Open Letter from Gilead CEO: Remdesivir Pricing(stories.gilead.com) |
Open Letter from Gilead CEO: Remdesivir Pricing(stories.gilead.com) |
I wonder how other countries are going to respond since the US seems to have bought up the entire global stockpile from Gilead (who are charging $390 - $520 to Americans).
[1] https://www.hindustantimes.com/india-news/india-s-hetero-pri...
[2] https://www.indiatvnews.com/business/news-covid19-drug-cipre...
Scenario A: There's a huge pandemic and massive demand, but the drug can only be sold at cost, so we break even.
Scenario B: The drug fails clinical trials. We lose a bunch of money.
Scenario C: The drug works, but no pandemic ever happens. We lose a bunch of money.
.... and then no one will develop antivirals, because on average, you can only come out behind.
As to why the government can't do everything itself, I'll quote Paul Graham on venture investing, which (like drug development) is a highly technical, winner-take-all business where most projects fail:
"Why not just have the government, or some large almost-government organization like Fannie Mae, do the venture investing instead of private funds?
I'll tell you why that wouldn't work. Because then you're asking government or almost-government employees to do the one thing they are least able to do: take risks.
As anyone who has worked for the government knows, the important thing is not to make the right choices, but to make choices that can be justified later if they fail. If there is a safe option, that's the one a bureaucrat will choose. But that is exactly the wrong way to do venture investing. The nature of the business means that you want to make terribly risky choices, if the upside looks good enough."
Expensive projects for the public good with no mandate to turn a profit.
If you're part of a government agency whose entire purpose is to develop and research new drugs, you're not going to be unduly risk averse. You're going to be doing your job, trying new things, working on getting new, effective, efficient treatments and cures developed, tested, and released to the public.
Personally, I don't know to what extent I believe that pharmaceutical companies have actively suppressed research on cures for diseases, in favour of life-long treatments, but the incentives definitely support the theory. Publicly-run pharmaceutical research would also be much more likely to do a proper, thorough investigation of the kinds of treatments that can come out of well-known natural/easily-synthesized substances (as opposed to the existing pharmaceutical industry, which is incentivized to do research into things that require more specialized expertise & equipment, so the people who want the drugs must but them from them).
Sigh
How many years of normalizing and internalizing the utter insanity that is the US medical industrial complex does it take to be able to just say that with a straight face?
Other companies will be looking hungrily at these earnings and invest in developing their own antivirals---which is exactly the desired outcome.
Sure, it would be great to have this drug available to everyone right here, right now, for cheap. But investing on those terms is not very attractive; hence the drug simply wouldn't exist.
[0]: https://www.citizen.org/article/the-real-story-of-remdesivir... [1]: https://www.nytimes.com/2018/07/16/opinion/prep-hiv-aids-dru...
How do they reconcile this principle with the huge price difference between the USA and the rest of the world? Or between the developed world and the developing world?
I assume they are still making a profit selling doses at low costs to developing countries. If the goal is to help as many people like they say, why not extend that pricing to everyone?
It’s disappointing that taxpayers fund the development of these drugs and then get screwed by the same companies when it comes time to make a profit.
Why would you assume that, instead of assuming that the high prices in the developed world are subsidizing losses elsewhere? (Or, at least, that they are amortizing R&D costs with the prices in the developed world, and doing so allows them to make a profit selling more of it above the marginal cost of producing more.)
The US price is in practice the same - they just had to account for the always-expected discount which will push it down to the same as others.
That doesn't really matter as the Trump administration has bought essentially the whole production capacity of Remdesivir for July, August and September.
https://www.theguardian.com/us-news/2020/jun/30/us-buys-up-w...
His lifelong research led to creation of many groundbreaking drugs against HIV, hepatitis and now Covid. This humble "invisible" guy's work literally saved millions of lives and is behind many of current Gilead drugs.
See https://english.radio.cz/antonin-holy-one-countrys-most-reno...
"All descriptive printed matter, including advertising and promotional material, relating to the use of the remdesivir clearly and conspicuously shall state that: :the remdesivir have not been approved [sic] :the remdesivir have been authorized by FDA under an EUA [sic]" page 6 https://www.gilead.com/-/media/files/pdfs/remdesivir/eua-fda...
and "Remdesivir is an investigational drug that has not been approved by the FDA for any use." https://www.gilead.com/remdesivir
I was in two minds about correcting the grammar but since they are all snips from the links decided to leave as is.
[Edit to clarify] My main point was that if they were pricing generics at a reasonable price they would have been trumpeting in the same press release as this. eg. if one is so reasonable that they openly discuss it then why not the pricing of generics.
Which makes medicine so expensive that it provides no value to the many people who are in a bad position and cannot afford it. Pricing by the value something provides is only relevant for those who can afford that value in the first place (they assume you stay for the duration; you are lucky if you do not); for the rest it provides no value at all because they don't get into that position in the first place.
As I read online, the entire treatment in India is well under $100[0]. I am all for getting the R&D money back, but charging medicine based on value (who determines that value anyway; that's highly subjective) it may provide is a recipe for disaster. Especially in this case; they stand to sell 10s of millions of these vials (even though they don't really seem to 'provide value' as clearly as advertised as others have mentioned here), so the R&D/investment story is... not very good.
[0] https://www.hindustantimes.com/world-news/european-regulator...
Source: https://www.theguardian.com/us-news/2020/jun/30/us-buys-up-w...
Hopefully now that this is determined as effective the manufacturing can ramp up and the whole world can get access.
https://www.hindustantimes.com/india-news/india-s-hetero-pri...
https://www.barrons.com/news/antiviral-remdesivir-showed-no-...
Besides having to recoup the costs of development of Remdesivir, as well as the costs to trial various drugs that never make it to market, Remdesivir is currently in short supply and probably costs a significant amount to produce. It seems unreasonable to expect a good in such short supply to be sold for cheap. The overall cost of $2k isn’t prohibitively expensive such that many lives would be lost over this anyways.
But don't do the same while you are gouging consumers. In other words, don't piss on me and call it rain.
The US is so full of morons they must love being ripped off or something.
I hate to tell you, but it's not better in Europe just because the racket is obfuscated by several more layers.
Here in the UK, there is exactly one layer: the NHS. It negotiates prices directly with drug suppliers, and as the sole buyer (monopsony) is able to get a great deal. It also sets the prices paid by consumers (the prescription price), which is a flat price charged for all drugs (yes really all of them) and is currently £9.15 (about 11 USD) for a prescription (i.e. a full course of multiple tablets of the drug). If you are given drugs in a hospital as part of an inpatient treatment the charge is usually nil.
Someone I know had cancer which required two years of therapy and also somehow did not hit their yearly deductible. A friend had a burnout and needed therapy over a long period of time, also very little personal costs.
This premium that I pay is more or less matched by my employer, that money goes into a fund to balance out insurers who have more risky demographic coverage. The government does offer subsidies for people who cannot afford the monthly premium, this obviously comes from taxes.
That’s pretty much it for funding the system. Personal premium + employer premium + tax subsidies for the poor. Dutch people complain about costs ‘spiraling out of control’, and it is true that over the years healthcare has gotten more expensive, but these criticisms are laughable when compared to the US.
It’s possible to fix the US healthcare system. Just pick any other western developed nation at random and do what they do. You’ll be better off.
Not a scholarly article, intentionally. I wanted to give a flavour of the existential (to our health system) nature of the problem of US style drug pricing.
There's also the small matter of pricing varying highly by country. Another more emotive example: https://www.drugwatch.com/featured/us-drug-prices-higher-vs-...
See also: https://www.drugwatch.com/featured/us-drug-prices-higher-vs-...
So actually, it is substantially better in Europe.
Imagine some drug that costs $100 million to develop and that the most it can earn in the market is $70 million at a price of $1000. Okay, but then the government thinks it's really important to provide, so it's going to subsidize the development to the tune of $40 million. The drug company could then spend $60 million for development and earn $70 million. Over the typical drug development and sales lifetime, that's actually a quite mediocre return, but let's not worry about that.
But wait, the government paid 40% of the development cost. Why the fuck should that company be able to charge $1000, they should only be able to charge 60% of that, they should charge $600. Well, then they are fucked because they are right back at the same equation for whether it is profitable to work on that drug.
In general, with a moment's thought, any intelligent person will realize that expecting discounts on products based on how much the development was subsidized by the government completely obviates the entire point of subsidies.
All this said, Pharma has abused its position and pricing power. Remdesivir is an ok but not amazing drug, and pricing it this high is bad policy. Part of what they are doing is protecting their flank. Pricing it too low would cause people to say, “see! You CAN price drugs low, let’s make you price other things lower.” This is immoral reasoning but it’s part of the logic.
Drug pricing is super complicated, it’s worth understanding more deeply. Remdesivir is a weird case, and should be viewed in a larger context. See this post as a great place to start with further links within:
https://blogs.sciencemag.org/pipeline/archives/2019/12/11/ar...
(Conflict declaration: I founded a biotech)
P.S. I worked for J&J once, seen their inefficiencies first-hand.
And how much more/less effective is Remdesivir compared to the generic Dexamethasone anti-inflammatory?
The hard part with drugs is usually finding out if they work. This one is hard to make, but they'll figure it out.
And then each country gets to make the choice for itself of how much it loves IP law and how much it loves human life.
> In the developing world, where healthcare resources, infrastructure and economics are so different, we have entered into agreements with generic manufacturers to deliver treatment at a substantially lower cost.
I assume this means that:
1. Remdesvir is not that hard to manufacture.
2. Gilead will license the drug to 3rd party factories, so no need to manufacture them in the US.
https://blogs.sciencemag.org/pipeline/archives/2017/10/18/dr...
There are about 35 trials in various states of completion of remdesivir [2].
If hydroxychloroquine actually does anything, we'll eventually find out. But the cold hard truth is that all the evidence so far is that remdesivir is a weakly effective treatment (shortens length of stay in hospital slightly, not a miracle cure) while hydroxychloroquine hasn't been shown to do much of anything useful in COVID. Both aren't as big a deal as Dexamethasone, which significantly reduces mortality in the sickest patients.
Most facilities have settled on using remdesivir + dexamethasone as the standard treatment for the sickest patients and have totally ditched hydroxychloroquine. Many are still administering zinc and other low-risk treatments like vitamin C and D to patients because while the evidence isn't there, there's no cost or safety reason not to try it.
The problem with talking about hydroxychloroquine is that it has become the rallying cry of the conspiracy theorist, so any talk about it results in someone saying you are "testing it wrong". The most common response is "it is a preventative treatment, not a treatment of already sick people! they are testing the wrong patients in trials!" or "it only works in combination with zinc!" or whatever. The good news is all those combinations are being trialed and if it actually does anything, we'll eventually find out. Whether anyone ever comes up with evidence that hydroxychloroquine does anything useful in COVID patients, it will definitely be one of the most studied drugs ever.
[1] https://clinicaltrials.gov/ct2/results?cond=covid&term=hydro...
[2] https://clinicaltrials.gov/ct2/results?cond=covid&term=remde...
First, this is not a randomized trial with a control group. It's a retrospective look at patients in Marseille where they gave HCQ+AZ by default to all patients who would take it and then compared those patients against the small number of people who either refused it or were too at risk of side effects to get it.
If you look at the breakdown of the groups, it's comically unbalanced. Of the 3,737 people they tracked, only 162 didn't receive HCQ or AZ. And the rate of heart disease in those 162 untreated people was 2.7x the rate in the group treated with HCQ+AZ (11.1% vs 4%)! Furthermore, only 28 of the 162 untreated people were in the high risk >= 65 age group. No deaths in any group were reported under the age of 60.
In other words, if you compare a couple tens of people with 2.7x the rate of chronic heart disease to a random assortment of other people, you get numbers that may or may not mean anything.
Meanwhile, there are other studies with proper control groups and balanced patient enrollment that show no benefit of HCQ and lots more studies still in progress that test it in different doses and times of administration. At the end of the day, you have to follow the best evidence.
US companies cannot really charge more than European companies [+]. They all charge more in the US and less elsewhere.
[+] In general, there are also cases where the same drug is marketed by a US company in the US and a non-US company in the rest of the world.
I was disputing that specifically drug purchasing is a "racket" with "more layers" the US system, which is what the parent comment claimed. None of the organisations or organisational units that you mention have anything to do with drug price negotiation, so I don't see what they have to do with the conversation.
Glad to hear things in the UK are so jolly.
You’re saying that if you joined some sort of union that you could negotiate from a much stronger position, similar to single-payer healthcare?
You will see a lot of buying power from free health care providers as they represent tens-hundreds of millions of people - they will most likely pass on a price gouging drug in favour for others. They won't pay market rate, whatever the drug manufacturers say.
Maybe it’s different in the start up world but larger companies all seem to offer private health insurance.
VC backed companies will sell you private health insurance as a perk. It is rarely useful. I suspect it is a way of funnelling money at low rates of tax to the VC's other holdings in at least one case, but have no proof. It certainly funds the privatisation agenda at low cost to the investor, though.
Seniority is signified through leadership or contracting. The latter you can get private insurance as a perk through your own company, but again, it is useless.
Most permanent non-lead roles I've had that have been more conventional haven't had it, though.
For what I read about USA, in HN and in other places, I suspect Americans would be surprised too. Those private plans have a very hard competitor in the public system, so, somehow, at least in my area, they manage to be pretty affordable.
In Europe at least in Switzerland quite many have private health care (the price difference is quite small because the obligatory insurance is tremendously high already), and if you think 'we' are rich..you are wrong.
Switzerland is one of the richest countries in Europe - it's GDP/capita is the 9th highest in the world.
This place (news.ycom) really has a skewed sense of reality. "Oh, you only got $100k offer straight out of University? That's a low number."
99% of the world lives far below anything you consider average.
For a website full of smart people, you all have trouble recognising your own extreme privledge.
Imagine if the rest of the world only paid for CPUs based on the per unit cost of silicon but none of the fab or engineering cost. So $20 CPUs for the rest of the world and $20k CPUs for the US since the US consumer has to cover the 10s of billions for fab/R&D cost while the rest of the world only pays for the silicon.
That's what happening with drug pricing right now. People _need_ medicine, which is how we got into this mess of drug pricing since it's frowned on to price people out of medicine. But European countries aren't exactly poor struggling post-war economies anymore. They can afford to shoulder more of the R&D cost instead of laughing at the US subsidizing the world.
Would not be the logic solution that the USA started negotiating as a block too?
Pharma is just a zero sum game; for the US to win, someone has to lose.
How much do drug companies spend on advertising in EU vs US?
So there's potential for ~3-7% cost improvement if direct-to-consumer advertising is banned in the US.
US pharma R&D intensity averages ~40%, which is more than double of Europe's average intensity.
Also private plans are mostly only available above a certain income level. So the demographics are skewed towards better educated, richer and thereby healthier people in the privat plans.
And this is not what anyone of the people complaining are looking for. That would make somewhat optimistically make Remdesivir $350 per vial, and that pricing would cause ... exactly the same outrage.
The actual issue is "too many" medicines. More and more effective and specialized medicine. But, of course, that you can just sidestep as an individual (you'll have to have your doctor on board, but that may be doable). It boils down to the same thing: if you're willing to forego the most expensive treatments and best possible outcomes you can avoid a lot of the financial problem. There's just zero willingness to do that.
Best possible treatments, no matter the human effort required to do that, at zero cost to anyone (not carried by the actual patients, not collectively carried by insurance, not carried by government, not by church, institutions or charitable giving). And we're not willing to give anywhere (for instance, cheaper drug trials, something the government could simply decide to provide at frankly minimal costs). This is not happening.
There just doesn't seem to be any solution here that I can see.
Supplementary insurance is conceptually different, by definition, from comprehensive private health insurance which provides alternative coverage for what is already covered within the public healthcare system.
https://www.moneyland.ch/de/privat-versicherung-spital-vergl...
There is even a 'half-private' one
That is whats called private, if you never heard the phrase private krankenkasse...well everyone uses it, it's also the first (maybe second) question when you go into any hospital.
Even if you're right and the term is used more generally than I thought, my main point stands: it's quite different from what people in other countries call "private health insurance" so in the context of the discussion here the distinction is relevant.
You never made that point...sorry
But I actually made the point:
Supplementary insurance is conceptually different, by definition, from comprehensive private health insurance which provides alternative coverage for what is already covered within the public healthcare system.
And that's what the person you replied to means with "very few people have private health care in Europe, at least in the UK".