4 ms·

> For a drug that costs literally pennies per dose to manufacture. Pennies per dose for a biologic?

by notlob 9y ago

walshemj 9y ago
But why does the cost increase over time (ignoring say normal inflation eg RPI) especially for a widely prescribed drug.
- notlob 9y ago
  It’s perhaps analogous to how list prices for college tuition aren’t necessarily reflective of what people actually pay. It’s a complex system and the price increases are used in part to negotiate with the intermediaries like PBMs. Biologics are a special case also due to complexities in how they (and biosimilars) are regulated, manufactured, and exclusivity periods they are granted. They certainly are not a few cents a dose to make. Not a satisfying answer, and apologies for that, but it’s difficult to traverse with anything approaching brevity.
  - walshemj 9y ago
    Not the same professors salary and other costs rise with inflation a drug once developed and a production line is in place does not face the same cost increase
    - notlob 9y ago
      Drug company employee salaries and overhead also keep pace with inflation, better than academic salaries. I don’t understand your point. A biologic production line requires extensive upkeep: it is a living product. Costs all around are higher. There are also Phase IV activities to consider. Bottom line, all else being equal, biologics cost more than small-molecule drugs to make and distribute.
olefoo 9y ago
I may have been using rhetoric; but I would be surprised if the direct cost ( lab time, process control, packaging, etc. ) were more than $40/dose. And consider that most of the research on which Humira, Embrel etc. came from was sponsored by the US Taxpayer.
- notlob 9y ago
  I don’t have specific knowledge on Humira or its biosimilars, but $40 is more reasonable. To be specific, Humira was developed from research by BASF Bioresearch (bought by Abbott) and a research consortium in the UK, so credit to the UK taxpayers is warranted; I’m not sure about the US side. Nevertheless, government sponsored research largely does not cover the development of the drug, and those costs are somewhere in the hundreds of millions USD range on up.

> For a drug that costs literally pennies per dose to manufacture. Pennies per dose for a biologic?

by notlob 9y ago

> For a drug that costs literally pennies per dose to manufacture. Pennies per dose for a biologic?

But why does the cost increase over time (ignoring say normal inflation eg RPI) especially for a widely prescribed drug.

notlob 9y ago
It’s perhaps analogous to how list prices for college tuition aren’t necessarily reflective of what people actually pay. It’s a complex system and the price increases are used in part to negotiate with the intermediaries like PBMs. Biologics are a special case also due to complexities in how they (and biosimilars) are regulated, manufactured, and exclusivity periods they are granted. They certainly are not a few cents a dose to make. Not a satisfying answer, and apologies for that, but it’s difficult to traverse with anything approaching brevity.
- walshemj 9y ago
  Not the same professors salary and other costs rise with inflation a drug once developed and a production line is in place does not face the same cost increase
  - notlob 9y ago
    Drug company employee salaries and overhead also keep pace with inflation, better than academic salaries. I don’t understand your point. A biologic production line requires extensive upkeep: it is a living product. Costs all around are higher. There are also Phase IV activities to consider. Bottom line, all else being equal, biologics cost more than small-molecule drugs to make and distribute.

olefoo 9y ago

I may have been using rhetoric; but I would be surprised if the direct cost ( lab time, process control, packaging, etc. ) were more than $40/dose. And consider that most of the research on which Humira, Embrel etc. came from was sponsored by the US Taxpayer.

notlob 9y ago
I don’t have specific knowledge on Humira or its biosimilars, but $40 is more reasonable. To be specific, Humira was developed from research by BASF Bioresearch (bought by Abbott) and a research consortium in the UK, so credit to the UK taxpayers is warranted; I’m not sure about the US side. Nevertheless, government sponsored research largely does not cover the development of the drug, and those costs are somewhere in the hundreds of millions USD range on up.