h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Another occasional series.

To kick of - US drug company Eli Lilly who, it's reported on CNN, have decided to limit supplies to Canada to try and stop Americans from crossing the border and buying cheaper (in other words affordable) drugs.

Shame on you Eli Lilly. In this Researcher's opinion you represent everything that's bad about big business and about big drug companies for doing that.

Agreed it is a Shame!
They are a thorn in my side.

It is hard to know (personal experience) something is out there that may help but the price tag is prohibitive to all but the very wealthy.

It is hard to know that many of the same companies to who reside here with tax benefits Can and Do sell to Canada at 1/3 the price we US citizens pay. They now want to prohibit us buying from Canada.

The voted in officials that allow this are given the top Blue Cross Blue shield insurance, paid for by our government (we the people).
Give them the equivalent of medicare coverage and no prescription benefit for their terms!

I would like to see how the companies have benefitted in the past 10 years while every election has promised help. 4 Presidental elections have seen this problem grow worse. It's not a party problem.

Just a thought, looking at it from the company's perspective for a second.

There are things Canada does that make it financially feasible for the company to sell at a much lower price their than they do here in the US. Canada essentially makes a deal to buy from Eli Lilly and not to buy (or at least not to buy in bulk) the drugs made by other companies that compete directly with the drugs Eli Lilly is selling to Canada. Less competition, their market share goes up, and they can afford for their price to go down.

The way this deal is set up, Eli Lilly doesn't need to advertise in Canada at all. That means no money needed for print advertisements in medical journals, no money needed for pharmaceutical sales reps going to doctors offices and giving away samples and freebies to the docs, no money for setting up huge booths at medical conferences, no money for TV commercials aimed at patients. Costs of selling the drug have now dropped significantly, and they can afford to drop the costs of the drug to the purchaser.

I'm willing to bet that their are also other benefits to Eli Lilly in the deal with Canada -- after all, it's only a sustainable deal if both sides are getting something out of it.

Here in the US, the main thing we pay so much extra for in our drugs is our *choice*. Our ability to choose in the open market between different medications that serve the same function. There have been attempts (by several states) at legislation to do, essentially, what Canada does -- to buy in bulk, but not every single drug possible from every single company possible. Such programs would lead to tremendous cost savings, just like in Canada. And yet, when legislators attempt to enact such programs, constituents throw tremendous fits that the government is *limiting their choices*, violating their rights as Americans, yada yada yada, and the programs often end up tied up in courts.

So I would stop and think a little while before laying 100% of the blame at the foot of the drug companies. It's a little too easy of a solution.

"Our ability to choose in the open market between different medications that serve the same function."

Accepting the reasons you gave for why the drugs are cheaper in Canada Mikey, many Americans are using their freedom of choice and buying the cheaper drugs from Canada. That's how the 'open market' works. I can't quote the details, but I've seen enough reliable reportage to know that American drugs, like for like, are amongst the most expensive, if not *the* most expensive in the world, and apparently they needn't be.

In the UK, such a move by Eli Lilly would be seen as a restraint of trade and is against the law. Furthermore, how much are they going to limit supplies - by the amount that Americans are buying? How do they know how much that is? If they don't limit enough people will still be able to find supplies. If they limit too much some Canadians who rely on the medications will not be able to get them.

It's purely and simply a case of running scared by EL - scared of the profits they're losing from sales which should be happening in the US, scared of their stockholders who will start to sell and buy another company's stock, and scared of the politicians whose campaign funds they no doubt greased, and are about to grease in the coming presidential election

Gosho, you seem to be missing the point. The company is giving those drugs at a lower price in return for certain concessions. Americans trying to buy those drugs in Canada have not granted those concessions, and have in fact fought those concessions. The market in Canada is *not* an open market, it's a government-controlled market. If US citizens were willing to have a government-controlled market for prescription drugs, they would be able to reap the benefits. But you don't get to have your cake and eat it, too.

So, in the market, how does Americans buying drugs from Canada affect things?

* It makes pharmaceutical companies deals with Canada less cost-effective. For every American buying Prozac from Canada, the company still has to expend it's massive US marketing efforts (because, after all, Americans have all these choices). But, Eli Lilly doesn't recoup any of those costs in the greatly decreased costs paid by consumers shopping in (or through) Canada.

* Since this *is* an open market, the company is unlikely to just sit back and take a loss. They will recoup the money somehow. That means either raising prices in their bulk deals with Canada, or raising prices here in the US. Or both, which is probably more likely.

So how has helping people buy drugs from Canada helped the population as a whole? Seems to me like it only shifts the cost burden around, but the population as a whole is still paying.

On the other hand, encouraging legislation that would allow states to engage in bulk buying programs like Canada's seems ideal to me. People would have the option of saving money by getting their drugs through such a program, although they would have sharply reduced options. Or, they could pay current US market rates for a wider variety of options. Here, there are true cost savings.

I see what you mean Mikey, but I doubt that you'd have such an easy time convincing the people who have to pay a fortune for their pills. Although we're not strictly dealing with the open market here since the price of the drugs in Canada is being controlled not by the market but by the government, voting with one's feet is the basis of the open market, and that's precisely what these people are doing. They don't care for the niceties of the argument, and they may well not be the people who want the choices you mentioned above, they just want affordable medication.

Well, the northern border states -- the states with the populations probably most likely to cross over to Canada for prescriptions -- were all the first to have the people file lawsuits over state programs to buy medications in bulk.

Americans have a history of "wanting it both ways", and I think this is a pretty prime example. Again, I'm not saying that the pharmaceutical industry is made up of angels striving solely for the public good, but I do think that a lot of the reasons why medications are more expensive here than they are elsewhere have *not* to do so much with the companies as they do with government policies and consumer behavior. Continuing to lay all the blame on the companies won't solve any problems.

This is all quite fascinating. The concept of an open market for the sale of drugs is one totally alien to me here in the UK. I'd never even thought of the idea.

The NHS here is a monolithic purchaser that buys practically every drug that gets prescribed to pateints. The price we pay is the price we say we are going to pay and the drug companies will have to like it or lump it. There are on going projects to reduce the use of branded drugs in our health servic eand replace them with much cheaper generic brands - same drug just doesn't have the fancy advertising and fancy mark-ups.

A recent development has been the creation of a National Institute for Clinical Excellence (yes, NICE) to bring together ideas of best practice in all areas of health care. With particular emphasis at the moment on prescribing policy and the introduction of new drugs. If they don't pass the test they don't get approved for prescription in the UK.

not forgetting most drugs have either a generic or eastern counterpart ,yin yan sort of message ,the internet being fast becomeing the new "littlewoods" "wallmart"for choices ect

Mickeys arguemnt that Canada is cheaper because NONe of the following is needed;

"That print advertisements in medical journals, no money needed for pharmaceutical sales, reps going to doctors offices, and giving away samples and freebies to the docs, no money for setting up huge booths at medical conferences, no money for TV commercials aimed at patients."


Those things are not necessary to the extent they are done here in the US.

They should not spend millions per hour on adverts for TV. I do not know if they are on radio too. They should not spend one penny trying to reach patients whom cannot prescribe to themselves on TV.

There are plenty of opportunities to advertise and educate Dr through journals, lectures and mail.

The Dr do not have time here for drug reps to take from patients. My Neurologists charges the drug reps for his time. This is happening more.

The Co. representatives know that by Medicare law a patient has 10 minutes and One Chief Complaint only. This often requires more appointments to cover the ground necessary for one 20-30 min appointment. This is not more efficient.

The pharm companies know this and react by advertising to the patient on TV. The busy Dr is then approached by the curious patient in the precious litle time.

These Pharm representatives get paid very well for sales.
They choose who to give samples too -how many depending on what they can get back. The Dr who has mostly Medicare patients and most needs free samples is not the one getting the most. The Dr treating the rich and privately insured get more freebies.

Just like any other business the free stuff goes to the ones that can most afford it to buy it and will be likely too. The folks that can afford to buy several months of medications at a time also can save. Many are cheaper in larger quantities.
It takes money to save money.
People that live month to month cannot do this.

Many people cannot take the Generic medications. For those persons extra sensitive they are not the same! The inert additives and color, buffers or other ingrediants can be a problem. It is not always the active ingrediants that equates. So they are not all equal to all.

The Pharm. Co are also allowed to rip off the public buy holding patents and changing only the color-box-name and reselling it as a new remedy-patent starting a whole new campaign to increase profits and keep them out of the hands of other manufacturers.

The newest drugs are not available in generics.
With the main mode of treatment these days is medications. It is only fair to find a way to keep costs down.

The Pharm companies also say we Americans pay more for medications because we are so generous to other countries , especially with Aids medications.
Like we are going to feel such pride that we do not mind paying more!? The ones that can afford it can have pride.
It is a choice between food and medication not paying less or more for many people. Many who can afford some of their RX cut tablets in half and skip them which in some cases does themselves more harm. Some chose to take the cheapest ones whatever they happen to be.

Speaking of free market what happened to supply and demand? The medications most used by the seniors should definitely be cheaper, they fit the criteria.

*may not be done*

abbi, those things may not be needed in an ideal world, but they *are* needed for a company to survive in a free market situation. A pharmaceutical company that doesn't advertise isn't able to compete successfully with its competitors. And so doesn't make money, and so isn't able to develop new medications, and so loses investors, and eventually folds. The only pharmaceutical companies that survive in today's market are the one's that advertise, and do so very aggressively. Not just on TV, radio, and print, but also on the internet, and through advertising that's targeted specifically to patients and advertising targeted specifically to doctors.

the only way to eliminate those things is to add some degree of market controls. again, you can't have it both ways.

there are also a few things that you said that are blatantly inaccurate. such as: "The Pharm. Co are also allowed to rip off the public buy holding patents and changing only the color-box-name and reselling it as a new remedy-patent starting a whole new campaign to increase profits and keep them out of the hands of other manufacturers."

Um, no, this isn't true at all. A company can go to the FDA and get permission to market a drug for a new indication under a new name, although doing so requires extensive additional studies at the expense of the company. A prime example of this would be 'Sarafem', which is the version of 'Prozac' (or maybe another SSRI, I forget which) that is marketed for PMS. Doing so, however, does NOT extend the patent of the medication in the slightest, and so does absolutely nothing to keep the medication out of the hands of other manufacturers. The patent still ends exactly when it would have even without the relabeling.

Another thing a company can do is create a *new* medication that is related to the previous medication. In this case, they are legally required to start from scratch with safety and efficacy studies, submitting them all to the FDA for approval. Once this new medication is approved by the FDA, the new medication has an entirely new "patent clock", but it has *no* impact on the patent of the original medication, which still expires and still gives other companies the opportunity to make their own version. A prime example of this would be with Claritin and Claritinex. Just before the patent on Claritin expired, the company had Claritinex approved by the FDA. Claritinex is *not* the same medication -- their names are similar, but they're not the same drug. The new patent on Claritinex had absolutely no impact on the expiration of the Claritin patent -- it still expired, and you can find the medication that was in Claritin over the counter now, from all sorts of different companies (note, the fact that it's over the counter now is a totally different thing than the patent expiring, although it's not a coincindence that they happened at the same time).

"There are plenty of opportunities to advertise and educate Dr through journals, lectures and mail."

The pharmaceutical companies do this now. And it is exactly this kind of thing which eats up a large chunk of their advertising budget. They don't get to be in those medical journals for free, they don't get to hold the lectures for free. And the mailings cost money, but don't do any good, because the doctors toss them out without opening them.

"It is only fair to find a way to keep costs down." "The newest drugs are not available in generics."

Yes, but buying drugs from Canada *doesn't* keep costs down overall -- it just shoves the costs onto someone else -- your neighbor, most likely. Other methods, like market controls, actually result in keeping costs down. And market controls have nothing to do with requiring people to use generics, so that's not really the point.

"Speaking of free market what happened to supply and demand? The medications most used by the seniors should definitely be cheaper, they fit the criteria."

Ummm... The law of supply and demand has never said that things in most demand should be the cheapest. Actually, it's quite the opposite.

Yes but....I believe it took a change in law (recently)to change the practices of the patents. There was some company benefit to changing the name and the use for Paxil or they would not have done it. Why did they got to that expense? Profits? Patient benefit?

I think something could be done about the marketing practices and I realise that one change will not do it. I know it is complicated ,free market legal - but that does not make it right.

The supply and demand I definitely had wrong! OK then, the principle does nothing to explain the cost of the lesser used medications.

I still think TV adverts are too expensive to waste money on.
I understand the need to advertise.

"market controls have nothing to do with requiring people to use generics, so that's not really the point."

*I thought you offered that as a compromise point for prices.
My mistake.

If you'd like to explain, what do you mean by market controls?

There are totally different types of market controls that can be used.

For example, there used to be a law in the US against television commercials for prescription medications -- this artifically affected the market by preventing the companies from pumping up the demand for the product as high as humanly possible. Still, it's my idea of a good market control -- but, it's never something that any one drug company is going to opt to do on it's own. As expensive as drug commercials are, they make *far* more in extra profits as a result of the commercials than they would without them. But the market would be more "controlled" without this extra source of advertisement.

Another type of market control is allowing states to bargain directly with pharmaceutical companies. For example, there are at least 6 different inhaled steroids on the market that people can use for asthma. As it is, each insurance company generally bargains with the pharmaceutical companies, saying "We'll have our doctors pick your inhaled steroid over the others, but only if you give all of our patients a discounted price." And despite all the nasty things we hear about insurance companies, they really do take into account the fact that some of these inhaled steroids are safer or more effective than others -- after all, if they pick a poorer but cheaper drug, more of their patients would end up in the hospital down the line, which would be even more expensive for them!

Anyway, if entire states were bargaining with pharmaceutical companies for their state employee insurance programs (like what I'm on), the state's Medicaid population, and any other insurance programs contracted through the state, the bargaining power would potentially be lot larger than it is for many insurance companies. Especially because states could say, "Instead of bargaining for 2 inhaled steroids at a kind of low price, I'm going to bargain for 1 inhaled steroid at an extremely low price" -- the one company they choose to go with would have a huge incentive to drastically cut costs, as they would be offered a huge market without needing extra advertising. When insurance companies bargain, they have to make sure they still leave doctors lots of choices, or else they and the patients get angry, but the number of choices means the companies still have to advertise, etc.

So, anyway, say the state bargains for just that 1 inhaled steroid at that drastically reduced price. Now, the vast majority of people with asthma in the state would go for that medication -- for most people, which inhaled steroid you're on doesn't make that big of a difference. For someone like me, it makes a little difference, but if the cost difference was enough, I would probably put up with it to save money. For the people who can't use that inhaled steroid, they still have the option of getting one of the others, but they have to pay more. "More" than the people getting the contracted one, yes, but actually no more than they would without such a program in place. And possibly less, if other companies lower their prices at all in an attempt to compete better in the market.

But -- since the state has saved so much money on everyone else's prescriptions, they now have more money to do things like:

* lower premiums or copays
* help people who need extra things that aren't fully covered (like, amazingly enough, the more expensive inhaled steroid)

Insurance companies are already doing this on a small scale, but the country as a whole would save a lot more money if it was done on a larger scale.

Does this help any?

Yes that is helpful, thank-you for your patience in explaning how it works for your area.

I am not in one of the few states that have acted on these ideas.
Do you suppose it is just a matter of time for the rest of the states to follow? Most of the states are broke. The news is saying next week a whole lot of people are going to be surprised about their premiums going up.

What you described would be a fair way to make other medication options available IF all else was in place.

This is a bit too close to home for me to stay with for now.
I'd also like to discuss the other huge problem I see with these companies sometime. The studies......
Perhaps another time if you'd like?
I'd be interested in your views.

Oh, abbi, this isn't how it works in my area. Those were just examples of market controls that the government *could* theoretically put in place. Hasn't happened here, though.

It has happened in very few places, and in the states that have tried it, there have been huge lawsuits, with doctors and patients suing the state for trying to coerce patients to pick the cheaper medication.

A lot of states would like to follow suit, since their insurance programs really are broke -- but they also can't afford huge lawsuits, so they are waiting to see how the lawsuits in the first few states turn out before starting their own programs.

I'd be happy to talk with you about drug studies some time. I signed up to be a patient in another drug study this morning, actually. For a long while I was too sick to be allowed to participate, but now I'm 'normal' enough to be 'sick enough' to qualify, but not so sick that they're scared I would keel over dead during the study and so it would unethical to include me. For me, one of the best things about being in a drug study is that I get many of my medications for free as long as I'm in the study -- even though I have good insurance, this is still quite a nice relief on the budget, as I'm sure you well understand! Plus, they pay you at the end, and I've always been a fan of cash....


Mikey

They are good ideas for reform

Z did an ecellant entry on the basics of entering studies for those with no personal experiences.

I am an experienced research subject like yourself.
Good Luck in the study Mikey!

It's almost an ideal study for me to be on, really. The study is for a medication that's already FDA approved, that I've taken before, and that I did find helped me. But, it's an expensive medication, and not only can I not afford to take every pill that could conceivably benefit me, I am also too lazy to swallow them all! But, under this set up, I get to keep taking all of my regular medications, they will pay for most of my regular asthma medications, plus give me either this other one that's helped some in the past (but which I don't take now, being too cheap and lazy), or a placebo. And because I was always too cheap and lazy to take it every day, I never really got a good idea of how well it could theoretically work for me, so I think that makes me a good subject for their study -- they can learn something useful by how much the drug helps me.

I love it when it all works out so simply. Doesn't happen so often, but it's a happy thing when it does, isn't it?

http://www.medscape.com/viewarticle/462504
I am not sure if you have to joint to read this.

Great Mikey ,it is nice to hear a good win-win story!

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A31678-2003Jul22&notFound=true

This is interesting twist of a story.
What is that at the end of the link?(2003Jul22&notFound=true)