4 ms·

The problem is not in patents or capitalism, but in perpetual extension of intellectual property in a Disney-like fashion. The point of "Cyclical" is that there

by abpavel 11y ago

The problem is not in patents or capitalism, but in perpetual extension of intellectual property in a Disney-like fashion. The point of "Cyclical" is that there is a cycle - a life-cycle of development, then intellectual monopoly and finally general availability. Sovaldi's patent should have expired in 2012, and Martin Shreli's Daraprim's patent should have expired in 1973. Perpetual extension simply abuses the system, and the stories like in the original article are just a reflection of system's abuse, not the flaw of the idea of protecting intellectual property in the first place.

adventured 11y ago
Not to mention the FDA holding back generic drug approvals. They've got a backlog of generics awaiting approval that is over 4,000 now (they like to white lie and say they've "acted" on many of those, which of course isn't the same thing as an approval).
- afarrell 11y ago
  Wow. How hasn't AARP raised hell about this? Maybe they aren't the most powerful lobbying organization in America after all.
maxerickson 11y ago
There's no patent keeping other companies from producing Daraprim equivalents for sale in the US, it's just that no generic maker had bothered to setup an FDA approved production process. There's a few thousand people using it in the US, so there isn't a huge market for it. Medicare is a big enough consumer that it should probably be running a program where it shares risk with generic makers that are willing to produce drugs that don't cost a lot, as long as the company maintains quality. Basically, make sure that line start up and regulatory costs aren't preventing $1 pills for rare conditions coming to market.
- chimeracoder 11y ago
  > Medicare is a big enough consumer that it should probably be running a program where it shares risk with generic makers Perhaps, but Medicare has literally no incentive to do this. It's one thing to posit that a monopsony or oligopsony could result in driving prices down. And in a closed system, that might be what happens[0]. But at the end of the day, Medicare has no mandate to ensure sustainability of reimbursement and payment rates. Since they can't raise revenues (taxes) without Congress, they balance the budget by driving reimbursements (for service providers) down below cost. Pharmaceutical companies are actually affected by this too, but because the big-ticket items are under monopoly protection (via drug patents), unlike care delivery, Medicare still has to pay sticker price for those. The people who end up being hurt by this, by the way, are not Medicare patients, but uninsured patients and privately-insured patients. [0] But not always - like a monopoly, a monopsony can choose price or quantity, but not both.
  - maxerickson 11y ago
    Medicare the-thing-run-by-Congress has incentive to do it. At least, in theory, as Congress should be looking to create regulations that are beneficial to taxpayers (Medicare isn't going away, therefore cost controls benefit taxpayers). To the extent that I understand it, I agree that Medicare the-thing-run-by-statute doesn't currently have much incentive to do it. I guess I could have said something about federal programs that run huge public health providers being structured to use market based policies to reduce costs, but I'm prone to colloquialisms (i.e., the pretense that Medicare isn't limited to existing statute, it can be amended to act differently).
    - chimeracoder 11y ago
      > At least, in theory, as Congress should be looking to create regulations that are beneficial to taxpayers In theory, theory and practice are the same. In practice, they aren't. It's one thing to talk about structuring government programs so that they are obligated to serve the public interest no matter what. But actually implementing that, in a manner ensured to be robust against creeping scope, capture, and corruption, is damn-near impossible.
yummyfajitas 11y ago
Patents are not perpetually extended, Disney-style. Only copyrights are. Daraprim is not under patent. The issue with Shkreli is purely exploitation of bad FDA rules, not patents. The FDA is the problem here.
- HarryHirsch 11y ago
  The issue with Shkreli is that he broke the gentlemen's agreement arount low-volume drugs. Derek Lowe talks about it from time to time. The FDA insisting that drugs conform to standards of purity and activity isn't the problem here. When you talk to someone who is working in pill manufacturing you'll learn that it is a complex process. The thing must reliably disintegrate in the digestive tract, the active substance must be distributed evenly, excipients do influence bioavailability - just as with Theranos the standards exist for a reason. The ecosystem around low-volume drugs is strange. Perhaps it would be best for the NIH to open up their own facility, just because of the bad press that Pharma Bro caused for the whole industry.
  - yummyfajitas 11y ago
    I'm not disputing the existence of safety/efficacy standards. I'm disputing the implementation. A "gentlemen's agreement" is bound to disintegrate - it's just begging for someone to defect. If regulatory mechanisms allow exploits like this they are clearly broken. Of course it's unlikely the FDA will fix this since their incentives are just as broken. If they prevent millions of people from getting potentially lifesaving drugs they keep their jobs. But if a few photogenic babies die due to a drug that they approved, congressional inquiry incoming!
    - HarryHirsch 11y ago
      Since we are talking orphan drugs that are no longer under patent, they do look like a natural monopoly to me, and there are tools in the economic toolbox to handle these. Regulated utilities show how it's done. There is no need for FDA dissing here. What "photogenic babies" are you even talking about? And who are the "millions of people"? We are talking orphan drugs! Do you have any examples or nothing beyond rhetoric? The biggest problem facing R & D in the phrmaceutical industry is that incentives for investment that the market provides are completely at odds to what is needed on the ground.

by abpavel 11y ago

adventured 11y ago

Not to mention the FDA holding back generic drug approvals. They've got a backlog of generics awaiting approval that is over 4,000 now (they like to white lie and say they've "acted" on many of those, which of course isn't the same thing as an approval).

afarrell 11y ago
Wow. How hasn't AARP raised hell about this? Maybe they aren't the most powerful lobbying organization in America after all.

maxerickson 11y ago

There's no patent keeping other companies from producing Daraprim equivalents for sale in the US, it's just that no generic maker had bothered to setup an FDA approved production process. There's a few thousand people using it in the US, so there isn't a huge market for it. Medicare is a big enough consumer that it should probably be running a program where it shares risk with generic makers that are willing to produce drugs that don't cost a lot, as long as the company maintains quality. Basically, make sure that line start up and regulatory costs aren't preventing $1 pills for rare conditions coming to market.

chimeracoder 11y ago
> Medicare is a big enough consumer that it should probably be running a program where it shares risk with generic makers Perhaps, but Medicare has literally no incentive to do this. It's one thing to posit that a monopsony or oligopsony could result in driving prices down. And in a closed system, that might be what happens[0]. But at the end of the day, Medicare has no mandate to ensure sustainability of reimbursement and payment rates. Since they can't raise revenues (taxes) without Congress, they balance the budget by driving reimbursements (for service providers) down below cost. Pharmaceutical companies are actually affected by this too, but because the big-ticket items are under monopoly protection (via drug patents), unlike care delivery, Medicare still has to pay sticker price for those. The people who end up being hurt by this, by the way, are not Medicare patients, but uninsured patients and privately-insured patients. [0] But not always - like a monopoly, a monopsony can choose price or quantity, but not both.
- maxerickson 11y ago
  Medicare the-thing-run-by-Congress has incentive to do it. At least, in theory, as Congress should be looking to create regulations that are beneficial to taxpayers (Medicare isn't going away, therefore cost controls benefit taxpayers). To the extent that I understand it, I agree that Medicare the-thing-run-by-statute doesn't currently have much incentive to do it. I guess I could have said something about federal programs that run huge public health providers being structured to use market based policies to reduce costs, but I'm prone to colloquialisms (i.e., the pretense that Medicare isn't limited to existing statute, it can be amended to act differently).
  - chimeracoder 11y ago
    > At least, in theory, as Congress should be looking to create regulations that are beneficial to taxpayers In theory, theory and practice are the same. In practice, they aren't. It's one thing to talk about structuring government programs so that they are obligated to serve the public interest no matter what. But actually implementing that, in a manner ensured to be robust against creeping scope, capture, and corruption, is damn-near impossible.

yummyfajitas 11y ago

Patents are not perpetually extended, Disney-style. Only copyrights are. Daraprim is not under patent. The issue with Shkreli is purely exploitation of bad FDA rules, not patents. The FDA is the problem here.

HarryHirsch 11y ago
The issue with Shkreli is that he broke the gentlemen's agreement arount low-volume drugs. Derek Lowe talks about it from time to time. The FDA insisting that drugs conform to standards of purity and activity isn't the problem here. When you talk to someone who is working in pill manufacturing you'll learn that it is a complex process. The thing must reliably disintegrate in the digestive tract, the active substance must be distributed evenly, excipients do influence bioavailability - just as with Theranos the standards exist for a reason. The ecosystem around low-volume drugs is strange. Perhaps it would be best for the NIH to open up their own facility, just because of the bad press that Pharma Bro caused for the whole industry.
- yummyfajitas 11y ago
  I'm not disputing the existence of safety/efficacy standards. I'm disputing the implementation. A "gentlemen's agreement" is bound to disintegrate - it's just begging for someone to defect. If regulatory mechanisms allow exploits like this they are clearly broken. Of course it's unlikely the FDA will fix this since their incentives are just as broken. If they prevent millions of people from getting potentially lifesaving drugs they keep their jobs. But if a few photogenic babies die due to a drug that they approved, congressional inquiry incoming!
  - HarryHirsch 11y ago
    Since we are talking orphan drugs that are no longer under patent, they do look like a natural monopoly to me, and there are tools in the economic toolbox to handle these. Regulated utilities show how it's done. There is no need for FDA dissing here. What "photogenic babies" are you even talking about? And who are the "millions of people"? We are talking orphan drugs! Do you have any examples or nothing beyond rhetoric? The biggest problem facing R & D in the phrmaceutical industry is that incentives for investment that the market provides are completely at odds to what is needed on the ground.