottom of the story are pretty funny too.

 

[mquinnjr]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

This guy gets it.

I bolded the middle paragraph as my most important takeaway. Let me put it this way: if the pitchfork internet army gets its way and takes down big, bad pharma once and for all, the innovators paying for R&D on new compounds will be whom, exactly? The US government.

I would 1,000,000 out of 1,000,000 put the compounds that come as a result of private industry R&D spend up against anything the US government would ever put to market in a big pharma-less world. It's extremely expensive to get a drug with proven trial efficacy to market, and lots of drugs do fail at multiple stages in the development lifecycle. You pay big money to a guy that can hit .300 in baseball, this is somewhat similar. The free market incentivizes innovation and spend to bring breakthrough drugs to market. I'm not very confident 100% government run R&D on new drug development is a step forward in terms of medical innovation. Cheaper, sure. Buyer beware, you'll get what you pay for.

 

[BigSteelThrill]

This isn't about promoting advances. Its about pure greed and disguising that fact.

 

[Leeroy Jenkins]

nothing says america like raking massive profits on prisons and prescriptions.

Was there a change to the law that suddenly allowed advertising and marketing of drugs directly to the consumer and doctors? It's like 15 years ago we started fettig flooded with these and now it is common place.

 

[The Big Guy]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

This guy gets it.

I bolded the middle paragraph as my most important takeaway. Let me put it this way: if the pitchfork internet army gets its way and takes down big, bad pharma once and for all, the innovators paying for R&D on new compounds will be whom, exactly? The US government.

I would 1,000,000 out of 1,000,000 put the compounds that come as a result of private industry R&D spend up against anything the US government would ever put to market in a big pharma-less world. It's extremely expensive to get a drug with proven trial efficacy to market, and lots of drugs do fail at multiple stages in the development lifecycle. You pay big money to a guy that can hit .300 in baseball, this is somewhat similar. The free market incentivizes innovation and spend to bring breakthrough drugs to market. I'm not very confident 100% government run R&D on new drug development is a step forward in terms of medical innovation. Cheaper, sure. Buyer beware, you'll get what you pay for.

If this was a case of a company like Pfizer raising prices to create more opportunities to develop more drugs, then no worries. This is a company that has done nothing and is doing nothing for the industry. This ceo is a drain on society and an absolute ######## who has absolutely zero f### to care about anyone.

 

[mquinnjr]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

This guy gets it.

I bolded the middle paragraph as my most important takeaway. Let me put it this way: if the pitchfork internet army gets its way and takes down big, bad pharma once and for all, the innovators paying for R&D on new compounds will be whom, exactly? The US government.

I would 1,000,000 out of 1,000,000 put the compounds that come as a result of private industry R&D spend up against anything the US government would ever put to market in a big pharma-less world. It's extremely expensive to get a drug with proven trial efficacy to market, and lots of drugs do fail at multiple stages in the development lifecycle. You pay big money to a guy that can hit .300 in baseball, this is somewhat similar. The free market incentivizes innovation and spend to bring breakthrough drugs to market. I'm not very confident 100% government run R&D on new drug development is a step forward in terms of medical innovation. Cheaper, sure. Buyer beware, you'll get what you pay for.

If this was a case of a company like Pfizer raising prices to create more opportunities to develop more drugs, then no worries. This is a company that has done nothing and is doing nothing for the industry. This ceo is a drain on society and an absolute ######## who has absolutely zero f### to care about anyone.

I'm with you in this case, and should have specified that. Sorry that I didn't, yes Turing in this case is in the wrong as they're basically calling their price to acquire the "R&D" they have to recoup. Do not agree with that in line with what I said about about a private firm recouping R&D amounts spent, combined with what Nick said about additionally recouping sales & marketing costs, etc. on top of that in bringing a product to market.

 

[Rove!]

I've always felt that government's role is not to control the markets, but to take steps that ensure that the markets run efficiently and fairly.

Not sure how we handle that in this situation, but there has to be way....

 

[FattyVM]

A lot of the old equipment I used to work for I guess can be related to this scenario as well. I used to work on analog instrumentation. This consisted of huge metal drawers with specialized resistors and capacitors along with many other compenents. If we ever had to replace a drawer, it would have to be custom made because none of the items were mass produced or produced anymore. Hence, the demand was extremely low. But almost every part cost upwards of six figures. Now we run almost extensively on windows. When something breaks we can just switch it out with a card that you can get from anywhere. So even though the analog technology is fifty years older than the technology we use now, it cost 100x more to use it.

Nuclear industry?

 

[Binky The Doormat]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

This guy gets it.

I bolded the middle paragraph as my most important takeaway. Let me put it this way: if the pitchfork internet army gets its way and takes down big, bad pharma once and for all, the innovators paying for R&D on new compounds will be whom, exactly? The US government.

I would 1,000,000 out of 1,000,000 put the compounds that come as a result of private industry R&D spend up against anything the US government would ever put to market in a big pharma-less world. It's extremely expensive to get a drug with proven trial efficacy to market, and lots of drugs do fail at multiple stages in the development lifecycle. You pay big money to a guy that can hit .300 in baseball, this is somewhat similar. The free market incentivizes innovation and spend to bring breakthrough drugs to market. I'm not very confident 100% government run R&D on new drug development is a step forward in terms of medical innovation. Cheaper, sure. Buyer beware, you'll get what you pay for.

If this was a case of a company like Pfizer raising prices to create more opportunities to develop more drugs, then no worries. This is a company that has done nothing and is doing nothing for the industry. This ceo is a drain on society and an absolute ######## who has absolutely zero f### to care about anyone.

Exactly. This guy better watch himself - the internet people have engaged and are out to get him.

Good.

 

[msommer]

3D printing of low volume drugs might be a solution. FDA has approved the first one (the link is in the disruptive technology thread)

 

[Fat Nick]

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector.

If companies can fire people and still get the job done they will - in fact they have a fiduciary duty to stockholders to do so.

Absolutely. But I guess to still echo my point, when you look at the list of the most profitable companies in the world, Pharma companies aren't the ones driving the list these days. It's Tech, Banking, and Oil...I think the most profitable "Pharma" company is J&J, which is honestly a consumer conglomerate with only a portion in Pharma.

 

[Fat Nick]

It's a 62 year-old drug that was being sold so cheaply there was no competition, presumably. So one producer upped the price in a big way. Since it's no longer a patented med, someone else will quickly pick up the slack and produce more priced less than $750. Eventually the market price will stabilize as supply meets demand.

In theory, yes...but this thing has less than 10,000 annual prescriptions. There's only so much money to be had. I don't think you're going to see generics jumping into the foray to make a drug with such low volume. Even at a high price per pill, there's only so much money to be had.

It is a free market economy on the non-patent drugs, but when it's not a common med, it's almost akin to custom medicine to get these drugs. You have to charge a ton to even justify making them.

I didn't realize it was a so-called "orphan" drug they're talking about. That does change the economics... in such a way that regulation of some sort is justified, I think. Especially on such an old drug. There isn't that much r&D required on a generic.... not like the company has to roll out hundreds of millions of dollars to produce a generic. There are costs,, yes, but nothing like with developing a new drug. But if no one will compete and the one vendor effectively has a monopoly on that drug, then I think some regulation needs to take place to best serve the public's interest. Especially when you;'re talking about a generic drug. If the patent hasn't expired, then yeah... give the company a shot at recovering their investment, but once it goes generic... in a case like this one, regulate it.... and by that I mean make the company justify its price like utility prices get regulated. If they can justify a $750 price... fine, but "justify" in this regard is going to be with respect to cost, not with respect to market demand.

Agree 100%. Many of the bigger pharma companies actually do this. They consider drugs that are viewed as "critically important," as in important to man-kind, but maybe not profitable. Most larger pharma companies have the ability to absorb the cost/loss on these drugs into their overall profit structure. I work for an Animal Health company now, and we do that even for animal products. There are products that we currently make that nobody else makes. They're not profitable, but we make them because if we didn't, animals would die.

I think the oddity here is that one of these "critically important" drugs has fallen in the hands of a guy only concerned about profit, and at a company perhaps not large enough to absorb these costs effectively.

I agree that they absolutely need to regulate these types of drugs in cases like this...maybe they will if it happens more frequently.

 

[Fat Nick]

In theory, yes...but this thing has less than 10,000 annual prescriptions. There's only so much money to be had.

$750 x 10,000 prescriptions x 10 pills per prescription = $75,000,000

Do you think it costs anywhere near even $1 million to produce 10,000 prescriptions of this drug?

I get the math...but if we go back to the $13.50 price, that's only $13.5M...That's peanuts in the pharma world.

I think if the price STAYS at $750, it'd entice generics, but generics aren't going to bring it back to the old price.

 

[Fat Nick]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

Tell me then, how can I get a drug for me dog that cost $2.00 per pill, but the same thing for me costs $15 per pill? This is just a generic example, my ex wife worked in the vet business and we saw many examples of this with different drugs.

I work for an Animal Health company that was once part of big pharma...I can't necessarily explain every aspect of it, but I can say that the human pharma manufacturing standards are much much more strict than the manufacturing standards for animal products.

Also, while the active ingredient may be the same, it's rarely truly the same pill. Human and Animal pharma are very synergistic at an R&D level, but the finished goods, regulatory bodies, manufacturing standards, and nearly everything else are different. Rimadyl (Carprofen) is widely used in dogs, and was at one point used in humans (not much anymore due to new, more effective products). They weren't the same formulation for humans and dogs.

Also consider that the number of relevant parties that need to profit are a lot less in AH than Human health. The human "profit chain" is basically Pharma Company --> Healthcare Insurer --> Healthcare Provider --> Patient. A lot more mouths that need a cut along the way. For AH, it's often AH Company --> Vet --> Patient, where the Vet often makes a minimal profit off the medicine and more on the Vet service.

 

[Fat Nick]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

This guy gets it.

I bolded the middle paragraph as my most important takeaway. Let me put it this way: if the pitchfork internet army gets its way and takes down big, bad pharma once and for all, the innovators paying for R&D on new compounds will be whom, exactly? The US government.

I would 1,000,000 out of 1,000,000 put the compounds that come as a result of private industry R&D spend up against anything the US government would ever put to market in a big pharma-less world. It's extremely expensive to get a drug with proven trial efficacy to market, and lots of drugs do fail at multiple stages in the development lifecycle. You pay big money to a guy that can hit .300 in baseball, this is somewhat similar. The free market incentivizes innovation and spend to bring breakthrough drugs to market. I'm not very confident 100% government run R&D on new drug development is a step forward in terms of medical innovation. Cheaper, sure. Buyer beware, you'll get what you pay for.

If this was a case of a company like Pfizer raising prices to create more opportunities to develop more drugs, then no worries. This is a company that has done nothing and is doing nothing for the industry. This ceo is a drain on society and an absolute ######## who has absolutely zero f### to care about anyone.

After reading this article more, I agree - In this individual case, this guy is just a #####. He may have a financially justifiable reason to raise this price, but he's a #####. But...it's also not right to consider this guy Pharma. As someone pointed out, he's a hedge fund guy going around buying up drugs.

There's a major societal impact of people doing this.

 

[Steve Tasker]

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Cut the ####, #######.

 

[Fat Nick]

Sorry for the deluge of posts all...I'm just catching up on the thread.

I read a few articles on this last night. It really is a sad case where greed is trumping the well-being of mankind. I'm not 100% versed on regulations on this type of thing, but if there isn't, there needs to be something that prevents these hedge-fund types from doing this type of thing with single-source drugs.

I think regulation is the only way (and I'm rarely for regulation). These drugs are rarely profitable, meaning the only impetus for "Big Pharma" to sell them is that they benefit humanity. They don't benefit their bottom line. If someone came along and offered to "buy" them, thus relieving Big Pharma of the burden, it's a win-win...then, some smarmy hedge fund jacks the price up because they don't have the reputation to risk, and don't care about people, only profits. It's a scary, slippery slope, and it's hard to tell what other drugs are out there that fall into this boat. It's truely a financial win-win for Big Pharma and the Hedge Funds, and a loss for anyone who needs the drug...and without regulation, there's little that can be done. I still assert that generics will only help so much in controlling the price pressures, because this just isn't the type of drug they're focused on.

 

[Brony]

Insurance companies could say we're not paying for this drug at price X and block the drug from their formulary out of principle. Then of course, the headline is that Aetna denies critical drug to elderly. Not worth it to Aetna to save a few thousand bucks on this scale. The American system is set up for situations like this. Other countries with single payer can set what they're willing to pay for drugs and don't run into situations like this. Countries with single payer will pay for innovative drugs so it doesn't kill the R&D pipeline, but it does diminish interest in new molecules to some extent.

 

[Fat Nick]

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Cut the ####, #######.

It's funny, because Turin Pharma has TWO products. It's pretty clear that this guy is in it for all the wrong reasons. If it was one of twenty, I could see his rebuttal making some sense, but it's half of his active portfolio.

 

[Fat Nick]

Insurance companies could say we're not paying for this drug at price X and block the drug from their formulary out of principle. Then of course, the headline is that Aetna denies critical drug to elderly. Not worth it to Aetna to save a few thousand bucks on this scale. The American system is set up for situations like this. Other countries with single payer can set what they're willing to pay for drugs and don't run into situations like this. Countries with single payer will pay for innovative drugs so it doesn't kill the R&D pipeline, but it does diminish interest in new molecules to some extent.

Yeah...the single payer model works well in general...My one concern is that the impact on Pharma innovation has been minimal thusfar. I think it's been minimal because while much of Europe/ROW is on a single-payer model, the big elephant US of A isn't. So pharma companies fund their innovation and make their profits in the US, and the rest of the world benefits from the innovation.

I'd be curious what would happen to the Pharma dynamic if the US went single-payer...I think the impacts would be big. Saying that the SP model works elsewhere, why not do it here, is a little short sighted, because I think part of the reason it works elsewhere is because we aren't doing here.

I agree that if it's an innovative drug, the single-payer model helps fund R&D, but what about in cases like this drug? It's not novel, it's not innovative...it's just seldom used, but necessary when it is. Those would be interesting scenarios to see play out.

 

[Ketamine Dreams]

From what I understand, generic drugs take a big ramp up to be able to produce them and this is such a low volume drug that no one feels that someone will step in and do that.

This. I see a shortage of common old drugs from time to time. Few companies produce them, so if there is any glitch then we run out. Low profit margins generally because the drugs have been around forever. Also, there is a strict control on the import of pharmaceutical drugs produced overseas, even if they are bioequivalent (big government failing on the acquisition side).

 

[belljr]

I hope he gets Aids and can't afford his own pill

 

[timschochet]

If there is a natural disaster like an earthquake or hurricane, there are laws in place to prevent local markets from price gouging to take financial advantage of emergency conditions. Shouldn't the same principle be applied here?

 

[Steve Tasker]

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Cut the ####, #######.

It's funny, because Turin Pharma has TWO products. It's pretty clear that this guy is in it for all the wrong reasons. If it was one of twenty, I could see his rebuttal making some sense, but it's half of his active portfolio.

I'm far from some anti-capitalism honk, but let's call it what it is here....this dude sees a way to make some serious $$ off an orphan drug. R&D my ###. Trying to stay in business? Why would a (by all accounts) brilliant hedge fund manager buy an orphan drug that is at risk to put him out of business at its current price point? The answer is: he wouldn't....

 

[timschochet]

Hillary Clinton to the rescue! Calling this price gouging, she is proposing a $250 cap on monthly payments for chronic users of these types of medicines.

Go Hillary!

 

[eoMMan]

I think he's a doosh simply for tweeting Eminem lyrics.

 

[Henry Ford]

nothing says america like raking massive profits on prisons and prescriptions.

Was there a change to the law that suddenly allowed advertising and marketing of drugs directly to the consumer and doctors? It's like 15 years ago we started fettig flooded with these and now it is common place.

The FDA issued new regulations in the late 1990s and early 2000s that relaxed the requirements for direct to consumer pharmaceutical advertising.

 

[Fat Nick]

Hillary Clinton to the rescue! Calling this price gouging, she is proposing a $250 cap on monthly payments for chronic users of these types of medicines.

Go Hillary!

But that fails to address the flip-side which is that somebody still has to make it worth-while for the manufacturers to make this stuff.

Is that cap limiting the cost to the patient? Sounds like it...if so, then what determines the price the manufacturer can charge? And if that amount is high, who picks up the difference?

I feel like you need a combination of points is needed to really fix this issue.

-Cap on the out-of-pocket for the patient.

-Limit (based on audited profitability by product) on the gross margin of a product to keep Pharma companies from just randomly inflating the price - if it's truly costly to make, then fine, but you have to prove it.

-Mandate that insurance companies cannot restrict the availability of a certain list of drugs like this just due to cost if there is no other comparable alternative medicine available.

 

[cstu]

In theory, yes...but this thing has less than 10,000 annual prescriptions. There's only so much money to be had.

$750 x 10,000 prescriptions x 10 pills per prescription = $75,000,000

Do you think it costs anywhere near even $1 million to produce 10,000 prescriptions of this drug?

I get the math...but if we go back to the $13.50 price, that's only $13.5M...That's peanuts in the pharma world.

I think if the price STAYS at $750, it'd entice generics, but generics aren't going to bring it back to the old price.

This is why I'm advocating government production of generics.

 

[Brony]

This is just the smallest tip of the iceberg on why HC is so expensive here.

 

[Brony]

In theory, yes...but this thing has less than 10,000 annual prescriptions. There's only so much money to be had.

$750 x 10,000 prescriptions x 10 pills per prescription = $75,000,000

Do you think it costs anywhere near even $1 million to produce 10,000 prescriptions of this drug?

I get the math...but if we go back to the $13.50 price, that's only $13.5M...That's peanuts in the pharma world.

I think if the price STAYS at $750, it'd entice generics, but generics aren't going to bring it back to the old price.

This is why I'm advocating government production of generics.

almost all generics are manufactured in India nowadays, why would you want our gov't to make generics? In this particular case, it might cost the govt $10's of millions to make this drug that only a few thousand people are on.

 

[saintfool]

it would be awesome if one of the India pharma companies just found a way to make a version of this drug on their own and released it one of the pharmas did that for HIV - i think - but limited it to just India. they happily, gladly violated copyright laws to serve a higher purpose.

 

[cstu]

almost all generics are manufactured in India nowadays, why would you want our gov't to make generics? In this particular case, it might cost the govt $10's of millions to make this drug that only a few thousand people are on.

I think you're over-estimating the difficulty and cost of creating drugs.

Here's a chart that shows the markup on generic drugs (from this link - PDF).

 

[Judge Smails]

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Cut the ####, #######.

It's funny, because Turin Pharma has TWO products. It's pretty clear that this guy is in it for all the wrong reasons. If it was one of twenty, I could see his rebuttal making some sense, but it's half of his active portfolio.

He's a hedge fund guy, in it for the money...

 

[johnnycakes]

Martin Shkreli, the founder and chief executive of Turing, said that the drug is so rarely used that the impact on the health system would be minuscule and that Turing would use the money it earns to develop better treatments for toxoplasmosis, with fewer side effects.

“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.

“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”

Cut the ####, #######.

It's funny, because Turin Pharma has TWO products. It's pretty clear that this guy is in it for all the wrong reasons. If it was one of twenty, I could see his rebuttal making some sense, but it's half of his active portfolio.

He's a hedge fund guy, in it for the money...

Probably drives a effing Ferrari.

 

[renesauz]

It's a 62 year-old drug that was being sold so cheaply there was no competition, presumably. So one producer upped the price in a big way. Since it's no longer a patented med, someone else will quickly pick up the slack and produce more priced less than $750. Eventually the market price will stabilize as supply meets demand.

Supply/demand considerations are just plain assinine in regards to medicine. There's only one company suppying electricity to your home...the laws of supply and demand suggest the electric company can and should charge far far more to deliver power than the do.

It's ridiculous to allow medicine to operate under (not-so) free market principles, because it is NOT a free market. It's not a luxury item, but a necessity. They shouldn't be morally allowed to charge whatever they want to just because they can.

 

[renesauz]

If only we had death panels!

Don't laugh. Anyone who's worked in an ICU will tell you we need them.

 

[johnnycakes]

It's a 62 year-old drug that was being sold so cheaply there was no competition, presumably. So one producer upped the price in a big way. Since it's no longer a patented med, someone else will quickly pick up the slack and produce more priced less than $750. Eventually the market price will stabilize as supply meets demand.

Supply/demand considerations are just plain assinine in regards to medicine. There's only one company suppying electricity to your home...the laws of supply and demand suggest the electric company can and should charge far far more to deliver power than the do.

It's ridiculous to allow medicine to operate under (not-so) free market principles, because it is NOT a free market. It's not a luxury item, but a necessity. They shouldn't be morally allowed to charge whatever they want to just because they can.

More importantly, I wrote the quoted before I realized it was an orphan drug.

 

[Rove!]

Sorry for the deluge of posts all...I'm just catching up on the thread.

I read a few articles on this last night. It really is a sad case where greed is trumping the well-being of mankind. I'm not 100% versed on regulations on this type of thing, but if there isn't, there needs to be something that prevents these hedge-fund types from doing this type of thing with single-source drugs.

I think regulation is the only way (and I'm rarely for regulation). These drugs are rarely profitable, meaning the only impetus for "Big Pharma" to sell them is that they benefit humanity. They don't benefit their bottom line. If someone came along and offered to "buy" them, thus relieving Big Pharma of the burden, it's a win-win...then, some smarmy hedge fund jacks the price up because they don't have the reputation to risk, and don't care about people, only profits. It's a scary, slippery slope, and it's hard to tell what other drugs are out there that fall into this boat. It's truely a financial win-win for Big Pharma and the Hedge Funds, and a loss for anyone who needs the drug...and without regulation, there's little that can be done. I still assert that generics will only help so much in controlling the price pressures, because this just isn't the type of drug they're focused on.

Basically, it's an inefficient market and the guy is taking advantage of that...

 

[Rove!]

In theory, yes...but this thing has less than 10,000 annual prescriptions. There's only so much money to be had.

$750 x 10,000 prescriptions x 10 pills per prescription = $75,000,000

Do you think it costs anywhere near even $1 million to produce 10,000 prescriptions of this drug?

I get the math...but if we go back to the $13.50 price, that's only $13.5M...That's peanuts in the pharma world.

I think if the price STAYS at $750, it'd entice generics, but generics aren't going to bring it back to the old price.

This is why I'm advocating government production of generics.

almost all generics are manufactured in India nowadays, why would you want our gov't to make generics? In this particular case, it might cost the govt $10's of millions to make this drug that only a few thousand people are on.

Which would likely be cheaper than funding some hedge fund managers yacht via Medicare Medicaid and Govt healthcare...

 

[Rove!]

Hillary Clinton to the rescue! Calling this price gouging, she is proposing a $250 cap on monthly payments for chronic users of these types of medicines.

Go Hillary!

This sounds like a simpleton answer to a complex problemsThe cure is worse than the problem

You're going to kill r&ad

Any drug which is relatively expensive to manufacture is going have a hard time finding a home

Drugs that are cheap to make would still be subject to gouging

We have a ####load of dumb candidates.

 

[Clifford]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

I have no experience so not challenging you on much of this, but are you relying solely on layoffs as proof of economic hard times? I know in my industry layoffs are a standard move to get a slight bump in the stock price, and often come hand in hand with double-digit YoY growth and record earnings.

 

[Jackstraw]

This reminds me of the gun situation.

"Nothing can be done" said the only nation in the world with these kinds of problems.

 

[Clifford]

Hillary Clinton to the rescue! Calling this price gouging, she is proposing a $250 cap on monthly payments for chronic users of these types of medicines.

Go Hillary!

This sounds like a simpleton answer to a complex problemsThe cure is worse than the problem

You're going to kill r&ad

Any drug which is relatively expensive to manufacture is going have a hard time finding a home

Drugs that are cheap to make would still be subject to gouging

We have a ####load of dumb candidates.

Wasn't the same slippery slope argument made any time there was ever a government mandated cost increase or regulation of any industry? Haven't we seen that despite what many called massive regulation increases the financial industry continues to make money hand over fist?

Obamacare passed in 2010 and all we heard was that small business were going to have to shut down / fire all their workers because of the onerous requirements.

http://www.nfib.com/assets/jobs-data-nfib-201509.png

Once people got past the doomsday predictions hiring was positive again.

You're not going to kill R&D because #1, there will still be researchers who actually give a #### about healing people and curing disease and #2 because there will still be people who want to market their drugs and make money.

Maybe some people who were used to the game being completely rigged in their favor will retire, but there will always be #1 and #2 unless we completely remove it from the private sector.

 

[Fat Nick]

I used to work in "Big Pharma. I'm not defending these practices, but I will say that it's a lot more complicated than the average person thinks, and there are some 2nd-line impacts that people often fail to realize.

-In the case of these old, smaller market drugs, the reason they're expensive is because of the effort that goes into making small quantities. Manufacturing lines have to be set-up for the drug...the fixed costs of that goes into the overhead of that line's run...On large volume drugs (statins, etc) the costs are minimal per pill...on these low-volume drugs, the cost per pill can be very high. It's akin to a "custom" item. You pay for the overhead, not the actual item. If it were profitable for generics to do it, they'd have found a way, but at low volume, there's no money in it.

-People often don't realize that Pharma companies aren't "obscenely rich." If Pharma companies made as much money as people think they do, there wouldn't be massive layoffs in the sector. It's much harder for people to understand and grasp the R&D that goes into a drug, resulting in a pill that costs $200, than it is an iPhone that costs $500...but both have their share of expenses and challenges. The cost of every drug that a company TRIED to bring to market and failed is rolled into the cost of the drugs that made it. So for every pill you take, you're paying for some of the pills that didn't succeed.

-You can't just start capping the costs of these things via regulations...Let's face it. We have great drugs because there's profit to be had in discovering them. If you start limiting the profit, you'll stifle the advancement. It's sad, but it's true. The first thing that starts to get cut when a pharma company is squeezed on earnings is R&D.

-People view generics as these great "saviors" that come in and provide affordable medicine. Generics allow the consumer to buy cheaper medicine by not contributing at all to the development of new drugs (if anything, they hinder it). It's the classic example of people wanting what's best unless they have to pay for it.

I'm 100% positive there are counters to most of these...I'm sure folks have/will cover them. I just wanted to point out that it's not so cut and dry. This particular article seems a bit excessive, but ask yourself this: What if that drug wasn't profitable at the old price. What if the company HAD to charge the new price to break even. Would you rather them stop selling it altogether, leaving no viable source for the drug, or sell it at the higher price?

I have no experience so not challenging you on much of this, but are you relying solely on layoffs as proof of economic hard times? I know in my industry layoffs are a standard move to get a slight bump in the stock price, and often come hand in hand with double-digit YoY growth and record earnings.

No...I just didn't feel like typing out all the reasons and figured that was a relatable one. Completely see your point, but many pharma companies are way beyond "normal rightsizing layoffs." I can tell you that Big Pharma is not in the midst of a profit boom, or record earnings. Many of them are really struggling to deal with patent expirations, and the end of the "blockbuster" drug. Most of the big statins are now off-patent. The small-molecule pipeline is dry. The biological pipeline is expensive and tough.

I could go on...but I'll stand behind the statement that Big Pharma companies as a whole are not making money hand-over-fist on their pharma products.

 

[cstu]

It's a 62 year-old drug that was being sold so cheaply there was no competition, presumably. So one producer upped the price in a big way. Since it's no longer a patented med, someone else will quickly pick up the slack and produce more priced less than $750. Eventually the market price will stabilize as supply meets demand.

Supply/demand considerations are just plain assinine in regards to medicine. There's only one company suppying electricity to your home...the laws of supply and demand suggest the electric company can and should charge far far more to deliver power than the do.

It's ridiculous to allow medicine to operate under (not-so) free market principles, because it is NOT a free market. It's not a luxury item, but a necessity. They shouldn't be morally allowed to charge whatever they want to just because they can.

This guy gets it.