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» The Ornery American Forum » General Comments » insane (5500%+) price increases on off patent and generic drugs

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Author Topic: insane (5500%+) price increases on off patent and generic drugs
LetterRip
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This seems ridiculous - should the government begin manufacturing these drugs when commercial entities abuse their pricing power? Or should the government regulate price changes)? Perhaps require a phase in time period for price changes (100% increase per year or such?)? Or is this price gouging legitimate capitalism?

quote:
he drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.
quote:
Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics.
quote:
In August, two members of Congress investigating generic drug price increases wrote to Valeant Pharmaceuticals after that company acquired two heart drugs, Isuprel and Nitropress, from Marathon Pharmaceuticals and promptly raised their prices by 525 percent and 212 percent respectively
quote:
Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014, according to the two lawmakers.
http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?partner=msft_msn&_r=1

[ September 24, 2015, 01:11 AM: Message edited by: OrneryMod ]

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scifibum
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The drugs aren't patented, so normal capitalism should lead to competition and a price correction. If this doesn't happen, perhaps there's a violation of anti-trust somewhere.
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LetterRip
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Oops,

I left off a zero it actually increased 5500% (moderator, would appreciate an edit).

scifibum,

Apparently there is a '30 month stay' (2.5 years) on generic drug approval before a corporation can manufacture a generic drug. So the strategy is buy the cheap generic manufacturers that are licensed to produce the generic - then charge a ridiculous price for at least 2.5 years until another company enters the market.

The other companies don't want to do massive investments to make the drug and then the price drops to nothing again. So the above company is guaranteed 2.5 years, and might have far longer.

Antitrust doesn't seem like it could act fast enough.

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LetterRip
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So I guess - best would be eliminate the 30 day stay - see if it could be cut to a single month (It seems that should be long enough to inspect the plant and manufacturing process and verify purity).
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D.W.
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Is the company with the 30 month stay the original developer? I don't follow the 'generic' part of this. Doesn't that mean this is at least the 2nd company in line and there is already a competitor?

Or does the 'generic' term come in and apply to the origional after the specified amount of time?

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Fenring
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Extorting people for life-saving medicine should be tried under extortion and racketeering laws. It's just as illegal if you're a corporation as if you're he mafia.

At first glance the argument would seem to be "it's capitalism, they have a right to choose any price they want." But now imagine they had a cure for cancer and they decided their price was "infinity", i.e. we refuse to sell this 'just because.' I would argue that withholding medicine in that way is equivalent to premeditated murder. So what's the difference between that and charging so much that someone has to mortgage the house to afford it? Racketeering; 'offering' someone an unfair deal that they simply must take.

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Wayward Son
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Oddly enough, the topic is already moot.

quote:
A huge overnight price increase for an important tuberculosis drug has been rescinded after the company that acquired the drug gave it back to its previous owner under pressure, it was announced on Monday.
However, not entirely moot:

quote:
By Saturday, he said, Rodelis had agreed to give back the drug. Rodelis confirmed this in a brief statement on its website.
The foundation now will charge $1,050 for 30 capsules, twice what it charged before, but far less than Rodelis was charging. Mr. Hasler said the new price was needed to stem losses.

But generic drugs won't help:

quote:
The drug made by generic companies abroad costs only about $20 for 100 capsules.
Amir Attaran, an expert on pharmaceutical access issues at the University of Ottawa, said it would have made much more sense to just import the drug from abroad, rather than have it produced in America for so few patients at such high cost.
Mr. Hasler said this was probably not done because foreign manufacturers were not willing to bear the expense of applying for regulatory approval in the United States.

And, ultimately, this will cause at least some legislation to control the price of drugs, if only to prevent a scam like this again.
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LetterRip
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It looks like the '30 month stay' occurs if someone files to produce the generic and a patent holder claims within 45 days they will be infringed. I'll look into this more when I have more time.

This document seems to provide a lot of useful info, but haven't had time to read it in full yet.

http://law.stanford.edu/wp-content/uploads/sites/default/files/publication/259458/doc/slspublic/ssrn-id1736822.pdf

[ September 22, 2015, 11:10 AM: Message edited by: LetterRip ]

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Seriati
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Not an expert in this area, but shouldn't the federal laws on monopolistic practices and price gouging already cover this? Is there some kind of exemption that makes this specifically okay? (and I wouldn't be surprised if there was, government often makes the problems we require them to solve).
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D.W.
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The whole reason there is a window of exclusive rights is to reward (or not turn into a charity) R&D.
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Pyrtolin
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quote:
Oddly enough, the topic is already moot.
Not entirely, because that's a different drug that also jacked its price up arbitrarily.
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