With prices like that, seems like insurance companies could arbitrage this by paying their patients to live on a beautiful resort island somewhere near India for the 3 month treatment course. You can afford to bring the patient to the pills instead of the other way 'round.
One of the biggest problems with the pharmaceutical/insurance hybrid system I experience is the inability to express choice.<p>My family has an insurance plan in which we pay a set premium cost monthly, and then for some set of health services our insurance promises covers (and thus reduce for us) some of the costs. I think most Americans are in a similar situation.<p>The insurance company is allowed to reject claims for some services. In particular, they frequently reject claims for drugs for which there is a cheaper "preferred" alternative.<p>To some extent, this seems reasonable and wise: if there's a cheaper, completely substitutable version of the drug, then let's use it.<p>The trouble is, things aren't nearly so simple. My grandmother has a strong preference for certain kinds of pain relief medication because some (let's call it Drug A) will knock her out effectively all day, and others (let's call it Drug B) let her function wonderfully and pain-free. However, Drug A is "preferred" to Drug B. As a result, the insurance refuses to cover it.<p>Every single incentive structure in this system is unproductive:<p>* My grandmother is left expressing her preference by voting with her dollars, out of pocket -- punishing her for expressing a preference. Because the price gap between Drug A and Drug B is inflated by the effect of the insurance company, this disincentive is so vicious that many people would be unable sustain this at all. Many consumers are effectively <i>unable to express preference</i> in the market because of the synthetically inflated price gap.<p>* The insurance company feels no pressure whatsoever to cover Drug B, even though the devastating side effects reported by my grandmother are extremely common. There's simply zero incentive for them to behave pro-consumer, <i>or even to bargain the price of Drug B down</i>.<p>* The drug manufactory feels reduced pressure to change the pricing of Drug B, because unless they drop it to <i>below</i> the price of their current high-seller Drug A, the insurance company will powerfully influence the market away from Drug B, despite the fact that it is in almost all cases superior to Drug A and no more difficult to manufacture.<p>By completely failing to align incentives to match good outcomes, we've ended up with a system that's pitted against its own progress. Hackers, can we construct a better market?
So why isn't someone smuggling bottles' worth back to the US until the price equilibriates? That's a pretty nice profit margin even for the illegal drug trade, and the US can't even reliably keep things like heroin from being readily shipped on a retail basis.
Pricing a medicine, like pricing any other product, will have its own complexities.<p>* You need to fix a price which would cover the cost of your research that went in (and also for unsuccessful researches that you write off for other ailments)
* You have idea about the scale of the ailment but little idea about market acceptance and reaction to your price.
* After market has accepted a price, even if it exceeds your predicted consumption by many fold, you have little incentive to change the price especially if insurance is paying for it.
* In a new market, because you have already recovered what went in to build the medicine, you can price it better.<p>In fact, insurance itself work very differently in US vs India. In India, in most cases your insurance won't pay for your medicines and medical expenses (diagnostics) if you don't end up hospitalized for at least a day. And that can govern how medicines are priced here because price has a direct implication on adoption.
There is no market for healthcare and medicines in the US. Its just an illusion.<p>US runs so much on the whims of the health insurance industry, that $1000 pill justifies a rich/middle class family's $1000 a month insurance premium.<p>Would the families/individuals pay the same expensive premium every month, if the pill was available for even $100 in US?<p>I pity the guy who jacked up the price of the pill in US, and got burned online. All he was doing, was to take a bigger chunk from the stinking rich health insurance companies, and providing the product in the US "Market".<p>I live in US and have spoken many Americans as to why they don't think of going to India for medical reasons. I was expecting some kind of a condescending / patronizing response about quality of service etc. Often, the response is that they have a "sunk cost of expensive monthly premiums", which gives them the illusion that getting treated in US costs lesser.<p>The blow of a $1000 pill is softened, to those who pay the expensive premiums.<p>As someone who moved from India to US, I can know market prices of individual tablets /medicines in India, but its way too difficult to know the "market rate" of medicines in US, unless you go by the rates shown by your health insurance company.
India is bigger than the US and Europe combined. I think we can even add in the US again. They are a rapidly developing economy with a strong educational system. Wouldn't we all benefit if the moved up from generics and created new medicines? More drugs, more competition, etc
India follows the "Sheep Herd" mentality.
The whole country's economy is based on people getting into "Profitable" domains mostly following the success of a pioneer in the field.
The most recent example of this ideology is the "Business Process Outsourcing" industry.
New BPO units are propping up here and there at a dime a dozen leading to a quality deterioration in the final deliverable.
This process will continue till a saturation level is reached and then they will wait till another "Killer" domain picks up momentum.
Till then India will be in a so called "Calm Period" where nothing great and major takes place.<p><a href="http://qz.com/519777/why-india-needs-a-new-constitution/" rel="nofollow">http://qz.com/519777/why-india-needs-a-new-constitution/</a>
I think making cheap drugs widely available is a way for China and India to improve their soft power in a way that the west can't really match. However, they first need to find a way to counteract the safety fear-mongering with regards to drugs produced outside of western countries.
> "From each according to his ability, to each according to his needs"<p>People that can pay more do, those that can't... don't?
Pricing comparison charts for 8 drugs in 14 countries:
<a href="http://www.bloomberg.com/graphics/2015-drug-prices/" rel="nofollow">http://www.bloomberg.com/graphics/2015-drug-prices/</a><p>US tops the list every time - even with discounts negotiated by insurers. The flipside to these exorbitant costs is the accessibility they bring.<p>It's easy to ignore the fact that US pricing arrangements motivate pharmaceutical companies to market more of these drugs. Keyword: market.<p>As sad as it feels to say this, a more socialist agenda wouldn't nurture as much drug commercialization - development perhaps, but not marketable products.<p>Australia's social healthcare, Medicare, is driving down the price of common "molecules" to negligible amounts.<p>These days, you can really sense apathy on the pharmas' part. Stock outages are frequent because there simply isn't a $ factor to make them care.<p>On top of being a geek, I'm a pharmacist business manager - knowing how drug pricing economics works is part of my job.
Well of course, I don't know why people find this surprising. You are not paying for the cost of manufacturing the single individual pill. You are paying for the cost of researching it and testing it, as well as a thousand other drugs that didn't make it to market.<p>If the US market didn't pay for these drugs, they wouldn't still be cheaper in India. They likely wouldn't exist at all.
Indian person here, in case what I'm about to write is offensive to anyone:<p>The difference is that the Indian companies are simply stealing intellectual property paid for by American taxpayers. These companies didn't spend years and billions of dollars going through the FDA maze to develop the drugs. They simply stepped in after all the hard work was done, to develop an alternative process for a proven drug.<p>That's right, India has "process" patents, not "product" patents, for pharmaceuticals. Look it up.