3 ms·

EconTalk from last week[1] shed some light on the convoluted world of drug pricing and pharmaceutical patents. While I agree with your point that AI could help

EconTalk from last week[1] shed some light on the convoluted world of drug pricing and pharmaceutical patents. While I agree with your point that AI could help with medical progress, I would also emphasize that we're being held back by meat-space institutions as well (in this case, drug patents). One of the key takeaways was looking at the return on marginal investment in gaming the patent system vs developing new drugs. As firms achieve success, they become conservative, wishing to hold onto current profit levels. The patent system, as formulated, enables the drug company to make a meaningless change to a drug and receive an extended period of patent monopoly. This keeps out generics, raising prices, and reducing investment in drug research. [1] http://www.econtalk.org/robin-feldman-on-drugs-money-and-secret-handshakes/ http://www.econtalk.org/robin-feldman-on-drugs-money-and-sec...

skwb 8y ago
All the preclinical work is actually the cheap part of pharmaceutical development. Most of the costs come from the clinical trials for the FDA. Now a lot of the reason for this is that the US spends a pretty penny (and a lot of elbow grease from grad students) on basic biomedical research that's published into journals for "free" from the perspective of the pharmaceutical corporation. That said, if you can make clinical trial reporting data collection more efficient, there's a LOT of money to be made. https://www.nature.com/articles/nrd3078 https://www.nature.com/articles/nrd3078
- ousta 8y ago
  it is a half baked truth. pharma want you to believe trials are expensive so they inflate crazily their costs to price their drugs high. but at the end when u try to sell them software they dont look at the inflates costs of trials be sure of that
  - skwb 8y ago
    Costs don't drive prices. Demand does. I'll be the first to admit that pharmaceutical economics is not simple (lots of externalities, asymmetry of information, etc.), but in the long run costs do matter, and so does price. Best example is Solvaldi, which initially sold for ~$100,000 per treatment. It's much much down (~$65,000) once Merk came online with their hep C competitor. Prices do matter, and while the market is easily distorted, it's not immune to the laws of economics.
mlinksva 8y ago
The week before that was even more incisive http://www.econtalk.org/jacob-stegenga-on-medical-nihilism/ http://www.econtalk.org/jacob-stegenga-on-medical-nihilism/

skwb 8y ago

All the preclinical work is actually the cheap part of pharmaceutical development. Most of the costs come from the clinical trials for the FDA. Now a lot of the reason for this is that the US spends a pretty penny (and a lot of elbow grease from grad students) on basic biomedical research that's published into journals for "free" from the perspective of the pharmaceutical corporation. That said, if you can make clinical trial reporting data collection more efficient, there's a LOT of money to be made. https://www.nature.com/articles/nrd3078 https://www.nature.com/articles/nrd3078

ousta 8y ago
it is a half baked truth. pharma want you to believe trials are expensive so they inflate crazily their costs to price their drugs high. but at the end when u try to sell them software they dont look at the inflates costs of trials be sure of that
- skwb 8y ago
  Costs don't drive prices. Demand does. I'll be the first to admit that pharmaceutical economics is not simple (lots of externalities, asymmetry of information, etc.), but in the long run costs do matter, and so does price. Best example is Solvaldi, which initially sold for ~$100,000 per treatment. It's much much down (~$65,000) once Merk came online with their hep C competitor. Prices do matter, and while the market is easily distorted, it's not immune to the laws of economics.

mlinksva 8y ago

The week before that was even more incisive http://www.econtalk.org/jacob-stegenga-on-medical-nihilism/ http://www.econtalk.org/jacob-stegenga-on-medical-nihilism/