Senator Warren’s Office of Drug Manufacturing

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Benjamin Espen

Ben is a medical devices engineer who has lived in Arizona almost his whole life. He has a website and can be found on Twitter.

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  1. Avatar Oscar Gordon
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    says:

    Any suggestions for orphan drugs?Report

    • Avatar Morat20 in reply to Oscar Gordon
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      It’s in the bill. One of the triggers for involvement is if there are no manufacturers of a drug. If there are no manufacturers of a drug that is (or can be) made, the US government will produce it. That might only apply to drugs that can be produced generically, but I’m not 100%.

      I’m trying to remember the other triggers — there’s at least two more. One involves a limited number of manufacturers (only two, I think?) and price hikes (I suspect built to keep them honest, especially in light of the massive and widening price fixing scandal that’s been found in generic drugs). The other involves significant price hikes in a generic that’s deem an “essential medicine” by the WHO organization, I think.

      One drug I know the bill is taking aim at is human insulin (the short term stuff, not he long-term stuff like Lantus), which has gone up three-fold or five-fold depending on what you’re looking at, despite being both a generic, and seeing no actual advances in manfacturing techniques since the late 90s. And the last advance was generically engineering e. coli bacteria to produce it (and later got yeast to produce it), back in the 90s, rather than source it from animals.

      Given the way it’s produced, human insulin prices should have dropped — or at least stayed steady, not risen three-fold, because none of the raw materials has jumped in price, and the increasing number of diabetics should have led to expanded production and greater economies of scale. E coli and yeast breed fast, and doesn’t take a lot to keep either happy and churning out insulin.

      But prices are still up into ridiculous levels, despite it being a cheap drug to produce, and given the competition (there are at least two companies producing human insulin), prices keep rising in lockstep. I deeply suspect they’ll be caught in the price-fixing scheme, as will the long-term insulin manufacturers. (They’ve also seen 500% price increases, despite not only competition from the get-go, but now generics. The price chart for Lantus and it’s generic competitor Basgular shows that Basgular was priced at about 70% the cost of Lantus, and then both Lantus and Basgular have seen steady, identical prices increases. I’m a little rusty on economics, but competition is generally supposed to bring prices down, especially when the raw material and manufacturing costs are dropping…)Report

      • Avatar Dark Matter in reply to Morat20
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        I’m a little rusty on economics, but competition is generally supposed to bring prices down, especially when the raw material and manufacturing costs are dropping…)

        I’m not sure “competition” is how we should describe this situation. If the barriers to entry are extremely high (they are) and even the barriers to increasing production are high (maybe), then one player could simply increase it’s prices and see if it’s extremely few “competitors” follow suite. “Competition” would be triggered by new producers in the market, but when we think about how hard that might be…

        If there’s only a handful of producers then you could inch up your prices in lockstep without technically crossing over the “price-fixing” line because that requires communication.Report

        • Avatar Morat20 in reply to Dark Matter
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          If there’s only a handful of producers then you could inch up your prices in lockstep without technically crossing over the “price-fixing” line because that requires communication.

          Well, given the ever widening price-fixing investigation, at this point? I suspect they’re all in on it.

          Take Lantus (long-term insulin) — it’s 20 years old, had a direct competitor out of the gate — and it’s price increased several fold since it’s release. It’s now open to biosilimilars (effectively a generic), and indeed one popped up — called Basgular. It was priced at about 30% below Lantus and Lantus’ other name brand competitor.

          And then the prices for all three rose in tandem from the release of a generic. That’s not normal.

          Same for human insulin in general, despite the fact that it’s gone from being sourced from animals to being produced in bulk through bioengineered yeast or e. coli. It’s up in price about five-fold since 2000, despite being both generic and not having had a single noticeable advance in 20 years. (The last being the bioengineered yeast).

          But, I note — only here. Last I checked, prices in Canada, Germany, the UK, and France are all — adjusted for inflation — roughly the same as they were in 2000. Somehow, despite several competitors, a fairly straight-foward production process (if you have CRISPR, you can modify the yeast to do it) as far as drugs go, it’s incredibly expensive here. Only here. Same for Lantus and it’s competitors.

          I have absolutely no doubt the price-fixing lawsuit will end up encompassing diabetic drugs in the end. Used to be, with a good job, you could afford the cash price for insulin. It was pricey — you’d be out about 200 bucks a month for both long and short-term insulin. Now? It’s between 800 and 1000 bucks a month. That’s negotiated insurance prices.

          I’ve got a friend who literally pays more now — paying only 20% through her insurance — than she paid for the same drug 20 years ago. It’s not because the drugs have become more expensive, or FDA regulations, or anything like that. It’s because she lives in America, instead of any other industrialized nation.Report

          • Avatar Jaybird in reply to Morat20
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            Well, given the ever widening price-fixing investigation, at this point? I suspect they’re all in on it.

            Regulatory capture is no joke. (And the FDA is corrupt as hell.)

            Maybe we should allow reimportation?Report

            • Avatar Marchmaine in reply to Jaybird
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              Maybe we should allow reimportation

              Maybe we should; we’d likely see decreased costs in the US, but increased costs elsewhere… or perhaps no change to costs but the end of supply to certain locations; both of which might have interesting follow-on effects.

              The argument that Govt. has a massive negotiating hand is, I think, mostly wrong with regards price. With regards protecting your intellectual property and formulations lest we plunder them, the hand they theoretically have is potentially a royal flush – but I’m pretty sure their negotiating partners would call the bluff and make them play the hand (especially given that the stakes are now “all in”). Once played, I expect the game is over with regards independently funded research; so let us prepare for spending our winnings to recreate what we have bankrupted.

              Maybe that’s collectively something we ought to do; I’m open to that… but I’m not particularly swayed by the idea that we’d do it better; maybe bad in an entirely different way though.

              We sell our software a different prices globally to recognize different market conditions, but if you buy our software in a very low priced market, you sure as hell can’t reimport it into the US and use it here… if you could, then we’d change our entire pricing structure to account for that reality. I can’t say for sure what would happen, but my first guess is that the markets that couldn’t (or wouldn’t) pay a reasonable facsimile to the prices we charge would cease to be markets. As it is now, those markets are mostly value add – unless and until they become value negative. Change the reality, change the price.Report

              • Avatar Jaybird in reply to Marchmaine
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                Maybe we should; we’d likely see decreased costs in the US, but increased costs elsewhere… or perhaps no change to costs but the end of supply to certain locations; both of which might have interesting follow-on effects.

                Ah, jeez. I did the thing where I assumed that everything would be exactly the same, only cheaper.

                I hate it when other people do that. I should hate it when I do it.Report

          • Avatar Oscar Gordon in reply to Morat20
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            It’s not because the drugs have become more expensive, or FDA regulations…

            The regs don’t make the drug more expensive, the regs raise the bar to entry so high as to severely limit the number of competitors who can make it.

            But that seems to be the point of the OP, right? If you can’t effectively lower the bar to entry through de-regulation (without compromising drug safety*), then you have to bring other incentives to the table to get more competitors in the market.

            *I am sure that the FDA can safely reduce the burden through some measure of de-regulation, but I am not certain that such would lower the bar far enough to encourage more competition without other incentives.Report

            • Avatar Benjamin I. Espen in reply to Oscar Gordon
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              I have some ideas on how the FDA could safely reduce regulatory burden without compromising safety, but that is a really hard sell. To work at the FDA is to be simultaneously blamed for stifling innovation, and blamed for not catching anything at all that slips through. Talk about disincentives….

              I also don’t think the FDA is particularly corrupt. If you want to see what a really corrupt regulatory looks like, check out the story of France’s Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM). ANSM had a super cozy relationship with corporations, and approved a drug that killed 1500 people. The whole bureaucracy was fired, and a new one stood up in it’s place.Report

              • Avatar Jaybird in reply to Benjamin I. Espen
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                I also don’t think the FDA is particularly corrupt. If you want to see what a really corrupt regulatory looks like, check out the story of …

                I am down with there being an acceptable level of corruption.

                I am not down with the argument that it ceases to be corruption because there are unacceptable levels of corruption.Report

              • Avatar Dark Matter in reply to Benjamin I. Espen
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                I have some ideas on how the FDA could safely reduce regulatory burden without compromising safety…

                At the moment we probably have more people dying from a lack of access to insulin than we have dying from “compromised safety”. This implies we should be more open to “compromising safety” than we are.

                There should be a mechanism to make the FDA responsible for withholding approval. At the moment they’re putting themselves at risk for approving drugs/etc, but not for the time/money needed to approve them and not for disapproving them.Report

              • Avatar Stillwater in reply to Dark Matter
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                At the moment we probably have more people dying from a lack of access to insulin than we have dying from “compromised safety”. This implies we should be more open to “compromising safety” than we are.

                “we”. Huh. Dark, you strike me as the kind of guy who’d sue the shit out of an insulin manufacturer if a bad dose killed one of your loved ones..Report

              • Avatar Jaybird in reply to Stillwater
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                We need more citizens who will say something like “well, we’re saving a lot more lives by having this level of quality control” when their loved ones die from bad insulin.

                (Out of curiosity, how many people are dying in the el cheapo countries from bad insulin? Are the governments over there suppressing the numbers?)Report

              • Avatar Stillwater in reply to Jaybird
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                “My child died for the greater good, peace be his reward.”

                Better get on it quick. That level of social engineering requires a propaganda deluge the likes of which the world has never seen.*

                *Actually, it has seen it.Report

              • Avatar Jaybird in reply to Stillwater
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                You mean with… VACCINES?!?Report

              • Avatar Stillwater in reply to Jaybird
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                Phase 1: identify a propaganda model
                Phase 2: implement propaganda model
                Phase 3: reap rewards of propaganda implementationReport

              • Avatar Chip Daniels in reply to Stillwater
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                We just need a clever ad campaign, like the one about drugs:

                *image of an egg breaking, dropping into a pan*

                “This is your loved one. Here is the delicious omelette made from their death.
                Any questions?”
                Report

              • Avatar Dark Matter in reply to Stillwater
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                “we”. Huh. Dark, you strike me as the kind of guy who’d sue the shit out of an insulin manufacturer if a bad dose killed one of your loved ones..

                :Amusement: Sure, I probably would.

                However what you’re suggesting is we need every bureaucrat, and every realm of forms that must be filled out, or tons of people will die. That if we drop the risk from one in a trillion to one in a billion that the streets will be just covered with dead bodies.

                How horrible was the insulin market 30 years ago when it was both cheaper (because of more competition) and less regulated? Lots of dead people around because of bad insulin? Have we actually saved anyone by creating this current setup which looks a lot like regulatory capture? Why is moving away from regulatory capture a bad idea?

                The cold reality is that people die, and trying to pretend that we can create a “risk free” society ill serves anyone. https://www.youtube.com/watch?v=eXWhbUUE4koReport

              • Avatar Chip Daniels in reply to Dark Matter
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                says:

                At the moment we probably have more people dying from a lack of access to insulin than we have dying from “compromised safety”. This implies we should be more open to “compromising safety” than we are.

                What if I told you, Neo, that there exists a world in which people neither die for lack of insulin, nor die from faulty insulin?Report

              • Avatar Jaybird in reply to Chip Daniels
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                Is it one with less obesity?Report

              • Avatar Dark Matter in reply to Chip Daniels
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                What if I told you, Neo, that there exists a world in which people neither die for lack of insulin, nor die from faulty insulin?

                And you can also have Good combined with Cheap and Quick.

                And all children are above average.Report

            • Avatar Morat20 in reply to Oscar Gordon
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              There are multiple competitors, yet the price keeps rising. There are least five types of long-term insulin, and three or four types of short-term. The latter is, as far as drugs go, really easy to make and meet regulatory standards — we’ve been making insulin for 70 years. It’s like talking about the regulatory burden of making generic aspirin.

              And there’s a giant price-fixing lawsuit which has spiraled into a larger price-fixing criminal investigation, and again all this is only happening in this country.

              How many manufacturers of insulin do we need to bust a price-fixing ring? Well only one, if they don’t want free money. That’s sort of the thing with price-fixing. Price-fixing has jack-all to do with government regulation, except perhaps lack of government investigation.

              You can get price fixing in a pure free-market libertarian utopia. In fact, you’re almost guaranteed it.

              Government regulations have not tripled or more the price of various insulin in the US the last two decades. If they have, you’ll have to show your work — why the US’s regulations are so much more burdensome then every other first world country’s, and further explain how every other country manages to have had a flat price for those drugs for 20 years — but not us.Report

              • Avatar Dark Matter in reply to Morat20
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                “Price fixing” implies direct communication with your “competitors”. However raising prices is a form of communication itself. You raise your prices a penny and see what the other guy does. If he increases his market share then that’s a problem and you lower your prices, if he also raises his prices then you both benefit.

                This creates outsized profits which in a real market would result in new players moving into the market, but thanks to regulatory capture you have set truly impressive barriers to entry. The gov can make it somewhere between extremely difficult, extremely uncertain, and impossible to legally enter the market.

                And yes, it’s possible that these companies actually are making telephone calls and have agreements to not compete, but imho if you’re looking at a highly dysfunctional market the first question for finding an explanation should be “what is the government doing here?”.

                you’ll have to show your work — why the US’s regulations are so much more burdensome then every other first world country’s, and further explain how every other country manages to have had a flat price for those drugs for 20 years — but not us.

                There are three companies in the US. There are outsized profits. That right there is strongly suggestive that it’s a gov regulation problem.

                CBS seems to think this has been accomplished via legally manipulating the system.
                https://www.cbsnews.com/news/how-drug-companies-keep-insulin-prices-high/Report

              • Avatar Oscar Gordon in reply to Morat20
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                says:

                To add to Dark’s comment, how well can people who need insulin shop around for different brands? Part of why you can have price fixing without overt communication is because there are only 3 makers, and I reckon most people don’t pay a ton of attention to which one they are using today*.

                If the bar to entry was lower, or there was some other incentive, you could have someone come in and undercut the price.

                *Although that kind of ignorance is furthered by price fixing. And I’m not saying their isn’t price fixing happening. The chances are very good there is, but the bar to entry is one reason the price fixing can happen. I mean, if the production is so easy and cheap, I would imagine a dozen or so medical universities would be happy to make it for just above cost, if only to alleviate suffering.Report

              • Avatar Aaron David in reply to Oscar Gordon
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                Also, if someone is using insurance to acquire the insulin, they have to deal with the insurance company’s formulary. In other words, the brand decision has already been made by the time it gets to the consumer and they have no control over this. Removing the end consumer from the purchasing equation makes a huge difference.Report

              • Avatar Chip Daniels in reply to Oscar Gordon
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                how well can people who need insulin shop around for different brands?

                We could just substitute the word “Medical Care” for “insulin” in that sentence, and it sums up why delivering medical care via the private market seems to be problematic.

                All the things that economists like to talk about regarding markets- entry/ exit, transparency, knowledge, choice…these are almost always missing from medical decisions.Report

              • Avatar Dark Matter in reply to Chip Daniels
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                We could just substitute the word “Medical Care” for “insulin” in that sentence, and it sums up why delivering medical care via the private market seems to be problematic.

                It’s getting better.

                My wife and kid need a test. My insurance company has a tool which details who gives that and how much it will cost me (and what “average” is for this area).

                It looks like an amazing sw search tool, the answer to all things “competition”. There’s like 20 providers who give these tests and that’s just local, their prices range from “x” to “6x”.Report

              • Avatar Chip Daniels in reply to Dark Matter
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                And if you don’t have “x”?

                In the medical marketplace, “x” can be anything from a trivial copay, to an astronomical amount.

                And you have no choice in the matter.

                See, our biological condition is on some level wildly unpredictable- you may live long and prosper, you may be stricken down tomorrow.

                But on an aggregate level, our futures are amazingly predictable.

                We all are going to get old. We don’t get to choose this.
                We all are going to get frail and sickly. We don’t get to choose this.
                And perversely, this will occur at the precise moment in life when we are unable to earn an income.We can’t choose this either.

                Our consumption of medical care will start slowly, but build and escalate, then in our last few years skyrocket to astronomical levels.

                This isn’t new. We have ten thousand years of human history showing this, which is why caring for the sick and aged is a problem every civilization grapples with.

                And invariably, the solution is to socialize medicine. Those who are young and healthy divert some of their resources to the old and sick.
                Sometimes this is the nuclear family, sometimes the extended family, sometimes the wider clan and now in our industrial age, the nation-state.Report

              • Avatar Dark Matter in reply to Chip Daniels
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                You’re correct, there are strong ethical and fiscal arguments for having society pay for everything medical. The counter argument is how to pay for it without breaking the budget.

                We need to make the system cheaper before we expand access and care. Markets have a history of being able to wring costs out of things.Report

    • Avatar Benjamin Espen in reply to Oscar Gordon
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      I haven’t looked deeply into orphan drugs, but here is my off-hand opinion:

      First, a definitional point. As @Morat20 noted, the ODM bill is targeted to drugs that have no current manufacturers:

      Morat20: It’s in the bill.One of the triggers for involvement is if there are nomanufacturers of a drug.

      However, this is not usually what is meant by the term “orphan drug”. Rather it being a case of where we have data to say that a drug can successfully treat a condition, but no one makes it, orphan drugs usually still in development, and need further work to be proven safe and effective.

      I think there are a few drugs that simply need to be manufactured by someone, but the second case is the more challenging. Drug R&D is increasingly difficult and expensive, a phenomenon known as Eroom’s Law. This means it is harder and harder to find a new drug that can make money selling. Real progress here would mean finding a fundamentally new way to develop drugs, which is not even on the technological horizon.

      I think the best we could do here is use the NIH to fund the necessary development work, and maybe even the clinical trials, and then use the ODM or something similar to make something once we know it works.Report

  2. Avatar Jaybird
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    I like the idea of outsourcing generic drug production. (I’d probably be against this idea if it entailed setting up a new department that was in charge of making the drugs.)

    The main thing that I see as the problem is the FDA. (We got into this a million years ago when we discussed why Europe had 8 different types of Epipen to buy and the US only had one.)

    But I think that that also ties into attitudes toward risk and trade-offs.

    Are we willing to give the contracts to companies that don’t have all of the infrastructure that a GSK has at its disposal? Then we should be fine with subcontracting out to little dinky companies that can turn a profit if the government signs the check and provides some top cover if some kids get rashes or something.

    If we say something like “no, one side-effect is too many!”, then the only people who will get clearance to make the generic drugs will be the people who made the original and will only go back to making it again if the government makes it worth their while.

    And if we demand that the only companies that the generic drug contracts will be available to are companies that don’t yet exist because they have to be owned by retired veterans who are differently-abled that have a certain number of boxes checked for group membership on the board?

    Well, we’ll get to explore whether companies that have never done this before will be able to provide the quality that we came to expect from established players.Report

  3. Avatar Michael Siegel
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    I think this is a terrible idea. I’d actually prefer price-fixing to this. Drug manufacturing by an entity that has sovereign immunity and shown a past tendency to muck up everything it touches? No thanks.

    There are very few players in the generics industry and an ongoing series of lawsuits accusing them of fixing prices. Chase that down first.Report

    • Avatar Dark Matter in reply to Michael Siegel
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      Case in point:

      France’s Infected blood scandal began in April 1991 when doctor and journalist Anne-Marie Casteret [fr] published an article in the weekly magazine the L’Événement du jeudi [fr] proving that the Centre National de Transfusion Sanguine [fr][citation needed] knowingly distributed blood products contaminated with HIV to haemophiliacs in 1984 and 1985.[1]

      In January 8, 1985, multi-national health care company Abbott Laboratories sought authorisation to sell equipment needed for blood testing. Response to the demand was delayed as the government was waiting for a rival French test to be released[1].

      https://en.wikipedia.org/wiki/Infected_blood_scandal_(France)Report

    • Avatar Chip Daniels in reply to Michael Siegel
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      a past tendency to muck up everything it touches?

      Why do people say this?

      For every scandal in a public utility, agency, or bureaucracy, you can find a parallel one in the private sector.
      The idea that “gummint can do no right” is just one of those zombie myths that everyone knows but doesn’t bother to interrogate. Its based on some form of magical thinking where profit motive just somehow makes everything better.Report

      • Avatar Oscar Gordon in reply to Chip Daniels
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        It’s not that government makes mistakes, it’s that the public has very poor options for relief when the government makes mistakes.

        If the security guard at the Hilton roughs me up too much while ejecting me from the premises, I can sue and have a chance of getting relief through the courts. If the security guard for the city (aka a police officer) does the same, hello immunity.

        Or we can look at the Gold King Mine spill. If the mining company caused the spill, everyone could sue. But the EPA, despite admitting fault, is claiming sovereign immunity.Report

        • Avatar Chip Daniels in reply to Oscar Gordon
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          If the mining company caused the spill, everyone could sue.

          Oh, you and your dry sense of humor.

          It’s like saying that we have much more control over government officials, since they can be voted out of office and the agency heads summarily dismissed.

          Both are highly theoretical mechanisms that work splendidly, when everything works as it should.
          The problem is never with a mechanism. Mechanisms only reflect the flaws and failures of the society that effects and operates them.

          In a perfect world, the head of the EPA should have been dismissed, and Don Blankenship should be rotting in prison.

          But neither the river, nor the dead miners, are valued enough to the citizens.Report

          • Avatar Dark Matter in reply to Chip Daniels
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            Think of how hard it is to have the police investigate themselves, or how hard it is to have various other groups to police themselves.

            I would really like that to not be an issue when it comes to drug safety.Report

            • Avatar Chip Daniels in reply to Dark Matter
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              says:

              As opposed to say, the handling of nuclear weapons?

              Wouldn’t a better form of your argument be something like, “The government actually does some things like utilities very, very well. Other things, like consumer goods and anticipating market shifts, are not among them.”

              Then it just becomes a question as to whether medicine is more like electricity or more like shampoo.Report

          • Avatar Oscar Gordon in reply to Chip Daniels
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            I’ll take the fiction of getting my day in court over the certainty of immunity ensuring that no one is held to account in any meaningful way.

            Now, if we have a path to overturn/strip immunity away from agencies and agents, I may reconsider my position, but as long as I am pretty damn certain that government will shield itself from accountability, then the areas where government should be having a hand needs to be minimal.Report

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