5 ms·

The drugs might end up being cheaper, but there will be much less research for drugs (aka less drugs in the future). Greed is a good motivator.

by brixon 11y ago

afandian 11y ago
I'm not much familiar with the system in the US, but I got the impression that the state already subsidises a large amount of the research anyway?
- refurb 11y ago
  Big pharma/biotech spends about 2x what the NIH spends on research. And that doesn't include the tens of billions in biotech VC funding.
  - dhimes 11y ago
    Then what does it include?
    - dlss 11y ago
      Reinvested profits?
      - dhimes 11y ago
        The biotechs with which I am familiar are the early-stage research arm of the development chain. Kind of like acqui-hire startups for google. They live off of investments from vc and/or license deals for final product. My impression was vc was the bulk. But my view might be myoptic, so I was double-checking.
        refurb 11y ago
        You are correct. Biotech start-ups live off of VC funding and maybe some NIH funding if they are lucky. Most of them never bring a product to market, instead they are acquired by a big pharma/biotech who has the capital to bring the molecule through FDA approval. The last number I saw was $6B invested in 2014.[1] [1]https://www.pwc.com/us/en/technology/assets/pwc-life-sciences-money-tee-q4-2014.pdf https://www.pwc.com/us/en/technology/assets/pwc-life-science...
        dlss 11y ago
        Ahh, okay. What ends up happening with the drug companies which aren't acquired by larger firms (in your example Google) is they begin reinvesting profits in R&D and acquiring other companies. Eli Lilly, for example, spent ~$4.5 billion on R&D in FY 2014 (24% of their total revenue) - http://www.lilly.com/about/key-facts/Pages/key-facts.aspx http://www.lilly.com/about/key-facts/Pages/key-facts.aspx ... I'm not sure how big the VC deals were for 2014, but I feel like if you include Pfizer, Genentech, 3M, GSK, and then all the smaller ones big enough to be listed on https://en.wikipedia.org/wiki/List_of_pharmaceutical_companies https://en.wikipedia.org/wiki/List_of_pharmaceutical_compani..., VC funding will be maybe 2-5% of the total private pharma spend. This is actually a lot like what Intel, Nvidia, and Google do. Basically your revenue takes over where the VCs left off. If the VCs are doing their jobs correctly, reinvested profit R&D is in aggregate much higher than VC dollars... Intel spent $3 billion last year on R&D for example... https://ycharts.com/companies/INTC/r_and_d_expense https://ycharts.com/companies/INTC/r_and_d_expense
        dhimes 11y ago
        I feel like we are defining biotech differently. Pfizer I would classify as pharma- they bought the biotech Coley a few years back after Coley did some research into bladder stuff IIRC. Perhaps I am simply stating a tautology b/c of the narrow definition, but I'm on the same page with refurb.
        dlss 11y ago
        I think the point is actually general enough to include every industry: VCs give you enough money to pay people to do R&D / product design until you've got a good enough product that your profits pay for the R&D / product design. In some product industries, this happens by switching to creating a new product (so 3M, GE, etc), and in some this is an endless stream of updates to the existing product (Google, Apple, Intel, etc). This process can be short circuited by an acquisition, but of course the acquisition is ultimately paid for by past customer profits too. In the context of https://news.ycombinator.com/item?id=10251676 https://news.ycombinator.com/item?id=10251676 's assertion that "Drug creation needs to be nationalized, 100% tax funded all the way from researcher to trials to manufacture, and the drugs sold at cost thereafter" which was followed by brixton's reply that "The drugs might end up being cheaper, but there will be much less research for drugs" this remains a very important point: drug R&D folk aren't in it for the VC funding... they're in it for the profit margin. If you remove that light at the end of the tunnel, there are no startups, and the smartest of us go work for the Googles of this world. (Though FWIW I do think you, refurb, and I are all roughly on the same page if we limit our scope to startups.)
bildung 11y ago
> The drugs might end up being cheaper, but there will be much less research for drugs (aka less drugs in the future). Greed is a good motivator The article pointed out that the drug in question is over 60 years old. I doubt the original creators thought about profitability at a time frame where they are most probably dead anyway.
ZenoArrow 11y ago
Keeping voters in good health is a good motivator too.
- JulianMorrison 11y ago
  Hence the manufactured outrage at "socialism". The only way to make people consciously vote to stay poor and sick is to convince them that God, freedom and apple pie depend on supporting team blue rather than team red.
  - LordKano 11y ago
    That makes for a superficially witty slogan but look at inner cities. Poor people have been voting for Democrats for 50 years and they're still poor. Getting people out of poverty is a lot more complicated than which political party one supports.
    - JulianMorrison 11y ago
      Mayor does not trump congress, unsurprisingly.
      - LordKano 11y ago
        It depends on the issue at hand. A Mayor can put together a deal that will bring an employer(and all of the jobs that it brings along) to a municipality, congress doesn't do that. A Governor can influence the business climate of a state. There's a reason why manufacturing jobs are moving to southern states.
mrbig4545 11y ago
most drug research is done in university anyway, and in most countries government funded. big pharma does the part after that in order to get it to market. trials and tweaks etc
santialbo 11y ago
I have a feeling the motivated researcher is not the one getting the money. We just need to cut out the middleman.
jakobdabo 11y ago
The same greed makes the drug industry to develop drugs which treat the illness rather than cure it. Regular drug users are much better for them than one-time users.
- refurb 11y ago
  This is an absolutely ridiculous statement. Last year Gilead sold a drug that cures hepatitis C. Cures! The error in your thinking is that curing a patient results in less money than just chronically treating one. Not so!
  - fnordfnordfnord 11y ago
    >The error in your thinking is that curing a patient results in less money than just chronically treating one. Not so! Come again? Please explain how that works.
  - restalis 11y ago
    That is a very real statement, which I personally experienced, BTW. I had a health issue and my default option was to address to a private clinic which had good image and publicity. Their attention to clients was irreproachable, ("clients" instead of "patients" is intentional inhere,) but they were elusive when I asked them for estimates on time of treatment and money. This marked some red flags for me and I was in response elusive about my decision to start the treatment right away. I started to dig a little bit on patient's experience with the said clinic and found not-so-encouraging feedback (mixed with a lot of downplay and apologism). I then turned to public health care service. It was frustrating (as expected) but they weren't trying to lure me in some kind of "relationship" and were straight to the chase. Public health should not be left to business.
  - JulianMorrison 11y ago
    While I have no love for the incentive structure for drug companies, I agree that conspiracies about them deliberately prolonging sickness are nonsense. Imagine the kudos that would go to the researchers and the company that cured the common cold! And a pill for that would sell well enough to offset the losses from palliative lozenges, decongestants, etc. And it's not like they are short of other pills to sell.
JulianMorrison 11y ago
I actually don't agree at all. There is a big danger in the approach I gave, but it's political interference. If the god-botherers can be forced to keep their mitts off, I expect my way would create more basic research and more simple effective drugs. Greed motivates chasing the slight change that will let your company replace an ageing-out-of-patent drug with a freshly patented one, drugs for rich people, drugs aimed at insurance payers, and it de-motivates improving the basics.
- ant6n 11y ago
  Also preventing hair-loss, and prolonging erections. https://www.youtube.com/watch?v=GA0l1JXhLaI https://www.youtube.com/watch?v=GA0l1JXhLaI
pessimizer 11y ago
Greed is a good motivator to make up diseases, fake test results, and to use business tactics to jack up the price of ancient drugs by three or four orders of magnitude. I see those as an adverse outcomes, so I would prefer a different way of funding drug development. "The Benefits and Savings of Publicly-Funded Clinical Trials of Prescription Drugs" http://www.cepr.net/publications/reports/the-benefits-and-savings-of-publicly-funded-clinical-trials-of-prescription-drugs http://www.cepr.net/publications/reports/the-benefits-and-sa... "Patent Monopolies and the Costs of Mismarketing Drugs" http://www.cepr.net/publications/reports/patent-monopolies-and-the-costs-of-mismarketing-drugs http://www.cepr.net/publications/reports/patent-monopolies-a...
fnordfnordfnord 11y ago
I'm not going to hold my breath waiting for the likes of Martin Shkreli to use their profits to fund new drug R&D. Call me a cynic, but I just don't see that happening.
restalis 11y ago
"Greed is a good motivator." Greed in here can also be a cause for the tragedy of the commons, which is more serious than any opportunity progress! Because of the said greed the drugs reached agriculture having all kinds of unintended effects, the most serious of which being development of many drug-resistant pathogens.
cptskippy 11y ago
Unfortunately these greedy companies are sinking billions into erectile dysfunction drugs.

The drugs might end up being cheaper, but there will be much less research for drugs (aka less drugs in the future). Greed is a good motivator.

by brixon 11y ago

The drugs might end up being cheaper, but there will be much less research for drugs (aka less drugs in the future). Greed is a good motivator.

afandian 11y ago

I'm not much familiar with the system in the US, but I got the impression that the state already subsidises a large amount of the research anyway?

refurb 11y ago
Big pharma/biotech spends about 2x what the NIH spends on research. And that doesn't include the tens of billions in biotech VC funding.
- dhimes 11y ago
  Then what does it include?
  - dlss 11y ago
    Reinvested profits?
    - dhimes 11y ago
      The biotechs with which I am familiar are the early-stage research arm of the development chain. Kind of like acqui-hire startups for google. They live off of investments from vc and/or license deals for final product. My impression was vc was the bulk. But my view might be myoptic, so I was double-checking.
      - refurb 11y ago
        You are correct. Biotech start-ups live off of VC funding and maybe some NIH funding if they are lucky. Most of them never bring a product to market, instead they are acquired by a big pharma/biotech who has the capital to bring the molecule through FDA approval. The last number I saw was $6B invested in 2014.[1] [1]https://www.pwc.com/us/en/technology/assets/pwc-life-sciences-money-tee-q4-2014.pdf https://www.pwc.com/us/en/technology/assets/pwc-life-science...
      - dlss 11y ago
        Ahh, okay. What ends up happening with the drug companies which aren't acquired by larger firms (in your example Google) is they begin reinvesting profits in R&D and acquiring other companies. Eli Lilly, for example, spent ~$4.5 billion on R&D in FY 2014 (24% of their total revenue) - http://www.lilly.com/about/key-facts/Pages/key-facts.aspx http://www.lilly.com/about/key-facts/Pages/key-facts.aspx ... I'm not sure how big the VC deals were for 2014, but I feel like if you include Pfizer, Genentech, 3M, GSK, and then all the smaller ones big enough to be listed on https://en.wikipedia.org/wiki/List_of_pharmaceutical_companies https://en.wikipedia.org/wiki/List_of_pharmaceutical_compani..., VC funding will be maybe 2-5% of the total private pharma spend. This is actually a lot like what Intel, Nvidia, and Google do. Basically your revenue takes over where the VCs left off. If the VCs are doing their jobs correctly, reinvested profit R&D is in aggregate much higher than VC dollars... Intel spent $3 billion last year on R&D for example... https://ycharts.com/companies/INTC/r_and_d_expense https://ycharts.com/companies/INTC/r_and_d_expense
        dhimes 11y ago
        I feel like we are defining biotech differently. Pfizer I would classify as pharma- they bought the biotech Coley a few years back after Coley did some research into bladder stuff IIRC. Perhaps I am simply stating a tautology b/c of the narrow definition, but I'm on the same page with refurb.
        dlss 11y ago
        I think the point is actually general enough to include every industry: VCs give you enough money to pay people to do R&D / product design until you've got a good enough product that your profits pay for the R&D / product design. In some product industries, this happens by switching to creating a new product (so 3M, GE, etc), and in some this is an endless stream of updates to the existing product (Google, Apple, Intel, etc). This process can be short circuited by an acquisition, but of course the acquisition is ultimately paid for by past customer profits too. In the context of https://news.ycombinator.com/item?id=10251676 https://news.ycombinator.com/item?id=10251676 's assertion that "Drug creation needs to be nationalized, 100% tax funded all the way from researcher to trials to manufacture, and the drugs sold at cost thereafter" which was followed by brixton's reply that "The drugs might end up being cheaper, but there will be much less research for drugs" this remains a very important point: drug R&D folk aren't in it for the VC funding... they're in it for the profit margin. If you remove that light at the end of the tunnel, there are no startups, and the smartest of us go work for the Googles of this world. (Though FWIW I do think you, refurb, and I are all roughly on the same page if we limit our scope to startups.)

bildung 11y ago

> The drugs might end up being cheaper, but there will be much less research for drugs (aka less drugs in the future). Greed is a good motivator The article pointed out that the drug in question is over 60 years old. I doubt the original creators thought about profitability at a time frame where they are most probably dead anyway.

ZenoArrow 11y ago

Keeping voters in good health is a good motivator too.

JulianMorrison 11y ago
Hence the manufactured outrage at "socialism". The only way to make people consciously vote to stay poor and sick is to convince them that God, freedom and apple pie depend on supporting team blue rather than team red.
- LordKano 11y ago
  That makes for a superficially witty slogan but look at inner cities. Poor people have been voting for Democrats for 50 years and they're still poor. Getting people out of poverty is a lot more complicated than which political party one supports.
  - JulianMorrison 11y ago
    Mayor does not trump congress, unsurprisingly.
    - LordKano 11y ago
      It depends on the issue at hand. A Mayor can put together a deal that will bring an employer(and all of the jobs that it brings along) to a municipality, congress doesn't do that. A Governor can influence the business climate of a state. There's a reason why manufacturing jobs are moving to southern states.

mrbig4545 11y ago

most drug research is done in university anyway, and in most countries government funded. big pharma does the part after that in order to get it to market. trials and tweaks etc

santialbo 11y ago

I have a feeling the motivated researcher is not the one getting the money. We just need to cut out the middleman.

jakobdabo 11y ago

The same greed makes the drug industry to develop drugs which treat the illness rather than cure it. Regular drug users are much better for them than one-time users.

refurb 11y ago
This is an absolutely ridiculous statement. Last year Gilead sold a drug that cures hepatitis C. Cures! The error in your thinking is that curing a patient results in less money than just chronically treating one. Not so!
- fnordfnordfnord 11y ago
  >The error in your thinking is that curing a patient results in less money than just chronically treating one. Not so! Come again? Please explain how that works.
- restalis 11y ago
  That is a very real statement, which I personally experienced, BTW. I had a health issue and my default option was to address to a private clinic which had good image and publicity. Their attention to clients was irreproachable, ("clients" instead of "patients" is intentional inhere,) but they were elusive when I asked them for estimates on time of treatment and money. This marked some red flags for me and I was in response elusive about my decision to start the treatment right away. I started to dig a little bit on patient's experience with the said clinic and found not-so-encouraging feedback (mixed with a lot of downplay and apologism). I then turned to public health care service. It was frustrating (as expected) but they weren't trying to lure me in some kind of "relationship" and were straight to the chase. Public health should not be left to business.
- JulianMorrison 11y ago
  While I have no love for the incentive structure for drug companies, I agree that conspiracies about them deliberately prolonging sickness are nonsense. Imagine the kudos that would go to the researchers and the company that cured the common cold! And a pill for that would sell well enough to offset the losses from palliative lozenges, decongestants, etc. And it's not like they are short of other pills to sell.

JulianMorrison 11y ago

I actually don't agree at all. There is a big danger in the approach I gave, but it's political interference. If the god-botherers can be forced to keep their mitts off, I expect my way would create more basic research and more simple effective drugs. Greed motivates chasing the slight change that will let your company replace an ageing-out-of-patent drug with a freshly patented one, drugs for rich people, drugs aimed at insurance payers, and it de-motivates improving the basics.

ant6n 11y ago
Also preventing hair-loss, and prolonging erections. https://www.youtube.com/watch?v=GA0l1JXhLaI https://www.youtube.com/watch?v=GA0l1JXhLaI

pessimizer 11y ago

Greed is a good motivator to make up diseases, fake test results, and to use business tactics to jack up the price of ancient drugs by three or four orders of magnitude. I see those as an adverse outcomes, so I would prefer a different way of funding drug development. "The Benefits and Savings of Publicly-Funded Clinical Trials of Prescription Drugs" http://www.cepr.net/publications/reports/the-benefits-and-savings-of-publicly-funded-clinical-trials-of-prescription-drugs http://www.cepr.net/publications/reports/the-benefits-and-sa... "Patent Monopolies and the Costs of Mismarketing Drugs" http://www.cepr.net/publications/reports/patent-monopolies-and-the-costs-of-mismarketing-drugs http://www.cepr.net/publications/reports/patent-monopolies-a...

fnordfnordfnord 11y ago

I'm not going to hold my breath waiting for the likes of Martin Shkreli to use their profits to fund new drug R&D. Call me a cynic, but I just don't see that happening.

restalis 11y ago

"Greed is a good motivator." Greed in here can also be a cause for the tragedy of the commons, which is more serious than any opportunity progress! Because of the said greed the drugs reached agriculture having all kinds of unintended effects, the most serious of which being development of many drug-resistant pathogens.

cptskippy 11y ago

Unfortunately these greedy companies are sinking billions into erectile dysfunction drugs.