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Insulin in the USA Insulin is expensive in the USA. “The average list price of one unit of insulin in the US is $98.70, compared to $12 in Canada and $7.52 in the UK.”
Then why do not people simply buy it from wherever it is cheaper? Because it is illegal to import it. Why is it not made more cheaply by competitors? Because the FDA have not approved this. President Biden claims to want to lower insulin costs but continues to support state violence that restricts access to medication.
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I don’t think it’s that simple. Those lower prices aren’t simply the result of market forces. They come from countries where medicine is state controlled, with only a single purchasing organization that can say to pharmaceutical companies, “You’ll sell us drug X at price p, or you won’t sell it at all”—a monopsony situation, coercively created. By that means they can drive the price down to where it just meets the variable costs of manufacture, with nothing over to cover the fixed costs. But those fixed costs include paying back the expense of creating the drug in the first place, coming up with a synthetic route, testing it, and getting it through government regulation—and of doing some of those things for multiple other drugs that never get to market in the first place. If no one were paying those high US prices, the costs of researching new drugs would never be paid off.
Of course you could have government agencies subsidize the development of new drugs with tax money. But that just means that people are paying high prices for drugs indirectly, through the state violence of coercive taxation. And ethics aside, I don’t think that a “Manhattan project” approach to treating cancer or psychosis is likely to be all that successful.
For the record, Biden scrapped Trump’s EO to reduce this burden, which was to go into effect on the 22nd of this month: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/regulatory-freeze-pending-review/
The original EO is removed from https://www.whitehouse.gov/presidential-actions/executive-order-access-affordable-life-saving-medications/ but still on the Wayback Macine.
Mr Stoddard explains what a monopoly can do when protected by government. He doesn’t explain why that’s OK when it is a pharma monopoly.
When I lived in Texas I found it worthwhile to fly home to the UK to get insulin, two months’ supply being the price of a return ticket.
An argument (not the only one of course, but perhaps the one most stridently made) put forward for these US drug prices is to pay for innovation and drug development which the rest of the world benefits from.
Does all the non US pharma pay for their research by selling to the US? Are non-US drug prices barely cost or do they represent a loss for non US pharma?
Why do US companies sell outside the US? (I know many of these companies are global with operations everywhere)
Its the sheer scale of the disparity between the US and so many other countries that stinks. Applying Occam’s razor based on this can only really lead to one conclusion (doesn’t it?)
The worm in the apple lies in the quote. The “average list price” means precisely nothing in the US context, where any medical device, procedure or prescription may have at least a half-a-dozen actual prices, depending on who’s asking and who’s paying, and none of which bear any relationship, necessarily, to the ‘list price’.
Like the MSRP on the window sticker in a car dealership in the US, it’s just a starting point, a line in the sand.
@rhoda klapp – your description intrigues me. Is insulin sold at retail in the UK?
llater,
llamas
William H Stoddard, Llamas: the trouble is it’s regulations and protection all the way down.
I wonder what a real free market in pharmaceuticals would look like.
This is just a small example of how the regulatory/government entities have weaponized their functions to allow Deep State participants to profit. What do you bet that there are a lot of members of Congress holding stock in the insulin manufacturer(s)?
Sounds similar to the epi-pen situation … https://theintercept.com/2016/08/24/epipen-uproar-highlights-companys-family-ties-to-congress/
Now take this pattern and spread it to almost every other industrial sector. This is why the Deep State works so hard to keep themselves out of the headlines.
@ruralcounsel – you raised an interesting point re -the Epi-Pen.
Leaving aside the semi-obvious issues surrounding its favouring by Congress 😊, I once took an in-depth look at the Epi-Pen, and I see where it’s actually possibly worth something around its sale price of around $350 per unit. Generics are now less than $100 per unit. It is just a fantastically-elegant design – but complex, and thus not-inexpensive to make. It’s a typical example of government/military procurement, designed to a vast array of complex specifications intended to ensure absolute reliability, stunning durability, and no doubt a half-a-hundred other governmental goals having very little bearing on its medical effectiveness. I’ll bet the springs inside have to be certified for everything from biological inertness to radiological neutrality, and that all costs money.
The simplest solution – a 5ml disposable syringe containing a couple of ml of generic epinephrine – should cost less than a dollar. Is that a viable alternative, in the scenarios for which an Epi-Pen is intended – an emergency IM injection where no skilled persons are available? I don’t know – although, in the recent flu outbreak, hundreds of thousands of minimally-skilled persons were administering hundred of millions of similar injections without too much trouble. IM injections are the easiest, and can be controlled simply by needle length.
Is there a net risk increase element, maybe, where the cost of the fancy autoinjectors dissuades their deployment, where the much-cheaper but possibly-not-quite-as-reliable alternatives might in fact save more lives?
Fascinating, and I Are Fascinated. Discuss.
llater,
llamas
Note that that article about prices is about new, improved insulin analogs – many of which are still under patent.
“Human insulin”, the generic old stuff, is cheap.
I want to know if the CA/EU prices are the same mix of insulins, before we even talk about anything else.
(Because “insulin” is not one thing. It’s a whole class of things, and they’re not the same price and don’t work in quite the same ways, which is why people don’t all just use the cheap stuff.)
(Not that the FDA isn’t a mess and there aren’t huge legal issues complicating everything … but often people writing such articles are all about finding maximum shock for clicks, not trying to compare only comparables, or even mention that there might be complexities there.)
And yet the US authorities approved the covid vaccines in a matter of months, with the providers given full legal immunity. Funny old world.
For clarity, I get insulin free on the NHS. The prices I researched at the time were $30 as the UK list (which nobody pays, all NHS diabetics get free scrips) and the US price $700 for exactly the same product, Lilly Humalog 30 5-vial packet, lasting me about 10 days a vial. I later found I could get the packet for as little as $500, so that is why I needed two packets to make the air ticket viable. Of course I didn’t actually take a trip just for that. There was a similar story for glucose testing gear and oral meds.
As far as epipens go, it was a scandal investigated in Congress in 2016. Someone had bought the company and rammed up the price. None of the usual justifications apply Here’s a link:
https://money.cnn.com/2016/08/29/investing/epipen-price-rise-history/index.html
@rhoda – Sorry, you don’t get Insulin free, unless you pay no taxes. Even then you may get it for free, but someone is paying for it.
At one point a “dose” of the AZT cocktail for aids cost about $0.01 in Africa. In the US it was over $1,000. That was an example of direct transfer of US supported medical innovation from 1st->3rd world. Insulin is tougher because it’s essentially an 18th century technology with a lot of muddy in it.
-XC
To answer Mark‘s question
I haven’t researched this, so take it with a grain of salt, but:
In these countries outside of the US, the governments make selling cheap drugs part of the requirements for getting patent protection.
Essentially, “Either you sell us the results of millions in research for the marginal cost of manufacture, or we’ll allow our manufacturers to copy your formula and sell it to us (and other markets)”.
In reference to general medications, Rob Fisher‘s follow-up comment needs an extra qualifier: It’s “regulations and protection all the way down”, but the problems may lie in the regulations and protection mandated by other countries.
Oddly, this answer probably doesn’t apply to the topic of Fisher’s original post, since insulin should have generic versions available by now. Though Sigivald might let me claim this comment is relevant.
@XC, let’s look at it another way. I don’t pay at the pharmacy. I do pay taxes, and the per-person-per-annum share of the NHS is around £3000, currently say $4000. The seven packs of insulin I use in a year would be $4900 or so. Therefore Americans are paying for my insulin to be free. Thanks Guys, but really you oughta have a word with Eli Lilly.
You can’t win the many-faceted drug price disparity argument on the field of insulin. It’s just too egregious an example of price-gouging the chronic sick.
@Cayleygraph
Interesting, but it is the scale of the disparity between US drug prices and those elsewhere which people question. As I don’t live in the US, to me, this is of academic interest.
However, not much diligence is required to watch the arguments, which, to put it mildly, are polarized: Either US payers are supporting some sort of global and never ending Marshall type plan or those same US payers are being ripped off on a biblical scale.
There seems to be little in between.
Five minutes of searching turned this up: https://www.cfr.org/blog/irish-shock-us-manufacturing, which would seem to suggest the latter.
Do the pharmaceutical industries of other countries do anything similar?
The FDA, and other government agencies, claim to protect people from powerful corporations – the truth is very different.
Government agencies, such as the FDA (but many others to), tend to protect corporations from competition – via endless regulations. Making people pay higher prices – indeed often preventing vital products getting to people at all. President Trump tried to address that – with such things as the “Right to Try” policy (if a person had a medical condition that could kill them – they could try something unapproved by the bureaucracy) – and he was HATED for that (hated by very powerful groups).
It is possible that the Progressives who created these endless agencies and bureaus were sincere – that they really did believe the bureaucracy would do good (not harm). But there is no excuse for still believing that now – after more than a century of this madness.
The Progressive state has failed – it does HARM.
I’m not sure why an article about how US pharmaceutical companies have shifted manufacturing to imports from their own foreign subsidiaries & record their profits as coming from same suggests that pharmaceutical companies aren’t relying on US consumers to pay for research.
Thomas Jefferson has been proved correct – over time corruptions have entered the system of government of the United States (as he predicted was very likely over time) and it is time for a “reset” which is just about the opposite of the reset planned by Dr Schwab and his friends.
The assumed powers of the Federal Government to spend money without limit (under the FALSE claim that there is a “general welfare spending power” – the “common defence and general welfare” actually being the PURPOSE of the specific spending powers granted to the Congress by Article One, Section Eight), and to regulate without limit (“regulate interstate commerce” was supposed to about free trade over State lines – making trade regular) have been so abused that THEY MUST GO.
The words “general welfare” and “regulate interstate commerce” must be negated – if need by a Constitution Convention.
Drastic action yes – but a lot less drastic that the sort of that Jefferson suspected would be needed every generation or so.
Clue – in a real “insurrection” people do not leave their firearms at home.
Without an end to the endless government spending (financed by creating money-from-nothing – just as ROGER SHERMAN feared it would be), and an end to the endless REGULATIONS (which are crippling every part of American society), the United States will collapse.
People can be as docile as lambs to the slaughter (as the Democrats want – as they get rid of the statues of the Founders, such as Jefferson, and so many others, even economic Progressives such as Theodore Roosevelt, whose crime is “Nationalism”), and America will still collapse.
The system that the international Collectivists are building just WILL NOT WORK – not in America, and not anywhere else either.
International Collectivists?
A “nomenklatura” by any other name.
They mean to RULE! Tarting up their sociopathic lust with paeans to “collectivism and “sharing” and endless other bullshit slogans, merely highlights their utter, actual contempt for the peasantry who “strive” and whose wealth is stolen, not by the “greedy capitalists” but by the nomenlkatura / “wise leadership”.
Just look ate the “holy” ones in the socialist pantheon. ALL portrayed themselves as being “of the people”.
Yeah; RIGHT!!.
These days?
Same old excrement; marginally different narrative.
As per “Atlas Shrugged”:
“Did you really think we want those laws observed?” said Dr. Ferris. “We want them to be broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against… We’re after power and we mean it… There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt. Now that’s the system, Mr. Reardon, that’s the game, and once you understand it, you’ll be much easier to deal with.”
@Cayleygraph
I don’t think it necessarily suggests that. Of course US buyers are supporting medical research as British, French etc buyers are supporting their pharmaceutical suppliers (as doubtless do taxpayers).
The basic question is the costs to the users and to whom that money is actually going. US buyers pay a lot more.
I believe the US has a huge trade deficit in pharmaceuticals, and this might be a reason why. It’s hardly low tech and the usual about cheap labour doesn’t really cut it. If US buyers are paying through the nose for the research, and foreigners (and we’re not talking the third world here) are getting the benefit, it would appear they are getting a lot of jobs as well.
Do British, French, German etc pharma do the same using US manufacturing? Just askin.
@rhoda klapp:
There is no such thing as “price-gouging”, the chronic sick or anyone else.
Nobody has any right to my property no matter how sick they are not you, not superman, not Boris Johnson, nobody.
My property is mine and I’ll sell it for whatever the fuck I want, or not sell it at all out of sheer nasty spite, and all thieving social justice warriors can fuck right off.
Rob Fisher
“I wonder what a real free market in pharmaceuticals would look like.”
Drug companies funding serious drugs from the wonderful profit margin on recreationals.
Fred Z, you missed the bit where while you are quite fairly setting any price you like, anybody with a lower price is excluded from the market. In the US you are not allowed to import the same drug, in the same packaging, from a free market. Price gouging only works because of that.
Funny you should mention this, given my today’s personal experience- numbers are annualized.
I take a prescribed blood pressure medication, nebivolol, one pill a day. I’m a retired State employee, so I had that (general, not just prescription) insurance, with about a $150 a month premium. The pills cost me $400 a year out of pocket.
My insurance came to an end because I turned 65. Medicare (pensioner insurance) will go into effect for me soon, but right now I’m not insured. Time to renew the prescription-
$ 2150.00
I did a quick check for medicare drug insurance plans. One in the middle range would cost me, for a year, plus the costs of this drug, $640. Of which $480 is the deductible.
You figure it out.
It’s FDA regulation. The EU – and others – are sensible. A new insulin formulation must be tested, properly. OK. Then someone starts to make the same stuff that needs to be tested to prove it is the same, but doesn’t need the full rigours of testing to show it works and is safe – that’s been done, right?
The FDA has historically demurred. Copies of biosimilars must be fully tested. It’s as if generic drugs have to go through Phase III trials again.
This is why insulin is expensive in the US. Plain old standard insulin is the plain old standard price but no doctor prescribes that – rightly so, too.
Fortunately, this has recently changed and the FDA has just approved the first biosimilar copy with more to come.
The FDA was specifically and deliberately banning competition. Now that it’s to be allowed prices will decline.
NON-USA pharma companies multiple their prices on entering the USA market, for both patent and post-patent/generic formulations
jakavi USA list price 15,800 USD
jakavi UK list price 2,860 GBP
Essentially USA customers subsidise the world on medical progress, pretty much everyone else free rides
Also, as noted above USA list prices is not the actual price paid.
Also, USA paid prices include pharmacy rebates, meaning that essentially pharmaceutical companies in the USA also subsidise the pharmacy network(pharmaceutical logistics) and the pharmacy benefits manager(unique to the USA)
The “prices” of prescription drugs are so obscured by regulation, subsidy, insurance, branding, and fog that no one knows what they are. Not even in a single city, never mind in separate countries.
Or even, as my experience demonstrated, to one patient for one drug in one pharmacy.
P. S., I know that the U. S. price of (prescription) cyclobezaprine is about 20x the (otc) price in Delhi, which is similar to the (otc) price in Cairo and Turkey.
“Essentially USA customers subsidise the world on medical progress, pretty much everyone else free rides”
I hope that makes the half million or so bankrupted in the US each year by medical bills feel better.
It’s a unique model!
Unique in the US too I would imagine.
@Fred Z – Fine. Then no patent protection for you, and anyone is free to reverse engineer your property and make their own and sell t for less. That’s how this works. You want societal protection for your intellectual property, you have to give something up. That is the transaction.
@llamas re epipens. You seem to claim the price difference is in the delivery device, not the drug. I seriously doubt that the generic versions are in a substandard delivery device. These things have been around for decades and have engineered the snot out of them. You’ll have to provide better info for that claim if you want to rely on it for the price difference described. Particularly when the non-generic price jumped dramatically from $103.50 in 2009 to more than $608.61 in 2016. Over 500% in one decade.
“That price went up because we were making investment. As I said, about $1 billion over the last decade that we invested in the product that we could reach physicians and educate legislatures,” Bresch [Mylan CEO]said. “But then you also invest in the supply chain, to make sure that, you know, that employers, that employees, that everyone has access to have our medicine.”
In other words, to pay for marketing and lobbying.
Mylan has introduced a generic injector in response to criticism. It sells for $300, half the price of the EpiPen. To try to deflect criticism, no doubt.
Yes Bruce – a fashionable term among leftists (on Twitter and elsewhere) for their foes is “human livestock”.
They fail to see that this is far more revealing about them (the Collectivists) than it is about us the “human livestock”.
This is how the international “liberal” crowd (from Klaus Schwab to the Economist magazine) see us – and their “democracy” is about the rule by themselves (the “educated”), with elections being allowed – as long as the result makes no difference.
If anyone suggests that elections should make a difference to basic POLICY – then they are “walking away from democracy” according to the Economist magazine (and the Davos crowd – and the U.N. and so on) as “democracy” does not, to them, mean ordinary people having any say at all on basic POLICY. The “General Will” (to be decided by the “educated”) must not be confused by the wicked “Will Of All” of the MAGA hat wearers.
Rousseau rules.
Rousseau really being Plato or Thomas Hobbes – with a smiley face mask on.