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  #351  
Old 03-06-2019, 02:53 PM
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I would love to get coupon data for analysis. I keep having concerns with the point of sale rebate push. That will make pricing messy.
Yeah, not looking forward to this Medicare bid season if a final rule on rebates isn't released in the next month or two. The Part D direct subsidy is based on the national average bid amount, so not only will we have to guess what the government is going to do on pos rebates, but we have to guess what other carriers are going to guess what the government and other carriers are going to do....
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  #352  
Old 03-06-2019, 03:26 PM
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Yeah, not looking forward to this Medicare bid season if a final rule on rebates isn't released in the next month or two. The Part D direct subsidy is based on the national average bid amount, so not only will we have to guess what the government is going to do on pos rebates, but we have to guess what other carriers are going to guess what the government and other carriers are going to do....
Uncertainty is job security.
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  #353  
Old 03-06-2019, 03:52 PM
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This is American healthcare in a nutshell: itís so messed up, but we donít have the will to fix it, so can we at least make it like 20% less shitty?
Lol, you optimist, aiming for 20%!

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Iíve been in meetings today for 10+ hours discussing, amongst other things, drug prices. So Iím tired and a little cranky. Just full disclosure there. Good news though, my new data shows unequivocally that our pts are being hospitalized at lower rates, Iím calling that a win.
I hear you, every victory we can get.
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  #354  
Old 03-06-2019, 03:52 PM
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Uncertainty is job security.
There is that...
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  #355  
Old 05-13-2019, 12:55 PM
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Attorneys general from 43 states sue multiple manufacturers of generic drugs. I watched the video, and it seems they do have some compelling evidence. The manufacturers are denying it wholesale, looking forward to seeing this unfold.

https://www.cbsnews.com/news/sweepin...es-2019-05-12/
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  #356  
Old 05-13-2019, 02:20 PM
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Well... I'm happy something is being done, but I'm not sure that approaching it as an intentional conspiracy is going to pan out - they will need to be able to show discussion and coordination between companies.

But I'm 90% sure you get the same kind of outcome from good old-fashioned game theory - as long as you recognize that this is NOT a free market.

The idea of generic competition holds only when the consumers are the ones doing the shopping. But consumer don't - pharmacies do the shopping. Most pharmacies don't carry the same generic from multiple different manufactures. They usually carry one manufacturer, although sometimes they change. And the consumers are often not facing the sales price directly, they're facing whatever cost share their insurer charges for that class of drug.

So take that starting point, and play a little game. Let's start with the simplified assumption that multiple manufacturers have brought their drug prices down to a level that saturates the market for that compound - as many people who are going to use it are using it, there's no additional market to be gained from competing compounds. Now step back and ask whether the competing compounds are actually competing.

There are a lot of drugs in the same therapeutic classes that treat the same condition, but they have different side effects, and some are more efficacious than others. For a really simple comparison, think about treatment for acid reflux. That can vary from antacids to H2 blockers to PPIs. H2 blockers are much more effective for frequent heartburn than antacids, and avoid some of the side effects (like too much NSAIDs from aspirin-containing alka selzer to constipation from the chalk and calcium content of tums). But PPis are even more effective than H2 blockers. And within the class of PPis, Nexium is more effective than Prilosec. So if someone is taking Nexium... they're unlikely to switch to a less effective treatment. These aren't really great examples though, as they're relatively inexpensive and available OTC. There are lots of generic drugs that don't have any real competing compounds, or for which there's a significant difference in efficacy.

So, let's say we've got a collection of manufacturers for a generic compound, that is at market saturation... and which doesn't have a reasonable alternative compound for the condition it treats. And let's say that most pharmacies only carry one manufacturer of that drug. And lets say that most people taking the drug have health insurance and aren't facing the full cost of the drug directly.

Now, let's assume that all the manufacturers start out at about the same price, let's say they vary between $100 and $110 for a 30-day supply.

What happens if one of the manufacturers triples their price to $300?

The customer taking the drug doesn't have a lot of say - if they have a copay, they may not even notice that it increased in cost. And if they have a deductible or fixed coinsurance, they may notice... but they're not particularly likely to call around to other pharmacies to find one that uses a different manufacturer - especially if they're taking multiple different drugs. And since there's no reasonable alternative for their condition, they're kind of stuck. So, there's not a whole lot of push-back from the customer.

The pharmacy is unlikely to change manufacturers. They usually have contracts and arrangements with manufacturers that act in bulk... and besides - they're getting reimbursed by the insurer for the vast majority of their customers. So not a lot of noise from the manufacturer.

The PBM probably won't have a lot of options. IIRC, most PBMs don't contract with manufacturers for generic drugs (maybe a few exceptions, like when Lipitor went generic), their focus is mostly on brand name drugs.

The insurer is probably really unhappy about it... but they have some constraints. They don't usually deal with manufacturers, they deal with PBMs, and they aren't likely to change which pharmacies are in their network based on a handful of generic drugs. And they're definitely unlikely to carve out those generics in their benefits.

So basically... one manufacturer triples their price, and their market share does not change. They face no negative consequences.

How long is it going to be before the other manufacturers of that drug notice and up their prices too? How long before the entire industry starts combing through their production line and identifying good candidates for price hikes?

All in all, none of them has anything to lose by increasing their prices by dramatic amounts, as long as they all set their prices relatively close to what their competitors do. They don't ever have to talk to each other, they don't have to coordinate or conspire. All that's needed is for one manufacturer to be good at game theory and take that first step... and for the other manufacturers to pay attention and follow along.
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  #357  
Old 05-13-2019, 04:18 PM
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Well... I'm happy something is being done, but I'm not sure that approaching it as an intentional conspiracy is going to pan out - they will need to be able to show discussion and coordination between companies.
They have texts and emails where the manufacturers seem to be coordinating. As in, the day before a big price hike, George sends an email to Helena saying 'hey, just FYI, we're upping the price on drug x by 200% tomorrow.' And then George hikes his price, and Helena follows suit the next day.

I'd like to think the market will fix this, and it may eventually. But you call out a lot of problems with the market. A $20 copay for generics means the pt doesn't care if the total cost is $40 or $1,000. And a pt may not even know how many manufacturers there are for a given drug. And the pharmacy may only stock one. So the invisible hand isn't going to be very good at fixing this, at least in the short term.

In theory, you could Amazon.com this, and let the large mail-order pharmacies show prices for drugs from multiple manufacturers, but I suspect if they did that, then the firms would push back with rebates for exclusivity. Could be an interesting fight. Full disclosure: haven't thought this through.
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  #358  
Old 05-13-2019, 04:23 PM
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They have texts and emails where the manufacturers seem to be coordinating. As in, the day before a big price hike, George sends an email to Helena saying 'hey, just FYI, we're upping the price on drug x by 200% tomorrow.' And then George hikes his price, and Helena follows suit the next day.
To be honest, I didn't read the whole article. I skimmed the first couple of paragraphs, then got distracted

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Originally Posted by George Frankly View Post
I'd like to think the market will fix this, and it may eventually. But you call out a lot of problems with the market. A $20 copay for generics means the pt doesn't care if the total cost is $40 or $1,000. And a pt may not even know how many manufacturers there are for a given drug. And the pharmacy may only stock one. So the invisible hand isn't going to be very good at fixing this, at least in the short term.

In theory, you could Amazon.com this, and let the large mail-order pharmacies show prices for drugs from multiple manufacturers, but I suspect if they did that, then the firms would push back with rebates for exclusivity. Could be an interesting fight. Full disclosure: haven't thought this through.
I am not an economist... but I don't think the invisible hand works when the market isn't free.
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  #359  
Old 05-13-2019, 04:47 PM
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To be honest, I didn't read the whole article. I skimmed the first couple of paragraphs, then got distracted

I am not an economist... but I don't think the invisible hand works when the market isn't free.
You have to watch the video to get it all, and it's 12-15 min long, so I understand.

I think there are probably forms of the invisible hand corresponding to how free/efficient the market is. In this case, pharma is greasing the palm of the invisible hand with large sums of money, or however that works.

So that's the 'free market,' now let's do 'state lines,' lol.
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  #360  
Old 07-11-2019, 01:45 PM
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https://www.axios.com/trump-drug-pri...44c47b734.html

Yep.
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