11 ms·

Oh, absolutely - but I think Derek's point in the article is that many critics of "Big Bad Pharma" who see the profitable drugs making it to market are unaware

Oh, absolutely - but I think Derek's point in the article is that many critics of "Big Bad Pharma" who see the profitable drugs making it to market are unaware of the expensive failures that never make it that far.

skohan 7y ago
> many critics of "Big Bad Pharma" who see the profitable drugs making it to market are unaware of the expensive failures that never make it that far. But I think this image - that pharmaceutical companies are constantly risking their financial future pouring resources into research for new drugs which will finally cure some disease that has plagued humanity - is also a mischaracterization of reality. For instance, drug companies also spend a large portion of their research budget developing "novel compounds" which are based on small chemical changes to existing drugs, just for the purpose of extending their patent and increasing the profitability (read: cost to consumer) of an existing treatment. So it's not as if all the resources they put in to research represent some altruistic good. To be honest, I think the incentive structure for drug companies, like many things in healthcare, is just not ideal for producing the best outcomes. Their ideal business model is to own expensive drugs which sick people have to take for their entire lives. If they produce truly curative treatments, that's actually a net loss for them. As some people have suggested, it would make a lot of sense to nationalize drug research in the US. The idea is you bring the top pharmaceutical researchers into the NIH, and while this would require a big up-front investment, you might even be able to operate at a profit by licensing the drugs they develop to the rest of the world. Also, in a single-payer world, you would have the healthcare provider under the same financial umbrella as the people creating the drugs. As a result, the incentive would be to drive treatment costs down.
- new299 7y ago
  > just for the purpose of extending their patent I don’t understand this point, though I’ve heard it before. If the original patents expire, the original drugs can be manufactured as generics right? If the new patents provide no new benefit, don’t use them? > The idea is you bring the top pharmaceutical researchers into the NIH... Projects I’ve seen suggests that technology development carried out in an academic context often requires significant refinement (or complete reworking tbh) when being brought to market. So, it’s not clear to me how well the model you suggest would work. Perhaps it would be best to have a public organization that manufactures genetic drugs first and build from that. But... I think that may also have issues.
  - skohan 7y ago
    > I don’t understand this point, though I’ve heard it before. If the original patents expire, the original drugs can be manufactured as generics right? If the new patents provide no new benefit, don’t use them? So it's because of a loophole created in the Hatch-Waxman act, which basically stipulates that if a drug company creates a "new chemical version" of a name-brand drug, then it's possible to extend the patent for 5 years and block the FDA approval of any generics. [0] [0]: https://www.upcounsel.com/how-long-does-a-drug-patent-last https://www.upcounsel.com/how-long-does-a-drug-patent-last > Projects I’ve seen suggests that technology development carried out in an academic context often requires significant refinement (or complete reworking tbh) when being brought to market. So, it’s not clear to me how well the model you suggest would work. So the problem, as I see it, is that the people who profit from the production and sale of drugs also have an essential monopoly over the talent pool which is capable of developing new drugs. As a result, the incentive is for them to direct their R&D resources in ways which maximize profitability rather than maximize health outcomes. In such a system as I have described, there would still be room for drug companies to do the work of producing drugs, but the incentives for the R&D process could be aligned with the general population rather than drug company shareholders. The current system represents something of a conflict of interest.
    - refurb 7y ago
      I think you mean new chemical entity (NCE). That’s not a small tweak, that’s an entirely new drug. And the older drug can still be sold by genetics companies.
      - skohan 7y ago
        The point is not the level of effort that it takes to create the drug, the problem is they are allocating resources to research drugs to treat already-served ailments due to the profit motive rather than trying to find solutions for conditions which are not yet adequately treated.
        refurb 7y ago
- SiempreViernes 7y ago
  You would loose access to some private capital tough, not to mention there will be constant attacks by that private capital on the political leadership to privatize all that research for peanuts.
  - skohan 7y ago
    Maybe it's naiveté on my part, but it seems to me that the system is hopelessly corrupt if you cannot even imagine making some basic structural changes in favor of better, cheaper health outcomes without assuming that private capital would thwart those efforts.
    - SiempreViernes 7y ago
      Private capital is always pushing for more privatization, because that is a precondition for the individual owners to accumulate more wealth. Historically, the sort of structural change you suggest is what gets you branded a communist and hanged.
- trentlott 7y ago
  They also spend a lot of time looking for University researchers that have found something they like, then buy esclusive rights to the compound This recently happened to a prof in my department. He's an organic chemist, d evisde a way to prevent plaque buildup, and had the rights to the compound contracted out by an unknown pharmaceutical company My boss also had a meeting with Pfizer about a thing In this case the research would have been publicly funded and been obtained by a private company who bypassed the need to spend money on development That's a shady technique, IMHO, because it's our tax money directly enriching a corporation
  - refurb 7y ago
    Is your prof’s drug ready for sale? If not, I don’t understand what you mean by “bypass development”. The most expensive and most risky part of drug development is getting a promising drug candidate all the way to market. 99% of those fail, yet can cost hundreds of millions. And not sure what country you’re in, but if it’s the US, your prof would likely stand to make a ton of money if the drug is successful. The company doesn’t get it for free, they buy it from the patent owners.
    - trentlott 7y ago
      Both projects progressed to the point of running successful animal trials (n ~ 250) Finding a prospective molecule is a huge part of the process - this is why computer binding models are such a hot topic The fact that we paid for discovery, synthetic development, and PoC is a pretty big deal whether or not it ends up being a marketed drug I know the guy who sold the patent was paid very well (aftet the university cut, of course) ... but who paid the bills to make it possible?
      - kjs3 7y ago
        Lemme get this straight...taxes paid for the basic research; that is, paid for something for which there was zero obligation to come up with a new drug. No shareholders to make happy, no board to placate. Go do research and write some papers. He found something, and a drug company willing to put up the other 99.99% of the money required to try to take the drug to market (even though the odds of that happening are miniscule) paid both the university and the researcher for the rights to use that discovery (and, as I understand it, usually to get a share of the profits should the drug be successful). So for a nominal tax-based fee (funding research, not bringing drugs to market), private companies get access to research results that a private company may not have even tried and the institutions involved get a funding bump. And maybe some malady cured as a result. Unless you're a serious "screw you I got mine" libertarian, that seems like how tax supported basic research should to work.
- jcranmer 7y ago
  > Their ideal business model is to own expensive drugs which sick people have to take for their entire lives. If they produce truly curative treatments, that's actually a net loss for them. Not really. Drug development is so difficult that you're not going to presented with a scenario where you have one drug candidate that cures the disease and another drug candidate that merely abates it. The bias that happens a lot is towards common diseases and away from rarer diseases or diseases that occur largely in poorer countries, although that's still no guarantee of success (hello, Alzheimer's).
  - tlb 7y ago
    And, to go even further, a drug that could cure something like high blood pressure in a single dose is almost inconceivable. How would it work? It’d have to permanently change some state in your body. And what if your blood pressure dropped too much — how would you reverse it?
  - mandevil 7y ago
    There is definitely a bias towards chronic rather than acute illness, which I think is what the GP is discussing. This is why there is more research on high blood pressure than into antibiotics. On the other hand, something like Solvadi (an actual cure for HepC in 90 days) really is a miracle cure for a chronic problem, and cost effective even at its very high price point (1k/pill, 90k total was its initial list price).
    - refurb 7y ago
      There is no bias towards chronic treatments, it's just the best that we have right now. Your Sovaldi example shows that - a one-time cure can command a price that is bigger than a chronic treatment. And the reason nobody invests in antibiotics (although there are several very profitable ones) is because any new drug is reserved for last line. Doctors don't want to bring out the big guns until all the others have failed.
      - entee 7y ago
        This, so much this. It's very hard to make an antibiotics company work, not so much because you can't make money on the pill itself, but because it will never actually get used unless the infection is dire. This means that your market is microscopic and you can't recover the cost of developing the drug in the first place. Antibiotics are special and should be incentivized using a different system. I've heard ideas like an international government compact that awards a large, multi-billion $ prize in exchange for the patent and full generic production immediately. This would allow a consortium/company to do very well for itself but the whole world to benefit in the aggregate for very little cost.

skohan 7y ago

> many critics of "Big Bad Pharma" who see the profitable drugs making it to market are unaware of the expensive failures that never make it that far. But I think this image - that pharmaceutical companies are constantly risking their financial future pouring resources into research for new drugs which will finally cure some disease that has plagued humanity - is also a mischaracterization of reality. For instance, drug companies also spend a large portion of their research budget developing "novel compounds" which are based on small chemical changes to existing drugs, just for the purpose of extending their patent and increasing the profitability (read: cost to consumer) of an existing treatment. So it's not as if all the resources they put in to research represent some altruistic good. To be honest, I think the incentive structure for drug companies, like many things in healthcare, is just not ideal for producing the best outcomes. Their ideal business model is to own expensive drugs which sick people have to take for their entire lives. If they produce truly curative treatments, that's actually a net loss for them. As some people have suggested, it would make a lot of sense to nationalize drug research in the US. The idea is you bring the top pharmaceutical researchers into the NIH, and while this would require a big up-front investment, you might even be able to operate at a profit by licensing the drugs they develop to the rest of the world. Also, in a single-payer world, you would have the healthcare provider under the same financial umbrella as the people creating the drugs. As a result, the incentive would be to drive treatment costs down.

new299 7y ago
> just for the purpose of extending their patent I don’t understand this point, though I’ve heard it before. If the original patents expire, the original drugs can be manufactured as generics right? If the new patents provide no new benefit, don’t use them? > The idea is you bring the top pharmaceutical researchers into the NIH... Projects I’ve seen suggests that technology development carried out in an academic context often requires significant refinement (or complete reworking tbh) when being brought to market. So, it’s not clear to me how well the model you suggest would work. Perhaps it would be best to have a public organization that manufactures genetic drugs first and build from that. But... I think that may also have issues.
- skohan 7y ago
  > I don’t understand this point, though I’ve heard it before. If the original patents expire, the original drugs can be manufactured as generics right? If the new patents provide no new benefit, don’t use them? So it's because of a loophole created in the Hatch-Waxman act, which basically stipulates that if a drug company creates a "new chemical version" of a name-brand drug, then it's possible to extend the patent for 5 years and block the FDA approval of any generics. [0] [0]: https://www.upcounsel.com/how-long-does-a-drug-patent-last https://www.upcounsel.com/how-long-does-a-drug-patent-last > Projects I’ve seen suggests that technology development carried out in an academic context often requires significant refinement (or complete reworking tbh) when being brought to market. So, it’s not clear to me how well the model you suggest would work. So the problem, as I see it, is that the people who profit from the production and sale of drugs also have an essential monopoly over the talent pool which is capable of developing new drugs. As a result, the incentive is for them to direct their R&D resources in ways which maximize profitability rather than maximize health outcomes. In such a system as I have described, there would still be room for drug companies to do the work of producing drugs, but the incentives for the R&D process could be aligned with the general population rather than drug company shareholders. The current system represents something of a conflict of interest.
  - refurb 7y ago
    I think you mean new chemical entity (NCE). That’s not a small tweak, that’s an entirely new drug. And the older drug can still be sold by genetics companies.
    - skohan 7y ago
      The point is not the level of effort that it takes to create the drug, the problem is they are allocating resources to research drugs to treat already-served ailments due to the profit motive rather than trying to find solutions for conditions which are not yet adequately treated.
      - refurb 7y ago
SiempreViernes 7y ago
You would loose access to some private capital tough, not to mention there will be constant attacks by that private capital on the political leadership to privatize all that research for peanuts.
- skohan 7y ago
  Maybe it's naiveté on my part, but it seems to me that the system is hopelessly corrupt if you cannot even imagine making some basic structural changes in favor of better, cheaper health outcomes without assuming that private capital would thwart those efforts.
  - SiempreViernes 7y ago
    Private capital is always pushing for more privatization, because that is a precondition for the individual owners to accumulate more wealth. Historically, the sort of structural change you suggest is what gets you branded a communist and hanged.
trentlott 7y ago
They also spend a lot of time looking for University researchers that have found something they like, then buy esclusive rights to the compound This recently happened to a prof in my department. He's an organic chemist, d evisde a way to prevent plaque buildup, and had the rights to the compound contracted out by an unknown pharmaceutical company My boss also had a meeting with Pfizer about a thing In this case the research would have been publicly funded and been obtained by a private company who bypassed the need to spend money on development That's a shady technique, IMHO, because it's our tax money directly enriching a corporation
- refurb 7y ago
  Is your prof’s drug ready for sale? If not, I don’t understand what you mean by “bypass development”. The most expensive and most risky part of drug development is getting a promising drug candidate all the way to market. 99% of those fail, yet can cost hundreds of millions. And not sure what country you’re in, but if it’s the US, your prof would likely stand to make a ton of money if the drug is successful. The company doesn’t get it for free, they buy it from the patent owners.
  - trentlott 7y ago
    Both projects progressed to the point of running successful animal trials (n ~ 250) Finding a prospective molecule is a huge part of the process - this is why computer binding models are such a hot topic The fact that we paid for discovery, synthetic development, and PoC is a pretty big deal whether or not it ends up being a marketed drug I know the guy who sold the patent was paid very well (aftet the university cut, of course) ... but who paid the bills to make it possible?
    - kjs3 7y ago
      Lemme get this straight...taxes paid for the basic research; that is, paid for something for which there was zero obligation to come up with a new drug. No shareholders to make happy, no board to placate. Go do research and write some papers. He found something, and a drug company willing to put up the other 99.99% of the money required to try to take the drug to market (even though the odds of that happening are miniscule) paid both the university and the researcher for the rights to use that discovery (and, as I understand it, usually to get a share of the profits should the drug be successful). So for a nominal tax-based fee (funding research, not bringing drugs to market), private companies get access to research results that a private company may not have even tried and the institutions involved get a funding bump. And maybe some malady cured as a result. Unless you're a serious "screw you I got mine" libertarian, that seems like how tax supported basic research should to work.
jcranmer 7y ago
> Their ideal business model is to own expensive drugs which sick people have to take for their entire lives. If they produce truly curative treatments, that's actually a net loss for them. Not really. Drug development is so difficult that you're not going to presented with a scenario where you have one drug candidate that cures the disease and another drug candidate that merely abates it. The bias that happens a lot is towards common diseases and away from rarer diseases or diseases that occur largely in poorer countries, although that's still no guarantee of success (hello, Alzheimer's).
- tlb 7y ago
  And, to go even further, a drug that could cure something like high blood pressure in a single dose is almost inconceivable. How would it work? It’d have to permanently change some state in your body. And what if your blood pressure dropped too much — how would you reverse it?
- mandevil 7y ago
  There is definitely a bias towards chronic rather than acute illness, which I think is what the GP is discussing. This is why there is more research on high blood pressure than into antibiotics. On the other hand, something like Solvadi (an actual cure for HepC in 90 days) really is a miracle cure for a chronic problem, and cost effective even at its very high price point (1k/pill, 90k total was its initial list price).
  - refurb 7y ago
    There is no bias towards chronic treatments, it's just the best that we have right now. Your Sovaldi example shows that - a one-time cure can command a price that is bigger than a chronic treatment. And the reason nobody invests in antibiotics (although there are several very profitable ones) is because any new drug is reserved for last line. Doctors don't want to bring out the big guns until all the others have failed.
    - entee 7y ago
      This, so much this. It's very hard to make an antibiotics company work, not so much because you can't make money on the pill itself, but because it will never actually get used unless the infection is dire. This means that your market is microscopic and you can't recover the cost of developing the drug in the first place. Antibiotics are special and should be incentivized using a different system. I've heard ideas like an international government compact that awards a large, multi-billion $ prize in exchange for the patent and full generic production immediately. This would allow a consortium/company to do very well for itself but the whole world to benefit in the aggregate for very little cost.