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It costs $5 Billion Dollars now to bring a new drug to market. Can anyone blame companies for trying to find loopholes to that staggering fee? https://www.for

It costs $5 Billion Dollars now to bring a new drug to market. Can anyone blame companies for trying to find loopholes to that staggering fee? https://www.forbes.com/sites/matthewherper/2013/08/11/how-the-staggering-cost-of-inventing-new-drugs-is-shaping-the-future-of-medicine/ https://www.forbes.com/sites/matthewherper/2013/08/11/how-th... We should be finding better ways to do clinical trials to help companies lower the cost. I'm glad there was a blockchain event in Miami recently about this. It's one of the most under discussed issues in tech/healthcare today.

Alex3917 9y ago
> It costs $5 Billion Dollars now to bring a new drug to market. It costs more like $35M. Look at the last 20 years of MAPS budgets.
- stochastician 9y ago
  Could you point to where this number comes from more precisely? I'm incredibly curious, given that it is an order of magnitude different from what I've seen. For example, there's the Tufts study: http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014... which arrives at $2.6B. And if you are interested in keeping up with some of these studies from someone in the industry, I highly recommend Derek Lowe's blog -- he's a medicinal chemist. For example, http://blogs.sciencemag.org/pipeline/archives/2017/09/12/it-costs-more-than-this http://blogs.sciencemag.org/pipeline/archives/2017/09/12/it-...
  - deleted 9y ago
    [deleted]
  - aaavl2821 9y ago
    The tufts study is the definitive source I usually hear as well. But most of the $2.6B is cost of failed candidates. The actual cash costs of developing a successful drug are probably more like $100-200M minimum from start of lead optimization to FDA approval, based on the tufts data and also anecdotally if you track venture funding raised from companies that get drugs approved In some indications however one phase 3 study can be $300M+
    - Alex3917 9y ago
      The upper bound isn't really relevant though, because of course any company can spend infinitely much on anything, and will if they're trying to maximize the amount of time they can sell the drug while it's under patent. The only thing that matters is how much the least expensive drug approvals cost.
      - aaavl2821 9y ago
        I'm probably taking you too literally but companies can't spend infinite amounts because they don't have infinite money The upper bound is actually very relevant. Those $300M studies are cardiovascular outcomes studies, which are required for many diabetes / cardiovascular drugs, and those expensive studies have basically stifled innovation in those areas because the cost of developing those drugs is too high compared to the expected profits Not sure I understand the statement that the only thing that matters is how much the least expensive drug approvals cost?
    - DangerousPie 9y ago
      Why shouldn't we consider the cost of failed candidates? That's like saying lottery tickets are a great investment, if we only look at the winning ticket.
      - aaavl2821 9y ago
        I completely agree you have to include cost of failed candidates and did not mean to suggest I did not I mentioned the cash costs for developing an approved drug as an additional data point to that illustrate GPs $35M is too low even excluding cost of failure
    - c3534l 9y ago
      The actual cost of developing a successful drug includes failed candidates. If you knew what chemicals would be effective medicines from the start, you wouldn't need to do research.
      - 9y ago
  - dantillberg 9y ago
    I'm sure there are other folks on here who know more on the subject, but the last time I looked into data from that Tufts group, it smelled fishy to me: closed source analysis of closed source data. It seemed to hardly count as verifiable academic research. The raw data was seemingly made available privately to the researchers by way of their close relationship with the companies they're studying, the raw data is not made available by reproduction of their analysis, and there's no way for others to acquire similar data for comparison. They may be honest, and the data and analysis may be accurate, and it may not be trying to paint a picture that favors its benefactors, but I did not conclude any of those things.
maxxxxx 9y ago
How much of this cost is research and regulatory vs marketing and sales activities?
- aaavl2821 9y ago
  The oft-cited $2.6B cost to develop a drug from the tufts studies pertains to r&d costs up to FDA approval. You need FDA approval to market a drug and the tufts studies don't include any pre-approval market research costs from what I can tell However a big part of the $2.6B is the money invested into drugs that don't end up getting approved, ie cost of failure. The actual cash cost of getting a drug approved is probably an order of magnitude less Once approved most drugs do 90%+ gross margins so are quite profitable
jfoutz 9y ago
On the flip side, most drugs don't actually do anything. Or have side effects that are worse than the thing they're trying to cure. sure, i'm on board with lowering the cost, but not at the expense of lowering the efficacy. I could see a good argument for balancing clinical trials vs toxicity, commonality and threat. Perhaps a drug that's only useful for .0001% of the population that would die otherwise, and isn't toxic, well maybe we can lower the bar there. but something that half the population takes, and overdoses will kill you, that should require really high standard. this approach is tough with the current system of off-label prescriptions though.
- marcosdumay 9y ago
  I would say that a high bar for toxicity and side effects is good. Leave it there. But there can be a more graded approach for effectiveness. There is little reason to completely forbid the commercialization of a drug because it's effectiveness isn't certain to a very low p-value.
  - jfoutz 9y ago
    I've got a $5000 sugar pill for you that will change your mind about that.
    - marcosdumay 9y ago
      So, by "graded approach" you understood the exact opposite extreme from the current?
  - dragonwriter 9y ago
    But, as I understand, they aren't independent considerations; toxicity, side effects, and effectiveness (and the nature of the condition they treat) are weighed together, not evaluated independently. The acceptable toxicity and side effects of a drug that's near 100% effective at treating quickly-fatal condition with no other available treatment is not the same as for something with only moderate effectiveness at treating headache pain.
we32nmiuh3 9y ago
First, what's this to do with medical devices? Second, I'm not so convinced by a science writers rather magical, in that we can't see his variables (just trust me I got it all right!), napkin math from 2013, and the complaints of a drug industry power player. > We should be finding better ways to do clinical trials to help companies lower the cost. I'm sure the rich drug companies can find ways to do this. Like cut ridiculous compensation packages when apparently your operating costs are skyrocketing? I'm not inclined to "help out" companies doing their share to dig themselves into a financial shitshow. They have enough power, including, apparently, an SC decision that let's them expropriate private property on vague promises of jobs, then providing no jobs: https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London And let's not forget the freedom they have to tweak a generic (with no change to the effect of the drug) and earn a fresh patent claim. I keep hearing pundits go on about how government can't seem to control it's costs, and is ridiculously inefficient -- we best just shut it down. Then in the next breath, they proclaim giant corps are having a hard time managing theirs, but obviously WE MUST HELP THEM.
s73v3r_ 9y ago
"Can anyone blame companies for trying to find loopholes" Yes, I absolutely can.
- refurb 9y ago
  Thanks for sharing your compelling argument. You've convinced me!
  - s73v3r_ 9y ago
    I absolutely can blame a company for the actions that they, as adults who are responsible for their actions, take.
jopsen 9y ago
Maybe we should just give up on privacy for medical records and require that all prescriptions, tests, symptoms, etc. are thrown into a large database where they can be analyzed. Then approval is given for X number of patients, when hypothesis is defined. And further approval follows automatically as long as on-the-fly analysis of all health records supports the hypothesis. Okay, I'm naive, and we integrating all health records is certainly non-trivial. My point is every prescription is an experiment that could be used as further evidence.
- dhbradshaw 9y ago
  Any time you care about the results of a set of actions, you should measure those results. If we care about the results of medical care, we should measure those results. It's irresponsible not to. I would venture to guess that millions of people are dying early because we don't have this as a mandatory, built in part of the process. But let's put this in terms of not just science but economics. A working market depends on having information about the normalized value of a particular proposition. To understand that value, you need to know the proposition's cost and its benefit. Insurance and other systems remove us from information about cost. Throwing away results data obscures the benefit. Is it any shock then that prices spiral out of control?

Alex3917 9y ago

> It costs $5 Billion Dollars now to bring a new drug to market. It costs more like $35M. Look at the last 20 years of MAPS budgets.

stochastician 9y ago
Could you point to where this number comes from more precisely? I'm incredibly curious, given that it is an order of magnitude different from what I've seen. For example, there's the Tufts study: http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014_cost_study http://csdd.tufts.edu/news/complete_story/pr_tufts_csdd_2014... which arrives at $2.6B. And if you are interested in keeping up with some of these studies from someone in the industry, I highly recommend Derek Lowe's blog -- he's a medicinal chemist. For example, http://blogs.sciencemag.org/pipeline/archives/2017/09/12/it-costs-more-than-this http://blogs.sciencemag.org/pipeline/archives/2017/09/12/it-...
- deleted 9y ago
  [deleted]
- aaavl2821 9y ago
  The tufts study is the definitive source I usually hear as well. But most of the $2.6B is cost of failed candidates. The actual cash costs of developing a successful drug are probably more like $100-200M minimum from start of lead optimization to FDA approval, based on the tufts data and also anecdotally if you track venture funding raised from companies that get drugs approved In some indications however one phase 3 study can be $300M+
  - Alex3917 9y ago
    The upper bound isn't really relevant though, because of course any company can spend infinitely much on anything, and will if they're trying to maximize the amount of time they can sell the drug while it's under patent. The only thing that matters is how much the least expensive drug approvals cost.
    - aaavl2821 9y ago
      I'm probably taking you too literally but companies can't spend infinite amounts because they don't have infinite money The upper bound is actually very relevant. Those $300M studies are cardiovascular outcomes studies, which are required for many diabetes / cardiovascular drugs, and those expensive studies have basically stifled innovation in those areas because the cost of developing those drugs is too high compared to the expected profits Not sure I understand the statement that the only thing that matters is how much the least expensive drug approvals cost?
  - DangerousPie 9y ago
    Why shouldn't we consider the cost of failed candidates? That's like saying lottery tickets are a great investment, if we only look at the winning ticket.
    - aaavl2821 9y ago
      I completely agree you have to include cost of failed candidates and did not mean to suggest I did not I mentioned the cash costs for developing an approved drug as an additional data point to that illustrate GPs $35M is too low even excluding cost of failure
  - c3534l 9y ago
    The actual cost of developing a successful drug includes failed candidates. If you knew what chemicals would be effective medicines from the start, you wouldn't need to do research.
    - 9y ago
- dantillberg 9y ago
  I'm sure there are other folks on here who know more on the subject, but the last time I looked into data from that Tufts group, it smelled fishy to me: closed source analysis of closed source data. It seemed to hardly count as verifiable academic research. The raw data was seemingly made available privately to the researchers by way of their close relationship with the companies they're studying, the raw data is not made available by reproduction of their analysis, and there's no way for others to acquire similar data for comparison. They may be honest, and the data and analysis may be accurate, and it may not be trying to paint a picture that favors its benefactors, but I did not conclude any of those things.

maxxxxx 9y ago

How much of this cost is research and regulatory vs marketing and sales activities?

aaavl2821 9y ago
The oft-cited $2.6B cost to develop a drug from the tufts studies pertains to r&d costs up to FDA approval. You need FDA approval to market a drug and the tufts studies don't include any pre-approval market research costs from what I can tell However a big part of the $2.6B is the money invested into drugs that don't end up getting approved, ie cost of failure. The actual cash cost of getting a drug approved is probably an order of magnitude less Once approved most drugs do 90%+ gross margins so are quite profitable

jfoutz 9y ago

On the flip side, most drugs don't actually do anything. Or have side effects that are worse than the thing they're trying to cure. sure, i'm on board with lowering the cost, but not at the expense of lowering the efficacy. I could see a good argument for balancing clinical trials vs toxicity, commonality and threat. Perhaps a drug that's only useful for .0001% of the population that would die otherwise, and isn't toxic, well maybe we can lower the bar there. but something that half the population takes, and overdoses will kill you, that should require really high standard. this approach is tough with the current system of off-label prescriptions though.

marcosdumay 9y ago
I would say that a high bar for toxicity and side effects is good. Leave it there. But there can be a more graded approach for effectiveness. There is little reason to completely forbid the commercialization of a drug because it's effectiveness isn't certain to a very low p-value.
- jfoutz 9y ago
  I've got a $5000 sugar pill for you that will change your mind about that.
  - marcosdumay 9y ago
    So, by "graded approach" you understood the exact opposite extreme from the current?
- dragonwriter 9y ago
  But, as I understand, they aren't independent considerations; toxicity, side effects, and effectiveness (and the nature of the condition they treat) are weighed together, not evaluated independently. The acceptable toxicity and side effects of a drug that's near 100% effective at treating quickly-fatal condition with no other available treatment is not the same as for something with only moderate effectiveness at treating headache pain.

we32nmiuh3 9y ago

First, what's this to do with medical devices? Second, I'm not so convinced by a science writers rather magical, in that we can't see his variables (just trust me I got it all right!), napkin math from 2013, and the complaints of a drug industry power player. > We should be finding better ways to do clinical trials to help companies lower the cost. I'm sure the rich drug companies can find ways to do this. Like cut ridiculous compensation packages when apparently your operating costs are skyrocketing? I'm not inclined to "help out" companies doing their share to dig themselves into a financial shitshow. They have enough power, including, apparently, an SC decision that let's them expropriate private property on vague promises of jobs, then providing no jobs: https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London And let's not forget the freedom they have to tweak a generic (with no change to the effect of the drug) and earn a fresh patent claim. I keep hearing pundits go on about how government can't seem to control it's costs, and is ridiculously inefficient -- we best just shut it down. Then in the next breath, they proclaim giant corps are having a hard time managing theirs, but obviously WE MUST HELP THEM.

s73v3r_ 9y ago

"Can anyone blame companies for trying to find loopholes" Yes, I absolutely can.

refurb 9y ago
Thanks for sharing your compelling argument. You've convinced me!
- s73v3r_ 9y ago
  I absolutely can blame a company for the actions that they, as adults who are responsible for their actions, take.

jopsen 9y ago

Maybe we should just give up on privacy for medical records and require that all prescriptions, tests, symptoms, etc. are thrown into a large database where they can be analyzed. Then approval is given for X number of patients, when hypothesis is defined. And further approval follows automatically as long as on-the-fly analysis of all health records supports the hypothesis. Okay, I'm naive, and we integrating all health records is certainly non-trivial. My point is every prescription is an experiment that could be used as further evidence.

dhbradshaw 9y ago
Any time you care about the results of a set of actions, you should measure those results. If we care about the results of medical care, we should measure those results. It's irresponsible not to. I would venture to guess that millions of people are dying early because we don't have this as a mandatory, built in part of the process. But let's put this in terms of not just science but economics. A working market depends on having information about the normalized value of a particular proposition. To understand that value, you need to know the proposition's cost and its benefit. Insurance and other systems remove us from information about cost. Throwing away results data obscures the benefit. Is it any shock then that prices spiral out of control?