5 ms·

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 proces

by 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.
GeekyBear 9y ago
Research from the Pew Charitable Trusts shows that in 2012 alone 27 Billion dollars was spent by US Pharmaceutical companies to promote their drugs to doctors and patients. http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2013/11/11/persuading-the-prescribers-pharmaceutical-industry-marketing-and-its-influence-on-physicians-and-patients http://www.pewtrusts.org/en/research-and-analysis/fact-sheet... This is money that could have been spent on R&D instead of advertising if we moved to a non-profit pharmaceuticals model.
- jonlucc 9y ago
  Pharma researcher here (on the early science side, not market research or that kind of thing) I think people vastly overestimate their physicians' ability to stay on top of newly published research, and that includes new drugs' safety and efficacy profiles. If I want the stuff I work on to reach patients (and I do), then I want doctors to know about it. In the absence of pharma marketing dollars aimed at doctors and patients, I would like if there were some way to bring doctors the new information. Maybe that should be handled by a third party that doesn't have the interests of pharma companies in mind, funded by all of the drug companies at the time of a new drug approval.
  - pmyteh 9y ago
    In Britain, we rely more on guidance from the National Institute for Health and Care Excellence (NICE). It does comparative reviews to make recommendations on the most suitable drugs to use. Motivation is primarily to restrict crazy-expensive drugs to those situations where they're actually going to represent value for (the public's) money, but also to point clinicians towards new approaches which can improve the quality of treatment. So hugely expensive advertising towards physicians is not the only way to do it.
    - jonlucc 9y ago
      That sounds like a fantastic resource that I can not imagine passing in the United States any time soon. Is it funded along with the rest of the NHS?

by mft_ 9y ago

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.

GeekyBear 9y ago

Research from the Pew Charitable Trusts shows that in 2012 alone 27 Billion dollars was spent by US Pharmaceutical companies to promote their drugs to doctors and patients. http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2013/11/11/persuading-the-prescribers-pharmaceutical-industry-marketing-and-its-influence-on-physicians-and-patients http://www.pewtrusts.org/en/research-and-analysis/fact-sheet... This is money that could have been spent on R&D instead of advertising if we moved to a non-profit pharmaceuticals model.

jonlucc 9y ago
Pharma researcher here (on the early science side, not market research or that kind of thing) I think people vastly overestimate their physicians' ability to stay on top of newly published research, and that includes new drugs' safety and efficacy profiles. If I want the stuff I work on to reach patients (and I do), then I want doctors to know about it. In the absence of pharma marketing dollars aimed at doctors and patients, I would like if there were some way to bring doctors the new information. Maybe that should be handled by a third party that doesn't have the interests of pharma companies in mind, funded by all of the drug companies at the time of a new drug approval.
- pmyteh 9y ago
  In Britain, we rely more on guidance from the National Institute for Health and Care Excellence (NICE). It does comparative reviews to make recommendations on the most suitable drugs to use. Motivation is primarily to restrict crazy-expensive drugs to those situations where they're actually going to represent value for (the public's) money, but also to point clinicians towards new approaches which can improve the quality of treatment. So hugely expensive advertising towards physicians is not the only way to do it.
  - jonlucc 9y ago
    That sounds like a fantastic resource that I can not imagine passing in the United States any time soon. Is it funded along with the rest of the NHS?