3 ms·

Not to be too snarky but to the question in the article, “The question for health systems: how much are one-time therapies worth?”, you mean like vaccines? Pres

by cf 8y ago

Not to be too snarky but to the question in the article, “The question for health systems: how much are one-time therapies worth?”, you mean like vaccines? Presumably, it should cost a similar amount.

dalbasal 8y ago
Good analogy. To the article's point, there is currently a dynamic where long term/chronic prescriptions such as anti-depression drugs "win out" relative to antibiotics & vaccines, which have the same pricing issue. It's mitigated by the large out-of-patent portfolio and (especially for vaccines) the large potential volume, but the problem is there. To some extent, this is a problem economist don't like. The pricing system shouldn't matter too much. If X has Y value and A cost, those (alongside competition, which should be driving price to A)... If the value/efficacy is identical, those are supposed to be the main determinates of price. Non-academic pricers understand that these pricing paradigms are big determinates though, in practice. Membership vs pay-as-you-go. Software & updates vs SAAS. These change demand & pricing dynamics enormously. A one-time pill, with measured effectiveness against depression on par with one-a-day alternatives is very unlikely to make as much money, in practice... blackboard reasoning be damned.
celinehh94 8y ago
Vaccines are actually super unprofitable for Pharma companies, so this isn't a great model to emulate (although I agree with the general metaphor of gene therapy -> vaccines) https://www.nber.org/papers/w9833 https://www.nber.org/papers/w9833
refurb 8y ago
Pricing it like a vaccine entirely ignores the number of patients treated. Unlike vaccines, you'd never give gene therapy to most of the population. It all likelihood, you give gene therapy to a few thousand patients. Hard to even break even if you're charging $100 and treating 2000 patients.

by cf 8y ago

dalbasal 8y ago

Good analogy. To the article's point, there is currently a dynamic where long term/chronic prescriptions such as anti-depression drugs "win out" relative to antibiotics & vaccines, which have the same pricing issue. It's mitigated by the large out-of-patent portfolio and (especially for vaccines) the large potential volume, but the problem is there. To some extent, this is a problem economist don't like. The pricing system shouldn't matter too much. If X has Y value and A cost, those (alongside competition, which should be driving price to A)... If the value/efficacy is identical, those are supposed to be the main determinates of price. Non-academic pricers understand that these pricing paradigms are big determinates though, in practice. Membership vs pay-as-you-go. Software & updates vs SAAS. These change demand & pricing dynamics enormously. A one-time pill, with measured effectiveness against depression on par with one-a-day alternatives is very unlikely to make as much money, in practice... blackboard reasoning be damned.

celinehh94 8y ago

Vaccines are actually super unprofitable for Pharma companies, so this isn't a great model to emulate (although I agree with the general metaphor of gene therapy -> vaccines) https://www.nber.org/papers/w9833 https://www.nber.org/papers/w9833

refurb 8y ago

Pricing it like a vaccine entirely ignores the number of patients treated. Unlike vaccines, you'd never give gene therapy to most of the population. It all likelihood, you give gene therapy to a few thousand patients. Hard to even break even if you're charging $100 and treating 2000 patients.