The real disgusting thing here is that EDTA, the heavy metal chelator, is one of the most commonly used chemicals in molecular biology. It costs very little to synthesize and is very stable when stored at room temp. In fact, it can be stored as a powder and reconstituted just-in-time to increase stability. There really is no reason this drug should cost more than a few dollars.
This deserves some emphasis. This is the kind of chemical you just have around in the lab in a 1kg package. I just checked, and 1kg was around 150EUR from Sigma Aldrich.
The medical version this is about are 5 ampules of 1g each. And those 5 ampules cost nearly 27,000 USD.
The cost of the EDTA itself is a rounding error in the whole thing. Of course the comparison is not fair, there is quite a bit more to creating a drug out of it. But increasing the price from 950 USD to 26900 USD can't really be justified by any underlying costs.
> With respect to concerns about the list price of CDV, past price actions enabled the provision of consistent supply of a product with high carrying costs and very limited purchase volume of 200-300 units per year. The list price of CDV does not reflect the actual cost of the product to hospitals that purchase it, after rebates and other adjustments. Because CDV has a relatively limited shelf life and the minimum CDV purchase requirement for Valeant is roughly 3-5 times higher than recent annual sales volume, we have written down at our own expense approximately half of purchased quantities in the past few years. The company does not generate material revenue from this product, which represents less than 0.01% of our total revenue.
(statement by Valeant)
A pharmaceutical that is being produced in such low volumes, irrespective of how mundane and cheap the raw chemical may be, cannot be produced cheaply.
This is a specious argument. AFAIK the cost of synthesizing any pharmaceutical is a negligible component of its retail price.
What that doesn't take into account is the money invested in turning it into an FDA approved drug, and the money wasted on all the other drugs they invested in that didn't pan out.
There are plenty of things wrong with the pharmaceutical industry, and medical care in the US generally, but over-simplified populist arguments about high prices relative to marginal cost aren't helping the situation. There is real complexity and nuance here, and it deserves to be treated as such.
The very real truth is that raising the price of this drug so high incentivizes other people to find competing drugs. It incentivizes pharmaceutical research in general, leading to more drugs, and ultimately more lives saved. That may not make you feel better about what they're doing, but it is a fundamental truth of markets. The more you can charge for something, the more of that thing you're going to get. If you artificially limit prices, you just as surely limit supply.
This is not speculation or philosophy. There are literally investors right now running NPV calculations on how much they are willing to invest in their next biotech startup, and the most significant controllable factor in that calculation is the price they expect to be able to charge for the drug, multiplied by its addressable market. And i'll bet you that the addressable market for lead poisoning drugs is pretty small (same with EpiPens, for that matter - you rarely need them, so most people only need the one, just in case).
Some people like to point to Europe and Canada as examples of places where drugs are cheap and plentiful, and they say that this is proof that this can work in the US too! But that view fundamentally misunderstands how the world pharmaceutical market works. Those drug markets are ancillary. They are fringe benefits to getting a drug approved by the US FDA. Pharmaceutical companies don't use those markets to recoup their costs, they recoup their costs in the US, and then just make whatever extra profit they can in those other places.
If the US market ceased to allow exorbitantly high pharmaceutical prices, the entire business model of Big Pharma would collapse. And maybe it's the case that it should, maybe there's some other model that would be more equitable and successful at developing new drugs. But personally I can't think of one, and unless you've got a bold idea in this vein, i'd be very careful about advocating the destruction of the one we have.
IMO the real solution is to stop letting other countries artificially restrict pharmaceutical prices. Right now the US is subsidizing all of this research for everyone else. You and I (assuming you are a US citizen as well) are paying for these drugs to be developed, and everyone on earth is benefiting from that without having to pay the cost. That is the true inequity here, and if that were removed, we'd see much more reasonable prices here too.
While some will condemn this is runaway greed, this is a natural side-effect of a healthcare system turned over to the private market. Outcomes and/or public health improvements are side-effects, if the happen great, but the motive will always be profit, regardless of how you get there (so long as it's legal).
This is a side effect of regulations which prevent the competition from selling chemicals that are very cheap to synthesize. Createing monopolies and then trying to fix the ills this causes with a government monopsony seems backwards.
There is very little competition by design in the US pharmaceutical market, so indeed, it contains many of the worst parts of private industry without the typical benefits of markets.
Just like the recent issue of EpiPen pricing, people (including the next likely president) spread the myth it was the result of a lack of regulation even though a single competitor, and there were many who tried to compete, would have made such a large swing towards high pricing a near self-destructive act for any company: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
The question is not whether or not the market is too free but whether or not to put the final bullet in one the last remaining freedoms of the pharmaceutical market at the costs of reduced R&D and fewer new drugs: http://www.ibtimes.com/should-government-control-price-presc...
side-effect of a healthcare system turned over to the private market
I would disagree entirely. Take a look at Medicare Part D. The gov't collects the premiums and sends the money to private companies to manage payments. It's one of the few gov't programs where the actual costs came in way lower than projected due to the competition among plans for patients. The market at work!
If only it was a market. The US healthcare system is anything but. If you've lived in a country where healthcare is more free market you would note the striking differences in cost, quality of care and accessibility. I lived in the US long term and now live in a so-called developing country where healthcare is much more free-market. Dramatic difference.
It's worth noting that Valeant has addressed this and the drug in question would not work as politicians such as Bernie Sanders have been implying in relation to what happened in Flint Michigan:
For what it's worth, they bought it as a failing product with decreasing sales volume. It could be that for the reasons they laid out, it could not be reasonably produced in such small quantities without incurring a loss, which would explain why they were sold it.
Oh goody, another probe for political points that won't address the insane underlying issues, which Congress is responsible for in the first place. What a joke, and what a poor excuse for "circus".
The healthcare and IP systems in this country need an enema.
Two years ago, the drug maker boosted the list price for Calcium EDTA by roughly 2,700 percent.
I understand the need for large numbers to wow the reader, but I find this less clear than "Two years ago, the drug maker multiplied the price of Calcium EDTA by 28".
This is a standard way to present price changes. We don't say "the price was multiplied by 1.5" - we just say the price went up 50%. This isn't there to "wow" anything - we should already be wowed by the greed being presented in this case.
[+] [-] rgejman|9 years ago|reply
[+] [-] fabian2k|9 years ago|reply
The medical version this is about are 5 ampules of 1g each. And those 5 ampules cost nearly 27,000 USD.
The cost of the EDTA itself is a rounding error in the whole thing. Of course the comparison is not fair, there is quite a bit more to creating a drug out of it. But increasing the price from 950 USD to 26900 USD can't really be justified by any underlying costs.
[+] [-] ceterum_censeo|9 years ago|reply
(statement by Valeant)
A pharmaceutical that is being produced in such low volumes, irrespective of how mundane and cheap the raw chemical may be, cannot be produced cheaply.
[+] [-] darawk|9 years ago|reply
What that doesn't take into account is the money invested in turning it into an FDA approved drug, and the money wasted on all the other drugs they invested in that didn't pan out.
There are plenty of things wrong with the pharmaceutical industry, and medical care in the US generally, but over-simplified populist arguments about high prices relative to marginal cost aren't helping the situation. There is real complexity and nuance here, and it deserves to be treated as such.
The very real truth is that raising the price of this drug so high incentivizes other people to find competing drugs. It incentivizes pharmaceutical research in general, leading to more drugs, and ultimately more lives saved. That may not make you feel better about what they're doing, but it is a fundamental truth of markets. The more you can charge for something, the more of that thing you're going to get. If you artificially limit prices, you just as surely limit supply.
This is not speculation or philosophy. There are literally investors right now running NPV calculations on how much they are willing to invest in their next biotech startup, and the most significant controllable factor in that calculation is the price they expect to be able to charge for the drug, multiplied by its addressable market. And i'll bet you that the addressable market for lead poisoning drugs is pretty small (same with EpiPens, for that matter - you rarely need them, so most people only need the one, just in case).
Some people like to point to Europe and Canada as examples of places where drugs are cheap and plentiful, and they say that this is proof that this can work in the US too! But that view fundamentally misunderstands how the world pharmaceutical market works. Those drug markets are ancillary. They are fringe benefits to getting a drug approved by the US FDA. Pharmaceutical companies don't use those markets to recoup their costs, they recoup their costs in the US, and then just make whatever extra profit they can in those other places.
If the US market ceased to allow exorbitantly high pharmaceutical prices, the entire business model of Big Pharma would collapse. And maybe it's the case that it should, maybe there's some other model that would be more equitable and successful at developing new drugs. But personally I can't think of one, and unless you've got a bold idea in this vein, i'd be very careful about advocating the destruction of the one we have.
IMO the real solution is to stop letting other countries artificially restrict pharmaceutical prices. Right now the US is subsidizing all of this research for everyone else. You and I (assuming you are a US citizen as well) are paying for these drugs to be developed, and everyone on earth is benefiting from that without having to pay the cost. That is the true inequity here, and if that were removed, we'd see much more reasonable prices here too.
[+] [-] rplst8|9 years ago|reply
Laboratory testing, animal trials, human trials, efficacy studies, FDA approval, liability insurance, etc. etc. etc.
[+] [-] adrenalinelol|9 years ago|reply
[+] [-] Moshe_Silnorin|9 years ago|reply
[+] [-] BurningFrog|9 years ago|reply
Calling it "turned over to the private market" is either ignorant or dishonest.
[+] [-] dmix|9 years ago|reply
Just like the recent issue of EpiPen pricing, people (including the next likely president) spread the myth it was the result of a lack of regulation even though a single competitor, and there were many who tried to compete, would have made such a large swing towards high pricing a near self-destructive act for any company: http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...
The question is not whether or not the market is too free but whether or not to put the final bullet in one the last remaining freedoms of the pharmaceutical market at the costs of reduced R&D and fewer new drugs: http://www.ibtimes.com/should-government-control-price-presc...
[+] [-] refurb|9 years ago|reply
I would disagree entirely. Take a look at Medicare Part D. The gov't collects the premiums and sends the money to private companies to manage payments. It's one of the few gov't programs where the actual costs came in way lower than projected due to the competition among plans for patients. The market at work!
[+] [-] geomark|9 years ago|reply
[+] [-] adventured|9 years ago|reply
http://www.valeantnow.com/valeant-corrects-inaccurate-statem...
[+] [-] microcolonel|9 years ago|reply
[+] [-] M_Grey|9 years ago|reply
The healthcare and IP systems in this country need an enema.
[+] [-] merraksh|9 years ago|reply
I understand the need for large numbers to wow the reader, but I find this less clear than "Two years ago, the drug maker multiplied the price of Calcium EDTA by 28".
[+] [-] jamroom|9 years ago|reply