Do Diabetes Pharma Companies Have a Monopoly?

Treatment
21

How do you then see a company recovering the massive research and development costs of the drug, Gary?

I claim that, if such a regulatory scheme were to be implemented, we’ll see the generation of new drugs, devices, and treatment regimens drop sharply in the US, becoming similar to the dearth of innovation found in these price-controlled countries. If not, why would it be different here?

I am no less outraged over this situation than anyone else here. The main difference is, I’m not willing to kill the goose that lays the golden egg. I want more golden eggs. I hope for a “cure” egg some day.

Until someone comes up with a way to make the economics of these medical advances globally fair, I’d rather live with being on the unfair end of things and have to figure out some way to pay for it than not be able to have it at all at any price.

Of course, the only truly fair solution is for everyone, worldwide, to pay the fair market value, which includes a reasonable profit return for the company. This would require that non-US payers cough up about US$60-70 per 10ml bottle of insulin, instead of $20-25. And then US diabetics could also pay the same, instead of more than US$200 a bottle.

It will never happen, though. Ever. So, I’m actually rather pessimistic and depressed about future innovations in diabetes. The scales are tipping in the US toward publicly financed, universal healthcare, and increased regulation of the pharmaceutical and medical devices industry. We need not speculate on the effect this will have – it’s happening already. Denial of advanced treatment is already being denied diabetics that previously had access.

I’m being told by our small-company insurance agent that my blessed days as a T2 with the Omnipod and Dexcom G4 are over starting in 2016. Next year, the exemption we had (we’re still not on an ACA-compliant plan yet, thanks to the President’s Executive Order delays).

Starting with the new plan next year, I will no longer be approved for these devices as a T2. In fact, I’ve done such a good job controlling my D with these tools (a1c now 5.8, down from 11.3 two years ago) that I may not even be able to continue taking insulin. No, for a T2 with my numbers, it’s metformin and sulfonylureas for me.

T1s… You think you’re going to get MORE test strips with socialized medicine? What are you smoking? Can I have some? Keep in mind that in many (if not most) nations with socialized medicine, PWD can’t get CGMs covered health insurance. They simply are not a part of the treatment universe. Why is that?

And CGMs have been available for how long, and have clearly proven their efficacy, no?

These are not easy problems to solve. However, I’ll offer this prophetic warning: Seeking to increase what you have others pay for, particular through the force of government an law, is generally a way to get LESS, overall, rather than more. People who don’t have diabetes, don’t understand it, etc., will listen to whoever gives them the cheapest “solution” to a problem they really don’t care about because they don’t have any skin in the game.

Sadly, I believe our D future will be getting worse, not better, given current social and political trends. Its depressing, so I try not to ponder it too much.

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22

Brian, opinions based in ignorance are worthless.

This article gives a good summary or profit margins in the drug industry. These figures can be verified elsewhere on the internet with cursory research.

The fact is, drug manufacturers average a profit margin around 5-6%, hardly anything to crow about. Also, hardly “evidence” of some sort of nefarious behavior, or attitude, by drug manufacturers to rape their customers for every penny in their wallets.

No, at these profit margins, a company is, well, barely successful. Compare Microsoft’s profit margins, or the software industry in general, if you want to see obscene profits.

Or try Facebook.

I just don’t get attitudes like yours, my friend (and I mean the “my friend” sincerely… my disagreement with you is strong, but not unfriendly in any way). These company’s are saving our lives, yet you seem convinced they’re colluding, secretively seeking ways to screw us, greedy, etc.

What has Facebook done for society? Why aren’t we demanding their profits be curtailed, and perhaps spent on more beneficial things?

Pharmaceutical companies are beating a dead horse, Brian. They don’t make inflated profit margins like 30%. They make modest profit margins, at the prices being charge right now, and there’s little wiggle room to charge less.

If you want a villian, it’s all the non-US countries that will not allow drug manufacturers to charge a fair market price, thereby laying the burden nearly exclusively on US patients to make these drugs possible by covering the R&D costs.

Everyone, to be clear: The hundreds of millions, and in some cases billions, of US $$ spent to develop things like Humalog, Novalog, Lantus, etc. are amortized over the US customer base. That’s why we pay so much. NOT because of piggy, greedy profiteering by the drug manufacturers.

Look at the financial facts. The numbers. Look at the history of drug and medical device innovation in Europe before, and then after, regulation.

Then ask yourself if you want to keep having these treatments, and want newer and better ones. Then explain how it’s going to happen if we regulate prices here the way they’re regulated over there.

23

Yeah, I didn’t understand that either, and couldn’t find anything on the web that cleared it up (although that certainly doesn’t mean it’s bogus).

I note that Humulin showed up with generics pretty quickly after Genentech’s patents expired, and it’s available over the counter now for $25 / 10ml vial.

I don’t see why the same couldn’t happen for the analogs. The manufacturing process is identical – just a different gene inserted into the bacteria culture.

24

The $25/ vial might be the insurance price for at least Novolin NPH. Out of pocket, except maybe at Wal-Mart, it can be quite a bit more, I think I paid about $70 or $80 for a bottle in 2011 as it was 4th of July weekend,my pump blew up and I had some carnitas to make and didn’t realize how easy it can be to get an RX called in if you call the “on call” number. That sort of price drop seems sort of odd to me.

25

The problem is that a generic is defined by the FDA is a product that has the exact active chemical ingredient as the original. But in the case of products made from living organisms, it is not so clear how to be about exact besides making it exactly the same way. While these products may be similar there can be real differences. For instance Humulin and Novolin are similar they are made in different ways and that can result in real differences in the products (Humulin is grown from yeast, Novolin from E. Coli), thus a patient who is allergic to yeast would hardly consider them the same. So the FDA has defined the category of biosimilar which has it’s own approval process. And while they are not generic and will not be as cheap as generic’s have been they will work nearly the same and be cheaper.

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26

There is a lot of squishy accounting that goes into pharmaceutical accounting. I’ll give you a citation from the BBC which references Forbes work in this area. I have a fair amount of respect for the reporting from the BBC. As an example, Pfizer only returned a little over 18% in 2014, but in 2013 it took home a net profit margin of over 42%. That almost boggles the mind.

27

Re biologics, here’s a piece from PBS’s NewsHour about biologics in the U.S.

Biosimilars have been available in Europe for some drugs for several years. Here’s an interesting excerpt re the safety concerns:

EMILY SENAY: That means biosimilars will never be identical to the original biologic.

According to the New England Journal of Medicine, “given the complex nature of biologics, it’s unlikely that a “one size fits all” systematic assessment of biosimilarity can be developed.”

But Miller says the U.S. should simply look to the European Union as a model. The European medicines agency, which is the equivalent of the F.D.A., has been approving biosimilars there for eight years.

STEVE MILLER: There has actually not been a single episode with a biosimilar in Europe that has risen to the point of concern. And they’ve had a great track record.

EMILY SENAY: In an email to NewsHour a spokesperson for the European Medicines Agency wrote, “biosimilars have a good safety record since introduction” in 2006.

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28

Dave, you mentioned obscene profits yet you didn’t mention Apple in the same breath??

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29

An unforgivable oversight :slight_smile:

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30

I’ll take a careful look, Brian.

I would note, however, a real-world reality: The historic performance of Pharma stocks is very consistent with the net profits reported, and the figures in the article I cited, than the sorts of enormous profit margins you claim. Those kinds of huge profits results in investor interest, and subsequent securities performance, like Google, Microsoft, Apple, etc.

Invvestors are not stupid.

I’m off to read the article you cited.

One final comment: Accounting is not “squishy”. It is, in fact, highly regulated, and carefully scrutinized by the SEC. I’ve been involved in it. It is near impossible to claim 10% net profit with actual NP 4-5x that, and get away with it for long. What I mean by “get away with it” is, either by breaking the law, in which case the feds will be knocking on your door before long, or if you use the legal avenues to reduce those profits, shareholders will be on your butt in a few years of those shenanigans.

Finally, it simply isn’t in a public company’s interest to hide profits, year after year. The company’s owners – the shareholders – get really upset, and dump their investment, when those running the company are not returning those profits to them without a really good reason.

Hiding them from public scrutiny is not a “really good reason”.

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31

To correct a point made by several of the posters above (I have no idea how to quote on the new site).

Prices in Europe are not subject to controls. What you do tend to have is monopoly buyers (i.e. in the UK the NHS) who are in a much stronger position when it comes to negotiating prices with the pharma companies*. In the US the insurance companies are in a far weaker position when it comes to driving a bargain (and since they can simply pass on the prices in increased rates- something that government schemes cannot do) are less inclined to do so anyway.

Even allowing for the need to fund development, in a functional market you would expect the price of a well established product such as Lantus to fall over the years, rather than rise. I am sure that Sanofi have more than recovered their development costs (and funded other research projects) as have Lilly with Humalog.

Joel

  • Contrast the position with some of the new anti cancer drugs which can be eye-wateringly expensive (e.g. £50-100K for a years treatment). On occasions when the NHS has refused to pay the asking price the pharma companies have often refused to supply. Newspaper exposure and the ensuing public outrage often induces the NHS to pay up.
32

I would also note that in the US, Medicare was barred by Congress from negotiating drug prices. Pharma lobbied heavily for this. And because of this private insurance follows. So basically in the US we have a system where almost the entirety of the payers don’t negotiate prices despite the fact that they carry an astounding amount of clout.

33

to quote a reply, simply highlight the text you want to quote, and a big grey box appears on it that says “quote reply”

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34

But, be sure to first hit “Reply”, then go back up to the desired text, highlight, and the gray “quote” box appears…

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35

While what you suggest does work, it is not necessary to start the reply before selecting the text you wish to quote.

You can also begin by simply highlighting (selecting) the text you wish to quote. The ”quote reply button should appear after you select the text. Clicking on the ”quote reply button will open up the reply edit window with the selected text inserted as a quote.

Here’s a screen capture which may help to illustrate this.

36

Ah very interesting, have to say it takes a few seconds for the “quote reply” to appear.

37

In my case there is no delay at all. Off the top of my head I would guess it could have something to do with either the speed of the device/computer you are using or the speed of your Internet connection or both. :neutral_face:

38

I have alot of processing power, and a lot of internet speed, so I don’t know.

39

[quote=“Roxanne0312, post:36, topic:46124, full:true”]

Ah very interesting, have to say it takes a few seconds for the “quote reply” to appear.
[/quote]to quote this Roxanne, I hit the Reply at the bottom of your comment, then clicked the very top left icon next the the capital black B (what I call the cartoon talk circle), and wah lah!! You are quoted in two clicks…plus my slow typing. No highlighting necessary and it’s PDQ :slight_smile:

40

are u saying if you do it the way that I mentioned, there is a delay?