That is a great idea and the only way they can get real leverage on pricing.
Looks like it might be illegal in some places though:
http://www.imtj.com/articles/2011/will-health-insurance-providers-adopt-medical-tourism-30096/
If I was a health insurance company I would be sending people to one of those countries, pay for the expenses for 3 months there, and save a crap ton over the current prices for that drug being charged here in the states.
Err I thought patents are good for 15 years?
edit: apparently design patents are 15, utility are 20
No one would call it fair, but it's precisely what happens, because hospitals need to cover costs incurred by patients who can't afford it or have no insurance and welch by declaring bankruptcy or giving false information at check-in. This is a well documented phenomenon.Let me jump into the conversation and start by saying I am not against profits, and even substantial profits by pharmaceutical companies and the medical industry in general.
That being said, the continued solvency and productivity of Gilead is not my concern, and the amounts they are charging for this drug are obscene.
Let's draw an analogy. A hospital in a decaying urban area is failing financially. One day, a wealthy man is wheeled into the ER in cardiac arrest. The ER doctors save the man's life, and charge him $1 million, arguing that substantial institutional overhead and this man's ability to pay mean that if the hospital is to remain solvent and productive, they need to charge some people huge amounts. Would anyone defend this practice as fair?
If Sovaldi was not a lifesaving drug... if it was like Viagra or Propecia or something, I would have no problem with them charging as much as they liked. But people with Hepititus C have no reasonable alternative, and people will spend unlimited amounts to save their lives.
As for the specific method to determine the price of the drug, I think it's pretty straightforward. Make the drug companies establish a research/testing/approval/production cost that is attributable only to that drug, and then allow them to apply a multiplier to that cost that bakes in subsidies for failed projects, and profits to shareholders. Drug companies that are well managed and generate good drugs consistently will still outperform other drug companies, and those that do not can't just charge obscene amounts for their good drugs to subsidize their poor management.
No I didn't. I said they should not be price gouging as much as they are.I didn't imply that it was, you posted that you wonder why companies don't price drugs based on their production and development costs. That's why.
No one would call it fair, but it's precisely what happens, because hospitals need to cover costs incurred by patients who can't afford it or have no insurance and welch by declaring bankruptcy or giving false information at check-in. This is a well documented phenomenon.
Of course it's price gouging.
Just because something is cheaper than the alternative does not make it not price gouging.
The patent system is indeed built to promote innovation and reward risk, but what the doctors and regulators are saying in this particular case is that the company has taken it too far.
And like I said before, I agree.
I also think some in big pharma may be getting nervous, because if the regulators decide to do something about it, it will hit everyone, not just this one company.
That's why I suggested earlier in this thread that had they priced things at say $50000 or maybe even $69000 per full course, people wouldn't be complaining so much.
Actually, a solution already exists in other countries. They governments negotiate with the companies on pricing, and usually for new high priced drugs such as this, it comes to a lower amount than what they charge in the US.Then go develop your own treatment and sell it at a reasonable profit margin. You'll still make a killing and everyone will spend less.
There's your solution, go make it happen.
Actually, a solution already exists in other countries. They governments negotiate with the companies on pricing, and usually for new high priced drugs such as this, it comes to a lower amount than what they charge in the US.
I mentioned $50000-$69000 because they charge less than US$60000 in the UK (and $69000 is already higher than another high priced drug in this category).
Let me jump into the conversation and start by saying I am not against profits, and even substantial profits by pharmaceutical companies and the medical industry in general.
-snip-
"There is what one knows, what one thinks one knows, and what one doesn't know. This also applies when understanding is substituted for knowledge."
And you don't think insurance companies take that role in the US? The negotiated amount is $84k.
I don't know the answers to the question I asked. I don't know what the particulars in this situation are. There might be fifty dollars going into the CEO's pocket for every hundred charged. Then again there might not.
A giant monopoly like an ENTIRE COUNTRY is going to have a much greater negotiating power to negotiate drug prices than however many insurance companies we have. This is why single payer makes sense and why libertarianism is dumb. Single payer systems act like one incredibly big union for it's entire citizenry.
Hayabusa: stop being daft, most drug discoveries have heavy government funding involved and drug companies just piggy back off that research and most of the 'benefit' that the drug companies provide is trials and studies to make sure the drugs are efficacious and safe. There's no justification for charging what they do and there's no justification for drug companies existing to begin with, everything should be done at private and public universities with government funding.
A giant monopoly like an ENTIRE COUNTRY is going to have a much greater negotiating power to negotiate drug prices than however many insurance companies we have. This is why single payer makes sense and why libertarianism is dumb. Single payer systems act like one incredibly big union for it's entire citizenry.
Actually some idea. Family members have worked for big (and little) pharma, some precisely in this role, and I have some done a bit of consulting work with big pharma as well.Do you have any idea the costs involved with researching drugs, submitting for initial trials, finally getting to human testing, and then maybe getting approved for use in the first world?
I know someone that could have used this. They ended up going the other route last month and got a liver transplant. All went pretty smooth except for a few bile duct leaks. I'm not sure what it cost them, but it was actually probably cheaper than that drug since they have insurance.
Release it to the public.