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https://www.zerohedge.com/geop...ke-prices-100s-drugs With just hours to go until the new year, Reuters reports that a group of the world's largest drug companies is preparing to hike drug prices, defying President Trump to issue a last-minute rebuke, as he has done in the past. Drugmakers including Pfizer Inc, Sanofi SA, and GlaxoSmithKline Plc plan to raise U.S. prices on more than 300 drugs in the United States on Jan. 1, according to drugmakers and data analyzed by healthcare research firm 3 Axis Advisors. The hikes come as drugmakers are reeling from effects of the COVID-19 pandemic, which has reduced doctor visits and demand for some drugs. They are also fighting new drug price cutting rules from the Trump administration, which would reduce the industry’s profitability. The companies kept their price increases at 10% or below, and the largest drug companies to raise prices so far, Pfizer and Sanofi, kept nearly all of their increases 5% or less, 3 Axis said. 3 Axis is a consulting firm that works with pharmacists groups, health plans and foundation on drug pricing and supply chain issues. During the early days of the Trump presidency, reports of price hikes elicited angry tweets from the president. This dynamic was credited with staving off a hike or two, but that doesn't change the fact that drug companies tend to raise prices on their inventory at least once, usually twice, per year. Still, even Reuters pointed out that the pace of drug price increases has "slowed substantially" since 2015, per Reuters. And the Trump Administration is pushing legislation that would constrain drugmakers' ability to raise prices. Nevertheless, with drugmakers' dedicating themselves to defeating COVID-19 (of course, the state has doled out billions of dollars in subsidies, which sort of diminishes the selflessness narrative), the industry is insisting that profits must be made up elsewhere. So prices on some 300 drugs will rise, with more formal announcements expected on Friday, and over the weekend. GSK did raise prices on two vaccines - shingles vaccine Shingrix and diphtheria, tetanus and pertussis vaccine Pediarix - by 7% and 8.6%, respectively, 3 Axis said. Teva Pharmaceuticals Inc hiked prices on 15 drugs, including Austedo, which treats rare neurological disorders, and asthma steroid Qvar, which together grossed more than $650 million in sales in 2019 and saw price hikes of between 5% and 6%. Teva hiked prices for some drugs, including muscle relaxant Amrix and narcolepsy treatment Nuvigil, as much as 9.4%. More price hikes are expected to be announced on Friday and in early January. [...] In 2020, drugmakers raised prices on more than 860 drugs by around 5 percent, on average, according to 3 Axis. Drug price increases have slowed substantially since 2015, both in terms of the size of the hikes and the number of drugs affected. Pfizer, which threw money at its "partner", BioNTech, to help develop and distribute a vaccine using the latter's revolutionary mRNA technology, is one of the biggest offenders, hiking prices on cancer drugs, and the ubiquitous rheumatoid arthritis treatment Xeljanz, famous for commercials that have spawned satirical takes on social media. Pfizer plans to raise prices on more than 60 drugs by between 0.5 % and 5%. Those include roughly 5% increases on some of its top sellers like rheumatoid arthritis treatment Xeljanz and cancer drugs Ibrance and Inlyta. Pfizer said it had adjusted the list prices of its drugs by around 1.3% across all products in its portfolio, in line with inflation. "This modest increase is necessary to support investments that allow us to continue to discover new medicines and deliver those breakthroughs to the patients who need them," spokeswoman Amy Rose said in a statement, pointing in particular to the COVID-19 vaccine the company developed with Germany’s BioNTech SE. It said that its net prices, which back out rebates to pharmacy benefit managers and other discounts, have actually fallen for the last 3 years. By contrast, China is cracking heads to ensure that drugmakers are responding to the public's need with massive price cuts. According to state-run media, some drugmakers are cutting prices by as much as 51%. Chinese patients can now get reimbursement for 2.8K medicines, including 1.4K Western drugs and 1,374 traditional Chinese medicines. _________________________ "Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it." Mark Twain | ||
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Those multi million dollar CEO bonuses will not be missed two years in a row. | |||
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The most telling data on a disconnect between drug prices and research costs has received almost no public attention. Data research by Memorial Sloan Kettering, and his colleagues compared prices of the top 20 best-selling drugs in the United States to the prices in Europe and Canada. They found that the cumulative revenue from the price difference on just these 20 drugs more than covers all the drug research and development costs conducted by the 15 drug companies that make those drugs—and then some To be more precise, after accounting for the costs of all research—about $80 billion a year—drug companies had $40 billion more from the top 20 drugs alone, all of which went straight to profits, not research. More excess profit comes from the next 100 or 200 brand-name drugs. Drug companies tend to say they are unique in needing to spend a higher proportion of their capital on research than almost any other industry. But of all the companies in the world, the one that invests the most in research and development is not a drug company. It’s Amazon. The online retailer spends about $20 billion a year on R&D, despite being renowned for both low prices and low profits. Among the 25 worldwide companies that spend the most on research and development—all more than $5 billion a year—seven are pharmaceutical manufacturers, but eight are automobile or automobile-parts companies with profit margins under 10 percent. Amazon’s operating margin is under 5 percent. Meanwhile, the top 25 pharmaceutical companies reported a “healthy average operating margin of 22 percent” at the end of 2017, according to an analysis by GlobalData. ______________________________________________ Life is short. It’s shorter with the wrong gun… | |||
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I hate the term "excess profits." I bought a Shockwave last year for 209. I sold it in may for 869. Am I guilty of excess profit? Who should set the price? | |||
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^^^^^^^^^^^^^^^ How much is spent on marketing? Those stupid commercials where folks are frolicking about and a soft voice is rattting off a list of side effects. | |||
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Since healthcare is the largest expense in America besides defense, yes someone should decide what “excess profit” is. If you don’t want socialized medicine then you had better figure out how to effectively regulate the industry. Comparing your shockwave to cancer medication is about as stupid as it gets. If private industry controlled the water supply and priced its access out of your price ability would you still cling to this idea of capitalism at all costs? Our society has agreed willingly and unwillingly to socialize certain aspects of our life. If you don’t have kids you still pay for schools when you buy a house. Don’t own a car? Well you are paving the roads anyway when you buy gas for your lawnmower. No insurance but you break your arm? Emergency room will fix it up. If you want the government to control everything then continue pretending like mandating every school has to have an Epipen abut first raise the price by a couple multiples. Some things in our society need to be regulated. If you don’t think this is one of those areas then you probably have been blessed and good for you. Everyone has fallen for the “high prices fund the research” nonsense for years. The math just isn’t there. Nobody needed your shockwave. Not being able to afford a cancer med killed someone. I hope you can recognize a difference.This message has been edited. Last edited by: pedropcola, | |||
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paradox in a box |
Maybe this isn't entirely relevant to the discussion. But apart from profits and research, regulations are a huge part of crazy high drug prices. Let's take for example just one "chemical". Sugar is used in the final formulation for a drug product. It is not an active ingredient but an excipient. The company buying the sugar needs to ensure the vendor is "approved". This means that they have to audit the company on a regular basis, sending auditors to inspect the company. It does not matter that Pfizer, BMS, Abbvie, etc have all audited the company. It doesn't matter that the company selling the sugar has to have an entire quality team hired to handle all the audits they must host. There is no consolidation of audits, no sharing of info. It doesn't matter if the sugar company is also inspected by the FDA. They must be audited and approved by the company buying the sugar as an excipient. Add to this that the company must provide a certificate of analysis for the sugar, meaning they have to do testing on each lot of sugar to prove that it is sugar. Finally they sell the drug company a pound of sugar for about $3000. This is the same sugar in your coffee, but the cost is now $3000. The biggest kicker in all of this... The purchasing company has to test for identity each lot they purchase. Keep in mind the certificate of analysis has already been provided showing that the lot has been tested and passed. The supplier has been audited and approved so we know they have good systems in place for performing these tests. Nevertheless the testing is repeated by the purchasing company, either in house or by a 3rd party testing company (which also needs to be audited and approved). So there you have it, a bag of sugar for a cost of 5 grand. That is just one of the maybe 6 ingredients in the final drug product, excluding the active ingredient. These go to eleven. | |||
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Down the Rabbit Hole |
I know what you mean. I can't wait to show up at the next natural disaster and charge those poor suckers $250.00 for a bottle of water. I can then stick it to um again when they try to fill up their cars on the way out. $400 dollars a gallon sounds about right. I know my prices a way low compared to what the Tax Payer Funded Drug Companies charge for life saving meds but I'm new at this. Diligentia, Vis, Celeritas "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." -- George Orwell | |||
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His Royal Hiney |
From the sugar company's POV, they don't want a repeat of what happened to i think Dow Chemical who made minimal profit for selling silicone used in breast implants but was also liable in the late 80s litigation. That cascaded into a lot of unintended consequences such as the manufacturer of Aeroshell bearing grease would never sell directly to the company I was in at the time because we used it in an implantable heart device. Everyone has to be accountable for their own supply chain because, otherwise, if shit hits the fan, Company XYZ can't be excused because Company ABC said a product was safe to use. "It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946. | |||
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| His Royal Hiney |
And you're falling for the false dichotomy where you have to choose between being eaten by crocodiles in the river or the lions waiting at the bank. Things are the way they are because of the racket set up between big government, drug and medical device manufacturers, medical service providers, and health insurance companies. The set up allows the established medical suppliers protection from competition which would lower prices, gives them cover to continually raise prices, and force consumers to be part of the market. In the current set up, the biggest winners are the insurance companies. The other stakeholders wouldn't mind socialized medicine as that gives them a bigger piece of the pie taking it away from the insurance companies. "It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946. | |||
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^^^^ If you mean physicians you are VERY wrong. While most physicians dislike insurance companies they are not in favor of socialized medicine. California may be the exception. | |||
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I’m certain both China and India would be happy to continue making vast profits and tightening their control over the prescription drug market. Pfizer, etc. would do well to remember this. “Remember to get vaccinated or a vaccinated person might get sick from a virus they got vaccinated against because you’re not vaccinated.” - author unknown | |||
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| Left-Handed, NOT Left-Winged! |
I get really tired of arguments for more regulation and socialism by people that should know better. You invent something and patent it, you get to charge whatever the market will pay for it. Doesn't matter how much was spent on R&D or how much profit you make. Supply and Demand. Make hay while the sun shines because when the patent expires and your drug goes generic, it becomes a commodity. Protection of intellectual property and the ability to profit from it is why the US is the most innovative country in the world. China for the most part copies and does not innovate because of the lack of IP protection. They also don't produce much in the way of entertainment media for the same reasons. Most of the new drugs that are being developed aren't necessarily any better than existing medications. They are just new and different. Long term use will show the efficacy and side effects, which may be better or worse than existing drugs. People WANT the new drugs because they saw a commercial on TV and ask their doctor. Doctors prescribe new drugs because they are marketed to by drug companies and given free samples to give to patients. And in the past there was a lot "taking care of the doctors" by the sales reps to encourage prescriptions. Every once in a while a new class of drugs is developed. SSRI's, Statins, and E.D. meds are probably the most notable in the last few decades. Yes they cost a lot at first, but all of them are generic now, and much much cheaper. And once one is introduced, the other drug companies usually develop competitive products that are similar in chemistry and effect but do not infringe on the original's patents. That's competition and it brings the price of the class of drugs down, unless there is illegal collusion between drug companies to fix prices. If that is happening, they are subject to anti-trust prosecution like any other industry. No one is entitled to take the fruits of another's labor and dictate to them how much they are allowed to be paid in return. That is essentially Ayn Rand's premise in all of her writing. Now, this assumes a functioning free market. Arbitrage opportunities exist when the market is not functioning normally, such as during natural disasters or pandemics. Price gouging in these cases can be illegal, but such events are special cases that do not last a long time. Right now there is huge demand for COVID19 vaccines and mass vaccination is seen as the only way out of this mess. It would be obscene to charge outrageous prices on vaccines "because they can", and the US government does have the authority to dictate things during a national emergency. Again this is a special case and it will not last more than a few more months. | |||
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| Left-Handed, NOT Left-Winged! |
"Comparing your shockwave to cancer medication is about as stupid as it gets. If private industry controlled the water supply and priced its access out of your price ability would you still cling to this idea of capitalism at all costs?" Water is a public utility and is regulated accordingly because of the logistics of having multiple water companies and piping systems. Same thing for electricity and natural gas. Logistics of distribution drive the establishment of regulated monopolies. This is not the case for bottled water which follows basic free market principles - lots of providers selling their products in a free market. Your example is an illegal abuse of a monopoly position, or illegal collusion among companies to fix prices, it is not "capitalism", it is anti-capitalism. "Some things in our society need to be regulated. If you don’t think this is one of those areas then you probably have been blessed and good for you." Yes, the free market does not self regulate for externalities that are not in their financial interest. It's cheaper to pollute, so we have to regulate against that. It's cheaper to ignore product safety in food/drug production so we regulate that too. And it's cheaper to enslave people and force them to work for no pay, and we fought a bloody war to make that illegal. "Everyone has fallen for the 'high prices fund the research' nonsense for years. The math just isn’t there." See my previous comments. They do not have to justify anything. If they have the IP they can charge what the market will pay, until competitive drugs enter the market. Insurance companies will not cover the drug or will negotiate lower prices if the cost is too high. They will also push patients to alternatives that are more economical. "Nobody needed your shockwave. Not being able to affect a cancer med killed someone. I hope you can recognize a difference." So everyone is entitled to every medical treatment that may benefit them regardless of cost? That is an unsustainable concept. Once you socialize it, then the government decides what treatments are permitted and who gets them. And I trust the free market a hell of a lot more than any government to make these decisions. A perfect example is the banning of hydroxchloroquine to treat COVID19 in conjunction with Zithromycin and Zinc despite some doctors' experience that it was helpful to patients. It was purely political and IMO a violation of patients rights and doctor/patient confidentiality. The drug has been around for decades, is safe, and used all over the world, for various purposes at the discretion of physicians. It is not dangerous except some well known side effects that occur in patients using it for long term treatment of chronic conditions. Yet it was banned for purely political reasons. Even if it didn't work, it would not have caused any problems, and thus no ban was needed. Any politician that had any part in the bans should be kicked out of office and prosecuted under any appropriate laws for overreach, interference in doctor/patient confidentiality, and anything else that might stick.This message has been edited. Last edited by: Lefty Sig, | |||
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As an employee of Teva, it's very concerning to find out that they are raising prices on that many medications. The site I work at had a workforce reduction a few months ago due to an increase in material and transportation costs plus a 30% reduction of demand for the products that were made in the site. Add to this the fact that Teva is still in litigation with the Feds over an industry wide price fixing investigation. I included the post from frayedends because this is what I do in the manufacturing dept. I take the incoming shipments of materials and take the samples to be tested. Our site alone gets about 5 or 6 different types of sugar, lol. This testing gets done on everything that comes in the door that relates to medications. Materials, bottles, caps, cotton, dessicants, empty capsules, etc. Some materials make take 20 different tests in the lab just to make sure the vendors results are the same that we get. We were also the site that packaged and shipped all the Hydroxychloroquine that was donated in the US before they stopped giving it to patients. Anyways, just my .02 worth. | |||
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| paradox in a box |
I used sugar as an example because I actually audited one of the sugar companies that makes mannitol, which is used in a lot of biologics final formulations. I was in Iowa and it was a very sticky factory to visit. I've never seen so much corn. But yeah, everything we use is supremely expensive compared to the same product not used in pharma. Suppliers are warning us now that we may not be able to get our disposables (everything is done in disposable materials now, rather than the stainless steel tanks we used to use). These go to eleven. | |||
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| Left-Handed, NOT Left-Winged! |
Frayedends, I heard the same story about maintenance of assembly lines at a device manufacturer. Motor goes bad, you have to get the replacement from an approved source. If the approved source is out of stock you have to wait. You cannot buy the motor from another vendor that has it in stock. Do you think all of the testing is necessary or is it overkill? Are the suppliers so unreliable that you have keep constant watch over them to make sure you get good product from them? One of the big changes in the auto industry since years ago is the elimination of incoming inspection. Suppliers are expected to send conforming parts and have to demonstrate statistical capability before they are source approved and are subject to periodic audits by the customer's supplier quality people. We might spot check things for internal cleanliness levels using millipore testing if it is critical to quality (high pressure fuel systems for diesels as an example) and to ensure that if there is contamination within an assembled system we can tell if it came in with the parts or if we caused it. | |||
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