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More drug pricing lunacy
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Don Roberto
Feb 19, 2017, 4:46:47 AM2/19/17
to
More drug pricing lunacy
Kaleo Pharma jacks up the list price of its lifesaving medicine by 600%
DAVID LAZARUS
2/18/2017
The latest poster child for cruel and inhuman drug pricing is Kaleo
Pharma, maker of an emergency injector for a med called naloxone, which
is used as an antidote to save the lives of people who overdose on
painkillers.
As America’s opioid crisis reaches epidemic levels, Kaleo has jacked up
the list price for its Evzio auto-injector by 600%, soaring from $690
several years ago to $4,500, according to lawmakers.
Nearly three dozen senators wrote to Kaleo’s chief executive, Spencer
Williamson, last week to say they were “deeply concerned” about the
price hike and to note that it “threatens to price out families and
communities that depend on naloxone to save lives.”
But that’s not what caught my attention.
Rather, I was struck by the company’s answers to me about lawmakers’
concerns.
In response to emailed questions, Williamson said that although the list
price for Evzio is more than $4,000, that’s “not a true net price to
anyone ... due to numerous discounts and rebates that are negotiated in
the supply chain that make up our healthcare system.”
In other words, even though the price tag for his company’s easy-to-use,
lifesaving device is ridiculous and indefensible, there’s no need to
worry because backroom deals by assorted players in the healthcare food
chain make that price tag meaningless.
And that, in a nutshell, illustrates the lunacy of the U.S. healthcare
system.
“Our system of healthcare financing is the most cynical such system in
the world,” said Uwe Reinhardt, a healthcare economist at Princeton
University. “It starts with the opaque hospital bill and ends with the
opaque system of product pricing and the disgrace of surprise medical
bills. Americans can rightly be ashamed of these arrangements.”
There’s a good reason why U.S. drug prices are so much higher than what
people pay in other countries. Most other developed nations place limits
on how much drug companies can charge to prevent them from taking
advantage of the sick. A fair profit is fine. Price gouging is not.
In this country, drugmakers charge whatever they can get away with,
which perhaps would be tolerable if we had an efficient, transparent
marketplace in which patients benefit from robust competition and an
ability to shop around for the best price. But we don’t.
Often, we have a single provider of a drug or medical technology that,
thanks to its monopoly power, is in a position to profit handsomely from
people’s misfortune. Their message to this captive market is based on an
ugly economic principle: Pay up or suffer.
Or in some cases, pay up or die.
In his statement to me, Williamson said most people won’t pay anywhere
close to $4,000 for Evzio. Even with a high-deductible insurance plan,
he said, a patient won’t pay more than $360 and might end up paying
nothing thanks to the company’s “enhanced patient access program.”
But that isn’t price transparency. That’s a magician’s trick known as
misdirection. Williamson is saying, “Don’t look at the crazy list price
in this hand, look instead at the sweet discounts in this hand.”
The upshot is that his company’s prices remain indecipherable.
“It’s awfully hard to see much value in this opaque approach to real
drug pricing,” said Nicholson Price, an assistant law professor at the
University of Michigan who focuses on healthcare and regulation.
“Especially if we want to have patients be more cost-conscious to keep
costs down, opaque pricing does us no favors.”
What it does do, he added, is “create lots of opportunities for gaming
and middlemen.”
Kaleo’s gamesmanship isn’t new. As my colleague Melody Peterson noted in
a story about naloxone pricing last year: “Not long ago, a dose of the
decades-old generic drug cost little more than a dollar. Now the lowest
available price is nearly 20 times that.”
The reason Williamson can so confidently declare that the list price for
Evzio isn’t worth fretting about is because he knows it’s completely
arbitrary. Drug companies and hospitals routinely open their
negotiations with insurers with a made-up price and then settle for a
much lower amount, which is what the patient ultimately sees.
Unfortunately, that system, such as it is, no longer works. An
increasing number of Americans face the full cost of healthcare as a
result of high-deductible insurance plans.
Kaleo might pat itself on the back for its patient subsidies and
protections, but the reality is that somebody has to pay the company’s
bills, either the patient or the insurer. Sky-high list prices for
insurers raise premiums for everyone.
What’s to be done? At the moment, the only effective tool is public
shaming. Case in point: Mylan, which introduced a cheaper (but still
overpriced) version of its EpiPen after facing public scorn over a 500%
price increase for its epinephrine injector.
Otherwise, we can follow the example of our economic peers and impose
price caps for prescription drugs (it’ll never happen) or pass
legislation that introduces some sunlight to negotiations between
pharmaceutical companies and insurers (ditto).
My sense is that the only politically feasible solution is to empower
Medicare to negotiate drug prices with pharmaceutical companies — right
now that’s forbidden by law; thanks, Republicans — and for details of
that process to be available to anyone who wants to see them, as is the
case for most public spending.
The drug industry wouldn’t like that, of course. It prefers operating in
the shadows and keeping consumers in the dark.
Matt Schmitt, an assistant professor of strategy at UCLA’s Anderson
School of Management, said it’s easy for Kaleo’s Williamson to shrug off
a 600% markup as a fantasy number. But “the true price increase, while
perhaps not 600%, may still be very substantial,” Schmitt said.
That’s what Kaleo and all other drug companies want to keep hidden — the
deals cut behind closed doors. And they’ll do this by getting people to
focus on the magic wand in their hand, rather than the cards up their
sleeve.
This week, Kaleo reintroduced Auvi-Q, a competitor to the EpiPen. Auvi-Q
had been recalled from the market in 2015 after reports of device
malfunctions.
Kaleo’s list price for the injector is $4,500. Before the recall, it
sold for $500.
But don’t worry, the company says. That list price is meaningless.
-----------------------
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen
daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your
tips or feedback to david....@latimes.com.
Kaleo Pharma jacks up the list price of its lifesaving medicine by 600%
DAVID LAZARUS
2/18/2017
The latest poster child for cruel and inhuman drug pricing is Kaleo
Pharma, maker of an emergency injector for a med called naloxone, which
is used as an antidote to save the lives of people who overdose on
painkillers.
As America’s opioid crisis reaches epidemic levels, Kaleo has jacked up
the list price for its Evzio auto-injector by 600%, soaring from $690
several years ago to $4,500, according to lawmakers.
Nearly three dozen senators wrote to Kaleo’s chief executive, Spencer
Williamson, last week to say they were “deeply concerned” about the
price hike and to note that it “threatens to price out families and
communities that depend on naloxone to save lives.”
But that’s not what caught my attention.
Rather, I was struck by the company’s answers to me about lawmakers’
concerns.
In response to emailed questions, Williamson said that although the list
price for Evzio is more than $4,000, that’s “not a true net price to
anyone ... due to numerous discounts and rebates that are negotiated in
the supply chain that make up our healthcare system.”
In other words, even though the price tag for his company’s easy-to-use,
lifesaving device is ridiculous and indefensible, there’s no need to
worry because backroom deals by assorted players in the healthcare food
chain make that price tag meaningless.
And that, in a nutshell, illustrates the lunacy of the U.S. healthcare
system.
“Our system of healthcare financing is the most cynical such system in
the world,” said Uwe Reinhardt, a healthcare economist at Princeton
University. “It starts with the opaque hospital bill and ends with the
opaque system of product pricing and the disgrace of surprise medical
bills. Americans can rightly be ashamed of these arrangements.”
There’s a good reason why U.S. drug prices are so much higher than what
people pay in other countries. Most other developed nations place limits
on how much drug companies can charge to prevent them from taking
advantage of the sick. A fair profit is fine. Price gouging is not.
In this country, drugmakers charge whatever they can get away with,
which perhaps would be tolerable if we had an efficient, transparent
marketplace in which patients benefit from robust competition and an
ability to shop around for the best price. But we don’t.
Often, we have a single provider of a drug or medical technology that,
thanks to its monopoly power, is in a position to profit handsomely from
people’s misfortune. Their message to this captive market is based on an
ugly economic principle: Pay up or suffer.
Or in some cases, pay up or die.
In his statement to me, Williamson said most people won’t pay anywhere
close to $4,000 for Evzio. Even with a high-deductible insurance plan,
he said, a patient won’t pay more than $360 and might end up paying
nothing thanks to the company’s “enhanced patient access program.”
But that isn’t price transparency. That’s a magician’s trick known as
misdirection. Williamson is saying, “Don’t look at the crazy list price
in this hand, look instead at the sweet discounts in this hand.”
The upshot is that his company’s prices remain indecipherable.
“It’s awfully hard to see much value in this opaque approach to real
drug pricing,” said Nicholson Price, an assistant law professor at the
University of Michigan who focuses on healthcare and regulation.
“Especially if we want to have patients be more cost-conscious to keep
costs down, opaque pricing does us no favors.”
What it does do, he added, is “create lots of opportunities for gaming
and middlemen.”
Kaleo’s gamesmanship isn’t new. As my colleague Melody Peterson noted in
a story about naloxone pricing last year: “Not long ago, a dose of the
decades-old generic drug cost little more than a dollar. Now the lowest
available price is nearly 20 times that.”
The reason Williamson can so confidently declare that the list price for
Evzio isn’t worth fretting about is because he knows it’s completely
arbitrary. Drug companies and hospitals routinely open their
negotiations with insurers with a made-up price and then settle for a
much lower amount, which is what the patient ultimately sees.
Unfortunately, that system, such as it is, no longer works. An
increasing number of Americans face the full cost of healthcare as a
result of high-deductible insurance plans.
Kaleo might pat itself on the back for its patient subsidies and
protections, but the reality is that somebody has to pay the company’s
bills, either the patient or the insurer. Sky-high list prices for
insurers raise premiums for everyone.
What’s to be done? At the moment, the only effective tool is public
shaming. Case in point: Mylan, which introduced a cheaper (but still
overpriced) version of its EpiPen after facing public scorn over a 500%
price increase for its epinephrine injector.
Otherwise, we can follow the example of our economic peers and impose
price caps for prescription drugs (it’ll never happen) or pass
legislation that introduces some sunlight to negotiations between
pharmaceutical companies and insurers (ditto).
My sense is that the only politically feasible solution is to empower
Medicare to negotiate drug prices with pharmaceutical companies — right
now that’s forbidden by law; thanks, Republicans — and for details of
that process to be available to anyone who wants to see them, as is the
case for most public spending.
The drug industry wouldn’t like that, of course. It prefers operating in
the shadows and keeping consumers in the dark.
Matt Schmitt, an assistant professor of strategy at UCLA’s Anderson
School of Management, said it’s easy for Kaleo’s Williamson to shrug off
a 600% markup as a fantasy number. But “the true price increase, while
perhaps not 600%, may still be very substantial,” Schmitt said.
That’s what Kaleo and all other drug companies want to keep hidden — the
deals cut behind closed doors. And they’ll do this by getting people to
focus on the magic wand in their hand, rather than the cards up their
sleeve.
This week, Kaleo reintroduced Auvi-Q, a competitor to the EpiPen. Auvi-Q
had been recalled from the market in 2015 after reports of device
malfunctions.
Kaleo’s list price for the injector is $4,500. Before the recall, it
sold for $500.
But don’t worry, the company says. That list price is meaningless.
-----------------------
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen
daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your
tips or feedback to david....@latimes.com.
F00
Feb 19, 2017, 5:38:46 AM2/19/17
to
On 2/19/2017 3:45 AM, Don Roberto wrote:
> More drug pricing lunacy
> Kaleo Pharma jacks up the list price of its lifesaving medicine by 600%
>
>
> DAVID LAZARUS
> 2/18/2017
>
> The latest poster child for cruel and inhuman drug pricing is Kaleo
> Pharma, maker of an emergency injector for a med called naloxone, which
> is used as an antidote to save the lives of people who overdose on
> painkillers.
>
> As America’s opioid crisis reaches epidemic levels, Kaleo has jacked up
> the list price for its Evzio auto-injector by 600%, soaring from $690
> several years ago to $4,500, according to lawmakers.
[...]
> More drug pricing lunacy
> Kaleo Pharma jacks up the list price of its lifesaving medicine by 600%
>
>
> DAVID LAZARUS
> 2/18/2017
>
> The latest poster child for cruel and inhuman drug pricing is Kaleo
> Pharma, maker of an emergency injector for a med called naloxone, which
> is used as an antidote to save the lives of people who overdose on
> painkillers.
>
> As America’s opioid crisis reaches epidemic levels, Kaleo has jacked up
> the list price for its Evzio auto-injector by 600%, soaring from $690
> several years ago to $4,500, according to lawmakers.
In NASA's infancy there were discussions about the place that agency
and its work would have in our society. The raw fact is that patents
and exclusive ownership of new discoveries is a licensing matter with
the outgrowth of "public interest" at its core. Given all that, where
were the rights to nuclear fission that comes directly as a consequence
of one of Einstein's 1905 papers, or the transistor and everything else
(computers?) that grew out of another of good old Albert's 1905 papers?
The simple fact is that some things are so important to society that
exclusive ownership of the idea and the product should be seized through
the intellectual equivalent of "eminent domain." How "socialist" a
concept is that? And my God, such an idea being promoted by the
conservative bastard F00????
If indeed the "discounted" price for naloxone is reasonable then there
is some other basis for the ridiculous pricing scheme, perhaps for tax
purposes? What should be looked at is what does the product end up
costing all of us given the way the tax codes are written?
In the USA the Interstate Commerce Commission was established in 1887 to
assure reasonable prices charged by common carriers. See Wikipedia on
this topic that remains inadequate to say the least. One of the main
proponents for rate regulation at the time was the railroads themselves
that were suffering because of cut throat competition for the largest
customer (Standard Oil pre-pipeline days) that fanned other flames
resulting in the "Grange" movement because low rates to oil were made up
by overcharging smaller farmers. See, for example, _The History of the
Pennsylvania Railroad_. In the end we, the public, were subsidizing the
shipment of oil products (putting more $ into Rockefeller pockets)
through higher food prices, accompanied by the economic destruction of
many a small farmer.
All this time later we still haven't resolved whether the government
did a good job or not in regulating those particular rates, but it is
clear that to assure growth of our nation some regulation was essential.
What becomes regulated and what doesn't, as well as the extent to which
something is regulated is a very fine balancing act more easily resolved
by dictate than is available in a representative democracy. In England
it used to be that all swans were the property of the crown. It took
similar measures in the US to declare all wild game to be the property
of the people, the harvesting of which is licensed by the individual
states.
Clearly we are accustomed to common ownership and regulation of socially
critical assets. Naloxone should be declared such a critical asset. How
some fair purchase price is determined to get the drug into the public
domain is a separate issue, but the entire basis for such an acquisition
remains to be decided as well. We don't need to be making new
Rockefeller category wealthy at public expense. In the end, drug addicts
for the most part don't have insurance so the cost of saving their lived
falls to the public.
Gys de Jongh
Feb 19, 2017, 7:34:57 AM2/19/17
to
On 19-Feb-17 11:38, F00 wrote:
> The simple fact is that some things are so important to society that
> exclusive ownership of the idea and the product should be seized through
> the intellectual equivalent of "eminent domain." How "socialist" a
> concept is that? And my God, such an idea being promoted by the
> conservative bastard F00????
glad you start seeing the light
> The simple fact is that some things are so important to society that
> exclusive ownership of the idea and the product should be seized through
> the intellectual equivalent of "eminent domain." How "socialist" a
> concept is that? And my God, such an idea being promoted by the
> conservative bastard F00????
now remove Ayn Rand's picture from the wall of your bedroom
while at it
forget Alan Greenspan, Friedrich Hayek and Milton Friedman
after all we invented the stuff :
<https://en.wikipedia.org/wiki/History_of_capitalism>
The history of capitalism can be traced back to early forms of merchant
capitalism practiced in Western Europe during the Middle Ages.[1] It
began to develop into its modern form during the Early Modern period in
the Protestant countries of North-Western Europe, especially the
Netherlands
F00
Feb 19, 2017, 8:31:17 AM2/19/17
to
On 2/19/2017 6:34 AM, Gys de Jongh wrote:
> On 19-Feb-17 11:38, F00 wrote:
>
>> The simple fact is that some things are so important to society that
>> exclusive ownership of the idea and the product should be seized through
>> the intellectual equivalent of "eminent domain." How "socialist" a
>> concept is that? And my God, such an idea being promoted by the
>> conservative bastard F00????
>
> glad you start seeing the light
> now remove Ayn Rand's picture from the wall of your bedroom
You obviously haven't read Ayn Rand's stuff, especially about the
> On 19-Feb-17 11:38, F00 wrote:
>
>> The simple fact is that some things are so important to society that
>> exclusive ownership of the idea and the product should be seized through
>> the intellectual equivalent of "eminent domain." How "socialist" a
>> concept is that? And my God, such an idea being promoted by the
>> conservative bastard F00????
>
> glad you start seeing the light
> now remove Ayn Rand's picture from the wall of your bedroom
necessity of the candle industry in her modeling. Too bad you don't
get that there is no "perfect system." One of the things Rand attempted
to teach is that you never destroy society or any part of it for an
ideal.
> while at it
> forget Alan Greenspan, Friedrich Hayek and Milton Friedman
>
> after all we invented the stuff :
>
> <https://en.wikipedia.org/wiki/History_of_capitalism>
>
> The history of capitalism can be traced back to early forms of merchant
> capitalism practiced in Western Europe during the Middle Ages.[1] It
> began to develop into its modern form during the Early Modern period in
> the Protestant countries of North-Western Europe, especially the
> Netherlands
you're proud...
Don Roberto
Feb 20, 2017, 6:55:40 AM2/20/17
to
problems kick in when government starts to administrate, i.e., run such
services.
Don Roberto
&
Feb 26, 2017, 12:47:32 AM2/26/17
to
On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>Clearly we are accustomed to common ownership and regulation of socially
>critical assets.
Yet you denounce universal health care insurance.
>Clearly we are accustomed to common ownership and regulation of socially
>critical assets.
F00
Feb 26, 2017, 1:47:32 AM2/26/17
to
*asset*. I predict, based on your performance, that I'll not be playing
with you for long so you best be quick and succinct about it.
&
Feb 26, 2017, 6:24:43 AM2/26/17
to
On Sun, 26 Feb 2017 00:47:27 -0600, F00 <F...@invaliddd.net> wrote:
>On 2/25/2017 11:47 PM, & wrote:
>> On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>>
>>> Clearly we are accustomed to common ownership and regulation of socially
>>> critical assets.
>>
>> Yet you denounce universal health care insurance.
>
>So? Show how universal health care coverage is a socially critical
>*asset*.
I'm not here to do your homework for you.
>On 2/25/2017 11:47 PM, & wrote:
>> On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>>
>>> Clearly we are accustomed to common ownership and regulation of socially
>>> critical assets.
>>
>> Yet you denounce universal health care insurance.
>
>So? Show how universal health care coverage is a socially critical
>*asset*.
But that's quite in keeping with your track record, which is
essentially devoid of anything that supports your views other than
your own bluster
Neverthelss, here's a little hint for the audience.
Affordable access to health care is a major health and development
issue.
>I predict, based on your performance, that I'll not be playing
>with you for long so you best be quick and succinct about it.
You already know how that feels.
Trading volleys with DR gets old, doesn't it.
I predict you'll be complaining about getting ignored again, and
profusely thanking those who, once in a blue moon, reply to your
nonsense, or who post a link whose contents you've been craving to
read.
Have fun.
F00
Feb 26, 2017, 8:45:33 AM2/26/17
to
On 2/26/2017 5:24 AM, & wrote:
> On Sun, 26 Feb 2017 00:47:27 -0600, F00 <F...@invaliddd.net> wrote:
>
>> On 2/25/2017 11:47 PM, & wrote:
>>> On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>>>
>>>> Clearly we are accustomed to common ownership and regulation of socially
>>>> critical assets.
>>>
>>> Yet you denounce universal health care insurance.
>>
>> So? Show how universal health care coverage is a socially critical
>> *asset*.
>
> I'm not here to do your homework for you.
> But that's quite in keeping with your track record, which is
> essentially devoid of anything that supports your views other than
> your own bluster
>
> Neverthelss, here's a little hint for the audience.
> Affordable access to health care is a major health and development
> issue.
Changing position in mid-stream without introducing any validity
> On Sun, 26 Feb 2017 00:47:27 -0600, F00 <F...@invaliddd.net> wrote:
>
>> On 2/25/2017 11:47 PM, & wrote:
>>> On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>>>
>>>> Clearly we are accustomed to common ownership and regulation of socially
>>>> critical assets.
>>>
>>> Yet you denounce universal health care insurance.
>>
>> So? Show how universal health care coverage is a socially critical
>> *asset*.
>
> I'm not here to do your homework for you.
> But that's quite in keeping with your track record, which is
> essentially devoid of anything that supports your views other than
> your own bluster
>
> Neverthelss, here's a little hint for the audience.
> Affordable access to health care is a major health and development
> issue.
to the new position properly reeks of "sore looser". You claimed
that universal health care coverage is an *asset.* It isn't and in
fact it is a liability for all of society. You don't actually understand
the first thing about economics, government, or anything, and the
only thing you know about is running your mouth without providing any
substance.
>> I predict, based on your performance, that I'll not be playing
>> with you for long so you best be quick and succinct about it.
>
> Go play with yourself, F00.
> You already know how that feels.
> Trading volleys with DR gets old, doesn't it.
unable to recognize who I am and differentiating that from who
you are. That's one of the many signs of schizophrenia, the loss of
identity and individuality. Try alt.support.dissociation for help.
> I predict you'll be complaining about getting ignored again, and
> profusely thanking those who, once in a blue moon, reply to your
> nonsense, or who post a link whose contents you've been craving to
> read.
>
> Have fun.
know what that meant when I first heard it from a teacher in grammar
school discussing lunacies like the above back in the 1950's but lots
of examples surfaced since then, including your postings here.
Don Roberto
Feb 28, 2017, 5:15:04 AM2/28/17
to
On 2/26/2017 3:24 AM, & wrote:
> On Sun, 26 Feb 2017 00:47:27 -0600, F00 <F...@invaliddd.net> wrote:
>
>> On 2/25/2017 11:47 PM, & wrote:
>>> On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>>>
>>>> Clearly we are accustomed to common ownership and regulation of socially
>>>> critical assets.
>>>
>>> Yet you denounce universal health care insurance.
>>
>> So? Show how universal health care coverage is a socially critical
>> *asset*.
>
> I'm not here to do your homework for you.
Yep - why would a troll like you be here to do anything but trolling.
> On Sun, 26 Feb 2017 00:47:27 -0600, F00 <F...@invaliddd.net> wrote:
>
>> On 2/25/2017 11:47 PM, & wrote:
>>> On Sun, 19 Feb 2017 04:38:43 -0600, F00 <F...@invaliddd.net> wrote:
>>>
>>>> Clearly we are accustomed to common ownership and regulation of socially
>>>> critical assets.
>>>
>>> Yet you denounce universal health care insurance.
>>
>> So? Show how universal health care coverage is a socially critical
>> *asset*.
>
> I'm not here to do your homework for you.
> But that's quite in keeping with your track record, which is
> essentially devoid of anything that supports your views other than
> your own bluster
>
> Neverthelss, here's a little hint for the audience.
Don Roberto
--------------------------------
Eat more and chase some chickens
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