from Hacker News

McKinsey taught Big Pharma how to price-gouge

by bing_dai on 11/28/21, 7:47 PM with 41 comments

• by 1cvmask on 11/28/21, 8:38 PM

  This is completely evading the truth. Big pharma is protected by legislation. There are restrictions to importing medicine from other countries. There is even legislation preventing the world's biggest buyer (the US government) of drugs from negotiating prices downwards:

  When Medicare Part D was passed in 2003, lawmakers included the “non-interference clause,” which essentially prevents the federal government from stepping in to negotiate prescription drug prices.

  https://www.alec.org/article/should-the-government-negotiate...

• by ab_testing on 11/28/21, 8:53 PM

  This sounds like a blame shifting article. Sure McKinsey as a consulting company would advise its clients on how to do something / anything while staying within legal fringes.

  But it was the pharmacy companies that wanted to price gouge while avoiding any kind of scrutiny . So they roped in McKinsey for how to best do that without attracting any kind of government attention and McKinsey advised them on that.

  The author blames McKinsey for gaming the system . But what is the system - it is just a list of laws and regulations written by Congress . If Congress finds any kind of gamification-it should change the laws accordingly.

  The biggest reason for higher prices for drugs for Medicare was the prescription drug bill passed under the Bush administration that prevented the government from using its buying power to negotiate prices. I understand that affects only Medicare patients but that became the springboard for other opportunistic pricing employed by all drug companies.

  Also the age old practice of buying the patents of an old drug and hiking the price by 10000% or more ( as employed by Daraprim (Martin Shakreli) or numerous other companies )was not Mckinsey’s brainchild but rather the demand from the drug companies that McKinsey helped to materialize.

• by Emigre_ on 11/28/21, 8:33 PM

  I worked as a contractor some time ago in a project that, I did not know it, but was managed by contractors from McKinsey. It was an awful experience and I left as soon as I could. They gave me the worst of impressions. A mixture of arrogance and incompetence. Strong command and control. Obviously this is just an individual’s point of view… just my personal experience… who knows.

• by pembrook on 11/28/21, 9:34 PM

  The premise of this article is quite funny, the idea that Big Pharma wouldn't care so much about profit optimizing if it weren't for those evil jr. consultants!

  It seems McKinsey's chief value proposition of providing executives and governments cover for politically unpopular decisions (both internally or externally)...is in fact accurate.

  Amazing how this narrative manages to shift blame off of the government who created these bizarre incentives and the executives who run the damn drug companies and responded to those incentives.

  Somehow our joke of a healthcare system is now the fault of 24-year-old powerpoint jockeys and their theatrically fake-analytical powerpoint graphs.

• by m_ke on 11/28/21, 8:53 PM

  Speaking of consulting firms, I just recently came across this from deloitte https://www2.deloitte.com/us/en/insights/industry/health-car...

• by ectopod on 11/28/21, 8:50 PM

  Medium won't let me read it. Alternative link:

  https://pluralistic.net/2021/11/25/strikesgiving/#cool-story...

• by radicalbyte on 11/28/21, 8:37 PM

  My first-hand experience of them - clueless muppets - but luckily they were quickly replaced by a team of actual experts.

  They are masters of playing the one-eyed man in the proverb "in the land of the blind, the one-eyed man is king".

• by throwawayboise on 11/28/21, 9:09 PM

  This is part of why I avoid doctors and prescription medication whenever possible. They are not motivated to get me healthy, they are motivated to keep me coming back for more.

• by armagon on 11/28/21, 8:52 PM

  > The problem with [the plan of changing the formulas of drugs so they can be re-patented, from the patent-holder's perspective] is that a reformulation doesn’t stop the old drug’s patent from expiring, opening the market for cheap generics. To head this threat off, McKinsey developed a disinformation campaign to discourage doctors from prescribing generics and to convince patients to refuse such prescriptions. The McKinsey campaign included outright lies — false statements claiming that the old formulations were unsafe. Alongside those lies, McKinsey developed messaging to convince patients and docs that the old drugs were “a step backwards.”"

  Great explanation of Merck disclaiming Ivermectin (see https://www.merck.com/news/merck-statement-on-ivermectin-use... ) despite the drug being safer than Tylenol when used by humans ( https://www.thedesertreview.com/opinion/columnists/the-great... )

  Edit: They specifically called out "A concerning lack of safety data in the majority of studies" and spread FUD saying "Ivermectin should not be used during pregnancy since safety in pregnancy has not been established."