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Another sign that health care and commerce do not mix. In some countries, there are plans to "regulate", in this case to mandate distributors to keep 4 months
by plmu 8y ago
Another sign that health care and commerce do not mix.
In some countries, there are plans to "regulate", in this case to mandate distributors to keep 4 months of supply. I doubt if that will work.
Instead, like the UK NHS, where the healthcare itself is non-commercial and fair to everyone, the R&D + production of drugs could also be organized much better:
Do the R&D via universities, that should receive grants to develop into directions that are socially wanted, instead of developing more of the same (like high-bloodpressure drugs) just because of commercial interests.
States can collaborate and organize e.g. very expensive high engergy physics R&D (such as CERN) or fusion energy. Why would the same system not work for drugs R&D?
The production itself, completely patent free, can be granted according to demand to commercial companies. These just produce what health care systems order. The states/systems pay a fair price allowing the companies to have a decent profit margin to remain viable, but the current profit margins in the pharma sector are much too high and immoral, since there are people dying because they cannot affort the necessary drugs.
I think this sector has proven more than once, that it is not capable of taking the very high responsbility, but is driven by greed that leads to immoral actions.
- refurb 8y agoConsidering most drugs fail to get to market, I’d offer that the profit margins aren’t all that good if you start from scratch. Saying profit margins are too high is easy if you just count the winners.
- Retric 8y agoMarketing is a larger cost than Reseach for major drug companies.
- chimeracoder 8y ago> Marketing is a larger cost than Reseach for major drug companies. People on HN love to point this out, as if it somehow implies that companies are wasting money. Marketing is how companies secure their revenues from the drugs that do make it to market. Without marketing, they'd have even less money to spend on R&D. (And yes, marketing takes place in countries besides the US. Marketing is more than just consumer advertising).
- refurb 8y agoThis trope is always pulled out but it’s wrong. The analysis looked at S&GA which represented far more than marketing. Second, marketing produces a positive ROI (or why else do it). So you spend $10M on marketing and get more than $10M back. Third, you can’t sell a drug without some type of marketing. I know HN is full of engineers who build products that sell themselves, but that’s BS. Doctors often have misconceptions or lack information about new drugs and getting someone in front of them to educate them is necessary.
- paulryanrogers 8y agoGreat, let's outlaw marketing to patients. Then paid experts can deliver independently produced research directly to doctors.
- Retric 8y agoDoctors fall to marketing all the time. Even just hearing something mentioned makes it easier to jump to conclusions and rarely for the better.
- Retric 8y agoPositive ROI relating to prescribing people useless and often harmful drugs. Just look at prescriptions that just happen to fall off after drugs go generic. People are also buying insurance which is priced based on the assumption people will get useless prescriptions. So, this advertising really adds a lot more costs without nessisarily any net benefits.
- heyxub 8y agoI think counting the losers is the great rhetorical trick pulled on the public by the pharmaceutical industry. In what other industry do organizations get away with charging customers such exorbitant amounts of money to cover their failures?
- akovaski 8y ago"Counting the losers" is part of R&D. Many companies invest in R&D, having failures is normal. According to Investopia[0], pharma companies float around the top of R&D spending. They indicate the semiconductor industry gets away with charging customers with more R&D spending. (Note, Investopedia doesn't cite any sources, so take it with a grain of salt.) [0] https://www.investopedia.com/ask/answers/060115/how-much-drug-companys-spending-allocated-research-and-development-average.asp https://www.investopedia.com/ask/answers/060115/how-much-dru...
- flexer_850 8y agoGP here. Using throwaways for privacy. Don't believe the hype. The total R&D cost of an entire industry has a tenuous connection to those for a single product or organization. The lion's share of early stage R&D in pharmaceuticals happens in academia or start ups. The big players "acquire" the successful ones somewhere around phase II trials. In the semiconductor industry, like pharma, failed startups go out of business and disappear. Intel would get laughed out of the room if they tried to claim the R&D costs of such failures as their own. Yet for some reason everyone buys this argument from the pharmaceutical companies.
- AllegedAlec 8y agoYou're severely underestimating how expensive drug research is. It costs nearly 3 billion dollars to get a drug from zero to market-ready according to the TCSDD.
- mikro2nd 8y agoHow much of that 3billion goes to the fundamental research vs. the amount needed for regulatory approvals, though? (On average -- obviously it will vary quite widely from one drug to the next and will depend on many factors.)
- gomox 8y agoThe expensive bit are the clinical trials. They are required for approval, but they are research.
- gomox 8y agoThis often quoted number includes the investments in failed drugs (an outstanding majority) and 1.5B of an 11% cost of capital "opportunity cost" (i.e. money not gained by investing in other stuff). It is therefore highly misleading when quoted out of context, as it is not the real amount of money that is spent on a single drug.
- refurb 8y agoHuh? Those two things certainly do represent real costs. If a company spends $2B to develop 5 candidate drugs and four fail, the cost was $2B for that drug. Learning what doesn’t work helps you find something that does. Second, opportunity costs are real costs, even though most consumers ignore them. You see this when buying a home. People never count the money they could have made by putting their down payment into the market, but that’s still money lost. You can argue 11% is too high, but that’s a different argument.
- gomox 8y agoI understand the numbers, but they are highly misleading, which is my point. When you say it costs $X to do $Y, including in $X the cost of 20 other times you fail to do some other thing that isn't $Y is unexpected. Likewise re: opportunity costs. The actual investment doesn't include the opportunity cost. I.e. only around half of that money had to be obtained. The numbers are meaningful from the capital allocator perspective, which is not the conventional perspective. The number that people picture when you say "the cost of bringing a drug to market" is ballpark 100-200M.
- coredog64 8y ago"Me too" drugs are quite useful. Let's say that compound A and compound B both treat your condition. Both have side effects, but there's some difference in the two sets. Or, if we're talking about compound still protected by patent, what if you have a negative reaction to the inactive ingredients in one? Would you rather that patients who can't tolerate side effects just go without? Serendipity is a real thing too. Nobody started with the idea of creating boner pills or hair regrowth cream when they created Viagra and Rogaine. Both were failed treatments for another condition that happened to have useful side effects.