6 ms·

Drug prices is an increasing problem everywhere. Now I’m European so bare with me and my “Stalinist” ways, but I don’t see why something so essential to societ

Drug prices is an increasing problem everywhere. Now I’m European so bare with me and my “Stalinist” ways, but I don’t see why something so essential to society is in the hands of corporations rather than the public. Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’et can get even richer.

mft_ 9y ago
Assuming you're referring to the general development and supply of all drugs (in particular new drugs, as well as generics) the simple answer is that the process of discovering and developing new drugs is both high-risk and also heinously expensive. As such, whoever approaches it needs to have many billions to spend and --very likely-- lose. The current capitalist Pharma model has developed to suit: investors in Pharma essentially take on the risk, and the 'downside' is high drug prices to pay back the investors for their investment and its risk. Are there alternatives? Well... * Large charities (the Gates Foundation, for example) might be able to fund development of drugs, but would be most likely to focus on a limited number of high-return, lower-risk opportunities. The Foundation's annual total spend ($4.6Bn in 2016) is roughly half of one large Pharma company's R&D spend (https://www.roche.com/research_and_development.htm https://www.roche.com/research_and_development.htm), so they've clearly not got the clout to enter general drug development. * Governments might be able to enter this space, but then you're betting that a government can do it cheaper/better than big Pharma, which is a major gamble, even before you get into arguments about public- vs. private-sector efficiency. You then also run into the challenge of governments not being great at making major long-term visionary investments in a 4/5-year election cycle, the electoral unpopularity of such an approach if drugs fail, and the ethical requirement of firewalling the government development arm from the drug approval (i.e. public-health-safeguarding) arm. And again, you've got to find the money: sure, Roche's drug development spend per year is only ~a tenth of the UK NHS's annual budget... but that's a super-cash-strapped health service - diverting 10% of its budget to maybe improve things in 10 years would be a tough sell. Any avenues I'm missing? (Now... fully agree that it would be possible for government or non-profits to enter the generic space, but... the majority of generics make pennies, if anything, and are certainly not cash cows. For every one 'bad' case that's brought to the public attention, be it a rare antibiotic, or the price of adrenaline pens, there are countless thousands of other examples which aren't a problem. So you'd need a very flexible generics strategy to only focus on these rare 'problem' cases... and this might not even always be scientifically or legally possible.)
- EliRivers 9y ago
  I understand the drug companies ("pharmaceutical industry" in the link below) pay about 60% of the research costs. It's a lot of it, but it's not orders-of-magnitude bigger than the public contribution. https://www.thebalance.com/who-funds-biomedical-research-2663193 https://www.thebalance.com/who-funds-biomedical-research-266... Some would suggest that the drug companies actually take on the lower risk research, leaving the high risk work to be funded by other sources: http://www.latimes.com/opinion/op-ed/la-oe-1027-mazzucato-big-pharma-prices-20151027-story.html http://www.latimes.com/opinion/op-ed/la-oe-1027-mazzucato-bi...
  - mft_ 9y ago
    It's not clear from the first article what sort of "research" is covered by the calculation, nor how they've come up with these figures. Lots of basic research is done which furthers our understanding of biology; whether this research results in new drugs is unclear. ----- There are different routes by which new drugs are discovered, but very simplistically, we can break them down to two: 1) a researcher somewhere (not in Pharma) comes up with some positive research that might eventually result in the new drug for some disease. To develop this finding, often they will create (spin off) a new private company, and somehow generate funding. The extent to which the original funding institution benefits from this research is likely variable, based on the legal framework and contracts under which the researcher was operating. (And frankly, if a university or other institution doesn't benefit from such a discovery it funded in its labs... they're not doing something right.) 2) a pharmaceutical company funds its own discovery operations, which work to discover new targets and/or drugs for those targets -- #1 is unpredictable, but can result in great new discoveries which are brought to market --and thus patients-- relatively cheaply (like in the hundreds of millions, rather than billions) #2 is difficult, and very expensive, but mostly works - some pharmaceutical companies grind out drug after drug. However, ultimate success is less certain, and cumulatively, considering the cost of discovery operations as well as subsequent development, the cost is usually in the billions per successful new drug. This is also why we're seeing a switch to a mixed model: big Pharma is increasingly spending big on smaller biotech operations with promising drug candidates, as a way of minimising risk.
- 9y ago
deleted 9y ago
[deleted]
Kalium 9y ago
> Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’et can get even richer. You're absolutely, completely, 100% right. That amount of money could buy an incredible amount of research! Right now, the American government institutions that fund this kind of research are infamous for being very risk-averse. They fund research, but do so in a way that takes few chances. Younger researchers get shut out. Researchers chasing novel ideas often get shut out. After all, why fund some moonshot when there's someone with a good track record of results to fund instead? Basically, there's ample reason to doubt that the American institutions in question could actually do better if they were handing out the funding. Oh, and the grant-giving bureaucracy is also infamous.

mft_ 9y ago

Assuming you're referring to the general development and supply of all drugs (in particular new drugs, as well as generics) the simple answer is that the process of discovering and developing new drugs is both high-risk and also heinously expensive. As such, whoever approaches it needs to have many billions to spend and --very likely-- lose. The current capitalist Pharma model has developed to suit: investors in Pharma essentially take on the risk, and the 'downside' is high drug prices to pay back the investors for their investment and its risk. Are there alternatives? Well... * Large charities (the Gates Foundation, for example) might be able to fund development of drugs, but would be most likely to focus on a limited number of high-return, lower-risk opportunities. The Foundation's annual total spend ($4.6Bn in 2016) is roughly half of one large Pharma company's R&D spend (https://www.roche.com/research_and_development.htm https://www.roche.com/research_and_development.htm), so they've clearly not got the clout to enter general drug development. * Governments might be able to enter this space, but then you're betting that a government can do it cheaper/better than big Pharma, which is a major gamble, even before you get into arguments about public- vs. private-sector efficiency. You then also run into the challenge of governments not being great at making major long-term visionary investments in a 4/5-year election cycle, the electoral unpopularity of such an approach if drugs fail, and the ethical requirement of firewalling the government development arm from the drug approval (i.e. public-health-safeguarding) arm. And again, you've got to find the money: sure, Roche's drug development spend per year is only ~a tenth of the UK NHS's annual budget... but that's a super-cash-strapped health service - diverting 10% of its budget to maybe improve things in 10 years would be a tough sell. Any avenues I'm missing? (Now... fully agree that it would be possible for government or non-profits to enter the generic space, but... the majority of generics make pennies, if anything, and are certainly not cash cows. For every one 'bad' case that's brought to the public attention, be it a rare antibiotic, or the price of adrenaline pens, there are countless thousands of other examples which aren't a problem. So you'd need a very flexible generics strategy to only focus on these rare 'problem' cases... and this might not even always be scientifically or legally possible.)

EliRivers 9y ago
I understand the drug companies ("pharmaceutical industry" in the link below) pay about 60% of the research costs. It's a lot of it, but it's not orders-of-magnitude bigger than the public contribution. https://www.thebalance.com/who-funds-biomedical-research-2663193 https://www.thebalance.com/who-funds-biomedical-research-266... Some would suggest that the drug companies actually take on the lower risk research, leaving the high risk work to be funded by other sources: http://www.latimes.com/opinion/op-ed/la-oe-1027-mazzucato-big-pharma-prices-20151027-story.html http://www.latimes.com/opinion/op-ed/la-oe-1027-mazzucato-bi...
- mft_ 9y ago
  It's not clear from the first article what sort of "research" is covered by the calculation, nor how they've come up with these figures. Lots of basic research is done which furthers our understanding of biology; whether this research results in new drugs is unclear. ----- There are different routes by which new drugs are discovered, but very simplistically, we can break them down to two: 1) a researcher somewhere (not in Pharma) comes up with some positive research that might eventually result in the new drug for some disease. To develop this finding, often they will create (spin off) a new private company, and somehow generate funding. The extent to which the original funding institution benefits from this research is likely variable, based on the legal framework and contracts under which the researcher was operating. (And frankly, if a university or other institution doesn't benefit from such a discovery it funded in its labs... they're not doing something right.) 2) a pharmaceutical company funds its own discovery operations, which work to discover new targets and/or drugs for those targets -- #1 is unpredictable, but can result in great new discoveries which are brought to market --and thus patients-- relatively cheaply (like in the hundreds of millions, rather than billions) #2 is difficult, and very expensive, but mostly works - some pharmaceutical companies grind out drug after drug. However, ultimate success is less certain, and cumulatively, considering the cost of discovery operations as well as subsequent development, the cost is usually in the billions per successful new drug. This is also why we're seeing a switch to a mixed model: big Pharma is increasingly spending big on smaller biotech operations with promising drug candidates, as a way of minimising risk.
9y ago

deleted 9y ago

[deleted]

Kalium 9y ago

> Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’et can get even richer. You're absolutely, completely, 100% right. That amount of money could buy an incredible amount of research! Right now, the American government institutions that fund this kind of research are infamous for being very risk-averse. They fund research, but do so in a way that takes few chances. Younger researchers get shut out. Researchers chasing novel ideas often get shut out. After all, why fund some moonshot when there's someone with a good track record of results to fund instead? Basically, there's ample reason to doubt that the American institutions in question could actually do better if they were handing out the funding. Oh, and the grant-giving bureaucracy is also infamous.