[ef4]

People with no money in the US go on Medicaid, and Medicaid is legally obligated to pay for any medically necessarily FDA-approved drug.

Much of the article above is essentially about state Medicaid programs freaking out for exactly this reason.

[cpwright]

This struck me as the largest problem here. They can charge $84,000; and medicare/medicaid will pay nearly that because they have no choice. If they could refuse based on cost, then Gilead would have more incentive to lower the cost.

There is very little true price discovery going on when the largest payer for healthcare services has absolutely no choice to purchase the product at a given price. All they have to do is get a new treatment approved (i.e. show that it works and is safe), and then the government has no choice but to buy it.

I don't see anything wrong with Gilead charging $84,000 for curing a disease. I just see something wrong with the stats not being able to take it or leave it.

[duaneb]

> I don't see anything wrong with Gilead charging $84,000 for curing a disease.

Personally, I do. Helping other people is never going to be friendly with a free market. I accept that it may have a cost, but I reject the idea that people's health is something that should be traded on the free market. While it's great that this cure was developed, it was developed because there was a profit to it. That's the worst reason to develop a cure—how about working on diseases that aren't likely to return a profit? Curing the cold may not make you rich, but it would yield substantial productivity benefits for our society. Same with basic dietary habits. In fact, I'd be willing to bet that the US (not familiar with other countries) is worse off, mental-health wise, since the invention of Prozac, compared to basic research into public awareness of exercise, diet, and basic emotional well-being.

[obvious_throw]

An easy fix here is for the patient to be evaluated for fault. If you got Hep C via botched transfusion, you're covered; if, however, you are a degenerate who chose to scrounge up used heroin needles from alleyways, then you're not.

This is, of course, for reasons nobody can adequately respond to with reason instead of feelings, unpopular.

But it's certainly 1. fair and 2. a large cost savings, given the sheer number of Hep C patients who brought it on themselves.

[brixon]

It's not a cost savings in the long run. 1. They will spread it to more people. 2. The disease causes more issues that will end up costing more than this drug.

This will not be an issue when the masses that have Hep-C now are cured. This is mostly a short term financing problem. Would you rather solve the issue for $1X now or pay $3-5X over time to deal with it. I would rather cure the masses now and lower the long term medical costs.

[king_jester]

To punish addicts by denying them health care is extremely cruel and unfair. There is no basis for denying care because of your irrational hatred.

[obvious_throw]

No basis?

The basis is that these people choose, of their own agency, to shoot up with used needles. This isn't some poor guy getting the cancerous genetic bit flipped by a cosmic ray or an uninsured single mom getting disabled by a drunk driver. These are consequences brought on by the patients themselves. By what moral basis should society be paying for the consequences of willful degeneracy?

[katbyte]

How about people who are injured during the course of risky sports? Or while drunk? Or from tobacco? or fromvovereating? By what moral basis should society be paying for the consequences of such willful risk taking and harm?

[sosborn]

>The basis is that these people choose, of their own agency, to shoot up with used needles.

They certainly chose to shoot up right until the point they achieved chemical addiction, but after that there is much less free will than people presume.

>By what moral basis should society be paying for the consequences of willful degeneracy?

I don't know about you but I hate seeing people self destruct. I certainly feel an obligation to assist them when possible. You might not, but please don't act like your moral compass is the only one that matter.

[bradleyjg]

> People with no money in the US go on Medicaid

Alas not necessarily. PPACA (aka Obamacare) was supposed to ensure exactly that, but the Supreme Court struck down those provisions. So in 24 states Medicaid does not necessarily cover poor, non-senior, non-disabled adults without dependent minor children.

That's leaving aside the entire category of aliens which even in the other 26 states have only spotty coverage.

[gordjw]

Ah, thank you. I was under the impression that Medicaid was just another form of insurance, which would need to be paid for like normal insurance.

That sounds similar to Medicare (Australia), although I haven't had to use Medicare to pay for medications.

That certainly does make it seem like they're attempting to price gouge the government, because "they can afford to pay".

[waps]

This is probably one of the rules that makes it so easy for pharma companies to make medicine so expensive.

Most European welfare states refuse certain treatments based on costs. This can, obviously, really suck because there are (sometimes) no private options, or they're unrealistic. And of course, every few years an expensive option is made available for a year or so because some politician's daughter happens to have it.

This has been a criticism of Europe. Drugs get developed because Americans will pay for them, then when the cost is mostly recouped (ie. a decade later), it finally becomes available in Europe. This is freeloading, but you can't really blame them.

[rbehrends]

This is an inaccurate generalization. The NHS does that to some extent, but (for example) neither France nor Germany do it. In fact, access to anticancer drugs in France is pretty exemplary [1, 2].

Countries that ensure universal access to approved drugs generally keep costs down by the negotiation power of a government-backed monopsony combined with the threat of compulsory licensing should demands be excessive (rarely exercised, but the fate of BRCA1/BRCA2 tests in France is an example).

[1] https://www.youtube.com/watch?v=_yF69KVbUaQ&t=4m11s

[2] http://blogs.reuters.com/anya-schiffrin/2014/02/12/the-frenc...

[Brakenshire]

In France that seems to have been the case until recently, but not any longer:

> New drug regulations in France: what are the impacts on market access?

"Cost-effectiveness studies will now be part of the market access requirements for all drugs in order to satisfy the selection criteria for medico-economic assessment."

...

"Conclusion: In light of these changes, it clearly appears that the access to the French drug market will be increasingly driven by data pertaining to comparative-effectiveness and cost-effectiveness, and an increased role of postmarketing studies in the years to come."

http://www.jmahp.net/index.php/jmahp/article/download/20891/...

> Countries that ensure universal access to approved drugs generally keep costs down by the negotiation power of a government-backed monopsony combined with the threat of compulsory licensing should demands be excessive

Putting compulsory licensing aside, which does not happen in many countries, I don't think this contradicts the poster above - a government agency makes a judgement about the cost-effectiveness of a particular drug, and they either decide to buy or not to buy depending on whether the price is above or below that limit.

[rbehrends]

> In France that seems to have been the case until recently, but not any longer

As your source notes, that does not affect "irreplaceable and expensive drugs". Cost-effectiveness concerns are typically about cases such as reimbursement for a generic vs. an equally-effective non-generic medicine.

> Putting compulsory licensing aside, which does not happen in many countries, I don't think this contradicts the poster above - a government agency makes a judgement about the cost-effectiveness of a particular drug, and they either decide to buy or not to buy depending on whether the price is above or below that limit.

Regarding compulsory licensing: contrary to what some people think, Europe isn't actually all that socialist; compulsory licensing exists as an ultima ratio in cases where the greed of a pharmaceutic corporation would endanger access to an important new drug or procedure (which was exactly the case in the BRCA case). It's a Sword of Damocles, not a weapon that's being wielded routinely. Whether the option actually exists is irrelevant: with a government-backed negotiator, it can always be legislated into practice (again, which is what happened in the BRCA case after a firestorm of criticism).

Regarding government agencies making a cost-effectiveness judgement about the purchase of a drug, that's again an inaccurate generalization.

First of all, recall that private insurance companies make such decisions all the time (see the article I referenced above), with the difference that they are interested only in their own bottom line, and that the health of their customers only enters into that calculation insofar as it affects profit or regulations force them to (the latter of which is the exact same situation as government backed-negotiation, except for the lack of the bargaining power of a monopsony).

Second, a minority of drugs are actually monopolies; price a drug for which there is competition out of the market, and you simply put money in your competitor's pocket. Likewise, drug companies don't just want to sell one single drug. Ask for too much for their one new irreplaceable drug, and they may see the income from their other ones go down (there is, after all, only so much money to be had in total).

Third, this is not necessarily how it happens. For example, it may not be a government agency (as in Germany, for example), and the agency may not have the power to make a decision whether to buy or not to buy a drug, but only whether the drug is effective (including relative effectiveness compared to other drugs), especially for life-saving drugs.

[Brakenshire]

> As your source notes, that does not affect "irreplaceable and expensive drugs". Cost-effectiveness concerns are typically about cases such as reimbursement for a generic vs. an equally-effective non-generic medicine.

There is still a cost-effectiveness judgment even for irreplacable drugs (that's the SMR/ASMR category I):

"Two criteria must be met: 1) The ASMR of the drug claimed by the company is major, important, or moderate (ASMR I, II, or III, respectively); and 2) the drug is likely to have a significant impact on the health insurance budget regarding its impact on care organization, professional practices, or patient care and, when applicable, its price. This decree also specifies the medico-economic assessment procedure. The pharmaceutical company, together with its request for inclusion (or renewal of inclusion) of a medicine on the reimbursable drugs formulary, transmits all medico-economic data related to the drug to CEESP and CEPS. CEESP will provide an opinion [reported as a ‘flash opinion’ (14)] (Fig. 1) on the predictable or established efficiency of the drug and its coverage by health insurance. This opinion is based on comparative analysis, between the different therapeutic alternatives, of the ratio of the cost compared to the expected or observed benefit for patient health and quality of life."

[arethuza]

"certain treatments based on costs"

I think here in the UK it's slightly more accurate to say that the NHS limits treatments on a balance of costs and expected benefits.

[makomk]

"Balance of costs and expected benefits" is definitely more accurate. For example, if the claims for this drug are accurate, I'd be surprised if it didn't make the cut because it has some pretty clear long-term benefits. The treatments you hear about the NHS not funding are generally ones which are both expensive and not terribly effective.

[andygates]

Indeed: The typical examples are cancer drugs for a specific cancer, which give a few extra months of good-quality life. The cost/benefit on these is not clear-cut.

[Brakenshire]

> And of course, every few years an expensive option is made available for a year or so because some politician's daughter happens to have it.

Has this ever actually happened? This reads like a caricature. The decisions about cost-effectiveness in Britain are made by the National Institute for Clinical Excellence, which has a very strong reputation for rigor and independence.

[DanBC]

> Drugs get developed because Americans will pay for them, then when the cost is mostly recouped (ie. a decade later), it finally becomes available in Europe.

Does anyone have any reputable cites for this please?

[hellrich]

Sounds implausible, given the number of European pharma companies...

[briandh]

That doesn't follow at all; foreign drug companies sell plenty of drugs to Americans. The test of that assertion is to look at when drugs have been introduced to different markets, compared to R&D costs and the price the manufacturer got for them.