4 ms·

That's also not a silver bullet see CF where foundation funded research and sold the IP to pharma company for 3.3B$ and the patients were then charged 300k a ye

by yread 8y ago

That's also not a silver bullet see CF where foundation funded research and sold the IP to pharma company for 3.3B$ and the patients were then charged 300k a year for it. https://philanthropynewsdigest.org/news/cystic-fibrosis-foundation-receives-3.3-billion-royalty-pay-out https://philanthropynewsdigest.org/news/cystic-fibrosis-foun...

zaroth 8y ago
I think you have cause and effect reversed. They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion. Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies which did not previously exist, saving and improving people’s lives. You can debate the profit motive (as your link mentions) but the Foundation considers this a massive win for their ability to fight CF and make CF sufferers lives better.
- wjnc 8y ago
  The important question is... why is it ethical for a foundation to deliver a product at $300k/yr where the cost are borne by other people? [1] In my world that price would never be paid, since about €100k/yr would max out the qaly. They would still have their medicine albeit at a perhaps $1 billion profit / return on risk. I'll bet my ethical balls here that none of the small contributors to a CF foundation expect a billion dollar windfall to come out if there contribution, regardless the merits that billion goes to afterwards. [1] Some economic reductionism here: if you know the cash flow, you can project the value and the other way around. So if someone offers you 3 billion and you know the effect of the medicine and the number of patients, you can infer the price of the medicine. This to establish the (moral) link between the selling of the IP and the price.
  - zaroth 8y ago
    The pharmaceutical company Vertex sells the drug for $300k. Because CF Foundation helped fund the development, they get royalties, just like universities sometimes do when they help develop a drug. This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. So the CF Foundation is “forcing donatations” from the healthy populace through increased insurance premiums to bankroll their continued investments in treatments and such. I don’t know if that makes it any more or less ethical, but certainly if it were mostly individual CF patients on the hook for the $300k (in aggregate that is — I’m not saying that never happens) then it would make less sense for the CF Foundation as a strategy.
    - JKCalhoun 8y ago
      > This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?
      - dodobirdlord 8y ago
        Sure, that's how insurance works. The crux of the issue is whether the prices are actually "exorbitant" or whether that's just political spin. I happen to think it's just political spin.
- netjiro 8y ago
  > Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. This is a _myth_ Big Pharma is an insanely inefficient structure for turning money into useful R&D results. Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money via taxes and/or insurance programs. R&D should be paid by government funds. Testing should be transparent and open. Production should be done by private companies. This would be a significantly more efficient use of our money. It would also align R&D expenditures much better with actual costs to society for medical issues.
  - rayiner 8y ago
    Typical R&D spend in pharma as percentage of revenues is 10-20%. That’s in the same range as Google, Intel, or Microsoft, which are widely considered to be very efficient structures for turning money into innovation. By your reasoning, we could cut out a lot of the fat and get better R&D for less by nationalizing Google.
    - eecc 8y ago
      Of the main customer of Google was the government itself then why not? (The point is: it’s not. So so what’s your point?)
      - rayiner 8y ago
        Who the customer is has no bearing on whether a company spending 15% of revenues on R&D is a sign of efficiency or inefficiency. If your premise was true—that you can achieve increased efficiency by nationalizing research because it lets you cut out the other costs of running a company, then that principle would be applicable to Google as well as Novartis.
        sykhotic 8y ago
        But if twice as much is spent on marketing then in the case of pharmaceuticals it appears this is inefficient. These drugs tend to be necessary for people in ways that Google is not. There are cases where people live in penury due to high drug costs. From the perspective of beneficial to society it seems from my perspective that this is inefficient. Whether or not Google is efficient isn’t relevant in this matter as far as I can tell. The typical argument for justifying high drug costs is that it costs lots of money to do R&D. This argument loses weight when the marketing costs are twice the R&D costs. Further to this point is the fact that the actual discovers aren’t the ones getting the big rewards of their discoveries. So it all appears inefficient in ways that don’t matter when applied to Google due to the fact that ultimately we are talking about peoples’ financial and physical health.

by yread 8y ago

zaroth 8y ago

I think you have cause and effect reversed. They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion. Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies which did not previously exist, saving and improving people’s lives. You can debate the profit motive (as your link mentions) but the Foundation considers this a massive win for their ability to fight CF and make CF sufferers lives better.

wjnc 8y ago
The important question is... why is it ethical for a foundation to deliver a product at $300k/yr where the cost are borne by other people? [1] In my world that price would never be paid, since about €100k/yr would max out the qaly. They would still have their medicine albeit at a perhaps $1 billion profit / return on risk. I'll bet my ethical balls here that none of the small contributors to a CF foundation expect a billion dollar windfall to come out if there contribution, regardless the merits that billion goes to afterwards. [1] Some economic reductionism here: if you know the cash flow, you can project the value and the other way around. So if someone offers you 3 billion and you know the effect of the medicine and the number of patients, you can infer the price of the medicine. This to establish the (moral) link between the selling of the IP and the price.
- zaroth 8y ago
  The pharmaceutical company Vertex sells the drug for $300k. Because CF Foundation helped fund the development, they get royalties, just like universities sometimes do when they help develop a drug. This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. So the CF Foundation is “forcing donatations” from the healthy populace through increased insurance premiums to bankroll their continued investments in treatments and such. I don’t know if that makes it any more or less ethical, but certainly if it were mostly individual CF patients on the hook for the $300k (in aggregate that is — I’m not saying that never happens) then it would make less sense for the CF Foundation as a strategy.
  - JKCalhoun 8y ago
    > This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?
    - dodobirdlord 8y ago
      Sure, that's how insurance works. The crux of the issue is whether the prices are actually "exorbitant" or whether that's just political spin. I happen to think it's just political spin.
netjiro 8y ago
> Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. This is a _myth_ Big Pharma is an insanely inefficient structure for turning money into useful R&D results. Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money via taxes and/or insurance programs. R&D should be paid by government funds. Testing should be transparent and open. Production should be done by private companies. This would be a significantly more efficient use of our money. It would also align R&D expenditures much better with actual costs to society for medical issues.
- rayiner 8y ago
  Typical R&D spend in pharma as percentage of revenues is 10-20%. That’s in the same range as Google, Intel, or Microsoft, which are widely considered to be very efficient structures for turning money into innovation. By your reasoning, we could cut out a lot of the fat and get better R&D for less by nationalizing Google.
  - eecc 8y ago
    Of the main customer of Google was the government itself then why not? (The point is: it’s not. So so what’s your point?)
    - rayiner 8y ago
      Who the customer is has no bearing on whether a company spending 15% of revenues on R&D is a sign of efficiency or inefficiency. If your premise was true—that you can achieve increased efficiency by nationalizing research because it lets you cut out the other costs of running a company, then that principle would be applicable to Google as well as Novartis.
      - sykhotic 8y ago
        But if twice as much is spent on marketing then in the case of pharmaceuticals it appears this is inefficient. These drugs tend to be necessary for people in ways that Google is not. There are cases where people live in penury due to high drug costs. From the perspective of beneficial to society it seems from my perspective that this is inefficient. Whether or not Google is efficient isn’t relevant in this matter as far as I can tell. The typical argument for justifying high drug costs is that it costs lots of money to do R&D. This argument loses weight when the marketing costs are twice the R&D costs. Further to this point is the fact that the actual discovers aren’t the ones getting the big rewards of their discoveries. So it all appears inefficient in ways that don’t matter when applied to Google due to the fact that ultimately we are talking about peoples’ financial and physical health.