10 ms·

Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. It seems to make people angry that greedy

Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. It seems to make people angry that greedy folks make money by saving lives, but lets remember that one likely alternative to this is greedy folks don't make money by not saving lives. Putting my investor hat on, I generally believe that making rich people pretty is a far less risky investment than making sympathetic sick people healthy - I won't become public enemy #1 by charging a fortune for Botox 2.0. (None of this is meant as commentary on the specifics of this guy - the media has decided he's a villain, prosecutors can boost their career by targeting him, and I have no way to determine the truth of the matter.)

vdaniuk 11y ago
>Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones Citation needed. Extremely needed. Counter-anecdote: https://en.wikipedia.org/wiki/Jonas_Salk https://en.wikipedia.org/wiki/Jonas_Salk edit: wording
- Malarkey73 11y ago
  If you can make exploitative profits from old drugs why risk your money making new ones?
  - deleted 11y ago
    [deleted]
- mhb 11y ago
  vdaniuk wrote and then deleted: "'Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones' Citation needed. Extremely needed. Counterfact: https://en.wikipedia.org/wiki/Jonas_Salk" https://en.wikipedia.org/wiki/Jonas_Salk" Here: http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3.... NB: the higher the price, the higher the quantity supplied
  - bmelton 11y ago
    Not sure why you're seeing it as deleted. It was edited s/counterfact/counter-anecdote/ https://news.ycombinator.com/item?id=10751262 https://news.ycombinator.com/item?id=10751262
- yummyfajitas 11y ago
  Are you saying I'm wrong, and that that pharma companies and others will donate hundreds of billions of dollars to drug development purely out of altruism? Or are you simply claiming that a small number of examples exist, therefore my claim doesn't follow as a hard and fast rule but merely as a trend?
  - jacquesm 11y ago
    It's not exactly a fine line between altruism and price gouging, there is a huge scala of options in between. I find your comments in this thread hard to rhyme with your recent post about medical tourism. After all, if not for generics and your ability to move temporarily to a country where medical care is affordable you'd be out a very large amount of money over and beyond what you paid for your treatment. Clearly - for you - medication and care where you live is too expensive and you too would have benefited from more affordable medication and care.
    - yummyfajitas 11y ago
      I'm not sure why you find my comments hard to rhyme. In this thread I'm claiming that if you make it harder to make a profit off lifesaving drugs, people will probably invest their money elsewhere and produce fewer such drugs. Reduced demand (or price ceilings) lower quantity produced. In the other thread I claimed that if you consider alternate sellers of medical labor, you can get a lower price. Increased supply lowers price and increases quantity provided. Both of these claims are just classic Econ 101. If medical tourism was not an option for me I'd have paid full price in the US and considered myself extremely lucky to have the option to trade money for the ability to do sex positions besides "girl on top, me not moving". I hardly think I'm alone - how many people would be willing to give up all medical procedures invented since 1970 in return for lower prices?
      - jacquesm 11y ago
        But the problem lies in the fact that for 'medical tourism' to be an option at all you first have to achieve a certain amount of wealth and your social situation has to be one where you can just pack-up-and-leave for an x amount of time without your life ending up in disarray upon your return. For many people these are not options because of money in the first place so they would not be able to pay the full price in the US to begin with. It's just another wealth-begets-more-wealth story, your jump off point is already one of considerable privilege, one that relatively few people in the US have.
- throwawaykf05 11y ago
  You mean "counter-anecdote"?
Malarkey73 11y ago
Lets not forget too that Martin Shkreli took no risk inventing this drug. He bought a monopoly - a necessary lifesaving drug with no alternative - and jacked up the price by thousands. Either a free market fundamentalist (ie no explotative patents) or a dyed in the wool regulator should be able to agree this is not how the market should work.
- rayiner 11y ago
  Daraprim is out of patent. He didn't buy a monopoly right, he just bought a drug that nobody else thought was worth making. Anyway, the distinction between inventing the drug and buying the patent is an artificial one. If you're going to allow creating monopoly rights--and that you can debate--then making the rights tradable will make the market more efficient. With drugs in particular, acquisition of promising drug candidates is a major input to the pipeline at the big drug companies. It enables separation of concerns: small startups to develop the drugs and big experienced companies to bring them to market. Creating an artificial distinction between inventors and acquirers precludes that efficient division of labor.
  - austinjp 11y ago
    Genuinely curious... does the world actually work like this? I strongly suspect not.
    - rayiner 11y ago
      Yes, it does. For example, the recent Hep-C breakthrough drug was created by Pharmasset, Inc. Pharmasset was founded by the inventors of the drug--two professors at Emory University. It was purchased by Gilead, who commercialized it.
    - simon_ 11y ago
      It does. Big pharma constantly acquires research-focused junior companies to input into its pipeline for regulatory approval / commercialization.
    - twoodfin 11y ago
littletimmy 11y ago
Why can't we have the government fund pharmaceutical research?
- EliRivers 11y ago
  To an enormous extent they already do. http://www.slate.com/articles/business/the_customer/2011/03/the_makebelieve_billion.html http://www.slate.com/articles/business/the_customer/2011/03/...
  - bshanks 11y ago
    In any case, the government would have to increase funding by some amount in order to fund 100% of the costs of bringing drugs to market, including all clinical trials, so as to remove the need for any private investment. If the study cited by the Slate article is correct, then this proposed increase would not have to be as large as some people expect. My person approach when evaluating the cost of proposals for the government to do something new, however, is to be pessimistic and lean towards the larger cost estimates.
- lentil_soup 11y ago
  Don't know why you're getting down voted, it seems like the best way to go about it. Share the cost of this research among all of us, just like we (in some countries) do with education, healthcare, police, etc.
  - pjc50 11y ago
    He's getting downvoted because, as the adjacent wall-of-text reminds us, there are only two countries in the world: the US and the USSR. Since they have diametrically opposed ways of doing things, any change to the US system would instantly turn it into the USSR. /s
- briandear 11y ago
  TLDR; No. See Soviet Union. Why should it? The free market is the most powerful incentive there is. Government control of the pharmaceutical industry has been tried before, in the Soviet Union and it was a mess. Here's an excerpt from Michael Binyon's "Life in Russia" (1983) "How often are foreigners asked by Russian friends to bring back drugs for sick relatives, and how often does the press complain that cheap, effective Soviet drugs are simply unobtainable! Take the case of a researcher who discovered an efficient drug to stimulate growth and spent fifteen years trying to get it on the market. In spite of repeated clinical tests, scientific endorsement and an urgent demand from people with deficiencies in growth hormones, the drug was unavailable. Instead manufacturers were producing a less effective foreign product which first came on the market twenty-two years ago. What is on sale in the shops or in special kiosks is so outdated or so general in its effects that few people buy the product. Packets of good pills are so valuable that they are sold at special foreign currency counters in tourist hotels. Doctors issue prescriptions even if the hospitals have no supplies, leaving it to hapless patients to use their wits in trying to get hold of what they need. There are plenty of stories of dentists working without adequate supplies of anaesthetic, of polyclinics unable to supply a full course of treatment, of chronically sick people living from month to month, never sure whether their prescriptions can be renewed. The drug industry suffers from none of the failings its Western counterpart is accused of: there is no risk of profit-taking at the expense of safety, no aggressive marketing of unnecessary drugs, no costly duplication of research laboratories. Instead, research, development, testing, approval, manufacture and promotion are organized as a public service. But the links between each stage are so weak that the time lag between research and retailing may be up to seven years. Responsibility for pharmaceuticals is divided between the Ministry of Health and the Ministry of Medication Industry. Everything used to come under a subdivision of the Ministry of Health, but because of poor results a separate ministry was created in 1967. The Health Ministry is still responsible for resarch, testing and licensing of new drugs. The new ministry deals with production and quality control. Most research is carried out in state laboratories, and if an effective product is discovered it is sent to the Ministry of Medication Industry which finds a suitable factory to try it out. Test batches go back to the Ministry of Health for clinical trials, and often, if approved, to another plant for mass production. A separate agency handles distribution and marketing, and quality control is the responsibility of an independent state inspectorate. Theoretically each stage leads to the next with no waste or duplication. In practice the chain becomes a bureaucratic nightmare. The institutional separation means that each body operates according to its own terms with little concern for the total process. By the time the product gets to the chemists' shelves, it has often been rendered obsolete. Research institutes have no real leverage to press factories to put their results into production, and have little incentive to do so. As for the manufacturers, they cannot get back their initial production costs because of a rigid pricing system, and find it cheaper and easier to stick to the older and tested lines for which there is already a market. The lack of advertising means that doctors are often unaware of what is available. Sometimes they prescribe drugs that have long been withdrawn from the market. Similarly, since brand-names play little part in the pharmaceutical industry, a factory manager is not too concerned about the name and reputation of his plant, and this breeds indifference. The Russians have tried various remedies. The simplest is to import drugs." Gilead spends almost a billion dollars PER QUARTER on R&D expenses. Amgen spends over a billion per quarter, Celgene spends 1.3 billion per quarter. Most of those discoveries that come from those expenditures will never see the light of day. So how else are they to recoup their costs? If the government started funding pharmaceutical development at the tune of 25 billion per year, how would that infrastructure suddenly be created? Would they also need to get into the manufacturing side as well? Manufacturing many drugs is not a trivial process. Then there's the marketing expense -- doctors would need to be aware of the new drugs. There's distribution involved. Getting the government into the pharmaceutical business would be a massive, massive expenditure and still result in lower quality than the private sector could produce because the competitive forces would be eliminated. See the success of pretty much any Iron Curtain industry compared to the US and Japan for examples of how this goes bad and ultimately results in lower quality. Can you name a single Russian electronics manufacturer that you can buy in the Frankfurt Duty Free shop? Of course the argument would be "we can do it more efficiently than the Soviets" -- sure. That's the same argument Communists use to suggest that "this time it'll work." I'd rather trust my life to someone that will profit from my survival than to a government that is influenced by whatever political forces are at play. Then you have the issue of what drugs deserve public funding and what drugs do not. That becomes a political decision and not a market decision. That's very dangerous.
Killah911 11y ago
There's a fundamental flaw in that thinking. Greed is far from the only motivating factor in humanity. As a matter of fact, I'd argue that it's precisely the belief in this status quo, that causes sociopathic a-holes to run sociopathic companies. The solution is not necessarily to make everything government run, but perhaps to simply not accept such behavior/thinking as having any place in our society.
- rayiner 11y ago
  Greed is not the most motivating factor, but it certainly is a key one. If you adopt the rule that greed has no place in "high minded" stuff like saving lives, then all the smart people who are nonetheless greedy will go into areas other than saving lives. There is no correlation between intelligence and selflessness. You give the best and brightest a choice between earning millions on Wall Street or never breaking $150k in science (after 7 years of low-paid doctoral and post-doctoral work) then you'll cut yourself off at the knees.
  - gohrt 11y ago
    You are assuming that the greedy Wall Street folks are actually contributing some of their smarts to improve the product of the industry in some way, and not just sneaking in and extracting value from the medical industry as Shkreli does.
    - rayiner 11y ago
      I'm not saying that the Wall Street folks are improving the products of the drug industry. I'm saying that a lot of very bright folks go to Wall Street instead of into science because of the opportunity to make a lot more money. And they're not even really greedy people. We live in a country where even a PhD making $150k still has to stress about saving for college and faces potential bankruptcy from medical expenses. You don't have to be greedy to want to stave off that risk by getting a high-paying Wall Street job.
maxerickson 11y ago
This particular rights purchase and price hike was just foolish. A compounding pharmacy responded to it by offering the same medicine for ~$1 per pill. http://bigstory.ap.org/article/c1264e78de574d869519f169d5a1a878/drug-company-offers-cheap-version-costly-turing-drug http://bigstory.ap.org/article/c1264e78de574d869519f169d5a1a...
onli 11y ago
The media has decided the is a villain? I do not think so. It is quite evident he made that decision himself, look at the interview linked in the top comment, or at his actions.
angdis 11y ago
Well, actually, this whole discussion IS about Shkreli and your comments are within the context of the discussion so don't disclaim that. Shkreli has foolishly attracted attention to himself by comically absurd price-gouging. Whether it is illegal or not, it was dick move and in the end probably not even likely to net much profit. It also has understandably destroyed the good-will of anyone other than Ayn-randian maniacs. Now he's been arrested for what sounds like illegal and extremely irresponsible financial shenanigans that happened before all this stuff. Greedy, amoral business people that break the law are usually able to maneuver themselves around getting jail-time. Shkreli's going to have a much harder time with that (because as you noted the media has decided he's a villain) and its his own dumb fault. Personality defects have consequences.
realusername 11y ago
This is only if you believe in a private market which works for drugs which I believe is not possible unless for really simple basic meds. I beleive the research should be public on this case, no legal incentive can really fix the drug market. This is one of those markets where the interests of both parties will likely never align.
- refurb 11y ago
  Keep in mind that most new drugs are discovered and developed in the US. If you take a look at the countries with strict price controls, you'll see a lot fewer new drugs being discovered.
coldtea 11y ago
>Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. Let's not forget that there are people who invent stuff and do research outside of monetary concerns too. Not to mention state funded research, which is how we got most of the foundations of the core science/technology we have now (either that or heavily subsidized "private" research, including pharmas). And let's also not forget that by several accounts, the costs of research for most of those life saving drugs are dwarfed by the costs of marketing and other BS the companies spend their money on, and not even for them (as life saving drugs practically advertise themselves anyway) but for non life-saving drugs like Viagra and co... >the media has decided he's a villain And for one, in this particular case, nobody can blame them!
- refurb 11y ago
  as life saving drugs practically advertise themselves anyway Ummm.... no, they don't. I have a friend who works in the industry and you'd be surprised how cautious some physicians are. The decision to treat a patient with a new drug isn't "oh! it's better, let's use it!", it's much more complicated than that. Even great drugs need to be promoted. Also, you can't compare the costs of marketing and R&D. You don't spend marketing dollars unless you think the return is greater than 1 (you make back more than you spent). If drug companies stopped marketing their drugs, they'd end up in a worse financial situation rather than a better one. That extra revenue means more R&D spend!
  - jonknee 11y ago
    > Ummm.... no, they don't. I have a friend who works in the industry and you'd be surprised how cautious some physicians are. The decision to treat a patient with a new drug isn't "oh! it's better, let's use it!", it's much more complicated than that. Even great drugs need to be promoted. And yet somehow the word on new drugs still gets to doctors in the rest of the world where public advertising of drugs is illegal. Any ideas on how this miracle occurs?
    - punee 11y ago
JackFr 11y ago
> if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. Someone call NIH -- I think they believe that part of the annual $30 billion they hand out in extramural research grants is being used just for that.
- refurb 11y ago
  I'm curious which drugs the NIH has launched? Can you list them?
- CWuestefeld 11y ago
  I think you're actually supporting the point. The people actually doing the research don't care whether they're being financed by VCs, or by NIH. As long as they're getting the money, they're happy. Moreover, if you're advocating pushing private investment even farther out, there are undesirable side effects. It means that the decision about what to pursue stops being driven by what there's actual demand for, and becomes a matter of political policy. We can already see the effects of this. Government investment in medical research is not proportional to the number of sufferers, or the expected gain in QALYs (Quality-Adjusted Life Years). It's clear that the investment is strongly slanted toward research on maladies that have distinct demographics - i.e., that are represented by organized voting blocs. Thus, you'll find far more money spent, proportionately, on research for HIV than for something that's pretty widely distributed like colon cancer. I believe it's wrong for politics to drive this so strongly.
  - lhc- 11y ago
    Of course, in the other direction, private spending has it's own problems. Most of the money is spent on recurring conditions where you have to take the drug forever rather than one-time cures. Additionally, things like hair loss and impotence draw far greater funding than actual life-threatening illness, because the only motive is profit.
- bshanks 11y ago
  More than half of the costs of biomedical research ( https://en.wikipedia.org/wiki/Medical_research#Privately_.28industry.29_funded_biomedical_research https://en.wikipedia.org/wiki/Medical_research#Privately_.28... ), and ~75% of clinical trials ( http://undsci.berkeley.edu/article/who_pays http://undsci.berkeley.edu/article/who_pays ) is paid by industry (ironically it seems the public can't (easily, freely) read the original sources of those figures, as cited by the linked webpages, because they in for-profit journals). My impression is that the cost of the final clinical trials account for a large part of the expense of bringing any single drug to market (but on the other hand a lot of other drugs fail before clinical trials) (some people think clinical trials are even 90%: https://www.manhattan-institute.org/html/stifling-new-cures-true-cost-lengthy-clinical-drug-trials-6013.html https://www.manhattan-institute.org/html/stifling-new-cures-... ; see https://news.ycombinator.com/item?id=10752639 https://news.ycombinator.com/item?id=10752639 for some disagreement with this figure). My impression is that the general tendency is for the government to focus more on funding the less expensive but more risky earlier stages of research, and for companies to focus more on funding the more expensive but less risky (but still rather risky) clinical trials. So the conclusion is that in order to do without private funding for drug discovery, the government would have to either (a) massively increase government funding for this, or (b) greatly lower the standards for how much evidence is required before permitting a new drug to be sold to patients (that is, to be content with companies selling a drug to patients, and billing patients/insurance companies/the government, without solid evidence that the drug actually works). Imo either or both of those may be a good idea; but those would both be huge systemic reforms and hence are unlikely to occur, and in the meantime we do in fact rely a lot on industrial funding to bring new drugs to market.
myth_buster 11y ago
Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. This is not true.
such_a_casual 11y ago
> Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. Well this is the smartest thing I'll hear today. Context, context, context. The story goes that the drug was already around, already invented, already profitable. Some rich people came along and bought the product for billions of dollars because they realized they could resell it at a much higher price. So yes, let's not forget that if you can't make money reselling AIDS medications at an inhumane price, you won't bother to. And let's also not forget how easy it is to come across as capitalist sheep when we ignore the basic facts of the story in order to support our own ideals.
sillyhealthcare 11y ago
Yes...and...no One of the biggest costs is getting a drug approved and then sold The FDA will prioritize Orphan drugs and other high priority drugs, and the US government will help pay for drugs that haven't even gotten full clearance through the FDA if they are considered high priority. Sovaldi (the Hep C drug that cures 90% of cases at over $1000/dose) and Harvoni (94%) you can apply your argument to. And there is a reason why the FDA and US government supports the pricing even over patients screams. Meanwhile, while the FDA did approve Zaltrap, it was not considered a priority drug, and they did not say a thing when Memorial Sloan Ketterring publicly announced they would refuse to perscribe because the clinical data made Zaltrap out to be as effective as many other off patent drugs, and at $11000/month, Zaltrap would bankrupt patients. In the end, Zaltrap's maker, Regeneron Pharmaceuticals, Inc., brought down the price. (http://www.nytimes.com/2012/10/15/opinion/a-hospital-says-no-to-an-11000-a-month-cancer-drug.html http://www.nytimes.com/2012/10/15/opinion/a-hospital-says-no... , https://www.advisory.com/research/oncology-roundtable/oncology-rounds/2012/10/cancer-drugs-cost-slashed-following-sloan-kettering-decision https://www.advisory.com/research/oncology-roundtable/oncolo... ) if Tomorrow you were to invent a new antibiotic that would work against drug resistant bacteria (this is considered to be a high priority research area and any drug that is ready for approval will be fasttracked), you could charge whatever you want, no complaints, and the media will not consider you a villian as much as part of the spectacle of medicine. If you re-invented botox for no reason, or stop others from being a provider in the market, then you get to be a villian

vdaniuk 11y ago

>Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones Citation needed. Extremely needed. Counter-anecdote: https://en.wikipedia.org/wiki/Jonas_Salk https://en.wikipedia.org/wiki/Jonas_Salk edit: wording

Malarkey73 11y ago
If you can make exploitative profits from old drugs why risk your money making new ones?
- deleted 11y ago
  [deleted]
mhb 11y ago
vdaniuk wrote and then deleted: "'Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones' Citation needed. Extremely needed. Counterfact: https://en.wikipedia.org/wiki/Jonas_Salk" https://en.wikipedia.org/wiki/Jonas_Salk" Here: http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3.... NB: the higher the price, the higher the quantity supplied
- bmelton 11y ago
  Not sure why you're seeing it as deleted. It was edited s/counterfact/counter-anecdote/ https://news.ycombinator.com/item?id=10751262 https://news.ycombinator.com/item?id=10751262
yummyfajitas 11y ago
Are you saying I'm wrong, and that that pharma companies and others will donate hundreds of billions of dollars to drug development purely out of altruism? Or are you simply claiming that a small number of examples exist, therefore my claim doesn't follow as a hard and fast rule but merely as a trend?
- jacquesm 11y ago
  It's not exactly a fine line between altruism and price gouging, there is a huge scala of options in between. I find your comments in this thread hard to rhyme with your recent post about medical tourism. After all, if not for generics and your ability to move temporarily to a country where medical care is affordable you'd be out a very large amount of money over and beyond what you paid for your treatment. Clearly - for you - medication and care where you live is too expensive and you too would have benefited from more affordable medication and care.
  - yummyfajitas 11y ago
    I'm not sure why you find my comments hard to rhyme. In this thread I'm claiming that if you make it harder to make a profit off lifesaving drugs, people will probably invest their money elsewhere and produce fewer such drugs. Reduced demand (or price ceilings) lower quantity produced. In the other thread I claimed that if you consider alternate sellers of medical labor, you can get a lower price. Increased supply lowers price and increases quantity provided. Both of these claims are just classic Econ 101. If medical tourism was not an option for me I'd have paid full price in the US and considered myself extremely lucky to have the option to trade money for the ability to do sex positions besides "girl on top, me not moving". I hardly think I'm alone - how many people would be willing to give up all medical procedures invented since 1970 in return for lower prices?
    - jacquesm 11y ago
      But the problem lies in the fact that for 'medical tourism' to be an option at all you first have to achieve a certain amount of wealth and your social situation has to be one where you can just pack-up-and-leave for an x amount of time without your life ending up in disarray upon your return. For many people these are not options because of money in the first place so they would not be able to pay the full price in the US to begin with. It's just another wealth-begets-more-wealth story, your jump off point is already one of considerable privilege, one that relatively few people in the US have.
throwawaykf05 11y ago
You mean "counter-anecdote"?

Malarkey73 11y ago

Lets not forget too that Martin Shkreli took no risk inventing this drug. He bought a monopoly - a necessary lifesaving drug with no alternative - and jacked up the price by thousands. Either a free market fundamentalist (ie no explotative patents) or a dyed in the wool regulator should be able to agree this is not how the market should work.

rayiner 11y ago
Daraprim is out of patent. He didn't buy a monopoly right, he just bought a drug that nobody else thought was worth making. Anyway, the distinction between inventing the drug and buying the patent is an artificial one. If you're going to allow creating monopoly rights--and that you can debate--then making the rights tradable will make the market more efficient. With drugs in particular, acquisition of promising drug candidates is a major input to the pipeline at the big drug companies. It enables separation of concerns: small startups to develop the drugs and big experienced companies to bring them to market. Creating an artificial distinction between inventors and acquirers precludes that efficient division of labor.
- austinjp 11y ago
  Genuinely curious... does the world actually work like this? I strongly suspect not.
  - rayiner 11y ago
    Yes, it does. For example, the recent Hep-C breakthrough drug was created by Pharmasset, Inc. Pharmasset was founded by the inventors of the drug--two professors at Emory University. It was purchased by Gilead, who commercialized it.
  - simon_ 11y ago
    It does. Big pharma constantly acquires research-focused junior companies to input into its pipeline for regulatory approval / commercialization.
  - twoodfin 11y ago

littletimmy 11y ago

Why can't we have the government fund pharmaceutical research?

EliRivers 11y ago
To an enormous extent they already do. http://www.slate.com/articles/business/the_customer/2011/03/the_makebelieve_billion.html http://www.slate.com/articles/business/the_customer/2011/03/...
- bshanks 11y ago
  In any case, the government would have to increase funding by some amount in order to fund 100% of the costs of bringing drugs to market, including all clinical trials, so as to remove the need for any private investment. If the study cited by the Slate article is correct, then this proposed increase would not have to be as large as some people expect. My person approach when evaluating the cost of proposals for the government to do something new, however, is to be pessimistic and lean towards the larger cost estimates.
lentil_soup 11y ago
Don't know why you're getting down voted, it seems like the best way to go about it. Share the cost of this research among all of us, just like we (in some countries) do with education, healthcare, police, etc.
- pjc50 11y ago
  He's getting downvoted because, as the adjacent wall-of-text reminds us, there are only two countries in the world: the US and the USSR. Since they have diametrically opposed ways of doing things, any change to the US system would instantly turn it into the USSR. /s
briandear 11y ago
TLDR; No. See Soviet Union. Why should it? The free market is the most powerful incentive there is. Government control of the pharmaceutical industry has been tried before, in the Soviet Union and it was a mess. Here's an excerpt from Michael Binyon's "Life in Russia" (1983) "How often are foreigners asked by Russian friends to bring back drugs for sick relatives, and how often does the press complain that cheap, effective Soviet drugs are simply unobtainable! Take the case of a researcher who discovered an efficient drug to stimulate growth and spent fifteen years trying to get it on the market. In spite of repeated clinical tests, scientific endorsement and an urgent demand from people with deficiencies in growth hormones, the drug was unavailable. Instead manufacturers were producing a less effective foreign product which first came on the market twenty-two years ago. What is on sale in the shops or in special kiosks is so outdated or so general in its effects that few people buy the product. Packets of good pills are so valuable that they are sold at special foreign currency counters in tourist hotels. Doctors issue prescriptions even if the hospitals have no supplies, leaving it to hapless patients to use their wits in trying to get hold of what they need. There are plenty of stories of dentists working without adequate supplies of anaesthetic, of polyclinics unable to supply a full course of treatment, of chronically sick people living from month to month, never sure whether their prescriptions can be renewed. The drug industry suffers from none of the failings its Western counterpart is accused of: there is no risk of profit-taking at the expense of safety, no aggressive marketing of unnecessary drugs, no costly duplication of research laboratories. Instead, research, development, testing, approval, manufacture and promotion are organized as a public service. But the links between each stage are so weak that the time lag between research and retailing may be up to seven years. Responsibility for pharmaceuticals is divided between the Ministry of Health and the Ministry of Medication Industry. Everything used to come under a subdivision of the Ministry of Health, but because of poor results a separate ministry was created in 1967. The Health Ministry is still responsible for resarch, testing and licensing of new drugs. The new ministry deals with production and quality control. Most research is carried out in state laboratories, and if an effective product is discovered it is sent to the Ministry of Medication Industry which finds a suitable factory to try it out. Test batches go back to the Ministry of Health for clinical trials, and often, if approved, to another plant for mass production. A separate agency handles distribution and marketing, and quality control is the responsibility of an independent state inspectorate. Theoretically each stage leads to the next with no waste or duplication. In practice the chain becomes a bureaucratic nightmare. The institutional separation means that each body operates according to its own terms with little concern for the total process. By the time the product gets to the chemists' shelves, it has often been rendered obsolete. Research institutes have no real leverage to press factories to put their results into production, and have little incentive to do so. As for the manufacturers, they cannot get back their initial production costs because of a rigid pricing system, and find it cheaper and easier to stick to the older and tested lines for which there is already a market. The lack of advertising means that doctors are often unaware of what is available. Sometimes they prescribe drugs that have long been withdrawn from the market. Similarly, since brand-names play little part in the pharmaceutical industry, a factory manager is not too concerned about the name and reputation of his plant, and this breeds indifference. The Russians have tried various remedies. The simplest is to import drugs." Gilead spends almost a billion dollars PER QUARTER on R&D expenses. Amgen spends over a billion per quarter, Celgene spends 1.3 billion per quarter. Most of those discoveries that come from those expenditures will never see the light of day. So how else are they to recoup their costs? If the government started funding pharmaceutical development at the tune of 25 billion per year, how would that infrastructure suddenly be created? Would they also need to get into the manufacturing side as well? Manufacturing many drugs is not a trivial process. Then there's the marketing expense -- doctors would need to be aware of the new drugs. There's distribution involved. Getting the government into the pharmaceutical business would be a massive, massive expenditure and still result in lower quality than the private sector could produce because the competitive forces would be eliminated. See the success of pretty much any Iron Curtain industry compared to the US and Japan for examples of how this goes bad and ultimately results in lower quality. Can you name a single Russian electronics manufacturer that you can buy in the Frankfurt Duty Free shop? Of course the argument would be "we can do it more efficiently than the Soviets" -- sure. That's the same argument Communists use to suggest that "this time it'll work." I'd rather trust my life to someone that will profit from my survival than to a government that is influenced by whatever political forces are at play. Then you have the issue of what drugs deserve public funding and what drugs do not. That becomes a political decision and not a market decision. That's very dangerous.

Killah911 11y ago

There's a fundamental flaw in that thinking. Greed is far from the only motivating factor in humanity. As a matter of fact, I'd argue that it's precisely the belief in this status quo, that causes sociopathic a-holes to run sociopathic companies. The solution is not necessarily to make everything government run, but perhaps to simply not accept such behavior/thinking as having any place in our society.

rayiner 11y ago
Greed is not the most motivating factor, but it certainly is a key one. If you adopt the rule that greed has no place in "high minded" stuff like saving lives, then all the smart people who are nonetheless greedy will go into areas other than saving lives. There is no correlation between intelligence and selflessness. You give the best and brightest a choice between earning millions on Wall Street or never breaking $150k in science (after 7 years of low-paid doctoral and post-doctoral work) then you'll cut yourself off at the knees.
- gohrt 11y ago
  You are assuming that the greedy Wall Street folks are actually contributing some of their smarts to improve the product of the industry in some way, and not just sneaking in and extracting value from the medical industry as Shkreli does.
  - rayiner 11y ago
    I'm not saying that the Wall Street folks are improving the products of the drug industry. I'm saying that a lot of very bright folks go to Wall Street instead of into science because of the opportunity to make a lot more money. And they're not even really greedy people. We live in a country where even a PhD making $150k still has to stress about saving for college and faces potential bankruptcy from medical expenses. You don't have to be greedy to want to stave off that risk by getting a high-paying Wall Street job.

maxerickson 11y ago

This particular rights purchase and price hike was just foolish. A compounding pharmacy responded to it by offering the same medicine for ~$1 per pill. http://bigstory.ap.org/article/c1264e78de574d869519f169d5a1a878/drug-company-offers-cheap-version-costly-turing-drug http://bigstory.ap.org/article/c1264e78de574d869519f169d5a1a...

onli 11y ago

The media has decided the is a villain? I do not think so. It is quite evident he made that decision himself, look at the interview linked in the top comment, or at his actions.

angdis 11y ago

Well, actually, this whole discussion IS about Shkreli and your comments are within the context of the discussion so don't disclaim that. Shkreli has foolishly attracted attention to himself by comically absurd price-gouging. Whether it is illegal or not, it was dick move and in the end probably not even likely to net much profit. It also has understandably destroyed the good-will of anyone other than Ayn-randian maniacs. Now he's been arrested for what sounds like illegal and extremely irresponsible financial shenanigans that happened before all this stuff. Greedy, amoral business people that break the law are usually able to maneuver themselves around getting jail-time. Shkreli's going to have a much harder time with that (because as you noted the media has decided he's a villain) and its his own dumb fault. Personality defects have consequences.

realusername 11y ago

This is only if you believe in a private market which works for drugs which I believe is not possible unless for really simple basic meds. I beleive the research should be public on this case, no legal incentive can really fix the drug market. This is one of those markets where the interests of both parties will likely never align.

refurb 11y ago
Keep in mind that most new drugs are discovered and developed in the US. If you take a look at the countries with strict price controls, you'll see a lot fewer new drugs being discovered.

coldtea 11y ago

>Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. Let's not forget that there are people who invent stuff and do research outside of monetary concerns too. Not to mention state funded research, which is how we got most of the foundations of the core science/technology we have now (either that or heavily subsidized "private" research, including pharmas). And let's also not forget that by several accounts, the costs of research for most of those life saving drugs are dwarfed by the costs of marketing and other BS the companies spend their money on, and not even for them (as life saving drugs practically advertise themselves anyway) but for non life-saving drugs like Viagra and co... >the media has decided he's a villain And for one, in this particular case, nobody can blame them!

refurb 11y ago
as life saving drugs practically advertise themselves anyway Ummm.... no, they don't. I have a friend who works in the industry and you'd be surprised how cautious some physicians are. The decision to treat a patient with a new drug isn't "oh! it's better, let's use it!", it's much more complicated than that. Even great drugs need to be promoted. Also, you can't compare the costs of marketing and R&D. You don't spend marketing dollars unless you think the return is greater than 1 (you make back more than you spent). If drug companies stopped marketing their drugs, they'd end up in a worse financial situation rather than a better one. That extra revenue means more R&D spend!
- jonknee 11y ago
  > Ummm.... no, they don't. I have a friend who works in the industry and you'd be surprised how cautious some physicians are. The decision to treat a patient with a new drug isn't "oh! it's better, let's use it!", it's much more complicated than that. Even great drugs need to be promoted. And yet somehow the word on new drugs still gets to doctors in the rest of the world where public advertising of drugs is illegal. Any ideas on how this miracle occurs?
  - punee 11y ago

JackFr 11y ago

> if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. Someone call NIH -- I think they believe that part of the annual $30 billion they hand out in extramural research grants is being used just for that.

refurb 11y ago
I'm curious which drugs the NIH has launched? Can you list them?
CWuestefeld 11y ago
I think you're actually supporting the point. The people actually doing the research don't care whether they're being financed by VCs, or by NIH. As long as they're getting the money, they're happy. Moreover, if you're advocating pushing private investment even farther out, there are undesirable side effects. It means that the decision about what to pursue stops being driven by what there's actual demand for, and becomes a matter of political policy. We can already see the effects of this. Government investment in medical research is not proportional to the number of sufferers, or the expected gain in QALYs (Quality-Adjusted Life Years). It's clear that the investment is strongly slanted toward research on maladies that have distinct demographics - i.e., that are represented by organized voting blocs. Thus, you'll find far more money spent, proportionately, on research for HIV than for something that's pretty widely distributed like colon cancer. I believe it's wrong for politics to drive this so strongly.
- lhc- 11y ago
  Of course, in the other direction, private spending has it's own problems. Most of the money is spent on recurring conditions where you have to take the drug forever rather than one-time cures. Additionally, things like hair loss and impotence draw far greater funding than actual life-threatening illness, because the only motive is profit.
bshanks 11y ago
More than half of the costs of biomedical research ( https://en.wikipedia.org/wiki/Medical_research#Privately_.28industry.29_funded_biomedical_research https://en.wikipedia.org/wiki/Medical_research#Privately_.28... ), and ~75% of clinical trials ( http://undsci.berkeley.edu/article/who_pays http://undsci.berkeley.edu/article/who_pays ) is paid by industry (ironically it seems the public can't (easily, freely) read the original sources of those figures, as cited by the linked webpages, because they in for-profit journals). My impression is that the cost of the final clinical trials account for a large part of the expense of bringing any single drug to market (but on the other hand a lot of other drugs fail before clinical trials) (some people think clinical trials are even 90%: https://www.manhattan-institute.org/html/stifling-new-cures-true-cost-lengthy-clinical-drug-trials-6013.html https://www.manhattan-institute.org/html/stifling-new-cures-... ; see https://news.ycombinator.com/item?id=10752639 https://news.ycombinator.com/item?id=10752639 for some disagreement with this figure). My impression is that the general tendency is for the government to focus more on funding the less expensive but more risky earlier stages of research, and for companies to focus more on funding the more expensive but less risky (but still rather risky) clinical trials. So the conclusion is that in order to do without private funding for drug discovery, the government would have to either (a) massively increase government funding for this, or (b) greatly lower the standards for how much evidence is required before permitting a new drug to be sold to patients (that is, to be content with companies selling a drug to patients, and billing patients/insurance companies/the government, without solid evidence that the drug actually works). Imo either or both of those may be a good idea; but those would both be huge systemic reforms and hence are unlikely to occur, and in the meantime we do in fact rely a lot on industrial funding to bring new drugs to market.

myth_buster 11y ago

Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. This is not true.

such_a_casual 11y ago

> Lets also not forget that if you can't make money off lifesaving drugs, you also won't bother to invent any new ones. Well this is the smartest thing I'll hear today. Context, context, context. The story goes that the drug was already around, already invented, already profitable. Some rich people came along and bought the product for billions of dollars because they realized they could resell it at a much higher price. So yes, let's not forget that if you can't make money reselling AIDS medications at an inhumane price, you won't bother to. And let's also not forget how easy it is to come across as capitalist sheep when we ignore the basic facts of the story in order to support our own ideals.

sillyhealthcare 11y ago

Yes...and...no One of the biggest costs is getting a drug approved and then sold The FDA will prioritize Orphan drugs and other high priority drugs, and the US government will help pay for drugs that haven't even gotten full clearance through the FDA if they are considered high priority. Sovaldi (the Hep C drug that cures 90% of cases at over $1000/dose) and Harvoni (94%) you can apply your argument to. And there is a reason why the FDA and US government supports the pricing even over patients screams. Meanwhile, while the FDA did approve Zaltrap, it was not considered a priority drug, and they did not say a thing when Memorial Sloan Ketterring publicly announced they would refuse to perscribe because the clinical data made Zaltrap out to be as effective as many other off patent drugs, and at $11000/month, Zaltrap would bankrupt patients. In the end, Zaltrap's maker, Regeneron Pharmaceuticals, Inc., brought down the price. (http://www.nytimes.com/2012/10/15/opinion/a-hospital-says-no-to-an-11000-a-month-cancer-drug.html http://www.nytimes.com/2012/10/15/opinion/a-hospital-says-no... , https://www.advisory.com/research/oncology-roundtable/oncology-rounds/2012/10/cancer-drugs-cost-slashed-following-sloan-kettering-decision https://www.advisory.com/research/oncology-roundtable/oncolo... ) if Tomorrow you were to invent a new antibiotic that would work against drug resistant bacteria (this is considered to be a high priority research area and any drug that is ready for approval will be fasttracked), you could charge whatever you want, no complaints, and the media will not consider you a villian as much as part of the spectacle of medicine. If you re-invented botox for no reason, or stop others from being a provider in the market, then you get to be a villian