Wikipedia:Reference desk/Archives/Science/2019 April 9

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April 9

Medicine prices US vs the world

According to the Enalapril article: "wholesale cost in the developing world is about US$0.08 to 0.80 per month. In the United States, it costs about $25 to $50 per month." I suppose the discrepancy between other medicines' prices are equally abysmal.

Why doesn't the market price in the US come down? Wouldn't importing it (legally or illegally) be a huge opportunity? Wouldn't such trade close the gap or at least reduce it? --Doroletho (talk) 14:26, 9 April 2019 (UTC)

Most of those imports are illegal. And illegally importing them falls under the same laws as importing cocaine and such.--Khajidha (talk) 14:47, 9 April 2019 (UTC)

(EC)This BBC story goes into some of the reasons why they are so high. Mikenorton (talk) 14:49, 9 April 2019 (UTC)

Here is a paper that looks at healthcare costs in the US compared to other wealthy countries, covering the costs of medicines, in addition to other factors. Mikenorton (talk) 15:10, 9 April 2019 (UTC)

How many of those $0.08 to 0.80 per month developing countries do the extensive research and safety testing needed to bring an innovative new drug to market? There are many bad things you can say about the pharmaceutical industry, but taking away the money that they use to develop new drugs isn't a good plan.[1] --Guy Macon (talk) 15:21, 9 April 2019 (UTC)

Well, how much of the money that U.S. consumers pays for drugs is spent on R&D? How much of it is pocketed by the shareholders of the drug companies and spent on third yachts? How much is likewise pocketed by the shareholders of insurance companies who spend it on their fourth summer home? How much of it is spent on bribing politicians to ensure the system never changes? R&D is a good thing. Most of the $500 per month that a diabetic U.S. consumer is charged for insulin is not going towards R&D. --Jayron32 15:51, 9 April 2019 (UTC)

2601:646:8A00:A0B3:78DA:714:B603:E789 (talk) 22:26, 9 April 2019 (UTC)

Percent of revenue (not profit) spent on research and development

Eli Lilly is currently spending roughly 23% of revenues on R&D.

Biogen is at approximately 22% of revenues on R&D.

Roche and Merck are spending just under 20% of revenues on R&D.

Pfizer, GlaxoSmithKline and AstraZeneca are closer to the 15% level.

Abbott Laboratories is at 12% of revenues on R&D.

Many smaller pharma companies have lower revenue totals to work with, so they spend significantly higher percentages of their budget on R&D – up to 50% for some firms.

Comparisons

The spending on R&D by industrial firms engaged in developing new products is a 1.3% of revenues on R&D.

The chemicals sector spends an average of 2 to 3% of revenues on R&D.

Apple and IBM spend about 3% of revenues on R&D

Aerospace and defense firms spend 4 to 5% of revenues on R&D.

Microsoft and Google spend approximately 12% of revenues on R&D.

The semiconductor industry is the only industry that regularly outpaces pharmaceutical companies in R&D spending as a percentage of revenues. The major semiconductor firms, such as Broadcom, regularly spend approximately 25 to 28% of revenues on R&D.

The high level of R&D expenditures in the pharmaceutical industry is easy to understand given the cost of developing a new drug and bringing it to market. The average R&D to marketplace cost for a new medicine is nearly $4 billion, and can sometimes exceed $10 billion.

Source: Investopedia.[2] --Guy Macon (talk) 08:13, 10 April 2019 (UTC)

Thank you for those numbers. That is enlightening. The question then that needs to be asked is "is it just that the cost of that R&D be born primarily by sick people"; is there a better way of funding that necessary research that does not fall primarily on people who need the existing drugs to survive? I will concede the idea that a large portion of the profit from drug sales goes to R&D, but that doesn't also mean that 1) other revenues are not being misspent on advertising, bribery, and profit taking and 2) that the best way to do R&D is to bankrupt poor sick people. --Jayron32 12:48, 10 April 2019 (UTC)

US healthcare is a real mess, with a huge numbers of middlemen who all take a share. It's allowed to stay that way because of political action committees that pay off politicians to look the other way, and donate money to the opponents of any who try to solve the problem. Regarding Trump, according to that BBC article linked above: "At the time, he said the government should negotiate drug prices for government health programmes, such as Medicare. He also voiced support for allowing people to buy medicines from countries where they cost less, such as Canada. Neither of those proposals was mentioned in Friday's speech." So, it looks like he doesn't have the guts to fight the PACs either. Instead of taking those actions which would have lowered US drug prices, and profits, he instead now encourages other nations to pay more for US drugs, which would increase US drug company profits. SinisterLefty (talk) 15:41, 9 April 2019 (UTC)

He barely has the guts to take a shit.--Khajidha (talk) 15:54, 9 April 2019 (UTC)

...Let's at least try to keep the tone encyclopedic during these difficult times...

For the interested citizenry, the U.S. Attorney General was put on the spot to explain this exact problem this morning (April 9, 2019). You can watch his baffling responses in the archive of the Department of Justice Budget Request for Fiscal Year 2020 hearing, (2 hours, 13 minutes in), in which Charlie Crist [3] asked how the Attorney General could justify his lawsuits that would specifically legalize discrimination in access to health care. The verbatim response from William P. Barr was that he was a lawyer, which apparently implies a certain amount of gutlessness: in his own words, "as you know, as Attorney General, ... the administration's position is hokey, but... I'm a lawyer."

I am not a lawyer, but I think the A.G.'s position is called the "Nuremberg" defense, for reasons of historical precedent.

Nimur (talk) 20:19, 9 April 2019 (UTC)

Although, presumably, Barr took the job voluntarily. ←Baseball Bugs ^{What's up, Doc?} carrots→ 01:06, 10 April 2019 (UTC)

As much as I fundamentally disagree with nearly everything Barr and Trump stands for, can't say I agree with the characterisation, at least based on viewing a snippet of the video above (starting at the beginning of Crist's time [4]) to the beginning of the next committee member).

Barr doesn't really seem to be saying he's just following orders but rather seems to be saying that as a lawyer and as the AG, it's his responsibility to follow the law and the constitution. If some law is unconstitutional, it's his responsibility to argue for that, no matter the bad consequences of such a declaration. It's the responsibility of the legislature to pass legislation which is constitutional, or to begin the process to amend the constitution if needed.

On a personal level this actually seems a reasonably position to take provided it consistent, i.e. he also argues against what Trump wishes when the situation compels it. (Or resigns.) It seems to me if there is criticism to be made of Barr, it would be in any lack of consistency in this direction.

Barr doesn't seem to be suggesting that the administration's position is "hokey" but rather saying that if their position really was "hokey", there would be no reason for Crist to be concerned since the Supreme Court would easily rule against him, as they're supposed to be an independent court compelled only by the strength of legal argument and the law, not who's the one arguing for it. The hokey bit therefore seems to be his way of suggesting that the reason why Crist is so concerned is because Crist as a lawyer and former AG himself (albeit not of the federal government) recognises Barr does actually have a reasonably compelling legal argument rather than a "hokey" one.

The implication I'm sure is assuming the law really is unconstitutional, it would be Congress's responsibility to pass a law protecting such rights that isn't rather than him simply ignoring the problems with the law because some of what it does is a good thing. Or alternatively Congress and the American people's (or states') responsibility to change the constitution.

An obvious problem is that Trump is likely to veto any law which doesn't meet any number of requirements he has which many people fundamental disagree with. Although they could override this if they had the numbers. This would I presume include reversion the part of Tax Cuts and Jobs Act of 2017 which changed the individual mandate to zero and is part of reason for the mess [5]. Of course it's a moot point since they haven't even come close to pass something.

But Barr is IMO fair to point out passing such a law is not really his responsibility, although he could I guess advise on what will and will not be constitutional.

I guess the argument could be made Barr should resign rather than working for an administration which will make it so difficult to pass any protection which passes muster with the constitution, but that seems a stretch. At least without considering other problems with the administration. (As I said earlier, it seems to me the biggest question is whether Barr is really that consistent in following the law and constitution.)

The other issue is whether his legal argument is really as strong as he implies but ultimately only time will tell. If he wins, or if loses but by a 5-4 decision, this would suggest his argument was decent. If he loses 9-0 this would suggest indeed his argument was "hokey". Longer term, the decision may be seen as wrong whatever is is, like the way the Dred Scott v. Sandford is now. And this would affect the view of the person who argued in favour of it, but that's likely to be a while.

Nil Einne (talk) 08:43, 10 April 2019 (UTC)

Trump says a lot of things. You can't take what he says about something at any given moment to be his "final answer" on the subject. ←Baseball Bugs ^{What's up, Doc?} carrots→ 15:55, 9 April 2019 (UTC)

With regards to Guy Macon's comment, it's worth remembering what we're talking about here. Enalapril is a drug who's patent expired in 2000. I didn't check the source, but even if this isn't the US, it was developed and first marketed in the last 1970s to early 1980s so by now it's patent must have long expired. The US, as with many countries, have decided that companies have a limited time to exclusively earn money off their research, after that anyone else is allowed to replicate it. This time is generally ~20 years. (This is somewhat of a simplification, but good enough.)

So Merck & Co. has already had the opportunity to earn back their R&D spending and probably even to earn more; which they can then put back into more R&D. They can still earn money off it, but their earnings are supposed to be limited by the fact others can, with some comparatively small amounts of R&D (including regulatory compliance), produce generic versions.

So why in I suspect nearly every other country in the world, both developing and developed, are common medications with expired patents sometimes so much cheaper? It shouldn't be because the developer needs to earn back their R&D since in that case the solution is surely to extend the length of the patent not put in additional barriers after the patent expired. If it's because of more complicated regulations of generics, then while undoubtedly there is a lot of dodgy stuff that goes on, the question is whether the regulations in the US are really fit for purpose, are things really that much worse in all the other countries of the world [6] [7]. If it's because of the mess of health insurance, lack of negotiation power etc then this would suggest legislative solutions in that direction.

Point being, "drug companies need money for R&D so let's pay a lot for medications with expired patents" seems a questionable argument.

Nil Einne (talk) 09:13, 10 April 2019 (UTC)

Drug companies in the US spend an enormous amount of money on marketing to the consumer. On the one hand, this is money that needs to be made back, and on the other hand this creates a barrier of entry for generics. Even if the drug is cheap to make, the brand recognition is not. In single-payer (or "few payer") healthcare markets, the single payer can mandate physicians to prescribe the generic drug, and the pharmacy to pick the cheapest equivalent brand. Even if this does not always happen, the possibility alone keeps prices lower, especially if the single payer negotiates standard prices. Also, of course, poorer markets generally can only bear lower prices - if your drug costs 20ct to get onto a store shelf, selling it for $2 is a profit of $1.80, while not selling it for $20 is a loss of 20ct. --Stephan Schulz (talk) 09:49, 10 April 2019 (UTC)

RAND just published a report, National Health Spending Estimates Under Medicare for All, (2019), that provides substantial reference material to explain current drug pricing in the United States, and cites several different proposals for restructuring the funding at a nation-wide level, including economic estimates about the total costs and to the distribution of those costs.

"U.S. payers are currently charged substantially more for drugs than payers in other countries (Danzon and Furukawa, 2008), which may be partially attributable to the fact that Medicare is currently barred from negotiating drug prices on behalf of enrollees. Within the United States, drug prices vary by payer..."

Perhaps the most enlightening part of the report is the emphasis that total drug costs might not change very much - perhaps they might fall to prices 10% cheaper than today - but the apparent cost to the consumer would fall very dramatically, because the payments would be structured differently, and would be spread more uniformly across the population (specifically, by taxation: "declines in health care payments by private sources would be replaced by new taxes...").

So the key point to emphasize: drug prices in America are the result of our economic policy: we have, as a nation, decided not to distribute costs uniformly. Whether any individual views this is "fair" or "humane" largely depends on their personal ethical and political stance. Roughly: should everyone pay to help the sick and ill, or should we require our sick and ill pay their own costs by themselves ... or do we settle on some ratio in the middle? To dispassionately summarize the status-quo, the conditions will not change unless our government takes action; and at present, our system of government is stalemated. It is for this reason that we have had to bring so much politicking into a request for scientific reference: drug pricing policy, and the distribution of the consequent societal burden, are fundamentally not an issue of scientific fact. The best we can really do is to point toward policy-statements by various science-minded experts, and try to explain the context. For example, the American Medical Association publishes advocacy pieces; yesterday (April 9, 2019), they updated their website, "How Are Prescription Drug Prices Determined?" And they run a full-blown political advocacy campaign entitled Truth in Rx. To be frank, I have read their advocacy, and it is not entirely clear to me that they are champions for lower prices: they are largely concerned with uniformity of pricing, which is absolutely not the same thing. At the same time, they strongly advocate for the individual mandate, which is a sort of code-word for protecting the Affordable Care Act (or "Obama-Care"), in its existing form, against the onslaught by a rampaging right-wing administration. Well, they don't exactly say "rampaging right-wing," because evidently their professionalism enables a little bit more dispassion than I can sustain).

Nimur (talk) 15:01, 10 April 2019 (UTC)

Hole in Eastern deer tick distribution

What causes the gap in the middle ? (If that can be replicated, it might be possible to reduce this disease vector.) SinisterLefty (talk) 15:24, 9 April 2019 (UTC)

Maybe it was competed out by another, closely related species, perhaps one of the other Ixodes ticks? --Jayron32 15:46, 9 April 2019 (UTC)

If that is the case, and the other species is less of a disease vector for humans, then spreading that other species would be the way to go. SinisterLefty (talk) 17:30, 9 April 2019 (UTC)

Incidentally, (and perhaps coincidentally), the grey "hole" seems to me to follow the Ohio River which itself follows along the northwestern slopes of the Appalachian Mountains. Either of those geographic features may (or may not) help explain the gap. --Jayron32 17:36, 9 April 2019 (UTC)

The eastern deer tick distribution has an uncanny match to regions where the white-tailed deer, one of its major hosts, exists in high density: [8]. I didn't look for sources on this tick specifically, but it wouldn't be the first parasite that thrived best in dense host populations. Someguy1221 (talk) 20:28, 9 April 2019 (UTC)

Yes, that sounds like the most likely reason. Unfortunately, culling the white tailed deer everywhere else to keep the tick population down seems like a nonstarter. Thanks. SinisterLefty (talk) 17:47, 14 April 2019 (UTC)