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I would disagree that many people are looking at this business plan with envy. CEO's of "real" pharma companies know this business model is possible, but no one

by bedhead 11y ago

I would disagree that many people are looking at this business plan with envy. CEO's of "real" pharma companies know this business model is possible, but no one bothers with it. I think this is partly out of ethical standards (yes, CEO's, even pharma CEO's, can possess this) and partly out of knowing the inevitable backlash makes it not worth it for the business and their personal reputation. Again, while KV isn't a perfect example, their brazenness ultimately bankrupted them, and most of the industry took note. So what you get is a process that only attracts extremely reckless and unethical people like Martin Shkreli, who unfortunately exist in this world. But there demonstrably are not 1,000 other guys trying to take Martin's place, he is an outlier.

drzaiusapelord 11y ago
Finding ways to make generics super-profitable is definitely common. Turing is, arguably, the ugliest of the bunch, but there's more than enough ugly to go around. Your mythical "honest and kindly pharma CEO who wants nothing but for everyone to have cheap drugs" doesn't exist. Its Shkreli's all the way down: http://billmoyers.com/2014/10/06/allow-big-pharma-rip-us/ http://billmoyers.com/2014/10/06/allow-big-pharma-rip-us/ Bill Moyers: For example, last February, before its patent expired on Namenda, its widely used drug to treat Alzheimer’s, Forest Laboratories announced it would stop selling the existing tablet form in favor of new extended-release capsules called Namenda XR. The capsules were just a reformulated version of the tablet. But even the minor change prevented pharmacists from substituting generic versions of the tablet. Result: Higher profits for Forest Labs and higher costs for you and me. Another technique is for drug companies to continue to aggressively advertise prescription brands long after their 20 year patents have expired, so patients ask their doctors for them. Many doctors will comply. America is one of few advanced nations that allow direct advertising of prescription drugs. A fourth tactic is for drug companies to pay the makers of generic drugs to delay their cheaper versions. These so-called “pay-for-delay” agreements generate big profits for both the proprietary manufacturers and the generics. But here again, you and I pay. The tactic costs us an estimated $3.5 billion a year. Europe doesn’t allow these sorts of payoffs, but they’re legal in the United States because the major drug makers and generics have fought off any legislative attempts to stop them.
- FireBeyond 11y ago
  "America is one of few advanced nations that allow direct advertising of prescription drugs." For one, read "the only". New Zealand was the only hold out (due to a trade agreement), but even there it's now been illegal for several years.
- dennisgorelik 11y ago
  > pay the makers of generic drugs to delay their cheaper versions Is it even legal? Sounds like monopoly-forming conspiracy to me.
- anigbrowl 11y ago
  America is one of few advanced nations that allow direct advertising of prescription drugs. To quote some comedian's take on this, 'in my country, your doctor tells you which drugs he wants to prescribe. In America, it's the other way around.' It's astonishing to me that direct-to-consumer pharmaceutical advertising is so rampant here, when somehow we managed to eliminate this for tobacco advertising without causing the 1st amendment to self-destruct. Besides the first-order consequences of medically ignorant consumers besieging their doctors with requests from drugs they can't even pronounce properly, it's also created this bizarre culture where illness is normative and every medical condition has to have a cute nickname or acronym - it can't be long before we start seeing people break up in soap operas because 'I love you...but my hep C isn't compatible with your A-fib!'
Lawtonfogle 11y ago
>I think this is partly out of ethical standards (yes, CEO's, even pharma CEO's, can possess this) Not buying it. I'll buy the fallout argument, as that will hurt them monetarily, but I'm not guying them have any moral or ethical concerns with those being hurt by high drug prices.
- rayiner 11y ago
  What's more ethically questionable: spending billions in capital developing drugs to save lives, and trying to make money off that, or spending billions of capital on endeavors like entertainment services that don't save lives at all?
  - Lawtonfogle 11y ago
    >spending billions in capital developing drugs to save lives Loaded question. This assumes they are doing it to save lives instead of doing it to make money. And doing it to make money, given the patent system, is the less ethical option when others would do it to save lives but are now forbidden to do such.
    - rayiner 11y ago
      Who cares why they're doing it--the point is that their money-making endeavors have the effect of saving lives, while other companies spend tons of capital on things that do not have the effect of saving lives. And who is out there willing to spend billions developing new drugs while giving them away for free? The patent system certainly isn't stopping those people.
      - toomuchtodo 11y ago
        > And who is out there willing to spend billions developing new drugs while giving them away for free? https://en.wikipedia.org/wiki/PATH_(global_health_organization) https://en.wikipedia.org/wiki/PATH_(global_health_organizati... http://www.gatesfoundation.org/ http://www.gatesfoundation.org/ > The patent system certainly isn't stopping those people. The patent system does prevent people from getting at lower costs. I continue to have hope for countries that invalidate drug patents, and for further methods to be developed to drive down the cost of drug production (so as to reduce the barrier to entry for drug production). If the patent system doesn't stop the non-profit development of drugs, then the breaking of patents and the pirating of patented drugs should in no way significantly dent pharmaceutical company profits, right?

by bedhead 11y ago

drzaiusapelord 11y ago

Finding ways to make generics super-profitable is definitely common. Turing is, arguably, the ugliest of the bunch, but there's more than enough ugly to go around. Your mythical "honest and kindly pharma CEO who wants nothing but for everyone to have cheap drugs" doesn't exist. Its Shkreli's all the way down: http://billmoyers.com/2014/10/06/allow-big-pharma-rip-us/ http://billmoyers.com/2014/10/06/allow-big-pharma-rip-us/ Bill Moyers: For example, last February, before its patent expired on Namenda, its widely used drug to treat Alzheimer’s, Forest Laboratories announced it would stop selling the existing tablet form in favor of new extended-release capsules called Namenda XR. The capsules were just a reformulated version of the tablet. But even the minor change prevented pharmacists from substituting generic versions of the tablet. Result: Higher profits for Forest Labs and higher costs for you and me. Another technique is for drug companies to continue to aggressively advertise prescription brands long after their 20 year patents have expired, so patients ask their doctors for them. Many doctors will comply. America is one of few advanced nations that allow direct advertising of prescription drugs. A fourth tactic is for drug companies to pay the makers of generic drugs to delay their cheaper versions. These so-called “pay-for-delay” agreements generate big profits for both the proprietary manufacturers and the generics. But here again, you and I pay. The tactic costs us an estimated $3.5 billion a year. Europe doesn’t allow these sorts of payoffs, but they’re legal in the United States because the major drug makers and generics have fought off any legislative attempts to stop them.

FireBeyond 11y ago
"America is one of few advanced nations that allow direct advertising of prescription drugs." For one, read "the only". New Zealand was the only hold out (due to a trade agreement), but even there it's now been illegal for several years.
dennisgorelik 11y ago
> pay the makers of generic drugs to delay their cheaper versions Is it even legal? Sounds like monopoly-forming conspiracy to me.
anigbrowl 11y ago
America is one of few advanced nations that allow direct advertising of prescription drugs. To quote some comedian's take on this, 'in my country, your doctor tells you which drugs he wants to prescribe. In America, it's the other way around.' It's astonishing to me that direct-to-consumer pharmaceutical advertising is so rampant here, when somehow we managed to eliminate this for tobacco advertising without causing the 1st amendment to self-destruct. Besides the first-order consequences of medically ignorant consumers besieging their doctors with requests from drugs they can't even pronounce properly, it's also created this bizarre culture where illness is normative and every medical condition has to have a cute nickname or acronym - it can't be long before we start seeing people break up in soap operas because 'I love you...but my hep C isn't compatible with your A-fib!'

Lawtonfogle 11y ago

>I think this is partly out of ethical standards (yes, CEO's, even pharma CEO's, can possess this) Not buying it. I'll buy the fallout argument, as that will hurt them monetarily, but I'm not guying them have any moral or ethical concerns with those being hurt by high drug prices.

rayiner 11y ago
What's more ethically questionable: spending billions in capital developing drugs to save lives, and trying to make money off that, or spending billions of capital on endeavors like entertainment services that don't save lives at all?
- Lawtonfogle 11y ago
  >spending billions in capital developing drugs to save lives Loaded question. This assumes they are doing it to save lives instead of doing it to make money. And doing it to make money, given the patent system, is the less ethical option when others would do it to save lives but are now forbidden to do such.
  - rayiner 11y ago
    Who cares why they're doing it--the point is that their money-making endeavors have the effect of saving lives, while other companies spend tons of capital on things that do not have the effect of saving lives. And who is out there willing to spend billions developing new drugs while giving them away for free? The patent system certainly isn't stopping those people.
    - toomuchtodo 11y ago
      > And who is out there willing to spend billions developing new drugs while giving them away for free? https://en.wikipedia.org/wiki/PATH_(global_health_organization) https://en.wikipedia.org/wiki/PATH_(global_health_organizati... http://www.gatesfoundation.org/ http://www.gatesfoundation.org/ > The patent system certainly isn't stopping those people. The patent system does prevent people from getting at lower costs. I continue to have hope for countries that invalidate drug patents, and for further methods to be developed to drive down the cost of drug production (so as to reduce the barrier to entry for drug production). If the patent system doesn't stop the non-profit development of drugs, then the breaking of patents and the pirating of patented drugs should in no way significantly dent pharmaceutical company profits, right?