Why have we decided the fair price of the drug is based on ICER analysis rather than something like below?
Cost of devel/# of courses over patent life + manuf cost + reasonable profit +/- time value of money
@VPrasadMDMPH @drjohnm @AnkurFactorialhttps://twitter.com/CMichaelGibson/status/1257381129751007233 …
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Replying to @venkmurthy @VPrasadMDMPH and
Can I just say that having an economic institute with the term ICER talking about cost-efficacy is extraordinarily confusing Also, because of capitalism I would assume. They charge what the market will bear
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Replying to @GidMK @VPrasadMDMPH and
Actually, drug pricing seems to be driven in large part by anti-competitive forces like patents and high regulatory barriers. In many cases they are necessary, but hard to say they are market driven.
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Replying to @venkmurthy @VPrasadMDMPH and
I was being a bit glib
That being said, the only people it really serves if the pricing mechanics become less opaque is the patients, so I suspect the prices won't come down significantly unless the US govt takes action1 reply 0 retweets 1 like -
Replying to @GidMK @venkmurthy and
The fact that drug companies can operate across most of the world very profitably with drugs a fraction of the cost of the US suggests that high prices are not a necessary precondition for the market to exist, no matter what the companies loudly proclaim
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Replying to @GidMK @VPrasadMDMPH and
I'm not sure I would take it that far.
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Replying to @venkmurthy @GidMK and
Marginal costs can be lower after fixed costs are paid for. Question is whether US should be responsible for such a large share of fixed costs and whether the QALY approach helps us get a better deal or just feel better about bearing a big chunk than everyone else?
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But many of the fixed costs are not to do with ~development~, they are to do with licensing (regulatory bodies etc) and that often requires similar expenditure by country. Regulatory burdens in Australia are quite high, but somehow our drugs are still <1/2 the price!
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Replying to @GidMK @venkmurthy and
us subsidizing R&D for the world...good for rest of world, rough for the US consumers unfortunately. Partly a pharma talking point, but a large grain of truth in it that US markets $ is what allows / incentivizes a good portion of drug development
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