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This is another example of a recurring theme where the profit motive is failing to incentivize pharma companies to create products that can have an immediate im

This is another example of a recurring theme where the profit motive is failing to incentivize pharma companies to create products that can have an immediate impact on saving lives or improving health outcomes. I'm no socialist, but this seems to be a real (albeit very specific) failure of capitalism. Does anyone know of a government agency that is chartered to solve these kinds of problems?

nickff 10y ago
The United States Department of Health and Human Services, whose motto is "Improving the health, safety, and well-being of America", which has a budget of just over 1.1 trillion dollars, and about eighty thousand employees.[1][2] For comparison, the largest pharmaceutical company in the world is Novartis, with annual revenues of approximately forty-seven billion dollars.[3] The pharmaceutical industry is one of the most, if not the most heavily regulated industry in the United States. This industry is also affected by various government interventions into research and development, both in funding and restricting options. If you believe there is a problem (and I think there is), it seems difficult to believe that it is due to a lack of government involvement. [1] https://en.wikipedia.org/wiki/United_States_Department_of_Health_and_Human_Services https://en.wikipedia.org/wiki/United_States_Department_of_He... [2] http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf http://www.hhs.gov/sites/default/files/fy2017-budget-in-brie... [3] http://www.pmlive.com/top_pharma_list/global_revenues http://www.pmlive.com/top_pharma_list/global_revenues
- erentz 10y ago
  About 90% of this budget is providing Medicare and Medicaid.
  - nickff 10y ago
    Yes, and a large portion of that is spent on prescription drugs; the US Government is one of (if not the) largest customers for most drugs.
    - pmoriarty 10y ago
      We need to stop thinking of the government and corporations as distinctly separate. Officials from government own stocks in corporations, serve on their boards, and often get cushy jobs in the very corporations they "regulated" or acquired government contracts for when they retire from "public service". Corporate executives also demonstrate their selfless commitment to the public good by going to work for the government and regulate their former employers. Corporations are taxed and that tax money flows from the government back to corporations. Corporations spend millions lobbying, bribing, and electing government officials to enact laws and contracts favorable to them. Often it's the same people who govern both corporations and the government, and profit from both. They have their hands in each other's pockets and scratch each other's backs.
- Retric 10y ago
  That's about as relevant as talking about the DoD budget because they spend a lot of money on healthcare. If you divide 1.1 trillion by 80k you get 13.75 Million per worker because they mostly hand out money to other organizations. PS: If you campare US spending on heathcare per person you find the real issue is we let way to many other people in on the game. When you see a doctor chances are far more time is spent by other people not in the room mostly deciding who pays what than the doctor spends dealing with you. That's 95% pure waste and has little to do with heathcare. A doctor making 300k per year (~250k excluding benefits) only costs ~75$ per half an hour. Co pay can often more than pay for a doctors time.
- BraveNewCurency 10y ago
  You didn't respond to his assertion. The drugs we have are warped by the abilities of people to make money off them. In fact, we can point to many "dead ends" where companies marketed drugs that were more expensive and worse than existing treatments. I've personally witnessed a company taking an ingestable pill and turning it into a nurse-administered injection, just so they could take advantage of reimbursement. Same drug, but the patient suffers just so they can make more money. The total budget of the DHHS is irrelevant. Only money that goes to researching unprofitable drugs would counter the assertion of the OP.
legulere 10y ago
Military can sometimes be interested in solving this kind of problems. Artemisinins which are used against malaria were discovered within the frame of a military project: https://en.wikipedia.org/wiki/Project_523 https://en.wikipedia.org/wiki/Project_523 I don't think that this can be the solution though.
WalterBright 10y ago
Doing the safe-and-effective testing the FDA requires is incredibly expensive. But the cocktail is formed from off the shelf cheap components. So why should a company pay half a billion for testing when anyone could then make the drug? (The article didn't say it was under patent, and the tone of it suggests it wouldn't be patentable.) This is the flip side of the good intentions of FDA's mandate.
- gozur88 10y ago
  This is the key point. The cost of bringing a drug to market is mostly in the clinical trials. If the drug company can't patent the compound it's testing, it will never make back development costs. This is the big problem with nutritional supplements and herbal medicine. You can't patent a plant, so there are all kinds of herbs people take that have never gone through double-blind testing. Some of them are probably efficacious.
  - hammock 10y ago
    >The cost of bringing a drug to market is mostly in the clinical trials. I would not say mostly, although clinical trials are a large part of the cost. (Roughly speaking) For every drug that makes it through final approval, there are ten that failed in trials. However, for every drug that makes it into trials, there were ten that didn't - and the R&D for those unseen drugs is also a huge cost for pharma companies.

nickff 10y ago

The United States Department of Health and Human Services, whose motto is "Improving the health, safety, and well-being of America", which has a budget of just over 1.1 trillion dollars, and about eighty thousand employees.[1][2] For comparison, the largest pharmaceutical company in the world is Novartis, with annual revenues of approximately forty-seven billion dollars.[3] The pharmaceutical industry is one of the most, if not the most heavily regulated industry in the United States. This industry is also affected by various government interventions into research and development, both in funding and restricting options. If you believe there is a problem (and I think there is), it seems difficult to believe that it is due to a lack of government involvement. [1] https://en.wikipedia.org/wiki/United_States_Department_of_Health_and_Human_Services https://en.wikipedia.org/wiki/United_States_Department_of_He... [2] http://www.hhs.gov/sites/default/files/fy2017-budget-in-brief.pdf http://www.hhs.gov/sites/default/files/fy2017-budget-in-brie... [3] http://www.pmlive.com/top_pharma_list/global_revenues http://www.pmlive.com/top_pharma_list/global_revenues

erentz 10y ago
About 90% of this budget is providing Medicare and Medicaid.
- nickff 10y ago
  Yes, and a large portion of that is spent on prescription drugs; the US Government is one of (if not the) largest customers for most drugs.
  - pmoriarty 10y ago
    We need to stop thinking of the government and corporations as distinctly separate. Officials from government own stocks in corporations, serve on their boards, and often get cushy jobs in the very corporations they "regulated" or acquired government contracts for when they retire from "public service". Corporate executives also demonstrate their selfless commitment to the public good by going to work for the government and regulate their former employers. Corporations are taxed and that tax money flows from the government back to corporations. Corporations spend millions lobbying, bribing, and electing government officials to enact laws and contracts favorable to them. Often it's the same people who govern both corporations and the government, and profit from both. They have their hands in each other's pockets and scratch each other's backs.
Retric 10y ago
That's about as relevant as talking about the DoD budget because they spend a lot of money on healthcare. If you divide 1.1 trillion by 80k you get 13.75 Million per worker because they mostly hand out money to other organizations. PS: If you campare US spending on heathcare per person you find the real issue is we let way to many other people in on the game. When you see a doctor chances are far more time is spent by other people not in the room mostly deciding who pays what than the doctor spends dealing with you. That's 95% pure waste and has little to do with heathcare. A doctor making 300k per year (~250k excluding benefits) only costs ~75$ per half an hour. Co pay can often more than pay for a doctors time.
BraveNewCurency 10y ago
You didn't respond to his assertion. The drugs we have are warped by the abilities of people to make money off them. In fact, we can point to many "dead ends" where companies marketed drugs that were more expensive and worse than existing treatments. I've personally witnessed a company taking an ingestable pill and turning it into a nurse-administered injection, just so they could take advantage of reimbursement. Same drug, but the patient suffers just so they can make more money. The total budget of the DHHS is irrelevant. Only money that goes to researching unprofitable drugs would counter the assertion of the OP.

legulere 10y ago

Military can sometimes be interested in solving this kind of problems. Artemisinins which are used against malaria were discovered within the frame of a military project: https://en.wikipedia.org/wiki/Project_523 https://en.wikipedia.org/wiki/Project_523 I don't think that this can be the solution though.

WalterBright 10y ago

Doing the safe-and-effective testing the FDA requires is incredibly expensive. But the cocktail is formed from off the shelf cheap components. So why should a company pay half a billion for testing when anyone could then make the drug? (The article didn't say it was under patent, and the tone of it suggests it wouldn't be patentable.) This is the flip side of the good intentions of FDA's mandate.

gozur88 10y ago
This is the key point. The cost of bringing a drug to market is mostly in the clinical trials. If the drug company can't patent the compound it's testing, it will never make back development costs. This is the big problem with nutritional supplements and herbal medicine. You can't patent a plant, so there are all kinds of herbs people take that have never gone through double-blind testing. Some of them are probably efficacious.
- hammock 10y ago
  >The cost of bringing a drug to market is mostly in the clinical trials. I would not say mostly, although clinical trials are a large part of the cost. (Roughly speaking) For every drug that makes it through final approval, there are ten that failed in trials. However, for every drug that makes it into trials, there were ten that didn't - and the R&D for those unseen drugs is also a huge cost for pharma companies.