[surrealvortex]

I'm conflicted about this article. On the one hand, the pharmaceutical companies gouging ordinary Americans is abominable. Doing something to circumvent their greed is something to support.

On the other hand, if enough people exploit loopholes like this, and the pharma company actually felt a significant drain in revenue, they may decide not to license the manufacture of these drugs in India at lower prices. If $84,000 seems unreasonably high in the US, imagine how out of reach it will be in India, where the cost of living is much lower.

[voodootrucker]

So it's fair for a multi-billion dollar company to exploit the "global market" by farming work out to 3rd world countries...

But not for a customer who is literally dying to take advantage of that same "global market" to save himself?

Like everything else in the global economy, laws are only enforced to protect the strong against the weak, and yet we wonder how all the wealth is accumulating in the hands of the few.

[rdtsc]

> So it's fair for a multi-billion dollar company to exploit the "global market" by farming work out to 3rd world countries...

That makes sense. It is interesting that when usually there are "anti-globalization" protests shown in the media, the protesters are presented as fringe idiots, violent, with facemasks and so on. Sort of implying "look at these crazies not wanting countries get close to each other, trade and be friends". The truth is globalization is overloaded to apply only to large companies. And usually the more they "globalize" -- the more they create inequality and pain for those at the bottom. So then they also end up increasing border controls, formulate various laws and agreements and ram those through each country's legislature to protect segmentation and control of market.

[icebraining]

All evidence I've seen points to a massive reduction of poverty "at the bottom" (the actual bottom, not developed world's bottom) as globalization has increased in the last few decades. On what do you base the claim that it has increased pain?

[surrealvortex]

I didn't take a position one way or the other in my comment. But if anything, I definitely did not support the company. I was more concerned about the billions of people in other countries who will suffer because they will lose access to medicine even more. Some of the comments below pointed out that India had the ability to break patents if the government considered the drugs overpriced, so I'm not sure that's a very valid concern anymore.

[option_greek]

That's a very interesting point! Is also applicable to digital content restrictions (pricing differences).

[ikeboy]

How is giving people jobs exploiting them again?

[ubernostrum]

I think a way to state this that you can't semantically object to is:

We live in a society in which those who control large corporations argue that it is virtuous to relocate significant portions of the business to locations which are cheaper due to more lax or nonexistent laws protecting workers and/or the environment, and thus consumers back in the US receive the same quality of product but at a lower price thanks to the location-based saving.

This opens up a counterargument that it should just as equally be virtuous to purchase medication from places where the retail price is cheaper due to more lax or nonexistent laws protecting intellectual property claims in pharmaceuticals, by which process consumers back in the US receive the same quality of product but at a lower price thanks to the location-based saving.

After all, protection of workers, protection of the environment and protection of intellectual property are all sliding-scale values; if it's fair for one person to do arbitrage on one of these in order to make money, why shouldn't it be fair for another person to do arbitrage on another?

[ikeboy]

>We live in a society in which those who control large corporations argue that it is virtuous to relocate significant portions of the business to locations which are cheaper due to more lax or nonexistent laws protecting workers and/or the environment, and thus consumers back in the US receive the same quality of product but at a lower price thanks to the location-based saving.

I don't think this is entirely fair. Some of the lower cost can surely be attributed to lower cost of living in those locations, not necessarily due to more lenient laws.

In that case, it isn't comparable to arbitrage over IP.

[trbvm2]

By the definition of exploit. http://www.dictionary.com/browse/exploit "to utilize, especially for profit; turn to practical account"

[ikeboy]

Well that meaning of exploit doesn't have the negative connotation clearly implied above, which requires harm.

[drauh]

https://en.wikipedia.org/wiki/Foxconn_suicides

[evanpw]

"The suicide rate at Foxconn during 2010 remained lower than that of the general Chinese population at the time as well as all 50 states of the United States."

[nickpsecurity]

What is the rate of employers whose practices cause a large group of their employees to jump off their building all at once? I can't remember ever seeing that headline in U.S. papers except referring to China and such. Must be rare here.

I wonder what the rate of mass suicide is in general for "all 50 states of the United States" vs Chinese companies like Foxconn.

[tim333]

>large group of their employees to jump off their building all at once?

Didn't happen at Foxconn. They were all on separate days over a few years. Not sure where you got "mass suicide" from. It's not mentioned in the comment you refer to.

[GreaterFool]

I have a private global (excluding USA) medical insurance that covers costs (no in-patient) up to 1M and it costs me $1k/year. I've been hearing about Obamacare for years and always thought "well, it's good that more people will have insurance". But when my colleagues in US told me what their deductibles on a good insurance plan are (thousands of dollars. my deductibles are $375) I was floored.

The whole medical system in US is broken. This morning I had a strange thought... I need to prepare for trips to US the same way I'd prepare for going to a third-world country: by buying a special medical insurance! It's one of the important TODO items when going to certain countries.

Fun fact: I can get a medical insurance that covers US with deductibles in low hundreds of dollars by doubling my not-so-high premium. As an expat. How crazy it is that I can get a better deal on insurance in US than local people?

[refurb]

Wait. Of course your insurance is cheap, it excludes in-patient care. You know, the most expensive part of medicine.

If it were legal in the US, no in-patient care insurance would be pretty cheap as well. I'll agree not as cheap as ex-US, but a hell of a cheaper than Obamacare plans.

[forrestthewoods]

America subsidizes the health care of the entire world. Because such a large portion of health profit comes from the US. If the US ceased to exist then global prices would increase and global research would decrease.

[adrianmacneil]

I hear this line repeated a lot on HN (it appears multiple times in this thread even), yet I've never seen a study or any hard evidence for it. How do you know that the massive profits made by drug companies in the US are being reinvested into drug development, and not simply returned to their sharedholders? Do you have any sources for this claim?

[zaroth]

Plenty of research on this topic and hard evidence abounds.

Regarding US share of research funding versus the rest of the world, this is well established... Public funding and private profits are the two big US sources of medical research dollars. The NE Journal of Medicine reports that the US funds about half of all global medical research spending, and that's split approximately evenly between public and private funding.

Here's [1] a CBO paper on the topic of pharma R&D spending / reinvestment which is also worth a look. R&D as a percentage of sales ("research intensity") is higher in pharma than almost any other industry, and increased significantly in the 80s and has held constant since then.

[1] - https://www.cbo.gov/sites/default/files/109th-congress-2005-...

[adrianmacneil]

Just saw this. Thanks for the link, it was an interesting read. It did feel like the authors leant heavily towards justifying currently spend rather than taking a critical view on it. It also didn't go very deep into R&D spend vs shareholder profit, instead trying to point out all possible places where profit was being over-accounted for and R&D costs were under-accounted.

[lostlogin]

I'd argue that US practice damages healthcare systems everywhere with the defensive practice of ordering every test and scanning every system to avoid liability. It contaminates thought processes where a 1 minutes pause would generate some level headed thought.

[CaptSpify]

> America subsidizes the health care of the entire world.

Howso?

[forrestthewoods]

Because profit is disproportionately earned in America. Europe, Canada, and the whole world enjoy lower prices because we pay higher prices.

[ptaipale]

I don't need to agree or to disagree, but I need to ask: why downvote the parent without offering any replies?

(Upvoted, just out of the feeling of irritation at this.)

[forrestthewoods]

HN seems to be getting worse by the day. If I could delete my account and all its comments I would.

[lhopki01]

Pharmaceutical companies have an average profit margin of about 17%. That's about the highest by industry in the world. I think it's more accurate to say that America subsidises the profit margins of pharmaceutical companies.

Important to note is that that profit margin is after taking into account that pharmaceutical companies spend more on advertising than they do on research. How about we just take out the profit margin, take out the advertising and give the money directly to universities who already do a lot of the research and then make the results freely available? That way US citizens on HN will still be able to feel superior about subsidising the healthcare of the 'entire world' and everyone will have access to low cost generics.

[hueving]

Right now US citizens are basically subsidizing other countries when it comes to drug revenue via price gouging. I would rather it be done via some other more explicit mechanism (e.g. India government subsidies) rather than at the expense of poor healthcare availability to people in the US.

[sandworm101]

Considering that Americans consume 75% of the world's prescription drugs, and I think it safe to assume an equivalent amount of non-prescription drugs, I don't think any of this makes much difference. The US is a very strange and unique drug market.

Citation: "5 percent of the United States is the world's population and consumes 75 percent of the the world's prescription drugs."

https://www.drugabuse.gov/related-topics/trends-statistics/i...

(And by "Americans" I and the gov included all those people in the US market who are not "US citizens". Ie me.)

[adrianN]

That statistic seems a little misleading to me, because very large parts of the world don't consume any prescription drugs at all, because they're too poor to go to the doctor.

[bpodgursky]

Yeah, but that's not going to happen. If a big pharm company doesn't provide India-priced versions of drugs, the Indian government just declares the patent invalid and lets generics produce it for free (yes, this happens).

[gruez]

Sounds like a good decision by india

[evgen]

Yeah, until the US decides that it will retaliate by, for example, adding a 100% import duty to all goods produced in India and no longer supplying visas to Indian citizens.

[dba7dba]

I don't think such retaliation will ever happen. Many lobbyists will be waiting in the hallway of US Senate before ink of the signature dries.

[Houshalter]

Yes but not a good decision for everyone else. Someone has to pay for the development of these drugs.

[creshal]

India wouldn't be able to either way.

[gradstudent]

That sounds terrific?

[rdtsc]

> Right now US citizens are basically subsidizing other countries when it comes to drug revenue via price gouging.

I am ok with that. They can take even more taxes out every month if it means people get access to better healthcare.

[jessriedel]

Does it bother you that Europe and the rest of the developing world also free-ride subtantially?

[rdtsc]

Not particularly.

By the way pharmaceutical companies also free ride on public universities. Research is often done there. Even if it is from grants, it often means professors end up working and spending their time for pharma companies instead of doing other things like teaching students.

Moreover, if our goal is to win hearts and minds and I don't know, promote Democracy (at least that is what the propaganda tells us), isn't providing health saving medication or building hospitals or schools working towards that goal better than say overthrowing their government or threatening to invade.

Going back to Western Europe, I hear it is already possibly to go to Germany (or was it Norway) and attend a 4 year university there for free. Isn't that free riding So they can have our pills and we can go there and not pay $200k in student loans. Globalization and free markets, we learned that was a good thing, right ...

[tracker1]

But pharma companies aren't competing in a free market... I can't by (prescription X) from a canadian drug store. So it's not globalized, except for the protectionist patent laws and treaties surrounding them.

It's time to reign in patent protections, specifically regarding extension patents, and bring in compulsory license maximums for prescription medicines. Give drug companies 5 years exclusivity once they react market... after that they can only charge X per day for licensing... imho that should probably be $10/day/prescription, and drop every year.

[refurb]

Price controls work so well in general, why not try them in pharmaceuticals?

[refurb]

By the way pharmaceutical companies also free ride on public universities.

Free ride? You think pharmaceutical companies just come along and pluck the best drugs for free? No, they out-license it from the university and pay royalties.

How else would Northwestern University build a brand new chemistry building from their Lyrica royalties?

[Daishiman]

Well, it's evidently cheaper for them to get it from a public resource than actually, you know, developing it from their own labs.

So nice for them to be able to pick and choose the successful research while not having to absorb all the other, less interesting research funded with public money.

[lhopki01]

Where is your basis for this statement? Pharmaceutical industry profit margins are about 17% which about the highest of any industry. Pharmaceutical companies spend more on advertising than research and development. Looks less like Europe and the rest of the world are free riding and more like the US is being conned.

[Zigurd]

No because the free riding is not actually substantive.

[jessriedel]

How so? The primary development incentive for the large majority of new drugs is the patent-protected revenue in the US.

[laurencerowe]

Sadly most of that money is spent on marketing [1] and most new drugs are just minor tweaks to existing compounds [2], much safer bets than brand new approaches.

[1] https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...

[2] http://healthaffairs.org/blog/2015/07/06/serious-risks-and-f...

[lostlogin]

Don't worry, with the Trans Pacific Partnership Agreement (TPPA) we are all signing up for we have agreed to be gouged deeply. New Zealand.

[gozur88]

India can break patents on drugs it considers too expensive. The real danger is if this sort of thing makes drugs unprofitable pharma companies won't spend any money researching drugs to treat uncommon conditions, and the drug will never exist to start with.

We'll get endless varieties of new opioids, blood pressure pills, pecker perkers, and not much else.

[danjoc]

I always hear this argument, but never any evidence to back it up. Is it simply regurgitating econ 101? There must be some economic incentive? Any time people die from a disease, that alone creates an incentive for those left living to find a cure.

What econ doesn't teach is that people are not perfectly rational creatures. Just like we will find people who will write code for free, who will make music for free, there will always be people who are searching for cures for the sake of searching for cures.

I don't buy the argument that only Big Pharma who can deliver cures. As the article pointed out, Gilead didn't develop the cure. They bought the company that did.

[gozur88]

>There must be some economic incentive? Any time people die from a disease, that alone creates an incentive for those left living to find a cure.

No matter how altruistic you are, as a private company you can't put billions of dollars toward a drug that's going to lose money.

>I don't buy the argument that only Big Pharma who can deliver cures. As the article pointed out, Gilead didn't develop the cure. They bought the company that did.

... which they would not have done without the expectation of a profit.

[refurb]

I don't think anyone is arguing only Big Pharma creates new cures. In fact, most big pharma companies acquire smaller companies for their drugs.

That said, I don't disagree that money is the only motivator. However, good intentions aren't enough to develop a new drug. It takes a hell of a lot of money as well.

If you don't create incentives for private investment, then you need to get that money somewhere else.

[sabujp]

lol, where do you think drug companies do research? That's right in India.

[sandworm101]

"..not to license the manufacture of these drugs in India"

And then India can purchase/void their domestic patent, allowing generic brands to fill the market the original creator decided to abandon.

[zaroth]

I think you should be conflicted for a slightly different reason :-)

Should Americans pay for a disproportionate share of pharma revenue? I for one am so happy for all the medical research that we fund in this country, it is probably the best thing we can possibly do for the world. Of all the American foreign aid and foreign intervention, very little else will compare to the amazing impact of widespread access to Harvoni/Sovaldi in India. That is truly an amazing gift that America is giving to India, and it's made possible exactly by extreme price discrimination.

This is an amazing miracle cure for a deadly disease. My understanding is that it cost a lot of money to develop, and took a lot highly skilled work, and involved a fair measure of risk of total loss. We want wins like this to be rewarded. We want a significant fraction of the dollars this drug earns to ultimately be re-invested in more of this kind of R&D. We definitely want more drugs like Harvoni/Solvaldi coming to market.

So the conflict I have is, when manufacturing is not the bottleneck, you want to get this cure out to people everywhere, but at the same time you can't afford to pay for it all to happen in one year. So you see cases like OP where they won't pay for the treatment until you are showing symptoms. But the cure is so easy, nobody wants to wait for symptoms, and how can you blame them?

[HillRat]

Compulsory licensing under TRIPS means that India can allow manufacturing without running afoul of international trade law, though if enough non-Indians started doing this it could cause some headaches due to the "predominantly for domestic use" clause. But in reality there's no way that pharma companies can stop developing countries from manufacturing critical medicines.

[kangar00]

I agree the real problem is the high cost.

It can be solved by extending patents in return for lower prices. Then the government must enforce patents internationally by putting pressure on countries that ignore patents.

Another concern is poor quality from knockoff manufacturers. You can partially solve that by lowering costs because the original product becomes more competitive. You can also try to apply pressure on countries that don't honor patents.

You can complain about the cost, but you can't just make pharma companies sell their products for less because you believe they are too expensive. You need to give them a reason to believe that they can continue to sell a good product and make money off of the research investment they put in. You also need to give them incentive not to make small changes to drugs to renew patents when the original version of the drug might be a better version.

Granted, it is sick when people make an excessive amount of money at the expense of those most in need. But, most of the bad that happens in pharma is due to suboptimal patents and suboptimal patent enforcement.

[tracker1]

But stronger patent protection won't improve pricing... competition will. I think we should reduce extension patents to 5 years, and possibly even have compulsory licensing fees ($10 per day, per prescription for the first year, $8 for the second ... 6... 4... down to $2, then $1) for prescription drug patents starting at 5 years. And the penalty for an insufficient patent application for a third party to properly apply within the first 8 years would mean a loss of said patent.

[refurb]

What about drugs that cost more than $10 per day to produce? Hell that's only $3650 per year. How many manufacturing plans can sustain themselves on that sort of revenue, particularly if they are creating a drug for a disease that only affects 1000 patients in the world?

One of the reasons why generic drugs prices jumped so much in the last few years, if because manufacturers said "screw this" and just stopped making the drugs because the margins were so low.

[tracker1]

The $10/day was for the licensing to the patent holder, not a cap on the cost of the drug to the consumer. This is about reducing patent protections on drugs to 5 years after market, and compulsory license caps after that, in order to encourage competition, not a price cap over production costs in a free market.

Without competition, you get inflated pricing.

[surrealvortex]

Curious about the last part. How does that work? If they make small changes and get patents based on the new formula, won't other companies be allowed to use the original formula?

I'm guessing somehow both formulae are covered by the renewed patent, but that is wrong on so many levels.

[codegeek]

"and the pharma company actually felt a significant drain in revenue, they may decide not to license the manufacture of these drugs in India at lower prices"

But thats the thing. There will be no drain in revenue as they make money in the US by selling for $84K while they make money from the sales in India as well due to licensing agreement (albeit a bit less revenue).

Overall, still a pretty good deal for these pharma companies if you ask me otherwise why would they even do such a deal with India ?

[surrealvortex]

Well, my point was that if everyone decided to source it through India, they will no longer sell anything for $84k. Even if 10% of people did that, their profits will slip enough for them to notice and take action.

[Zigurd]

Lots of research in the US is university and government lab-based. Even if private sector drug development were cut back, it would not end useful drug development. I suspect the way government and university research is monetized could be improved so that more competition would exist.

[rayiner]

Let's say we shut down Silicon Valley and had the government do computer research. You think that would be efficient and effective?

At the end of the day, you need to give smart people a reason to make their lives' work saving lives instead of selling financial products or advertising algorithms. That's not going to happen if going into drug development means topping out at GS-15 in a government lab.

[Zigurd]

Let's say we stopped exclusive licensing for government funded research. Then, when commercialized, drugs would be available from multiple competing sources. Or the IP could be set free, for generics manufacturers to pick up.

Maximizing rent-seeking doesn't seem like the wisest course of action.

[Daishiman]

How funny that you mention that, given that the Internet, the very backbone upon so much of the economy moves around, started and developmed mostly as... a military project. Supported by universities and public research.

[maxerickson]

The market paid Cisco and the like to develop the ever advancing hardware that powers the internet as it exists today.

[Daishiman]

Sure they did, because corporations are much better at iterative product improvements than at radical, high-risk research projects with no short-term returns. So?

[refurb]

Please list all of the drugs that public money has brought all the way to market. It's not that long.

[rayiner]

What exactly is "gouging?" The average wedding in the U.S. is almost $30,000. Average new car price is $33,000. Is $84,000 one-time an unreasonable price for a complete cure to a chronic disease?

[bogomipz]

That's a strawman argument and you know it. A car is financed over 5 years. You can't get financing on pharmaceuticals. The "average" wedding is an equally bad comparison and your figure is wrong - average is actully 26K with majority of weddings under $10k:

http://www.costofwedding.com/

It is absolutely reprehensible behavior. If $1,500 is a reasonable price point and profit margin for a company elsewhere in the world then $84K in another part is simply outrageous.

[rayiner]

> A car is financed over 5 years. You can't get financing on pharmaceuticals.

As a matter of economics, the value of something doesn't (or shouldn't) depend on how easy it is to get financing for that thing. In fact, your financing example cuts the other way. That $33k new car is actually worth more like $40k to the buyer, because that's how much they pay after financing it. The market shows that people value an average new car at > $40k. So how is it unreasonable to say that the value of a Hep-C cure is at least $84k?

> It is absolutely reprehensible behavior.

Gilead is saving lives. Apple is making money hand over first selling shiny trinkets that nobody really needs. Which is the reprehensible one? What you're basically saying is that a company should make less money for creating products that fundamentally help humanity. That's crazy!

People should be able to get these drugs, even if they can't afford it. That's the difference between iPhones and Sovaldi. But it's the government's job to make that happen--the companies shouldn't be forced to basically be private charities.

[pgodzin]

Or Gilead is exploiting dying people desperate to save their lives and have enough money to do so, while letting the rest die. And then I'm sure they are lobbying the government to make sure it won't do anything about it.

Meanwhile, Apple is selling luxury products that people can buy if they would like to. And those that can't, survive just fine without one.

[rayiner]

So the company that is saving some lives is more reprehensible than the one that is saving no lives? Companies that create life-saving things should be charities, while companies that create things everyone can "survive just fine without" should be richly rewarded. Right? That doesn't seem backwards to you?

It's not like Sovaldi grows on trees, free for the picking, and Gilead came along and fenced-in the trees and now is charging $84,000 for access. It created a cure to what used to be a terminal disease. It should be rewarded in proportion to the value of curing the disease.

[pgodzin]

Yes, the company that actively prevents people from obtaining life-saving medicine for billions extra in profit is more reprehensible than the company that makes no pretenses about having anything to do with life and death.

Creating the cure was admirable, what it has done with it is reprehensible. It certainly has the right to make a significant profit. But a monopoly on medicine paid for by dying people with no other options does not accurately establish the value of curing the disease.

[verroq]

If all the poor people got naturally selected out then there won't be poor people anymore.

[lostlogin]

You may or may not have noticed that extreme poverty and hardship doesn't lead to less offspring, in fact the opposite occurs. Look at birth rates between wealthy and poor countries or groups.

[pgodzin]

Hope you're trolling, but speeding up the process for the most vulnerable in our society is extremely inhumane

[bogomipz]

Huh? Who said anything about "value"? You are the one who mentioned car pricing not me. My point is that cars are peoples single largest purchases outside of home ownership and for most people the only reason that is even viable is because a source of financing exists.

Why are you dragging iphones and Apple into this? You are way off point.

"the companies shouldn't be forced to basically be private charities." Wow, I don't anybody has ever compared a big pharma company to a private charity before. I had to reread that sentence twice.

How about Martin Shkreli the CEO of Turing Pharmaceuticals who overnight raised the price of an AIDS drug from $13.50 to $750.00 a pill overnight? Is that OK? He shouldn't in your words "be forced to basically be private charity" right?

[1856294]

>As a matter of economics, the value of something doesn't (or shouldn't) depend on how easy it is to get financing for that thing.

When interest on mortgages shrinks the house prices will become inflated. In fact it's smarter to buy a house durng a time of high interest at 400k and later refinance with a lower interest rate than to buy the same house for 800k at a low interest rate without posibility of even cheaper refinancing.

[refurb]

If Gilead charged $1500 in every country it wouldn't have been worth to invest in the first place.

Remember they paid $11B for the right to the drug and they still had to bring it through development.

[mattdw]

Surely the right to the drug was only worth $11B in the first place because of $84k possibilities at the other end? If it was only ever going to be $1500, that $11B would have been adjusted accordingly.

[remicade]

Yes, for the affluent those are what you typically spend. You clearly have never been seriously ill with a chronic condition. I have to take a drug every six weeks (remicade) that costs $17,000 each time for the rest of my life. I'm 23. Let that sink in. This is the state of affairs in the US. It's horrid, I didn't ask for Crohn's disease, but I'm being punished for it.

[bdcravens]

I have Cystic Fibrosis. Orkambi is the closest we've been to a cure (treating it at cellular level). Retail: $260,000 a year. However, I pay $15/month. (insurance + manufacturer subsidy). Many of my other medicines (which would cost another $100k+) are similar. I picked one of the better insurance packages (about $375/mo); I pay another $100-200 a month in copays to get $400k or more in medicine.

I'm also in the US. Why is my experience so much different than yours?

(edit: some punctuation)

[kgwgk]

I'm sorry you have to take remicade for the rest of your life, but remicade won't cost $17k each time for the rest of your life. Generic versions of remicade are already available in Europe, and will be available in the US not later than Sep 2018 (when the patent expires, but in fact a biosimilar has already been approved by the FDA and could be launched "at risk" at any time).

On the other hand, it's likely that better treatments for your condition are developed in the future and at that point you will complain about how expensive those new drugs are.

[vdance]

must me nice in your bubble that $84,000 as a one time payment is reasonable. normal people can't get a loan for something like this, and obviously don't have cash stored away for something like this, and like the article mentioned, the op won't get covered by insurance even though he's done his part and paid insurance premiums. he clearly had no other options. glad you drive a $33k car. seems like the op doesn't.

[rayiner]

Don't misinterpret my point: I think the government should absolutely pay for necessary medical treatment like this.

But, it's important not to confuse what are actually two different inquiries: what is the fair price for a Hep-C cure, and how do we make sure those who need get it. The first is a purely economic question, not a moral one. Otherwise you create a perverse incentive structure: people make lots of money creating things people don't need (a new iPhone model every year), while people make much less money creating things people do need (breakthrough cures).

[refurb]

Do you think charging $300K for a liver transplant is gouging too? Because that's what this $84K drug just replaced.

[tomc1985]

Yes, $300k is even more unconscionable.

Medicine in the US is wwaaaaaaaaaaay overpriced. Things that are critical for life needs to be priced at a reasonable flat rate above costs, and conducted with the attitude of public service and human actualization. Let big pharma reap their R&D costs some other way

[jrockway]

> Let big pharma reap their R&D costs some other way.

That's easy: they'll just cut R&D and manufacture generics or toothpaste or something that is cheaper.

[greeneggs]

> Let big pharma reap their R&D costs some other way

How?! You think they should create a social network for doctors? A billion dollars in ad sales is somehow morally better than a billion dollars from saving lives? They're making their money by saving lives, and being criticized for it. You're effectively saying that they shouldn't do any R&D, like the Indian generic drug companies.

Sorry for the exclamation points. I think that you have a particular system of morality, that is more important than saving lives. To me this is like arguing for abstinence-only sex education, which demonstrably does not work. I wish in general people would be more willing to look at data and outcomes.

[tomc1985]

I'm not in that industry, I'm sure my ideas aren't very good.

* massive step up in grant funding to front-load R&D costs so they're paid by the time the drug is out, or

* worldwide medical R&D fund, bounties for individual re-searchable issues, or

* move private R&D to universities, have profits gained pay back R&D, send any extras to researchers, and shutter R&D aspect of private medicine

At least I'm trying to think of alternatives, and not just trying to shoot other commenters down

[mhalle]

Minor correction: the total bill for a liver transplant is more like $700-800K, medical alone (not including personal costs such as loss of productivity or wages).

[themartorana]

And more importantly, much like student loans, even if OP was able to get a loan, it prevents him/her from taking other loans - say, for that car.

Economically crushing people (and removing them from normal economic activity by way of crushing debt) hurts the entire economy except for the pharma industry.

[justinpombrio]

The median lifetime earnings in the US is $1.7 million or so [1]. $84 thousand is 5% of that. 5% of all the money you will ever make is a lot, considering that most of that money is already accounted for by college tuition, housing, and transportation. Also consider that this is a lump sum, that you weren't planning for it, and that this may happen in the middle of your life when you've only made a fraction of all the money you will ever make.

[1] https://cew.georgetown.edu/wp-content/uploads/2014/11/colleg...

[zaroth]

I think you need to factor in that it's not the individual personally paying 5% of their earnings, the personal cost is simply one year of your insurance out-of-pocket max. Anyone and everyone should be ready, willing, and able to pay for one year of whatever their out-of-pocket maximum is in order to access a miracle cure for a terminal illness.

The better question is what are insurance companies actually paying and how much should they have to pay? And then we get to the actual reason the drug is priced so high... it's because it is actually less expensive per cured human than all the alternatives. At $84k, this drug is actually saving insurance companies money per-cure.

The problem is that the cure is so damn good that everyone wants it right away, where-as the previous choices sucked badly so only a small percentage of the inflicted even went for it. Exactly how the OP describes, the cure is so good and so free of side-effects, patients want it even before they are showing symptoms of the disease! Of course the insurance companies can't afford to cure the planet of HepC all in one year -- there has to be a way to spread the (lower) cost over time.

[coralreef]

But you can choose to have a cheap wedding, and choose to buy a used car.

[selectodude]

You can also choose to not share dirty needles.

[codegeek]

Choose not to share ? A lot of times it is difficult to tell and if you have dishonest nurses like the one below [0], what do you then ? Victim blaming is easy but people can get infected not due to their own fault.

[0] http://www.nj.com/healthfit/index.ssf/2015/10/eeuw_nurse_in_...

[bdcravens]

The #1 killer in the US is heart disease, but insurance companies cover those medicines quite readily, despite the fact that one can choose not to eat fast food or smoke.

[remicade]

That's not the only way to get it bud.

[vdance]

are there really people this naive lingering on this forum?

[ptaipale]

There are many other ways to get hepatitis C. For instance, it is not an unknown phenomenon that drug addicts use needles as a weapon. Errors in healthcare, e.g. needles or blood transfusions.

[nkozyra]

You're essentially saying it's ok to price out large segments of the population for life-saving medication. This is life or death, not a new Audi versus a used Hyundai. There is an ethical consideration that your analogues ignore.

[JoeAltmaier]

At some point, the price of a thing is related to the resources a person can bear on a task. People are priced out of better lives all the time - cars, jobs, where they live, what they eat. Its the way society works. To make medicine a special case, with the govt providing infinitely deep pockets, is irrational. Inconsistent with how we run everything else anyway.

Yes I believe studying, working, getting ahead ought to give me and my family a better life. Else what's the point? Its not just a game with points; its survival. Its supposed to work that way. If money doesn't buy the most important things, then we need some new system of exchange that does buy important things.

[nkozyra]

> People are priced out of better lives all the time

But again, this is not what we're debating. It's why the "average car price" does not apply.

[JoeAltmaier]

Clearer: its not 'ok' that segments of the population are 'priced out'. Its just economics. Life is hard.

[nkozyra]

Look everybody knows it's economics that drives this. That's not the point. We have mechanisms in place that can isolate certain aspects of life and remove them from the capitalist machine.

On a grand scale it's socialized medicine but even on a smaller scale it's health insurance. And it's why hospitals don't kick out a dying person just because they're destitute. What we're talking about isn't "why does medicine X cost $Y?" Most people understand that.

And that's why it's unfair to compare life-saving medication to buying a luxury vehicle.

[maxerickson]

A better comparison is the several hundred thousand for the not as good treatment, a liver transplant.

There's still lots of room for a policy discussion. Can we develop such cures and pay less for them?

[surrealvortex]

Most of the criticism against drug companies is that while they invest x for R&D and actual manufacturing, they earn back at least 100*x in profits. I don't think there are many other industries that allow this to happen.

I'm not entirely familiar with what makes pharma patents that much different from software (you don't really have a monopoly even if you own a software patent), but that's basically what's happening.

Once a company gets a patent, free market rules no longer apply, and they are free to price their drugs as they want.

[netheril96]

> while they invest x for R&D and actual manufacturing, they earn back at least 100*x in profits.

If that is true, VC's money will be flooding over pharmaceuticals instead of Silicon valley. This "100x" number probably fails to account for the vast number of failed trials that is all cost and no profit.

[forgotpwagain]

Typically quoted values are (in the current market), approx. $2-3B per product brought to market.

Drug development is incredibly difficult -- for very good reasons. The FDA has to be risk-averse in order to protect the health of the public and to prevent harm to be done.

[philh]

More cynically, the FDA has to be risk-averse because people get much more upset over "this person died because the FDA approved a bad drug" than over "this person died because the FDA didn't approve the drug that would have saved her".

[tomc1985]

That's 2x to 3x the before-tax income of your average non-tech-employed American. Are you kidding?!?!

[greeneggs]

But isn't it worth two or three years of income to save your life? It seems absolutely worth it to me, frankly a much better value than almost anything I spend money on (I mean, Netflix?).

[tomc1985]

Not if people who can't afford it have their lives ruined simply because they can't afford it

[greeneggs]

How is someone's life ruined by the existence of a treatment option that didn't exist before?

[imgabe]

"Average" is just that. There are many car options cheaper than the average, and many wedding options cheaper than the average. There are no other cheaper options for this drug except what the OP did.

[rdtsc]

Agreed, it makes sense. And people buying it from India is like going to Vegas to get married in a drive-through chapel or going to the judge. Free market doing its thing it seems.

[amalcon]

Two of these are things where you have cheaper alternatives, and also the option to not do them at all. The third is something where you must buy this specific thing, or you die. That third thing costs substantially more than most U.S. households make in a year.

[giarc]

I guess the moral issue is that we have medical insurance, we don't have wedding insurance and car purchase insurance. I guess you could argue that the author did have insurance and brought the price down to $6,000... after his liver was diseased.