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Home Publications Blogs Beat the Press When it Comes to Drugs the Washington Post Is So Protectionist It Can't Even Discuss Free Trade

When it Comes to Drugs the Washington Post Is So Protectionist It Can't Even Discuss Free Trade

Friday, 25 July 2014 05:48

The Washington Post gave us another front page moral hand wringer. A round of treatment of Sovaldi, a new and effective drug for treating Hepatitis C, costs $84,000. With three million people suffering from the disease that comes to $250 billion. Should insurers be required to pay the price? How about government programs like Medicaid?

Yes, that could be a real tough question, but for those not committed to using protectionism to maintain the drug industry's profits, the answer is simple: trade. Generic versions of Sovaldi are available in India for less than $1,000 a treatment. We can pay to send patients and their families to India and receive the treatment there (in modern facilities) and still save tens of thousands of dollars per patient. The question becomes much simpler if we are talking about something like $10,000 per patient rather than $84,000.

This would of course disrupt the system of supporting research with government-granted patent monopolies, but it is long past time we talked about more efficient ways of financing drug research, even if the drug companies do pay lots of money to advertise in the Washington Post.

Comments (13)Add Comment
Sovaldi Likely Saves Money Despite High Cost
written by Robert Salzberg, July 25, 2014 8:08
A quick search revealed research into what the available treatments for Hepatitis C cost per patient in 2013 before Sovaldi was introduced. As expected, Sovaldi's pricing matched prior treatment costs:

"The median cost per patient was $83,509. The researchers multiplied that by the reciprocal of the 44% sustained viral response (2.27), and arrived at $188,859 per response."

Because Solvandi, given in combination with other drugs, has a cure rate of around 90%, the cost per sustained viral response should be considerably less than $188,859. So Solvandi will save Medicaid, Medicare, and other health insurers money compared with what they paid before.

I'm not saying I agree with the pricing, I'm just saying the cost of Sovaldi will likely save the health care system money overall. Liver transplants cost around $600,000 so avoiding a liver transplant saves money and because Hep C will now have a much better treatment, a higher percentage of people who need liver transplants will now get them since Hep C needs will decline. So Sovaldi will also save lives if made widely available.

The glaring little noted issue is that Hep C affects a lot of poor people and paying for health care for poor people in America has become a political issue.

Hep C link, final answer
written by Robert Salzberg, July 25, 2014 8:23
I found another link that should work without a paywall. If not, you can search directly with the title:

Costs for Treating Hepatitis C Skyrocket

New Paul Ryan Anti-Poverty Program: Sovaldi is Still Worth It
written by Last Mover, July 25, 2014 9:25

The glaring little noted issue is that Hep C affects a lot of poor people and paying for health care for poor people in America has become a political issue.

This is obviously part of Paul Ryan's new anti-poverty program designed to shift costs to the states. It fits the meme.

Despite how high the latest cost of treatment is, it's always justified as long as it can be presented as lower than current/prior cost.

That's about as stupid as claiming each email message should cost (as a price) just below the cost of physical snail mail to send the same message by say, $.40 first class USPS.

Paul Ryan really wants to help the poor pay for Sovaldi doesn't he. First he will blame them for not avoiding dirty needles. Then he will blame the federal government for subsidizing purchase of Sovaldi. Then he will advocate states pay for it only in selected cases where the poor were proved not at fault.

But he will never, ever blame Sovaldi for using big government to extract a price tag of $84,000 from the poor or anyone else. After all it still costs less than before.
Costs Skyrocket? Incorrect
written by Larry Signor, July 25, 2014 9:42
Supporting the current drug development scheme is foolish but so is bad arithmetic. Multiplying a big number (84000) by another big number (3 million) tells us very little about the cost comparisons of Sovaldi and triple therapy, the current regimen of Hep C treatment. The price of Sovaldi is pure extortion (actual production costs for an $84,000.00 regimen are ~ $140.00), but the costs of all other Hep C treatments are equally abhorrent, with a marked difference in efficacy. There is no doubt that Dean is correct about financing drug development, but the good ship Sovaldi has left the harbor. Scalability is probably the most likely way the cost of treatment will decrease.

written by Bloix, July 25, 2014 11:08
John Avarosis (of Americablog) goes to France to stock up on his asthma medication. Given the difference in cost, the savings pay for the trip - he takes a "medical vacation" every year.

Yes, the drug industry needs reform!
written by Dave, July 25, 2014 11:29
Drug patents need to be eliminated just as patents on genomes need to be eliminated.

There's no good reason to allow monopoly rents on life-saving and food-producing technologies. The patent system is being abused.
written by PeonInChief, July 25, 2014 11:33
Even cheaper: contract with the Indian government to treat people in Cuba. The US pays India for the drug, while treatment is provided in Cuba free. India then gives a grant or other aid to Cuba for something, compensating Cuba for the cost of the treatment.
written by JDM, July 25, 2014 12:21
You could send the family to India first class air and put them up in a 5 star hotel.
How much of the research into this drug was paid for by public funds.
written by Umabird, July 25, 2014 3:10
How much of the research into this drug was paid for by public funds. Was research subsidized by public funding, infrastructure, etc.?
I'm going to throw up!
written by Dave, July 25, 2014 5:46
PK and BD, I barf on you!

Dean and Jared, you are the saviors of our economy. Keep doing it, please.

I wish I was strong enough to play along, but I'm not...
Russia, here we come!
written by Dave, July 25, 2014 6:02
We have to push Russia back at this point. We have to eliminate their military dominance over Ukraine. Now!

Why now and not then? Because they have gone too far. We have them every chance.

We have to take Ukraine into US and European hands, and that includes NATO and the European Union. This is when. Now.
Take out the MFs!
written by Dave, July 25, 2014 6:06
It is time to take out the mother fuckers!

Nuclear war be damned! Good vs. bad will win this time.

And take putin with. Truth be told, American russians HATE PUTIN!


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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.