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How expensive do prescription drugs need to be to fund research?

96 points by okfine 8y ago

kingkawn 8y ago
Not at all if research is publicly funded for the public good
- barry-cotter 8y ago
  The research part of R&D is publicly funded, the development part isn’t, and it’s very, very expensive. On average about a billion dollars.
  - astazangasta 8y ago
    The idea that development is not publicly funded is a myth. Regulators define every step, put in a good deal of the money, and do a lot of the organizing. A lot of the rest is done in coordination with researchers at hospitals and universities that are often publicly funded. As with most large industry involved research efforts, the government and academia are heavily involved in the effort. Only the profit is privatized. It has always been thus.
    - barry-cotter 8y ago
      If your model of the pharmaceutical industry were true they would have very, very high profit margins. They don’t. Privatised profit and socialised losses is a great way of making an individual profit but the pharmaceutical industry is not politically connected enough to do that. https://www.forbes.com/sites/johnlamattina/2018/01/23/about-those-soaring-pharma-profits/ https://www.forbes.com/sites/johnlamattina/2018/01/23/about-... > The average return on equity for key industries from 2014 – 2016 shows that biopharma’s profits stand at 16.2%, significantly lower than Computer Sciences (31.6%), Beverages (27.4%), Aerospace/Defense (23.0%), and Trucking (19.1%) while modestly higher than Software System/Applications (15.2%) and Healthcare Support Services (14.4%). > Another measure, Internal Rate of Return (IRR) is even more telling. IRR calculates the sales/cash flows resulting from R&D investments, ties R&D and the returns it generates together, and is a more appropriate metric for biopharma productivity. Deloitte reports that the IRR for biopharma R&D has been steadily falling from 10.1% in 2010 to 3.2% in 2017. Even Wall Street hasn’t bought into the “pharma soaring profits” view. Since February 1, 2014, while the Dow has risen 63%, the stock prices of a number of major pharma companies have been muted with Pfizer and Bristol-Myers each growing by about 15%, and Merck and AstraZeneca by roughly 6.5%. Even Lilly’s growth of 43% still lags the Dow.
      - astazangasta 8y ago
        This is an industry that has had 15-20% returns for decades. I'm not sure what "computer sciences" is as an industry separate from the rest of software, but saying there are some sectors more profitable than pharma says not much. Pharma is huge as a fraction of GDP and consistently profitable because its profit is based on rents. If it is flagging in recent years it is because public sector spending on research is flagging and hasn't yielded as many cash cows as usual.
    - greeneggs 8y ago
      > Only the profit is privatized. It has always been thus. This is false. Just the other day we had a discussion on another Alzheimer's drug failure [1]. From the linked article, "Biogen and Eisai will discontinue two late-stage trials designed to evaluate the efficacy and safety of the drug, aducanumab, which has cost the partners more than $830 million over the past three years." This comes after Eli Lilly spent $3 billion on another Alzheimer's drug, that failed in 2016, and other failures from Merck and Johnson & Johnson. There's a fortune being spent on the last steps of getting a drug to market, or not. One might argue that there has been some regulatory capture, that the pharmaceutical giants have happily acquiesced with the FDA in making drug trials more and more expensive. Now only the giants can afford trials, and small companies have to go through them. But the trials are absolutely extremely expensive. [1] https://news.ycombinator.com/item?id=19468987 https://news.ycombinator.com/item?id=19468987
    - refurb 8y ago
      Yeah, no. Regulators put no money into it other than what it costs to fund it's own regulatory process. And, under PDUFA, drug manufactures pay >$1M to fund the review of their drug. It's paid for by industry. Yes, clinical trials are often run by hospitals and universities, but manufacturers pay for everything. Drugs, people, etc. And you forgot to mention that failures are privatized too. Spend $500M on a trial that fails? That's not the public's money, that's investors money.
      - astazangasta 8y ago
        It's the public's money, since the only reason that the investors have that money is they are given patent monopolies that allow them to take in 1.5% of GDP in rents every year.
        credit_guy 8y ago
        And my house is a public good, since the only reason it's not being vandalized/robbed/burnt down is that the public spends x.y% of the GDP on law enforcement
        astazangasta 8y ago
        Your house, if it is like mine, is a lot more reasonably a public good than it is "private property". I didnt build this thing, will "own" it for probably 5% of its existence and do little to maintain it myself. Yeah, you are right. We owe a lot more to the "public" than we usually acknowledge.
  - kingkawn 8y ago
    The “for the public good” part is what’s missing in that setup
    - barry-cotter 8y ago
      No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat. Deng Xiaoping
      - kingkawn 8y ago
        This quote was in reference to trying to grow the Chinese economy after Mao. Given how many people go bankrupt for drugs, and how much high drug prices distort the economics of healthcare overall, id argue our current setup is not catching mice. A good alternative would be Public investment in healthcare to add fluidity to the labor market, and to prevent a single sectors profiteering from dragging down overall economic growth.
        refurb 8y ago
        Drug costs are ~10% of all healthcare spending in the US. Even if the gov't created all the drugs and made them "free", we'd still be spending double the next closest developed country. Drug spending might be very visible to the public, but it's not a major contributor to healthcare costs.
        kingkawn 8y ago
        Last I saw healthcare accounts for just under 20% of the US GDP. So then we’re talking about a market that’s just under 2% of the GDP if your 10% number holds. At these scales nothing is trivial.
        vonmoltke 8y ago
        It's trivial with respect to moving the needle on the overall problem, particularly since that number needs to be broken down by how much is spent on really expensive drugs versus how much is spent on affordable, generic maintenance medications.
ianai 8y ago
If the government is willing to dole out research loans at appropriate terms all medication can be profitable.
rossdavidh 8y ago
The answer will always be, "more expensive than they are now". It's not like there will ever be a point at which more money, if available, could not in any way be used for some kind of drug research that might be useful. It's like saying "how much money do you need in order to keep from ever dying?" There will always be health problems, and there will always be some at least semi-plausible way in which we could spend money to try to research a way to at least ameliorate the condition. So, this doesn't mean we shouldn't spend some money, or even a lot. But, it will never be enough, so at some point we will have to say, "we could spend more, and it might give us a little more life, but let's not." I don't think we're remotely ready for that conversation.
- djrobstep 8y ago
  The hypothetical situation you're describing has no connection to the reality of how drug research money gets allocated. We're not even ready to talk about how: - drug companies spend more money on marketing drugs than researching them - drug companies waste much of their research on copycat drugs rather than new treatments - IP law needlessly denies millions access to existing treatments by artificially inflating prices.
  - barry-cotter 8y ago
    > drug companies spend more money on marketing drugs than researching them Free samples to doctors are counted as a marketing expense at retail prices, not at marginal prices > drug companies waste much of their research on copycat drugs rather than new treatments Marginal improvements are actually a huge deal and make for a lot of improvement. Because of our astonishing ignorance doctors will often go through multiple drugs looking for one with good efficacy and side effects profile with different patients. > IP law needlessly denies millions access to existing treatments by artificially inflating prices. It’s not needless. Someone needs to pay for pharmaceutical R&D for the global market. Right now that someone is US consumers (mostly in the form of high insurance premia). If they don’t pay then either the pace of drug R&D will fall or some other mechanism will need to be found to pay for it. As to pharmaceutical company profits, their return on capital is nothing special, not like academic publishing rent seekers like Elsevier.
freen 8y ago
How much do governments care about health outcomes?
- barry-cotter 8y ago
  Not that much. we could cut healthcare spending in half with very few noticeable effects on outcomes. https://en.wikipedia.org/wiki/RAND_Health_Insurance_Experime.. https://en.wikipedia.org/wiki/RAND_Health_Insurance_Experime.... An early paper with interim results from the RAND HIE concluded that health insurance without coinsurance "leads to more people using services and to more services per user," referring to both outpatient and inpatient services.[5] Subsequent RAND HIE publications "rule[d] out all but a minimal influence, favorable or adverse, of free care for the average participant"[6] but determined that a "low income initially sick group assigned to the HMO... [had a] greater risk of dying" than those assigned to fee-for-service (FFS) care.[7] The experiment also demonstrated that cost sharing reduced "appropriate or needed" medical care as well as "inappropriate or unnecessary" medical care. https://en.wikipedia.org/wiki/Oregon_Medicaid_health_experim.. https://en.wikipedia.org/wiki/Oregon_Medicaid_health_experim.... Approximately two years after the lottery, researchers found that Medicaid had no statistically significant impact on physical health measures, but "it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain."[4][5]
  - Amygaz 8y ago
    That Oregon study was too limited in scope, variables, population, and time. It just wasn’t well done. Now if your goal is to decrease state spending shorterm, then this is definitely a dumb move, and we didn’t even need that “experiment”. It’s about how you value your population and the type of society you are trying to develop.
entee 8y ago
This is such a complicated issue, I'd highly recommend the following as a primer: https://www.forbes.com/sites/matthewherper/2015/10/13/four-reasons-drugs-are-expensive-of-which-two-are-false https://www.forbes.com/sites/matthewherper/2015/10/13/four-r... Also Derek Lowe is invariably awesome in this space, one highlight: https://blogs.sciencemag.org/pipeline/archives/2019/02/05/targets-versus-drugs https://blogs.sciencemag.org/pipeline/archives/2019/02/05/ta... Drugs occasionally need to be expensive, particularly on-patent drugs, to make the endeavor worthwhile. That said, it's a two-way street. Making drugs insanely expensive (as has been happening more recently) is breaking the implicit trust that those in the medical field must work hard to maintain. Traditionally pharma was careful not to abuse the inherent "your money or your life" dynamic, it seems these days that is breaking down. It's sad because for very powerful drugs (i.e. gene therapy treatments) the cost is actually quite high to even make the drug (I've heard quotes in the 100's of K even in the 1-2 M), which means the treatment has to be expensive. That said we need to work hard to bring that down, and there's absolutely no place for the kinds of shenanigans going on with insulin among others: https://www.nytimes.com/2019/01/18/opinion/cost-insurance-diabetes-insulin.html https://www.nytimes.com/2019/01/18/opinion/cost-insurance-di... With abusive practices like this, how can you ask patients to trust you when you say, "yes but this time I actually need it to be this high"?
- darawk 8y ago
  > With abusive practices like this, how can you ask patients to trust you when you say, "yes but this time I actually need it to be this high"? I think part of the problem is that it's not the same people. Some companies are pursuing aggressive price gouging tactics, and others are legitimately charging a lot of money for something that either costs a lot to make or that they invested a lot of research dollars in.
- amelius 8y ago
  I suspect things could be much simpler if universities or government institutions developed drugs instead.
  - 0815test 8y ago
ArtWomb 8y ago
It's the ultimate prediction problem. And short term, computational bio methods are driving R&D costs up, not down. But arguably, techniques like DeepFold constitute current best hope https://moalquraishi.wordpress.com/2018/12/09/alphafold-casp13-what-just-happened/ https://moalquraishi.wordpress.com/2018/12/09/alphafold-casp...
- msds 8y ago
  I'm putting my money on CryoEM solving all the relevant structural problems first. Plus, I like exotic electron optics and UHV much more than ML - at least you get some expensive paperweights when a turbopump grenades...
- Amygaz 8y ago
  Garbage in / garbage out. You can’t get away from reliable and predictable data. At that part is shockingly lacking. We have much better, sensitive and high-though put methods these days, but we are still relying on mice or cell culture data. We should be using ML to find what’s dissonance and missing links in the data, not to predict what will work.
darpa_escapee 8y ago
How marketable do prescription drugs need to be to have their R&D funded?
- berbec 8y ago
  I never understood the change in US law allowing direct-to-consumer advertising of prescription-only medication. Doctors are told not to write scripts to family, friends and themselves, so how the hell can I make an informed decision about my cancer treatment using a 30 second infomercial?
  - stevenwoo 8y ago
    Doesn't this boil down to Citizens United - if corporations are allowed to use money as they see fit because money is roughly equivalent to free speech then all three branches of government are responding to the entities with the most of it - in this case big pharma.
    - barry-cotter 8y ago
      It boils down to the First Amendment, the government cannot censor speech. In US law groups have the same free speech rights as individuals. Michael Moore doesn’t lose his free speech rights when he makes a propaganda movie with a film studio, and Citizens United didn’t lose their free speech rights when they made their propaganda movie either.
    - danaris 8y ago
      Citizens United wasn't the decision equating money with speech. I don't know offhand which that was, but it was much earlier. IIRC, Citizens United was the decision that allowed much more and much more opaque spending on political campaigns by corporations and wealthy individuals—it allowed the creation of SuperPACs, for instance.
    - berbec 8y ago
      I am not making any reference to Citizens United. This started in the US in 1981 and there was FDA guidance issued in '85. "The FDA said in 1985 that drug makers could air ads, but they also had to follow rigid rules for disclosing side effects and other information." [1] 1: https://www.statnews.com/2015/12/11/untold-story-tvs-first-prescription-drug-ad/ https://www.statnews.com/2015/12/11/untold-story-tvs-first-p...
jorblumesea 8y ago
Why is it expected that private industry the only funder of research? Isn't that something that governments should have a stake in and also fund basic scientific research in? That's like saying, how expensive does an iphone need to be to fund material science research?
- barry-cotter 8y ago
  No one expects private industry to fund all research and they don’t. Governments fund a lot of basic and applied research, in pharmaceuticals and many other domains. What they don’t really find is drug development, taking a drug from the “This looks good” stage through animal models, safety testing and efficacy testing.
aaavl2821 8y ago
This article raises important issues but it also cherry picks some findings and makes some unsupported claims. I am not able to link / dig up sources for all of the below, but I should probably do so at some point bc there is a lot of incomplete and biased info out there (on all sides) - article claims that spending on meds is biggest source of overspending compared to other developed countries. The article they link to only evaluates a few specific cost areas and does not present sufficient evidence to support the claim in the article. Under 10% of US healthcare spend is on rx drugs, that's middle-of-the-pack compared to OECD. Biggest driver of us HC spend is hospital and physician care (50% of spend). Also hospital spend has grown faster than drug spend last few years. https://www.cdc.gov/nchs/fastats/health-expenditures.htm https://www.cdc.gov/nchs/fastats/health-expenditures.htm - the study that analyzes cost of developing cancer drugs ignores cost of failure. The article i think mentions that one study includes cost of failure for cancer drugs but puts failure rate at 25%; I don't know what sample they are looking at or how they define failure, but historically cancer drugs have a less than 10% chance of getting approved from phase 1 - the article says that most cost is "early" and cheap i.e. in phase 2 failure. It is true that 60%+ of phase 2 fail, but phase 2 failure is not early or cheap. The article mentions the cost of running a phase 2 study but ignores all the costs required to get to phase 2. It can cost $100-200M+ Just to get to phase 2 and only 35-40% of drugs make it past that. Only mentioning the cost of a phase 2, and not all the stuff that is before phase 2, is misleading and makes me wonder whether the authors are biased. Phase 2 failure is the biggest driver of cost of drug development. Paul et al 2010 nature rev drug discovery - it criticizes the tufts studies bc the numbers are proprietary. That's fair but just bc the dataset isn't public doesn't mean the results are wrong. The studies the article mentions to "refute" the tufts data are even more flawed than the tufts one (see above point about the cancer drug cost study that ignores cost of failure). - mentions the tufts study includes "capitalized" costs. Even excluding those costs, the cost of developing a drug is over $1B - mentions that companies only develop cancer drugs because they are most profitable. But doesn't mention that developing drugs for almost any other indication is not profitable. If developing drugs was really so cheap and profitable, pharma would be developing a lot more drugs than it is - does not discuss the declining returns to pharma r&d, erooms law, and pharmas use of the balance sheet to fund r&d in recent years because pharma r&d is failing and they have to buy drugs from startups - ignores all r&d spend by non big pharma. Most drugs are developed by small companies not pharma, but pharma buys the small companies before the drugs are commercialized. So all the industry's profits accrue to big pharma but r&d costs are spread out To me, the fact that this article makes claims that either neglect nuance or are unsupported by the articles they link to, that they criticize certain articles that support high cost of r&d but do not criticize articles that show low cost of r&d, and the use of either misleading, wrong or unexplained data points makes me strongly think this is a biased article
apo 8y ago
Patent expirations don't factor into this article very much, but there's this: The simple explanation for excessive drug prices is monopoly pricing. Through patent protection and FDA marketing exclusivity, the U.S. government grants pharmaceutical companies a monopoly on brand-name drugs. But monopolies are a recipe for excessive prices. A company will raise prices until its profits start to drop. That monopoly is very fleeting. By the time a drug makes it to market, it's typically been about ten years since the patent was issued. That gives a drug company about 8 or so years of exclusivity before any other drug maker can produce the drug without infringement.
- refurb 8y ago
  Indeed. Companies have a limited time to recoup costs. Once the patent runs out, that $10,000 drug turns into a $500 drug. Forever. That benefit can't be ignored.
  - ourmandave 8y ago
    Well, except for Daraprim which has been off patent for 62 years. It went from $13.50 to $750 overnight because it only has one producer that decided to raise the price 5500%. https://www.vox.com/2015/9/22/9373557/daraprim-competitor-turing https://www.vox.com/2015/9/22/9373557/daraprim-competitor-tu... And there's no generic insulin sold in the US, even though it was discovered 90+ years ago. https://www.npr.org/2015/03/22/394634923/90-years-after-its-discovery-no-generic-insulin-sold-in-the-u-s https://www.npr.org/2015/03/22/394634923/90-years-after-its-...
    - refurb 8y ago
      Exceptions don’t make the rule. For the vast,vast majority of drugs they are dirt cheap once the patent runs out.
      - ourmandave 8y ago
        But exceptions are the point. We live with a system that allows exceptions that manifest as the Pharmabro. My power bill doesn't randomly jump 5000% from last month.
nradov 8y ago
This article fails to mention the Quality Adjusted Life Year (QALY) concept. In theory we ought to set maximum prices that third-party payers (governments and private insurance) would pay for drugs based on how many years the drug would add to the patient's life and how much it would improve the patient's quality of life. Setting that maximum insured price would allow the free market to work through price signals and encourage drug companies to focus their research on areas most likely to deliver real benefits to public health. The US federal government currently values a human life at something in the range of $100K per year for regulatory purposes so that would give a starting point. Of course the notion of setting limits on drug prices is politically fraught due to misguided concerns over "socialism", "big government", "death panels", etc. https://en.wikipedia.org/wiki/Quality-adjusted_life_year https://en.wikipedia.org/wiki/Quality-adjusted_life_year
Causality1 8y ago
However expensive it is, it should cost the same in all markets globally, whether it's being purchased by a patient in cash, by an NGO, by a state Healthcare system, or by an insurance company. I'm tired of paying a five hundred percent markup to subsidize markets thousands of miles away.
- refurb 8y ago
  Really? So a country with a per capita income of $5,000 should pay the same as what a country with a $50,000 per capita income? That would be a terrible outcome.
  - m0zg 8y ago
    You should extend this line of reasoning to other goods. Pay 10x for your food, too, so someone else could get theirs for less. Pay $50 per gallon of gas, stuff like that. The op's POV might seem cruel, but only if you're in an ivory tower. There are _plenty_ of people right here in the US who can't afford drugs because we insist that they should be 10x the price in the US than everywhere else. In fact, I'd say those people comprise a _majority_ of US healthcare consumers, due to just how unequal the incomes are. There's also another negative side effect: due to what amounts to dumping, other countries essentially don't have any pharma research of their own, likely because it wouldn't be profitable. That includes pretty much all of them other than Switzerland (where both the health insurance and drugs are pretty expensive).
    - bildung 8y ago
      > There are _plenty_ of people right here in the US who can't afford drugs because we insist that they should be 10x the price in the US than everywhere else. The very article explains this isn't true, as drug price doesn't really correlate with R&D costs. > There's also another negative side effect: due to what amounts to dumping, other countries essentially don't have any pharma research of their own That's wrong, too. According to [0], U.S. pharma companies globally spent about 70 billions, of which about 11 billions were spent in Western Europe, so net amount was at most (assuming nothing was spent outside the US and Western Europe) 59 billion dollars. By comparison, according to [1], R&D spend from national companies from Germany, Switzerland, UK and France were about 20 billion USD. So the population adjusted R&D spend relation is lower than 1:2 between Western Europe and the US. [0] = https://www.healthaffairs.org/do/10.1377/hblog20170307.059036/full/#one https://www.healthaffairs.org/do/10.1377/hblog20170307.05903... [1] = https://www.vfa.de/download/the-pharmaceutical-industry-in-germany.pdf https://www.vfa.de/download/the-pharmaceutical-industry-in-g...
thewhitetulip 8y ago
I saw a show earlier this week, an insulin shot costs 2$ in rest of the world and 100+$ in the US. Isn't this loot?
- rygxqpbsngav 8y ago
  Makes sense. Thanks to the advances in medical research in US, and the approach they take (i.e. divide divide and divide and dig to the nanoscopic level of human body to give a disease it's own name. ) There are more bespoke diseases in US than anywhere in the world. Drug industry has to keep itself busy to invent drugs just to affect that single bespoke disease.
- ausbah 8y ago
  only if a person has a high copay?
  - nabnob 8y ago
    Or doesn't have health insurance.
- vonmoltke 8y ago
  > I saw a show earlier this week, an insulin shot costs 2$ in rest of the world and 100+$ in the US. "Insulin" is not a singular thing. For various reasons, lower-cost insulins are difficult to impossible to find in the US, which is a problem. Also, some insulins are $2/dose in some parts of the world. Most insulins in the developed world are significantly more expensive than that (to whomever is paying for it), though still significantly less than what they cost in the US.
  - thewhitetulip 8y ago
    Yes, US users pay a lot for insulin. Price has shot up from single digit dollar to 3 digit from 70s to today
Nf508 8y ago
Interestingly in the case of the the Abiraterone example used in the article, none of the R&D was even done by JNJ. The original work was done at The Institute of Cancer Research, an academic/charity drug discovery institute. JNJ actually only market this drug because of acquisitions rather than R&D efforts. Which is the way that a lot of pharma is going these days, letting smaller biotechs take the high risk of developing a therapeutic and buying them up before FDA/EMA approval.
- RHSeeger 8y ago
  I don't buy that argument. It's like saying I should sell something I bought at the store for free, because I didn't pay the cost to make it directly (someone else did, and I paid them). The research had to be done, and JNJ bought the company that did it. The price they had to pay was impacted by the cost of the research.
  - pbhjpbhj 8y ago
    But if the product you're selling in your store was made using charity? Or gifted you by the government? then high prices couldn't be justified by R&D costs.
    - refurb 8y ago
      If it’s anything like the CF Foundation that helped Vertex develop Kadelyco, the non-profit saw an absolutely massive return by selling the right to the drug.
    - RHSeeger 8y ago
      True, but remember that you're not just paying for the research cost of Drug_X when you price Drug_X. You're also paying for all the research that failed, that didn't produce a useful drug. If you spend 100 million researching 100 drugs, and one of them produces something you can sell, you don't need to make back 1 million when selling that drug. You need to make back 100 million, plus a profit.
      - 8y ago
samcday 8y ago
If you’re going to rip sick people off to pad your bottom line and reward your executives and shareholders, at least have the courage to be upfront about it. It’s weird to say this, but maybe the world needs more Martin Shkreli’s. That way there’s no room to doubt the motivations of virtually all large drug companies (at least in the US).
scotty79 8y ago
When the question is stated like that it becomes really questionable whether cost of drugs should have anything to do with drug research cost. Those two things look like they should be completely separate, done by separate entities with separate funding.
- Brakenshire 8y ago
  I think the reason you want them connected is the ability to channel private capital towards achieving medical progress. If there is a disease which costs the general population tens of billions of dollars a year, either in providing healthcare or in an inability to carry on a normal life, work, look after yourself and so on, then there is an inherent and huge pot of money which can go to solving the problem. If you sever the connection, you rely solely on funding achieved through political processes. Which given the level of expensive failure inherent to the process, tabloid campaigns, lack of public understanding, and short termism from politicians, does not seem like something we should rely on. For instance, can you imagine what the reaction would have been if the hundreds of millions spent on alpha-beta clearance for Alzheimers had been spent by public bodies? Future funding would depend on a battle waged on twitter, opinion pages and talk radio.
  - PeterisP 8y ago
    Furthermore, you could pretty much forget about funding for socially/politically unpopular diseases - I can certainly imagine some voters rabidly requesting their representatives that HIV drugs shouldn't be funded at all because God's punishment should be allowed to take its course.
  - scotty79 8y ago
    > I think the reason you want them connected is the ability to channel private capital towards achieving medical progress. And yet, despite having that connections, not only in the medicine but in all branches of technology, most impactful discoveries of last century come from tax funded university research not business. Business is best at researching how to reduce the cost of manufacturing and distribution of a thing. Which is very important by itself. But when it comes to finding new stuff business usually falls short because it's too risky. > inherent and huge pot of money Size of this pot of money is direct result of how much the company will be allowed to charge for the drug once it's discovered. Comapnies are so risk averse that you have to make this pot of gold disproportionately huge by allowing them to charge whatever they will manage to squeeze out of the market.
freen 8y ago
How expensive do tolls have to be to fund roads?
aantix 8y ago
Infinitely expensive? How many hypotheses do we want to test? As many as possible.
pessimizer 8y ago
They can be free (edit: or rather the patent burden can be eliminated), and we can fund research in different ways. Dean Baker has been banging on about this for years.

96 points by okfine 8y ago

kingkawn 8y ago

Not at all if research is publicly funded for the public good

barry-cotter 8y ago
The research part of R&D is publicly funded, the development part isn’t, and it’s very, very expensive. On average about a billion dollars.
- astazangasta 8y ago
  The idea that development is not publicly funded is a myth. Regulators define every step, put in a good deal of the money, and do a lot of the organizing. A lot of the rest is done in coordination with researchers at hospitals and universities that are often publicly funded. As with most large industry involved research efforts, the government and academia are heavily involved in the effort. Only the profit is privatized. It has always been thus.
  - barry-cotter 8y ago
    If your model of the pharmaceutical industry were true they would have very, very high profit margins. They don’t. Privatised profit and socialised losses is a great way of making an individual profit but the pharmaceutical industry is not politically connected enough to do that. https://www.forbes.com/sites/johnlamattina/2018/01/23/about-those-soaring-pharma-profits/ https://www.forbes.com/sites/johnlamattina/2018/01/23/about-... > The average return on equity for key industries from 2014 – 2016 shows that biopharma’s profits stand at 16.2%, significantly lower than Computer Sciences (31.6%), Beverages (27.4%), Aerospace/Defense (23.0%), and Trucking (19.1%) while modestly higher than Software System/Applications (15.2%) and Healthcare Support Services (14.4%). > Another measure, Internal Rate of Return (IRR) is even more telling. IRR calculates the sales/cash flows resulting from R&D investments, ties R&D and the returns it generates together, and is a more appropriate metric for biopharma productivity. Deloitte reports that the IRR for biopharma R&D has been steadily falling from 10.1% in 2010 to 3.2% in 2017. Even Wall Street hasn’t bought into the “pharma soaring profits” view. Since February 1, 2014, while the Dow has risen 63%, the stock prices of a number of major pharma companies have been muted with Pfizer and Bristol-Myers each growing by about 15%, and Merck and AstraZeneca by roughly 6.5%. Even Lilly’s growth of 43% still lags the Dow.
    - astazangasta 8y ago
      This is an industry that has had 15-20% returns for decades. I'm not sure what "computer sciences" is as an industry separate from the rest of software, but saying there are some sectors more profitable than pharma says not much. Pharma is huge as a fraction of GDP and consistently profitable because its profit is based on rents. If it is flagging in recent years it is because public sector spending on research is flagging and hasn't yielded as many cash cows as usual.
  - greeneggs 8y ago
    > Only the profit is privatized. It has always been thus. This is false. Just the other day we had a discussion on another Alzheimer's drug failure [1]. From the linked article, "Biogen and Eisai will discontinue two late-stage trials designed to evaluate the efficacy and safety of the drug, aducanumab, which has cost the partners more than $830 million over the past three years." This comes after Eli Lilly spent $3 billion on another Alzheimer's drug, that failed in 2016, and other failures from Merck and Johnson & Johnson. There's a fortune being spent on the last steps of getting a drug to market, or not. One might argue that there has been some regulatory capture, that the pharmaceutical giants have happily acquiesced with the FDA in making drug trials more and more expensive. Now only the giants can afford trials, and small companies have to go through them. But the trials are absolutely extremely expensive. [1] https://news.ycombinator.com/item?id=19468987 https://news.ycombinator.com/item?id=19468987
  - refurb 8y ago
    Yeah, no. Regulators put no money into it other than what it costs to fund it's own regulatory process. And, under PDUFA, drug manufactures pay >$1M to fund the review of their drug. It's paid for by industry. Yes, clinical trials are often run by hospitals and universities, but manufacturers pay for everything. Drugs, people, etc. And you forgot to mention that failures are privatized too. Spend $500M on a trial that fails? That's not the public's money, that's investors money.
    - astazangasta 8y ago
      It's the public's money, since the only reason that the investors have that money is they are given patent monopolies that allow them to take in 1.5% of GDP in rents every year.
      - credit_guy 8y ago
        And my house is a public good, since the only reason it's not being vandalized/robbed/burnt down is that the public spends x.y% of the GDP on law enforcement
        astazangasta 8y ago
        Your house, if it is like mine, is a lot more reasonably a public good than it is "private property". I didnt build this thing, will "own" it for probably 5% of its existence and do little to maintain it myself. Yeah, you are right. We owe a lot more to the "public" than we usually acknowledge.
- kingkawn 8y ago
  The “for the public good” part is what’s missing in that setup
  - barry-cotter 8y ago
    No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat. Deng Xiaoping
    - kingkawn 8y ago
      This quote was in reference to trying to grow the Chinese economy after Mao. Given how many people go bankrupt for drugs, and how much high drug prices distort the economics of healthcare overall, id argue our current setup is not catching mice. A good alternative would be Public investment in healthcare to add fluidity to the labor market, and to prevent a single sectors profiteering from dragging down overall economic growth.
      - refurb 8y ago
        Drug costs are ~10% of all healthcare spending in the US. Even if the gov't created all the drugs and made them "free", we'd still be spending double the next closest developed country. Drug spending might be very visible to the public, but it's not a major contributor to healthcare costs.
        kingkawn 8y ago
        Last I saw healthcare accounts for just under 20% of the US GDP. So then we’re talking about a market that’s just under 2% of the GDP if your 10% number holds. At these scales nothing is trivial.
        vonmoltke 8y ago
        It's trivial with respect to moving the needle on the overall problem, particularly since that number needs to be broken down by how much is spent on really expensive drugs versus how much is spent on affordable, generic maintenance medications.

ianai 8y ago

If the government is willing to dole out research loans at appropriate terms all medication can be profitable.

rossdavidh 8y ago

The answer will always be, "more expensive than they are now". It's not like there will ever be a point at which more money, if available, could not in any way be used for some kind of drug research that might be useful. It's like saying "how much money do you need in order to keep from ever dying?" There will always be health problems, and there will always be some at least semi-plausible way in which we could spend money to try to research a way to at least ameliorate the condition. So, this doesn't mean we shouldn't spend some money, or even a lot. But, it will never be enough, so at some point we will have to say, "we could spend more, and it might give us a little more life, but let's not." I don't think we're remotely ready for that conversation.

djrobstep 8y ago
The hypothetical situation you're describing has no connection to the reality of how drug research money gets allocated. We're not even ready to talk about how: - drug companies spend more money on marketing drugs than researching them - drug companies waste much of their research on copycat drugs rather than new treatments - IP law needlessly denies millions access to existing treatments by artificially inflating prices.
- barry-cotter 8y ago
  > drug companies spend more money on marketing drugs than researching them Free samples to doctors are counted as a marketing expense at retail prices, not at marginal prices > drug companies waste much of their research on copycat drugs rather than new treatments Marginal improvements are actually a huge deal and make for a lot of improvement. Because of our astonishing ignorance doctors will often go through multiple drugs looking for one with good efficacy and side effects profile with different patients. > IP law needlessly denies millions access to existing treatments by artificially inflating prices. It’s not needless. Someone needs to pay for pharmaceutical R&D for the global market. Right now that someone is US consumers (mostly in the form of high insurance premia). If they don’t pay then either the pace of drug R&D will fall or some other mechanism will need to be found to pay for it. As to pharmaceutical company profits, their return on capital is nothing special, not like academic publishing rent seekers like Elsevier.

freen 8y ago

How much do governments care about health outcomes?

barry-cotter 8y ago
Not that much. we could cut healthcare spending in half with very few noticeable effects on outcomes. https://en.wikipedia.org/wiki/RAND_Health_Insurance_Experime.. https://en.wikipedia.org/wiki/RAND_Health_Insurance_Experime.... An early paper with interim results from the RAND HIE concluded that health insurance without coinsurance "leads to more people using services and to more services per user," referring to both outpatient and inpatient services.[5] Subsequent RAND HIE publications "rule[d] out all but a minimal influence, favorable or adverse, of free care for the average participant"[6] but determined that a "low income initially sick group assigned to the HMO... [had a] greater risk of dying" than those assigned to fee-for-service (FFS) care.[7] The experiment also demonstrated that cost sharing reduced "appropriate or needed" medical care as well as "inappropriate or unnecessary" medical care. https://en.wikipedia.org/wiki/Oregon_Medicaid_health_experim.. https://en.wikipedia.org/wiki/Oregon_Medicaid_health_experim.... Approximately two years after the lottery, researchers found that Medicaid had no statistically significant impact on physical health measures, but "it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain."[4][5]
- Amygaz 8y ago
  That Oregon study was too limited in scope, variables, population, and time. It just wasn’t well done. Now if your goal is to decrease state spending shorterm, then this is definitely a dumb move, and we didn’t even need that “experiment”. It’s about how you value your population and the type of society you are trying to develop.

entee 8y ago

This is such a complicated issue, I'd highly recommend the following as a primer: https://www.forbes.com/sites/matthewherper/2015/10/13/four-reasons-drugs-are-expensive-of-which-two-are-false https://www.forbes.com/sites/matthewherper/2015/10/13/four-r... Also Derek Lowe is invariably awesome in this space, one highlight: https://blogs.sciencemag.org/pipeline/archives/2019/02/05/targets-versus-drugs https://blogs.sciencemag.org/pipeline/archives/2019/02/05/ta... Drugs occasionally need to be expensive, particularly on-patent drugs, to make the endeavor worthwhile. That said, it's a two-way street. Making drugs insanely expensive (as has been happening more recently) is breaking the implicit trust that those in the medical field must work hard to maintain. Traditionally pharma was careful not to abuse the inherent "your money or your life" dynamic, it seems these days that is breaking down. It's sad because for very powerful drugs (i.e. gene therapy treatments) the cost is actually quite high to even make the drug (I've heard quotes in the 100's of K even in the 1-2 M), which means the treatment has to be expensive. That said we need to work hard to bring that down, and there's absolutely no place for the kinds of shenanigans going on with insulin among others: https://www.nytimes.com/2019/01/18/opinion/cost-insurance-diabetes-insulin.html https://www.nytimes.com/2019/01/18/opinion/cost-insurance-di... With abusive practices like this, how can you ask patients to trust you when you say, "yes but this time I actually need it to be this high"?

darawk 8y ago
> With abusive practices like this, how can you ask patients to trust you when you say, "yes but this time I actually need it to be this high"? I think part of the problem is that it's not the same people. Some companies are pursuing aggressive price gouging tactics, and others are legitimately charging a lot of money for something that either costs a lot to make or that they invested a lot of research dollars in.
amelius 8y ago
I suspect things could be much simpler if universities or government institutions developed drugs instead.
- 0815test 8y ago

ArtWomb 8y ago

It's the ultimate prediction problem. And short term, computational bio methods are driving R&D costs up, not down. But arguably, techniques like DeepFold constitute current best hope https://moalquraishi.wordpress.com/2018/12/09/alphafold-casp13-what-just-happened/ https://moalquraishi.wordpress.com/2018/12/09/alphafold-casp...

msds 8y ago
I'm putting my money on CryoEM solving all the relevant structural problems first. Plus, I like exotic electron optics and UHV much more than ML - at least you get some expensive paperweights when a turbopump grenades...
Amygaz 8y ago
Garbage in / garbage out. You can’t get away from reliable and predictable data. At that part is shockingly lacking. We have much better, sensitive and high-though put methods these days, but we are still relying on mice or cell culture data. We should be using ML to find what’s dissonance and missing links in the data, not to predict what will work.

darpa_escapee 8y ago

How marketable do prescription drugs need to be to have their R&D funded?

berbec 8y ago
I never understood the change in US law allowing direct-to-consumer advertising of prescription-only medication. Doctors are told not to write scripts to family, friends and themselves, so how the hell can I make an informed decision about my cancer treatment using a 30 second infomercial?
- stevenwoo 8y ago
  Doesn't this boil down to Citizens United - if corporations are allowed to use money as they see fit because money is roughly equivalent to free speech then all three branches of government are responding to the entities with the most of it - in this case big pharma.
  - barry-cotter 8y ago
    It boils down to the First Amendment, the government cannot censor speech. In US law groups have the same free speech rights as individuals. Michael Moore doesn’t lose his free speech rights when he makes a propaganda movie with a film studio, and Citizens United didn’t lose their free speech rights when they made their propaganda movie either.
  - danaris 8y ago
    Citizens United wasn't the decision equating money with speech. I don't know offhand which that was, but it was much earlier. IIRC, Citizens United was the decision that allowed much more and much more opaque spending on political campaigns by corporations and wealthy individuals—it allowed the creation of SuperPACs, for instance.
  - berbec 8y ago
    I am not making any reference to Citizens United. This started in the US in 1981 and there was FDA guidance issued in '85. "The FDA said in 1985 that drug makers could air ads, but they also had to follow rigid rules for disclosing side effects and other information." [1] 1: https://www.statnews.com/2015/12/11/untold-story-tvs-first-prescription-drug-ad/ https://www.statnews.com/2015/12/11/untold-story-tvs-first-p...

jorblumesea 8y ago

Why is it expected that private industry the only funder of research? Isn't that something that governments should have a stake in and also fund basic scientific research in? That's like saying, how expensive does an iphone need to be to fund material science research?

barry-cotter 8y ago
No one expects private industry to fund all research and they don’t. Governments fund a lot of basic and applied research, in pharmaceuticals and many other domains. What they don’t really find is drug development, taking a drug from the “This looks good” stage through animal models, safety testing and efficacy testing.

aaavl2821 8y ago

This article raises important issues but it also cherry picks some findings and makes some unsupported claims. I am not able to link / dig up sources for all of the below, but I should probably do so at some point bc there is a lot of incomplete and biased info out there (on all sides) - article claims that spending on meds is biggest source of overspending compared to other developed countries. The article they link to only evaluates a few specific cost areas and does not present sufficient evidence to support the claim in the article. Under 10% of US healthcare spend is on rx drugs, that's middle-of-the-pack compared to OECD. Biggest driver of us HC spend is hospital and physician care (50% of spend). Also hospital spend has grown faster than drug spend last few years. https://www.cdc.gov/nchs/fastats/health-expenditures.htm https://www.cdc.gov/nchs/fastats/health-expenditures.htm - the study that analyzes cost of developing cancer drugs ignores cost of failure. The article i think mentions that one study includes cost of failure for cancer drugs but puts failure rate at 25%; I don't know what sample they are looking at or how they define failure, but historically cancer drugs have a less than 10% chance of getting approved from phase 1 - the article says that most cost is "early" and cheap i.e. in phase 2 failure. It is true that 60%+ of phase 2 fail, but phase 2 failure is not early or cheap. The article mentions the cost of running a phase 2 study but ignores all the costs required to get to phase 2. It can cost $100-200M+ Just to get to phase 2 and only 35-40% of drugs make it past that. Only mentioning the cost of a phase 2, and not all the stuff that is before phase 2, is misleading and makes me wonder whether the authors are biased. Phase 2 failure is the biggest driver of cost of drug development. Paul et al 2010 nature rev drug discovery - it criticizes the tufts studies bc the numbers are proprietary. That's fair but just bc the dataset isn't public doesn't mean the results are wrong. The studies the article mentions to "refute" the tufts data are even more flawed than the tufts one (see above point about the cancer drug cost study that ignores cost of failure). - mentions the tufts study includes "capitalized" costs. Even excluding those costs, the cost of developing a drug is over $1B - mentions that companies only develop cancer drugs because they are most profitable. But doesn't mention that developing drugs for almost any other indication is not profitable. If developing drugs was really so cheap and profitable, pharma would be developing a lot more drugs than it is - does not discuss the declining returns to pharma r&d, erooms law, and pharmas use of the balance sheet to fund r&d in recent years because pharma r&d is failing and they have to buy drugs from startups - ignores all r&d spend by non big pharma. Most drugs are developed by small companies not pharma, but pharma buys the small companies before the drugs are commercialized. So all the industry's profits accrue to big pharma but r&d costs are spread out To me, the fact that this article makes claims that either neglect nuance or are unsupported by the articles they link to, that they criticize certain articles that support high cost of r&d but do not criticize articles that show low cost of r&d, and the use of either misleading, wrong or unexplained data points makes me strongly think this is a biased article

apo 8y ago

Patent expirations don't factor into this article very much, but there's this: The simple explanation for excessive drug prices is monopoly pricing. Through patent protection and FDA marketing exclusivity, the U.S. government grants pharmaceutical companies a monopoly on brand-name drugs. But monopolies are a recipe for excessive prices. A company will raise prices until its profits start to drop. That monopoly is very fleeting. By the time a drug makes it to market, it's typically been about ten years since the patent was issued. That gives a drug company about 8 or so years of exclusivity before any other drug maker can produce the drug without infringement.

refurb 8y ago
Indeed. Companies have a limited time to recoup costs. Once the patent runs out, that $10,000 drug turns into a $500 drug. Forever. That benefit can't be ignored.
- ourmandave 8y ago
  Well, except for Daraprim which has been off patent for 62 years. It went from $13.50 to $750 overnight because it only has one producer that decided to raise the price 5500%. https://www.vox.com/2015/9/22/9373557/daraprim-competitor-turing https://www.vox.com/2015/9/22/9373557/daraprim-competitor-tu... And there's no generic insulin sold in the US, even though it was discovered 90+ years ago. https://www.npr.org/2015/03/22/394634923/90-years-after-its-discovery-no-generic-insulin-sold-in-the-u-s https://www.npr.org/2015/03/22/394634923/90-years-after-its-...
  - refurb 8y ago
    Exceptions don’t make the rule. For the vast,vast majority of drugs they are dirt cheap once the patent runs out.
    - ourmandave 8y ago
      But exceptions are the point. We live with a system that allows exceptions that manifest as the Pharmabro. My power bill doesn't randomly jump 5000% from last month.

nradov 8y ago

This article fails to mention the Quality Adjusted Life Year (QALY) concept. In theory we ought to set maximum prices that third-party payers (governments and private insurance) would pay for drugs based on how many years the drug would add to the patient's life and how much it would improve the patient's quality of life. Setting that maximum insured price would allow the free market to work through price signals and encourage drug companies to focus their research on areas most likely to deliver real benefits to public health. The US federal government currently values a human life at something in the range of $100K per year for regulatory purposes so that would give a starting point. Of course the notion of setting limits on drug prices is politically fraught due to misguided concerns over "socialism", "big government", "death panels", etc. https://en.wikipedia.org/wiki/Quality-adjusted_life_year https://en.wikipedia.org/wiki/Quality-adjusted_life_year

Causality1 8y ago

However expensive it is, it should cost the same in all markets globally, whether it's being purchased by a patient in cash, by an NGO, by a state Healthcare system, or by an insurance company. I'm tired of paying a five hundred percent markup to subsidize markets thousands of miles away.

refurb 8y ago
Really? So a country with a per capita income of $5,000 should pay the same as what a country with a $50,000 per capita income? That would be a terrible outcome.
- m0zg 8y ago
  You should extend this line of reasoning to other goods. Pay 10x for your food, too, so someone else could get theirs for less. Pay $50 per gallon of gas, stuff like that. The op's POV might seem cruel, but only if you're in an ivory tower. There are _plenty_ of people right here in the US who can't afford drugs because we insist that they should be 10x the price in the US than everywhere else. In fact, I'd say those people comprise a _majority_ of US healthcare consumers, due to just how unequal the incomes are. There's also another negative side effect: due to what amounts to dumping, other countries essentially don't have any pharma research of their own, likely because it wouldn't be profitable. That includes pretty much all of them other than Switzerland (where both the health insurance and drugs are pretty expensive).
  - bildung 8y ago
    > There are _plenty_ of people right here in the US who can't afford drugs because we insist that they should be 10x the price in the US than everywhere else. The very article explains this isn't true, as drug price doesn't really correlate with R&D costs. > There's also another negative side effect: due to what amounts to dumping, other countries essentially don't have any pharma research of their own That's wrong, too. According to [0], U.S. pharma companies globally spent about 70 billions, of which about 11 billions were spent in Western Europe, so net amount was at most (assuming nothing was spent outside the US and Western Europe) 59 billion dollars. By comparison, according to [1], R&D spend from national companies from Germany, Switzerland, UK and France were about 20 billion USD. So the population adjusted R&D spend relation is lower than 1:2 between Western Europe and the US. [0] = https://www.healthaffairs.org/do/10.1377/hblog20170307.059036/full/#one https://www.healthaffairs.org/do/10.1377/hblog20170307.05903... [1] = https://www.vfa.de/download/the-pharmaceutical-industry-in-germany.pdf https://www.vfa.de/download/the-pharmaceutical-industry-in-g...

thewhitetulip 8y ago

I saw a show earlier this week, an insulin shot costs 2$ in rest of the world and 100+$ in the US. Isn't this loot?

rygxqpbsngav 8y ago
Makes sense. Thanks to the advances in medical research in US, and the approach they take (i.e. divide divide and divide and dig to the nanoscopic level of human body to give a disease it's own name. ) There are more bespoke diseases in US than anywhere in the world. Drug industry has to keep itself busy to invent drugs just to affect that single bespoke disease.
ausbah 8y ago
only if a person has a high copay?
- nabnob 8y ago
  Or doesn't have health insurance.
vonmoltke 8y ago
> I saw a show earlier this week, an insulin shot costs 2$ in rest of the world and 100+$ in the US. "Insulin" is not a singular thing. For various reasons, lower-cost insulins are difficult to impossible to find in the US, which is a problem. Also, some insulins are $2/dose in some parts of the world. Most insulins in the developed world are significantly more expensive than that (to whomever is paying for it), though still significantly less than what they cost in the US.
- thewhitetulip 8y ago
  Yes, US users pay a lot for insulin. Price has shot up from single digit dollar to 3 digit from 70s to today

Nf508 8y ago

Interestingly in the case of the the Abiraterone example used in the article, none of the R&D was even done by JNJ. The original work was done at The Institute of Cancer Research, an academic/charity drug discovery institute. JNJ actually only market this drug because of acquisitions rather than R&D efforts. Which is the way that a lot of pharma is going these days, letting smaller biotechs take the high risk of developing a therapeutic and buying them up before FDA/EMA approval.

RHSeeger 8y ago
I don't buy that argument. It's like saying I should sell something I bought at the store for free, because I didn't pay the cost to make it directly (someone else did, and I paid them). The research had to be done, and JNJ bought the company that did it. The price they had to pay was impacted by the cost of the research.
- pbhjpbhj 8y ago
  But if the product you're selling in your store was made using charity? Or gifted you by the government? then high prices couldn't be justified by R&D costs.
  - refurb 8y ago
    If it’s anything like the CF Foundation that helped Vertex develop Kadelyco, the non-profit saw an absolutely massive return by selling the right to the drug.
  - RHSeeger 8y ago
    True, but remember that you're not just paying for the research cost of Drug_X when you price Drug_X. You're also paying for all the research that failed, that didn't produce a useful drug. If you spend 100 million researching 100 drugs, and one of them produces something you can sell, you don't need to make back 1 million when selling that drug. You need to make back 100 million, plus a profit.
    - 8y ago

samcday 8y ago

If you’re going to rip sick people off to pad your bottom line and reward your executives and shareholders, at least have the courage to be upfront about it. It’s weird to say this, but maybe the world needs more Martin Shkreli’s. That way there’s no room to doubt the motivations of virtually all large drug companies (at least in the US).

scotty79 8y ago

When the question is stated like that it becomes really questionable whether cost of drugs should have anything to do with drug research cost. Those two things look like they should be completely separate, done by separate entities with separate funding.

Brakenshire 8y ago
I think the reason you want them connected is the ability to channel private capital towards achieving medical progress. If there is a disease which costs the general population tens of billions of dollars a year, either in providing healthcare or in an inability to carry on a normal life, work, look after yourself and so on, then there is an inherent and huge pot of money which can go to solving the problem. If you sever the connection, you rely solely on funding achieved through political processes. Which given the level of expensive failure inherent to the process, tabloid campaigns, lack of public understanding, and short termism from politicians, does not seem like something we should rely on. For instance, can you imagine what the reaction would have been if the hundreds of millions spent on alpha-beta clearance for Alzheimers had been spent by public bodies? Future funding would depend on a battle waged on twitter, opinion pages and talk radio.
- PeterisP 8y ago
  Furthermore, you could pretty much forget about funding for socially/politically unpopular diseases - I can certainly imagine some voters rabidly requesting their representatives that HIV drugs shouldn't be funded at all because God's punishment should be allowed to take its course.
- scotty79 8y ago
  > I think the reason you want them connected is the ability to channel private capital towards achieving medical progress. And yet, despite having that connections, not only in the medicine but in all branches of technology, most impactful discoveries of last century come from tax funded university research not business. Business is best at researching how to reduce the cost of manufacturing and distribution of a thing. Which is very important by itself. But when it comes to finding new stuff business usually falls short because it's too risky. > inherent and huge pot of money Size of this pot of money is direct result of how much the company will be allowed to charge for the drug once it's discovered. Comapnies are so risk averse that you have to make this pot of gold disproportionately huge by allowing them to charge whatever they will manage to squeeze out of the market.

freen 8y ago

How expensive do tolls have to be to fund roads?

aantix 8y ago

Infinitely expensive? How many hypotheses do we want to test? As many as possible.

pessimizer 8y ago

They can be free (edit: or rather the patent burden can be eliminated), and we can fund research in different ways. Dean Baker has been banging on about this for years.