The Price of Remission(propublica.org)
propublica.org
The Price of Remission
https://www.propublica.org/article/revlimid-price-cancer-celgene-drugs-fda-multiple-myeloma
90 comments
Even that is still an obscene amount if money for something that cost 20p per pill.
The manufacturing cost of a 20p pill has literally nothing to do with its price.
Yes I know. And that is, in my opinion, a problem.
So people who figure out how to make 20p drugs and get them approved should make... 20p/dose. People who figure out how to target ads 1% more effectively should make billions, but people who cure diseases should do so at cost, less their R&D costs.
I'm trying to remember who it was who said you could sum all of economics up with the sentence "people respond to incentives."
I'm trying to remember who it was who said you could sum all of economics up with the sentence "people respond to incentives."
Was it Charlie Munger perhaps?
So $200/pill for something that costs them $0.25 to make. That's still obscene.
the way I'd look at is what's the return-on-capital for pharmaceuticals as a whole.
Generally I think (this is highly subjective and irrational, of course) that I'd be comfortable with a 10%-20% return-on-capital overall. Lower than that and I'd think that risky drugs couldn't get funding; higher and I'd think there's too much rent-seeking.
Perhaps some economists have studied what an optimal ROC might be for pharmaceuticals.
In any case, the gross margin per-pill doesn't really tell you anything about ROC. 99.875% is astounding, but what was invested to get to that point - including the drugs that never made it to market?
Generally I think (this is highly subjective and irrational, of course) that I'd be comfortable with a 10%-20% return-on-capital overall. Lower than that and I'd think that risky drugs couldn't get funding; higher and I'd think there's too much rent-seeking.
Perhaps some economists have studied what an optimal ROC might be for pharmaceuticals.
In any case, the gross margin per-pill doesn't really tell you anything about ROC. 99.875% is astounding, but what was invested to get to that point - including the drugs that never made it to market?
> Celgene said it spent $800 million to develop Revlimid and spent several hundred million more on additional trials to study the use of the drug in other cancers. Those combined figures represent about 2% to 3% of Revlimid sales through 2018.
These guys are making 300% ROI in annual revenue from their one-time investment into R&D. In order for that to be fair (in line with your 20% average ROI target), they would need to be testing 15 new drugs per year, and if all of the others had failed, then it would be fair to markup the one that succeeded by this amount. But according to the Wikipedia page, the company has investigated less than 10 drugs in their entire existence, much less 15 drugs per year.
These guys are making 300% ROI in annual revenue from their one-time investment into R&D. In order for that to be fair (in line with your 20% average ROI target), they would need to be testing 15 new drugs per year, and if all of the others had failed, then it would be fair to markup the one that succeeded by this amount. But according to the Wikipedia page, the company has investigated less than 10 drugs in their entire existence, much less 15 drugs per year.
Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites.
Are you thinking this through? It costs billions of dollars to bring a new drug to market --- before sales, admin, and marketing costs --- and most attempts to bring drugs to market fail. In the very best case for the public, the drugs are incredibly cheap to manufacture; that's an achievement for a pharma company. Do you see how the incentives work here?
> It costs billions of dollars to bring a new drug to market
Have you ever wondered why this is the case?
In the "Golden Age" of pharmaceutical development -- from roughly 1930 through 1962 -- it cost orders of magnitude less, adjusted for inflation, was much faster, and outcomes were no worse.
I'd argue that the new (post-1962) Phases II and III -- drug efficacy studies -- are wholly unnecessary and are indeed unethical.
First, because you can't even presume to gauge a drug's "efficacy" without huge and exorbitantly expensive trials -- and, even then, trials can be inconclusive.
Second, because the FDA selectively ignores efficacy data. See, e.g,. flibanserin and certain Alzheimer's drugs that have been approved recently. This was scandalous, but not nearly scandalous enough.
Third, the statistically sound way to find both rare harms and true-to-life benefits is to watch how a drug behaves in millions of real patients, not in a few thousand volunteers. Modern electronic-health-record feeds, claims databases, and wearable data streams let regulators run near-real-time Bayesian safety signals across populations that dwarf any Phase III cohort; the surveillance network that caught rofecoxib’s cardiovascular signal in 2004 had orders-of-magnitude more patient exposure than the approving trials, and today’s infrastructure is far denser.
It would literally be 10x faster, 100x cheaper, and 100x easier to grant conditional approval after Phase I and then run postmarketing surveillance. You'd better signal-to-noise on both efficacy and harm at a small fraction of the cost and time. It's downright perverse to outlaw early access to promising investigational drugs, forcing patients to wait 8-12 years, and then foot them with a multibillion-dollar bill for ritualized trials that are unnecessary -- for the same ends could have been attained in far better ways.
Have you ever wondered why this is the case?
In the "Golden Age" of pharmaceutical development -- from roughly 1930 through 1962 -- it cost orders of magnitude less, adjusted for inflation, was much faster, and outcomes were no worse.
I'd argue that the new (post-1962) Phases II and III -- drug efficacy studies -- are wholly unnecessary and are indeed unethical.
First, because you can't even presume to gauge a drug's "efficacy" without huge and exorbitantly expensive trials -- and, even then, trials can be inconclusive.
Second, because the FDA selectively ignores efficacy data. See, e.g,. flibanserin and certain Alzheimer's drugs that have been approved recently. This was scandalous, but not nearly scandalous enough.
Third, the statistically sound way to find both rare harms and true-to-life benefits is to watch how a drug behaves in millions of real patients, not in a few thousand volunteers. Modern electronic-health-record feeds, claims databases, and wearable data streams let regulators run near-real-time Bayesian safety signals across populations that dwarf any Phase III cohort; the surveillance network that caught rofecoxib’s cardiovascular signal in 2004 had orders-of-magnitude more patient exposure than the approving trials, and today’s infrastructure is far denser.
It would literally be 10x faster, 100x cheaper, and 100x easier to grant conditional approval after Phase I and then run postmarketing surveillance. You'd better signal-to-noise on both efficacy and harm at a small fraction of the cost and time. It's downright perverse to outlaw early access to promising investigational drugs, forcing patients to wait 8-12 years, and then foot them with a multibillion-dollar bill for ritualized trials that are unnecessary -- for the same ends could have been attained in far better ways.
You have an interesting argument here. It sounds like you're saying that once you've proven safety in Phase I trials, and you can skip to the large, post-market Phase IV studies to do the dose-finding and efficacy-proving that would traditionally be done in smaller Phase II and III trials. As long as the drug is not dangerous, which can be proven by the Phase I trial, there is no need for the masses to wait for slow Phase II/III trials because in the worst-case scenario, the drug is safe but not effective, which is an acceptable outcome. So far, I find this pretty convincing.
However, I would raise two objections.
1. Without a Phase III trial that proves effectiveness, payers do not have sufficient motivation to purchase a drug that may or may not work. One solution would be to have the producer of the drug offer the drug for free/cheap until it demonstrates effectiveness, but that becomes a lot more expensive when you have a larger cohort. This is admittedly an implementation detail that could be sorted out, but it's a very important detail that would have to be addressed for this plan to work in the real world. The bigger problem is:
2. The best way to prove that a drug works is a large, randomized controlled trial. Your proposal is definitely an improvement over current trials in terms of making them larger, which would help to improve statistical power (and also get potentially helpful drugs into the hands of patients, of course). However, without the "ritual" of a Phase III trial, you lose randomization and you lose the placebo control. These are big losses that make statistical interpretation of results very hard because they open up the door to many potential confounders. As you mentioned, Bayesian signals can try to control for some of these confounders, but you can never be confident that you've considered every possible variable, whereas randomized placebos can eliminate almost all confounders.
So ultimately, I think that Phase III effectiveness trials are necessary in order to prove effectiveness because the statistics with post-market Phase IV trials will never be as "clean" as an RCT. And if we were to delete Phase III trials and skip straight to Phase IV, we would never again be able to confidently say whether or not a drug works. Thus, the ethical cost of making patients wait a few years for the Phase III trials to finish is outweighed by the benefit of being able to say with confidence that the drug works for the rest of eternity.
However, I would raise two objections.
1. Without a Phase III trial that proves effectiveness, payers do not have sufficient motivation to purchase a drug that may or may not work. One solution would be to have the producer of the drug offer the drug for free/cheap until it demonstrates effectiveness, but that becomes a lot more expensive when you have a larger cohort. This is admittedly an implementation detail that could be sorted out, but it's a very important detail that would have to be addressed for this plan to work in the real world. The bigger problem is:
2. The best way to prove that a drug works is a large, randomized controlled trial. Your proposal is definitely an improvement over current trials in terms of making them larger, which would help to improve statistical power (and also get potentially helpful drugs into the hands of patients, of course). However, without the "ritual" of a Phase III trial, you lose randomization and you lose the placebo control. These are big losses that make statistical interpretation of results very hard because they open up the door to many potential confounders. As you mentioned, Bayesian signals can try to control for some of these confounders, but you can never be confident that you've considered every possible variable, whereas randomized placebos can eliminate almost all confounders.
So ultimately, I think that Phase III effectiveness trials are necessary in order to prove effectiveness because the statistics with post-market Phase IV trials will never be as "clean" as an RCT. And if we were to delete Phase III trials and skip straight to Phase IV, we would never again be able to confidently say whether or not a drug works. Thus, the ethical cost of making patients wait a few years for the Phase III trials to finish is outweighed by the benefit of being able to say with confidence that the drug works for the rest of eternity.
So as for #1: Payers were reportedly okay with paying for aducanumab, at something like $30k/year, which was approved by the FDA despite effectively zero efficacy in clinical trials.
And, besides, I think it stands to reason that if time-to-market and drug development costs are reduced, prices will inevitably drop, and there'll be more competition in the market.
Right now, small firms are effectively priced out of the pharmaceutical market. The typical business model is to develop something to preclinical/Phase I and pray for a buyer or "partner" -- a larger firm that specializes in regulatory compliance and has pockets deep enough for continued development.
As for #2:
What makes you think you need a placebo control? And have you considered that in certain otherwise-fatal diseases, a placebo control might be grossly unethical in and of itself?
There's no way to eliminate confounders, anyway. Even in clinical trials, patients aren't kept in bubbles. (Some of them might even drink grapefruit juice!)
The problem with "proving effectiveness" is that it's inordinately difficult (sometimes actually impossible) and the costs are borne by patients and society. "Golden Age" drugs like penicillin and corticosteroids, among many others, didn't need efficacy trials. Drugs don't really need them today. With enough data derived from patient populations, we can do much better -- faster, too, and more ethically.
And, besides, I think it stands to reason that if time-to-market and drug development costs are reduced, prices will inevitably drop, and there'll be more competition in the market.
Right now, small firms are effectively priced out of the pharmaceutical market. The typical business model is to develop something to preclinical/Phase I and pray for a buyer or "partner" -- a larger firm that specializes in regulatory compliance and has pockets deep enough for continued development.
As for #2:
What makes you think you need a placebo control? And have you considered that in certain otherwise-fatal diseases, a placebo control might be grossly unethical in and of itself?
There's no way to eliminate confounders, anyway. Even in clinical trials, patients aren't kept in bubbles. (Some of them might even drink grapefruit juice!)
The problem with "proving effectiveness" is that it's inordinately difficult (sometimes actually impossible) and the costs are borne by patients and society. "Golden Age" drugs like penicillin and corticosteroids, among many others, didn't need efficacy trials. Drugs don't really need them today. With enough data derived from patient populations, we can do much better -- faster, too, and more ethically.
Are you arguing this can't be achieved by the public sector too? Or that pharma companies don't make obscene margins?
Honest question, are there simulations about thirty of medicine if pharma margins were near zero ?
I'm arguing that the logic in the comment I responded to is dubious, for the reasons I gave.
You just gestured vaguely about it being expensive and "incentives". I would like to know why you believe the private sector is uniquely equipped to "bring drugs to the market" and why you think having middlemen is more efficient than not having them.
No, I simply pointed out that it costs billions to bring a drug to market --- before marketing --- and that you can't plausibly recoup those expenses for a cost-plus priced product. Do you have a response to that? I'm not interested in expanding the argument.
I don't think we need to recoup those expenses. Fund R&D with public money, once a drug is developed and tested it becomes a common good and should pay for itself with the gain of productivity obtained from a healthier population.
Again: I'm really not interested in litigating how drug production would function under an entirely different economic system, only in pointing out an issue with the logic you used in critiquing this system.
It's becoming increasingly difficult to understand what you're even arguing about. My original comment was:
> Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites.
If a company sells a pill for $100 that cost them $2 to manufacture, that's a 5000% markup. Indeed, they would need to recoup R&D expenditures, but I am arguing for a system where we don't need to, because R&D is paid for by the state, and we don't need to turn a profit once the product has been developed. Where's the logic flaw?
> Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites.
If a company sells a pill for $100 that cost them $2 to manufacture, that's a 5000% markup. Indeed, they would need to recoup R&D expenditures, but I am arguing for a system where we don't need to, because R&D is paid for by the state, and we don't need to turn a profit once the product has been developed. Where's the logic flaw?
No, it's obviously not a "5000%" markup, because the pharma company doesn't just pay its COGS.
My wife’s company developed a multiple myeloma immunotherapy that is for people that have had previous treatments of other drugs but then go into remission.
It works so well that their efficacy reports have caveats like “not enough patients that were treated have died yet” to provide meaningful statistics.
The drug was initially developed in china. They presented results at a conference in the USA but no one believed them other than a skeptical Pfizer who sent a big team to china to confirm the data. Pfizer soon invested billions into the company and drug to bring it to market.
The drug’s sales are on track to be $1 billion this year but the stock is heavily depressed because of the china connection.
It works so well that their efficacy reports have caveats like “not enough patients that were treated have died yet” to provide meaningful statistics.
The drug was initially developed in china. They presented results at a conference in the USA but no one believed them other than a skeptical Pfizer who sent a big team to china to confirm the data. Pfizer soon invested billions into the company and drug to bring it to market.
The drug’s sales are on track to be $1 billion this year but the stock is heavily depressed because of the china connection.
What kind of focus do biopharma companies put on their stock prices? If a company like the one you described had a great treatment option that could genuinely help people and was raking in money by the boatload, is that “enough” for them as a “winning” business strategy regardless of how outside investors might perceive it?
Biotech companies raise money by selling shares. That's they go public so early compared to any other sector. The more suppressed your share price is, the harder it is to raise the money you need to do research and clinical trials.
Selling $1B of drugs might no necessarily mean they have sufficient free cash flow to do the things they want to do.
Selling $1B of drugs might no necessarily mean they have sufficient free cash flow to do the things they want to do.
It leaves them vulnerable to takeover, for one. They have over $1B cash right now to pay for clinical trials in other markets as well as new indications but their valuation is about 5x that. Someone could leverage the $1B as part of a hostile takeover.
Any chance you could share what therapy this is or at least a hint?
Remember the time that Florida fought the federal government for access to socialized medicine?
https://www.flgov.com/eog/news/press/2024/florida-becomes-fi...
> "Today, the DeSantis administration received U.S. Food and Drug Administration (FDA) approval of its Canadian Prescription Drug Importation Program. The Agency for Health Care Administration (AHCA) submitted this first-of-its-kind plan to safely import cheaper drugs from Canada to the FDA nearly 37 months ago, and after filing a lawsuit against the FDA due to delays, has finally received approval. This approval will save Florida up to $180 million in the first year."
https://www.flgov.com/eog/news/press/2024/florida-becomes-fi...
> "Today, the DeSantis administration received U.S. Food and Drug Administration (FDA) approval of its Canadian Prescription Drug Importation Program. The Agency for Health Care Administration (AHCA) submitted this first-of-its-kind plan to safely import cheaper drugs from Canada to the FDA nearly 37 months ago, and after filing a lawsuit against the FDA due to delays, has finally received approval. This approval will save Florida up to $180 million in the first year."
Talk about irony! Ron hates trump, but is afraid to open his mouth too much. Now trump's tariffs might (who knows for sure, he can't seem to make up his mind.) make their cheaper drugs not so cheap.
Crazy how they managed to restrict the competing researchers from obtaining the drug.
How did they do that?
Why is the sale of a super expensive drug used exclusively to treat a super specific type of cancer even controlled in the first place? What is even the argument?
I couldn't think of any argument before. After reading, I can only think of "to restrict competition".
How did they do that?
Why is the sale of a super expensive drug used exclusively to treat a super specific type of cancer even controlled in the first place? What is even the argument?
I couldn't think of any argument before. After reading, I can only think of "to restrict competition".
The argument in essence is that only permitting pharmaceutical companies these outrageous profits will induce them to continue investing the likewise outrageous costs of new drug development now that all the low-hanging fruit like antibiotics, and sildenafil and other antihypertensives, has been picked. This extends (usually by implication) to trivial variations in molecular chemistry which have no functional effect on a medication but which are used to extend patent protections solely on the basis of a structural change - a practice also visible in the history of one family of drugs I have mentioned, and one which without some sort of justification might be taken for an example of a law's letter being abused to violate that same law's intent.
Look, I didn't say I buy it. But you asked for the basic argument advocates make in support of such practices, and here it is.
Look, I didn't say I buy it. But you asked for the basic argument advocates make in support of such practices, and here it is.
> This extends (usually by implication) to trivial variations in molecular chemistry which have no functional effect on a medication but which are used to extend patent protections solely on the basis of a structural change
How does that work? Does it extend patent protection on the original molecule? Or if not, what stops generic copies of the original version?
How does that work? Does it extend patent protection on the original molecule? Or if not, what stops generic copies of the original version?
It doesnt. A competitor can make generics of the original.
What is does is stagger coverage with version release so that you have coverage for latest and greatest version.
Generics are extremely common following patent exclusivity. By then, patients and doctors usually want the shiny new drug.
What is does is stagger coverage with version release so that you have coverage for latest and greatest version.
Generics are extremely common following patent exclusivity. By then, patients and doctors usually want the shiny new drug.
it's not a great argument since iirc half of pharmaceutical company spending is on marketing; far far outstripping r&d
That's part of it, but pharma is also a portfolio business, like VC or music; the winners have to pay for the losers.
(I don't know how much that matters in this case, where a tiny company lucked into a blockbuster and then used every lever in the system to protect their exclusivity).
(I don't know how much that matters in this case, where a tiny company lucked into a blockbuster and then used every lever in the system to protect their exclusivity).
Yeah, nobody serious is really arguing the winners shouldn't pay for the losers. How many times over, though?
I sort of don't care, as long as investor value isn't being protected abusively, by anticompetitive schemes with the patent system and exclusivity. We pay lots of money for all sorts of things, most of which don't actually matter to our lives; pharmaceuticals matter a great deal, and I'm OK with the idea that advancements are incentivized by a time-limited lane for nosebleed pricing.
(Pharmaceutical costs, all in, across the board, are a relatively small component of total health spending in the US. They're not why your health insurance is so expensive.)
This is mostly a story about anticompetitive abuses, so that question isn't super relevant to the story. I'm just answering the claim that invisible marketing/SG&A costs are why drugs cost so much. They also cost a lot because most drugs fail, sometimes after billions invested.
(Pharmaceutical costs, all in, across the board, are a relatively small component of total health spending in the US. They're not why your health insurance is so expensive.)
This is mostly a story about anticompetitive abuses, so that question isn't super relevant to the story. I'm just answering the claim that invisible marketing/SG&A costs are why drugs cost so much. They also cost a lot because most drugs fail, sometimes after billions invested.
well but the portfolio managers in this case could really do a much better job at picking hits. we wouldn't have 20 years of failing Alzheimer's drugs if pharma identified that the protein hypothesis was junk (which people were talking about in the aughts)
That's a really interesting point, yeah. Not that I'm really equipped to evaluate the technical arguments, but it's striking on reflection how absent from the discussion the question seems to be of how efficiently on average the funding to trial a given drug and indication is allocated. The governing assumption appears to be that the status quo is acceptably close to optimality.
And a lot of pharma research is based on publicly-funded research in the first place.
Sure, but that's a bit of a red herring. The largest expense in bringing a new prescription drug to market is the phase 3 clinical trial, which now costs on the order of $1B each. Those often fail, so it's a huge gamble. There is very little public funding for type of research.
And a drug like Revlimid makes its manufacturer tens to hundreds of billions; the "legacy" portfolio in which BMS classes it pulled in a cool $5.6b just in Q1 '25, of which Revlimid itself was about a sixth, or just under a billion - down by almost half year on year. See https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/do..., pp. 8-9.
It is as if VCs in the tech industry demanded the taxpayer guarantee them a healthy rate of profit, to a standard of health the VCs themselves are privileged to define. Indeed, as with Allred and the regional airlines, perhaps now we see whence Altman has cribbed his "innovation."
It is as if VCs in the tech industry demanded the taxpayer guarantee them a healthy rate of profit, to a standard of health the VCs themselves are privileged to define. Indeed, as with Allred and the regional airlines, perhaps now we see whence Altman has cribbed his "innovation."
I don't understand your point. Some drugs are enormously profitable. Others lose money. There are no taxpayer guarantees. Pharmaceutical companies on average don't generate higher shareholder returns than other industrial sectors. A few like K-V and Dendreon have even gone bankrupt.
One could make an argument that taxpayer subsidized health plans which include prescription drug coverage such as Medicare Part D or Medicaid should limit the prices they are willing to reimburse on a QALY basis. And Medicare has started a limited drug price negotiation program. But generally, voters have been unwilling to accept the trade-offs inherent in drug price controls.
https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price...
One could make an argument that taxpayer subsidized health plans which include prescription drug coverage such as Medicare Part D or Medicaid should limit the prices they are willing to reimburse on a QALY basis. And Medicare has started a limited drug price negotiation program. But generally, voters have been unwilling to accept the trade-offs inherent in drug price controls.
https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price...
My point is that if you want to provide support for the advocacy argument, you've quite a long way yet to go. A good place to start would be to pick any one claim you have made and attempt to substantiate it. Until then, I've nothing with which to attempt further to argue.
(If you want to do something else, I can't tell what it would be.)
(If you want to do something else, I can't tell what it would be.)
What advocacy argument? You're not making any sense and are just posting lazy, low-effort criticism. None of my claims require further substantiation, you can easily look up for yourself if you want to understand how the system works and the incentives involved.
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"How can we lower the cost of phase 3 clinical trials without allowing non-functional medication (scams) to proliferate" is very important. The point of a phase 3 trial is to prove that a medication treats what it claims to treat.
Phase 3 trials don’t cost $1B - they’re more on the order of $20M.
Sorry I should have been more specific. Average total cost to bring a new drug to market is on the order of $2B.
https://www.fiercebiotech.com/biotech/drug-development-cost-...
https://www.fiercebiotech.com/biotech/drug-development-cost-...
yes, that includes failures, which includes shit that a beginning grad student could tell you wouldn't work.
The NIH already creates grants for Phase 1 and Phase 2 trials. It's a bit insane that we don't also do phase 3 trials. Heck, even drug manufacturing is already done both by the DoD and the VA. It's crazy that we have a vision that private investment will somehow make things either cheaper, more affordable, or more available.
Big pharma is providing very little benefit and a lot of cost. We've seen their playbook with people like Martin Shkreli who'll buy up patents to existing drugs and jack up the price to make a quick buck. Do we really need that sort of "private investment"?
Big pharma is providing very little benefit and a lot of cost. We've seen their playbook with people like Martin Shkreli who'll buy up patents to existing drugs and jack up the price to make a quick buck. Do we really need that sort of "private investment"?
I don't think anyone is seriously making the argument that private investment in drug development is making things cheaper or more available. So that's a strawman argument.
The primary claim in support of the current system is that it encourages greater levels of innovation than would happen under a socialized central planning system where government bureaucrats allocate funding for all trials. We don't have any solid evidence about that one way or the other. But year after year, US pharma companies do consistently release more new drugs than any other countries on a per-capita basis. We don't want to wreck that just because of high prices on a few patent protected drugs. Let's take a longer view and consider possible second-order effects before making any drastic changes.
The primary claim in support of the current system is that it encourages greater levels of innovation than would happen under a socialized central planning system where government bureaucrats allocate funding for all trials. We don't have any solid evidence about that one way or the other. But year after year, US pharma companies do consistently release more new drugs than any other countries on a per-capita basis. We don't want to wreck that just because of high prices on a few patent protected drugs. Let's take a longer view and consider possible second-order effects before making any drastic changes.
"Number of new drugs released" doesn't feel like a good metric for pharma productivity to me.
An ideal metric would be "person-years of increased healthspan per dollar spent by the consumer," and I'd wager that's very low because the profit motive is to create drugs that treat symptoms (and are prescribed for life) rather than cure an illness.
An ideal metric would be "person-years of increased healthspan per dollar spent by the consumer," and I'd wager that's very low because the profit motive is to create drugs that treat symptoms (and are prescribed for life) rather than cure an illness.
Most countries do exactly that. determine how much they will pay for a drug based on person years of increased health span. The term you are looking for is quality adjusted life years (QALY). Many European countries will pay up to around €80,000, and sometimes more for cancer treatments. I think France will pay 300k or so for oncology.
Cures are hard. No companies are suppressing cures that would make them tens of billions of dollars out of long term self interest. You take the cash and move on to the next one (or not).
The time value of money means that profits more than 10 years or so into the future are essentially irrelevant compared to money today.
Cures are hard. No companies are suppressing cures that would make them tens of billions of dollars out of long term self interest. You take the cash and move on to the next one (or not).
The time value of money means that profits more than 10 years or so into the future are essentially irrelevant compared to money today.
I disagree. Curing and preventing disease brings in a pretty large paycheck for drug companies. Semaglutide is extremely effective and has made nordisk billions.
Curing cancers also will remain a particularly lucrative trade. Particularly because cancer is a million different diseases which everyone gets if they live long enough.
There is never just one person that gets a disease.
That said, it's definitely true that pharma will never spend research dollars to see if a disease can be treated with a generic drug. Universities and the NIH can and do.
Curing cancers also will remain a particularly lucrative trade. Particularly because cancer is a million different diseases which everyone gets if they live long enough.
There is never just one person that gets a disease.
That said, it's definitely true that pharma will never spend research dollars to see if a disease can be treated with a generic drug. Universities and the NIH can and do.
What does semaglutide cure? What outside the treatment period does it prevent?
> What does semaglutide cure?
Prediabetes and hypertension. Assuming long term dietary changes, outside of treatment those effects are pretty permanent.
> What outside the treatment period does it prevent?
Again, assuming dietary changes, it'll prevent type 2 diabetes and heart attacks.
Prediabetes and hypertension. Assuming long term dietary changes, outside of treatment those effects are pretty permanent.
> What outside the treatment period does it prevent?
Again, assuming dietary changes, it'll prevent type 2 diabetes and heart attacks.
It's indicated as a diabetes medication, but never mind, I'm not going to cavil about off-label use for obesity. What if the dietary changes are made alone?
throwanem(1)
> innovation than would happen under a socialized central planning system where government bureaucrats allocate funding for all trials.
What innovation? All the innovation with the current system happens outside the big pharma companies. They are merely swooping in at the final steps and manufacturing to benefit from the public investment.
The actual innovation is happening because of public social investment. Not because if private investment (at least in terms of medicine). Private investment here is simply leaching off of the public investment.
What innovation? All the innovation with the current system happens outside the big pharma companies. They are merely swooping in at the final steps and manufacturing to benefit from the public investment.
The actual innovation is happening because of public social investment. Not because if private investment (at least in terms of medicine). Private investment here is simply leaching off of the public investment.
You're ignoring second-order effects. While the big pharma companies do some original drug development themselves, they also commonly acquire start-ups which have promising drugs that aren't approved yet. This is tremendously risky because many of those drugs never get approved, or don't sell very well. Most of those start-ups would never have been founded in the first place if an acquisition wasn't possible.
If we want to have new a lot of new drugs every year that meet the FDA standard for being safe and effective then someone has to put in enormous capital investments. In theory I suppose we could raise taxes and socialize the whole system but so far I haven't seen any evidence that would be a net improvement. More likely just another opportunity for graft and corruption.
If we want to have new a lot of new drugs every year that meet the FDA standard for being safe and effective then someone has to put in enormous capital investments. In theory I suppose we could raise taxes and socialize the whole system but so far I haven't seen any evidence that would be a net improvement. More likely just another opportunity for graft and corruption.
That's not how drug research typically works. There aren't drug research start ups (at least, not a lot of legitimate ones) because developing and researching drugs is a capital intense process.
90% of the system is socialized. The remaining 10% is what pharma funds.
> I suppose we could raise taxes and socialize the whole system but so far I haven't seen any evidence that would be a net improvement.
The entire process is already experiencing the worst parts of what being fully socialized would bring. Everyone is paying for health insurance whose rates are partially set by the cost of the drugs to the general public. We also already pay taxes to develop these drugs via the NIH. Heck, part our taxes pay to manufacture these drugs via the DoD and the VA.
The main benefit of fully socializing these drugs is that it will be cheaper for everyone and we can bring more drugs to market. We don't have to pay advertising, executives, or shareholders for new drugs. We don't have to worry about these new drugs turning a profit.
The graft and corrupting in government is nearly entirely in the form of private contractors working for the government. It's how the current system works where the public funds a huge portion of the research while a few large companies rake in exhobitant fees.
And even worse, we have examples of vioxx, Dalton, and oxy where these companies knowingly push unsafe medicine to turn a profit. That simply doesn't happen with a fully social system as there's literally no benefit to anyone to keeping unsafe drugs around.
90% of the system is socialized. The remaining 10% is what pharma funds.
> I suppose we could raise taxes and socialize the whole system but so far I haven't seen any evidence that would be a net improvement.
The entire process is already experiencing the worst parts of what being fully socialized would bring. Everyone is paying for health insurance whose rates are partially set by the cost of the drugs to the general public. We also already pay taxes to develop these drugs via the NIH. Heck, part our taxes pay to manufacture these drugs via the DoD and the VA.
The main benefit of fully socializing these drugs is that it will be cheaper for everyone and we can bring more drugs to market. We don't have to pay advertising, executives, or shareholders for new drugs. We don't have to worry about these new drugs turning a profit.
The graft and corrupting in government is nearly entirely in the form of private contractors working for the government. It's how the current system works where the public funds a huge portion of the research while a few large companies rake in exhobitant fees.
And even worse, we have examples of vioxx, Dalton, and oxy where these companies knowingly push unsafe medicine to turn a profit. That simply doesn't happen with a fully social system as there's literally no benefit to anyone to keeping unsafe drugs around.
that number is not correct. you can get phase trials done in 100M ish. IIRC the 1B number is average cost, all three phases, including drug failures.
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2024 numbers -- Selling, General & Admin vs. R&D
Roche (Pharma Division): 7533 MCHF vs. 11096 MCHF
Novartis: 12566 MUSD vs. 10022 MUSD
Pfizer: 14730 MUSD vs. 10822 MUSD
Eli Lilly: 8594 MUSD vs. 10991 MUSD
AstraZeneca: 19977 MUSD vs. 13583 MUSD
Johnson & Johnson: 22869 MUSD vs. 17232 MUSD
The left side here contains more than just marketing, and already "far far outstripping" seems like a mischaracterization.
For comparison, the average R&D spend between these firms is bigger than the 2024 NSF budget (~9bn) and bigger than 1/4 of the 2024 NIH budget (~37bn).
Roche (Pharma Division): 7533 MCHF vs. 11096 MCHF
Novartis: 12566 MUSD vs. 10022 MUSD
Pfizer: 14730 MUSD vs. 10822 MUSD
Eli Lilly: 8594 MUSD vs. 10991 MUSD
AstraZeneca: 19977 MUSD vs. 13583 MUSD
Johnson & Johnson: 22869 MUSD vs. 17232 MUSD
The left side here contains more than just marketing, and already "far far outstripping" seems like a mischaracterization.
For comparison, the average R&D spend between these firms is bigger than the 2024 NSF budget (~9bn) and bigger than 1/4 of the 2024 NIH budget (~37bn).
Also worth considering that this only includes internal R&D, not R&D acquired through acquisition of smaller biotech firms (known as in process R&D). VC investment in biotech startups is, at least in part, built around the assumption that acquisition by a larger pharmaceutical company is a viable exit strategy. To take the example of Eli Lilly, I think they spent an additional 10-20% of their R&D budget on IPR&D in 2024, though this obviously can fluctuate more year to year. They acquired Morphic, which produces a pharmaceutical that treats IBS, and Scorpion Therapeutics, which produces a precision oncology treatment, this year and I'm guessing neither spent much on consumer sales.
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This is trickle down economics for healthcare. It is stupid. No, it is worse than that, it is evil.
Bayh-Dole legislation in the 1990s allowed universities to exclusively license researcher inventions to private parties. Hence:
> "Celgene had acquired the rights to thalidomide patents held by researchers at Rockefeller University in 1992."
Change Bayh-Dole law to non-exclusive licensing, but with some level of royalties paid to institution that originated the patent, and other corporations could have made the drug - and it would be a competitive market, so costs would drop due to lack of a monopoly on the drug.
This one simple change to Bayh-Dole - 'non-exclusive' - would upset the academic-corporate apple cart well beyond pharmaceuticals. Eg the PageRank algorithm created at Stanford could not have been exclusive licensed to Google - any American corporation or person could have applied for a license to the invention, entirely erasing the benefits of a monopolistic patent to the corporation.
One great benefit of this change is that corporations who wanted exclusive patents would have to finance their own private R & D divisions, instead of just capturing the output of taxpayer-financed researchers.
> "Celgene had acquired the rights to thalidomide patents held by researchers at Rockefeller University in 1992."
Change Bayh-Dole law to non-exclusive licensing, but with some level of royalties paid to institution that originated the patent, and other corporations could have made the drug - and it would be a competitive market, so costs would drop due to lack of a monopoly on the drug.
This one simple change to Bayh-Dole - 'non-exclusive' - would upset the academic-corporate apple cart well beyond pharmaceuticals. Eg the PageRank algorithm created at Stanford could not have been exclusive licensed to Google - any American corporation or person could have applied for a license to the invention, entirely erasing the benefits of a monopolistic patent to the corporation.
One great benefit of this change is that corporations who wanted exclusive patents would have to finance their own private R & D divisions, instead of just capturing the output of taxpayer-financed researchers.
There is some light at the end of the tunnel. I suppose the patent runs out early next year, as the drug was released in 2005 and the generic which is already available but volume limited also has that volume limitation until January 31, 2026. The press release formulates this as if Celgene did this out of graciousness but I suppose it's just that the government granted monopoly ends.
https://web.archive.org/web/20220811173542/https://ir.celgen...
> Celgene has agreed to provide Alvogen with a license to Celgene’s patents required to manufacture and sell an unlimited quantity of generic lenalidomide in the United States beginning no earlier than January 31, 2026.
https://web.archive.org/web/20220811173542/https://ir.celgen...
> Celgene has agreed to provide Alvogen with a license to Celgene’s patents required to manufacture and sell an unlimited quantity of generic lenalidomide in the United States beginning no earlier than January 31, 2026.
> But Revlimid is also, I soon learned, extraordinarily expensive, costing nearly $1,000 for each daily pill. (Although, I later discovered, a capsule costs just 25 cents to make.)
That daily pill is 25mg. You can buy 5g of Revlimid's active ingredient for $352.
> https://www.sigmaaldrich.com/US/en/product/aldrich/901558
200 doses at less than $2/ea.
If you want to get adventurous, you can probably buy 1kg from China or India for $900. Find a university or commercial lab with HPLC and LC/MS and run your own QC for a few hundred bucks. Store the powder in a vacuum-sealed container in a refrigerator. You're set for life.
I've done this sort of thing before, and a lot of people are doing it for GLP agonist drugs. (To say nothing of sports doping, nootropics, etc.)
Sometimes you've gotta take matters into your own hands.
That daily pill is 25mg. You can buy 5g of Revlimid's active ingredient for $352.
> https://www.sigmaaldrich.com/US/en/product/aldrich/901558
200 doses at less than $2/ea.
If you want to get adventurous, you can probably buy 1kg from China or India for $900. Find a university or commercial lab with HPLC and LC/MS and run your own QC for a few hundred bucks. Store the powder in a vacuum-sealed container in a refrigerator. You're set for life.
I've done this sort of thing before, and a lot of people are doing it for GLP agonist drugs. (To say nothing of sports doping, nootropics, etc.)
Sometimes you've gotta take matters into your own hands.
We agree that, while it's nice this is an OPTION, it's a crazy state of affairs, right? I'm tired of the phrase "free market" since it isn't really either of those words.
No one would take the drug for this condition unless the company spent years and a billion dollars proving to the FDA that it was sufficiently safe and effective. It's hard for me to get my mind around the controversy here.
It makes me wonder, is there a way to get this drug from a Chinese or Indian lab? I'm sure there are severe legal repercussions, but purely theoretically. It reminds me of the film The Dallas Buyers' Club
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Yes, it's readily available to buy online from India for <$1/pill.
In practice there aren't legal repercussions. If you import scheduled drugs (adderall, opioids, etc.) and get caught that's obviously going to be a big issue. But with most prescription medications, the worst case scenario is that Customs will just toss your package. And the likelihood of that is low; the majority of the time it makes it through undetected.
I've done this in the past with another drug. In the US it was $30/month but from India I got 1000 pills for $30 + $40 expedited shipping. For me the big factor wasn't cost, but rather the convenience of not needing to go through the process of getting a prescription.
In practice there aren't legal repercussions. If you import scheduled drugs (adderall, opioids, etc.) and get caught that's obviously going to be a big issue. But with most prescription medications, the worst case scenario is that Customs will just toss your package. And the likelihood of that is low; the majority of the time it makes it through undetected.
I've done this in the past with another drug. In the US it was $30/month but from India I got 1000 pills for $30 + $40 expedited shipping. For me the big factor wasn't cost, but rather the convenience of not needing to go through the process of getting a prescription.
How do you know you're actually getting what you bought?
At least in theory, you can take a random sample of those 1000 pills to your friendly neighborhood chemist, and slip them a $20 to run them through e.g. a mass spectrometer or something to ensure they actually have the goods. And maybe also to ensure they don't have any bands you might be concerned about.
Thanks to the bargaining power of my nationalised healthcare, my government pays around 1/5th of that, and I'll pay nothing myself.
Revlamid is listed under it's generic name Lenalidomide, price is in pence: https://www.drugtariff.nhsbsa.nhs.uk/#/00791628-DD/DD0079145...