9 ms·

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

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.
  - ikeboy 8y ago
    >Free samples to doctors are counted as a marketing expense at retail prices, not at marginal prices That doesn't sound like GAAP - is this proper accounting?
    - ineedasername 8y ago
      Yeah, I'm not a pharmaceutical, but I have a side hustle of sorts. When I give something away, I'm only allowed to deduct the marginal cost.
      - cosmie 8y ago
        But marginal cost for whom? The entity manufacturing the drug, the entity that holds the inventory, the entity that owns the IP, or the entity that the pharmaceutical rep works for? Any sufficiently large corporation is more likely than not to be an amalgamation of interconnected subsidiaries, for a wide variety of purposes. Once you're at that stage, there's a lot of room to get creative with how you structure intra-company charges to form whatever optics you want. It's entirely plausible that one internal entity may charge the marketing entity full retail price for samples, if they feel it's beneficial and have enough justification to satisfy accounting and auditors that it's a fair market value for the product (which list price would generally satisfy that requirement).
        ineedasername 8y ago
        Good points, they can just shuffle the money from one balance sheet to another, but then get to deduct the whole thing anyway.
        ikeboy 8y ago
        That's not how accounting works.
    - barry-cotter 8y ago
      I don’t know if it’s proper accounting but there’s no way the marginal cost of producing drugs is high enough to cost as much in marketing costs as they do. > Between 1996 and 2000, they accounted for slightly more than half of the total promotional dollars spent by industry [22]. Although there is controversy about how best to tally the amount of money the pharmaceutical industry spends on free samples, a recent analysis of 2004 figures sets the retail value of samples at approximately 16 billion US dollars [23]. The retail value of free samples has risen steadily, doubling between 1999 and 2003 [24] (Figure 1). Chimonas S, Kassirer JP (2009) No More Free Drug Samples? PLoS Med 6(5): e1000074. doi:10.1371/journal.pmed.1000074 https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1000074 https://journals.plos.org/plosmedicine/article?id=10.1371/jo...
- refurb 8y ago
  drug companies waste much of their research on copycat drugs rather than new treatments Innovations in pharmaceuticals is often incremental, not huge leaps forward. You have 4 different cancer drugs, each one adds 6 months of life for each launch and you end up with 2 extra years of life. As well, copycats are needed, because not every drug reacts the same in everyone. If you need to lower your cholesterol, you have dozens of different statins to choose from. Some you won't be able to tolerate, others you can. Options are good, not bad.
ineedasername 8y ago
I think you're using an ungenerous interpretation of the question here. The subtext is clearly "how much do they need to cost to support the current level of research"
supertrope 8y ago
https://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html https://www.nytimes.com/2009/07/19/magazine/19healthcare-t.h... "Why We Must Ration Health Care" by Peter Singer. New York Times Opinion Section. Unfortunately this is a very difficult conversation to have between people and their physicians, between family members, and with ourselves. It ties into another very difficult discussion of facing death. In a democracy the lowest common denominator argument wins out with catchy slogans, in-group signaling, burying uncomfortable facts, avoiding short term sacrifice, and/or wielding anecdotes instead of rational analysis. Thus the rationing happens when it is least effective - during a crisis when significant human, monetary, and time resources are drained. And not much earlier when some planning and hard work could greatly ease the burden.
- drewrv 8y ago
  The dystopian angle to healthcare rationing is the realization that we already do ration care. We do it with dollars rather than by need or outcome.
- refurb 8y ago
  When people always ask "how come healthcare is so much more affordable in countries outside the US?", the correct answer is rationing. If you need joint replacement surgery in Canada, you can expect a wait of many months to years. Canada has made the call that they will put a certain dollar amount into joint replacement and if the demand is higher, then people will just have to wait. Same thing with the latest and greatest drugs. Some countries just say "no". If you want an affordable healthcare system in the US, then rationing has to be a part of the equation. As others have pointed out, we already ration in the US, but trustfully, if you have good insurance, you'll get very good care in the US. The question is whether all that extra care is actually producing better outcomes.
  - shkkmo 8y ago
    I don't think that is true at all, it is very clear that identical procedures and materials cost less in other countries.
maxerickson 8y ago
That doesn't really address the interesting question though, which is more about what level of spending is reasonable given the underlying basic science and currently available treatments. Spending enormous sums on vague, incremental improvements is likely not an important use of funds.
DennisP 8y ago
They could spend more on research today, but don't. From the article: > after accounting for the costs of all research—about $80 billion a year—drug companies had $40 billion more from the top 20 drugs alone, all of which went straight to profits, not research. More excess profit comes from the next 100 or 200 brand-name drugs.

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.
- ikeboy 8y ago
  >Free samples to doctors are counted as a marketing expense at retail prices, not at marginal prices That doesn't sound like GAAP - is this proper accounting?
  - ineedasername 8y ago
    Yeah, I'm not a pharmaceutical, but I have a side hustle of sorts. When I give something away, I'm only allowed to deduct the marginal cost.
    - cosmie 8y ago
      But marginal cost for whom? The entity manufacturing the drug, the entity that holds the inventory, the entity that owns the IP, or the entity that the pharmaceutical rep works for? Any sufficiently large corporation is more likely than not to be an amalgamation of interconnected subsidiaries, for a wide variety of purposes. Once you're at that stage, there's a lot of room to get creative with how you structure intra-company charges to form whatever optics you want. It's entirely plausible that one internal entity may charge the marketing entity full retail price for samples, if they feel it's beneficial and have enough justification to satisfy accounting and auditors that it's a fair market value for the product (which list price would generally satisfy that requirement).
      - ineedasername 8y ago
        Good points, they can just shuffle the money from one balance sheet to another, but then get to deduct the whole thing anyway.
        ikeboy 8y ago
        That's not how accounting works.
  - barry-cotter 8y ago
    I don’t know if it’s proper accounting but there’s no way the marginal cost of producing drugs is high enough to cost as much in marketing costs as they do. > Between 1996 and 2000, they accounted for slightly more than half of the total promotional dollars spent by industry [22]. Although there is controversy about how best to tally the amount of money the pharmaceutical industry spends on free samples, a recent analysis of 2004 figures sets the retail value of samples at approximately 16 billion US dollars [23]. The retail value of free samples has risen steadily, doubling between 1999 and 2003 [24] (Figure 1). Chimonas S, Kassirer JP (2009) No More Free Drug Samples? PLoS Med 6(5): e1000074. doi:10.1371/journal.pmed.1000074 https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1000074 https://journals.plos.org/plosmedicine/article?id=10.1371/jo...
refurb 8y ago
drug companies waste much of their research on copycat drugs rather than new treatments Innovations in pharmaceuticals is often incremental, not huge leaps forward. You have 4 different cancer drugs, each one adds 6 months of life for each launch and you end up with 2 extra years of life. As well, copycats are needed, because not every drug reacts the same in everyone. If you need to lower your cholesterol, you have dozens of different statins to choose from. Some you won't be able to tolerate, others you can. Options are good, not bad.

ineedasername 8y ago

I think you're using an ungenerous interpretation of the question here. The subtext is clearly "how much do they need to cost to support the current level of research"

supertrope 8y ago

https://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html https://www.nytimes.com/2009/07/19/magazine/19healthcare-t.h... "Why We Must Ration Health Care" by Peter Singer. New York Times Opinion Section. Unfortunately this is a very difficult conversation to have between people and their physicians, between family members, and with ourselves. It ties into another very difficult discussion of facing death. In a democracy the lowest common denominator argument wins out with catchy slogans, in-group signaling, burying uncomfortable facts, avoiding short term sacrifice, and/or wielding anecdotes instead of rational analysis. Thus the rationing happens when it is least effective - during a crisis when significant human, monetary, and time resources are drained. And not much earlier when some planning and hard work could greatly ease the burden.

drewrv 8y ago
The dystopian angle to healthcare rationing is the realization that we already do ration care. We do it with dollars rather than by need or outcome.
refurb 8y ago
When people always ask "how come healthcare is so much more affordable in countries outside the US?", the correct answer is rationing. If you need joint replacement surgery in Canada, you can expect a wait of many months to years. Canada has made the call that they will put a certain dollar amount into joint replacement and if the demand is higher, then people will just have to wait. Same thing with the latest and greatest drugs. Some countries just say "no". If you want an affordable healthcare system in the US, then rationing has to be a part of the equation. As others have pointed out, we already ration in the US, but trustfully, if you have good insurance, you'll get very good care in the US. The question is whether all that extra care is actually producing better outcomes.
- shkkmo 8y ago
  I don't think that is true at all, it is very clear that identical procedures and materials cost less in other countries.

maxerickson 8y ago

That doesn't really address the interesting question though, which is more about what level of spending is reasonable given the underlying basic science and currently available treatments. Spending enormous sums on vague, incremental improvements is likely not an important use of funds.

DennisP 8y ago

They could spend more on research today, but don't. From the article: > after accounting for the costs of all research—about $80 billion a year—drug companies had $40 billion more from the top 20 drugs alone, all of which went straight to profits, not research. More excess profit comes from the next 100 or 200 brand-name drugs.