6 ms·

Jesus how much did these drugs cost to develop? Are these numbers justified?

by idclip 7y ago

ohyes 7y ago
It’s priced based on ability to pay. US it will be 100,000 other countries it will be less.
- Cougher 7y ago
  It isn't priced on the customer's ability to pay: it's priced on the companies' ability to gouge.
  - ohyes 7y ago
    Well, it is discriminatory pricing. If someone isn’t saying it is too expensive you haven’t priced the product aggressively enough. In the US market the profit was maximized at 100k, in other markets the profit is maximized at a lower price level because almost no one can afford 100k.
- r_singh 7y ago
  Yup, the generic version of the drug is price at $384 per bottle of 28 pills in India Here's an article on how the patent did not affect it's price in India: https://m.economictimes.com/industry/healthcare/biotech/pharmaceuticals/patent-not-to-affect-hepatitis-c-drug-price-in-india-gilead-sciences-inc/articleshow/52228499.cms https://m.economictimes.com/industry/healthcare/biotech/phar...
- lawn 7y ago
  Ability to pay? Is that a joke? Considering that 40% of Americans can't cover a $400 emergency expense[0], what makes you think they can pay $84,000 for a 12-week treatment? [0]: https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html https://money.cnn.com/2018/05/22/pf/emergency-expenses-house...
  - jacquesm 7y ago
    Maximized for the total bottom line it isn't a joke. That some people die is not a consideration for those that control access to these drugs, the question is how many people should die in order for them to make the most money of the ones that stay alive. Think of the ones that die as marketing.
    - claudeganon 7y ago
      This is the only sincere appraisal of the healthcare industry in the US I’ve seen on HN in months. Thank you for your clarity.
    - lol2143651 7y ago
      The way it generally works for these drugs is the insured get it covered and the uninsured get it cheap or free.
  - nkozyra 7y ago
    As with most commercial goods there's a market identified and the goods priced accordingly to maximize profit. This means that somebody is priced out no matter what. Given the state of American healthcare it's easier to reconcile if you remove the emotional part and view a drug treatment as, say, a television. If I make a 50" television and price it at $500, I accept that some people will not buy it and target my television to my intended market. What I'm saying is the drug companies are probably fine saying "ok, some people can't afford it, but we maximize profit by selling at a premium to those that can." All that said, if it's life saving you might be surprised what people can and will do, savings notwithstanding.
    - chmod775 7y ago
      > All that said, if it's life saving you might be surprised what people can and will do, savings notwithstanding. Withholding a life-saving treatment has to be criminal in some way. I just can't imagine a hospital sending people home to die because they can't pay.
- chmod775 7y ago
  In many other countries getting treated for hepatitis C won't cost you a dime besides your regular health insurance payment. Prices are often negotiated by health insurers and are pretty much guaranteed to be lower for that reason. Depending on what system you are in, you might never even learn what your treatment cost. Not that you should care.
  - twoodfin 7y ago
    That depends on the treatment and politicians’ willingness to pay for it. Take cystic fibrosis in England: Until this year, modern, highly effective (and, yes, expensive) treatments available for years in the US—covered at low out-of-pocket cost by insurers there—were unavailable through the NHS.
    - 3fe9a03ccd14ca5 7y ago
      The exception or the rule?
    - makomk 7y ago
      The same was true of hepatitis C in England - even though NICE, the body responsible for assessing what drugs should be available on the NHS, found that the new treatments were cost effective at the price they were being sold for, the NHS balked due to the total cost of curing everyone and refused to offer it to anyone except a handful of patients who already had severe liver damage.
      - refurb 7y ago
        This is true. The new HCV drugs, even at the outrage inducing price of $90k, easily met the NICE cost effectiveness threshold. The issue was really volume. There wasn’t enough money to treat everyone.
ameister14 7y ago
Drug R&D includes failures - not saying they aren't for profit companies but there is significant cost (in the billions yearly) and risk in running a pharmaceutical research company
spaginal 7y ago
These drugs are priced this high for the sake of health insurance and the screwy pricing market based around it. When you get the final bill with the “adjustments” and “discounts” it will be far less. If you signaled to the provider you are paying cash it’s far less. My physical therapy was $1200 a visit to my insurance provider, and magically $40 out of pocket once my insurance cut off my covered trips.
Tharkun 7y ago
Drug development is incredibly costly. It's also something of a long term gamble. It can take 10-20 years to develop a new drug. A lot of that time is spent testing safety and waiting for approval. As a drug company, you need to have several new drugs in your pipeline at any given point, or you'll be seriously fucked if one (or more) of your products don't pan out. It's basically a high-risk-high-reward type of gambling situation. Imagine having thousands of people on payroll, some working on drug design, some designing experiments to test the drugs, some doing the legal paperwork to get drugs approved etc, and suddenly the patent for your best selling drug expires and your latest drug doesn't work. You're pretty much boned.
dfsegoat 7y ago
The development costs per a Forbes analysis are as follows: > "The median per-drug R&D spending of companies that developed more than six drugs – that’s only 8 companies – was $5.8 billion." ...so that is $5-6B USD per drug DEVELOPED in large companies. Gilead - maker of Sovaldi/Harvoni for HepC treatment - has been on a development tear of late, and almost certainly falls into that range IMO [2]. For companies that produce fewer drugs - the estimates are between $700M-$1B per drug. Note these are prices for drug R&D only ("development") - there is no guarantee those drugs developed make it to market ("approval") - Over 90% do not. edit: source links 1 - https://www.forbes.com/sites/matthewherper/2017/10/16/the-cost-of-developing-drugs-is-insane-a-paper-that-argued-otherwise-was-insanely-bad https://www.forbes.com/sites/matthewherper/2017/10/16/the-co... 2 - https://en.wikipedia.org/wiki/Gilead_Sciences#2010_to_2019 https://en.wikipedia.org/wiki/Gilead_Sciences#2010_to_2019
- yoloClin 7y ago
  I imagine those numbers wouldn't be all that reliable for a bunch of reasons - companies would have vested interests in over or under reporting costs for various reasons, technology progressions mean previously expensive to develop drugs may be cheaper if they were to be redeveloped now, and sample size probably wouldn't be large enough for the raw data to be used when bankrolling pharma research ventures. Edit: I should contextualise this by noting I have basically no experience with pharma so grain of salt blah blah
  - idclip 7y ago
    I dont think you should be downvoted because thats valid, yet hard to use as an argument, paranoia. The basic assummption in cryptography is “assume the target system is already compromised” so i would wager you are partially correct. Its just that its not the whole story, especially if u think that private persons get massssive discounts if they try to privately pay (from reading below comments about quotes to insurance companies vs private people). Its a sad dynamic thats probably ruining more loves than it should.
  - dfsegoat 7y ago
    I think your points are fair. Sample size for their analysis was about 100 drugs. FDA approves about 25 per year. My main point is that drug development is more expensive than most realize. Beyond R&D, a lot of that cost is in postmarketing (after approval) safety studies and surveillance- to catch side effects not observed in clinical trials. This process can be made somewhat more efficient as you suggested, but at the end of the day a human is reviewing every side effect report and reporting those back to regulatory agencies etc. I am not qualified to discuss the economics re: your point on pharma r&d - drug discovery is it’s own thing aside from actual drug development.
deleted 7y ago
[deleted]
inasio 7y ago
It cost exactly 11 billion for Gilead to "develop" Sofosbuvir (they bought Pharmasset who discovered the drug [1]) [1] https://en.wikipedia.org/wiki/Sofosbuvir#History https://en.wikipedia.org/wiki/Sofosbuvir#History
- refurb 7y ago
  They didn’t buy an approved drug, they bought a clinical lead. They still spent a ton getting it approved.

Jesus how much did these drugs cost to develop? Are these numbers justified?

by idclip 7y ago

Jesus how much did these drugs cost to develop? Are these numbers justified?

ohyes 7y ago

It’s priced based on ability to pay. US it will be 100,000 other countries it will be less.

Cougher 7y ago
It isn't priced on the customer's ability to pay: it's priced on the companies' ability to gouge.
- ohyes 7y ago
  Well, it is discriminatory pricing. If someone isn’t saying it is too expensive you haven’t priced the product aggressively enough. In the US market the profit was maximized at 100k, in other markets the profit is maximized at a lower price level because almost no one can afford 100k.
r_singh 7y ago
Yup, the generic version of the drug is price at $384 per bottle of 28 pills in India Here's an article on how the patent did not affect it's price in India: https://m.economictimes.com/industry/healthcare/biotech/pharmaceuticals/patent-not-to-affect-hepatitis-c-drug-price-in-india-gilead-sciences-inc/articleshow/52228499.cms https://m.economictimes.com/industry/healthcare/biotech/phar...
lawn 7y ago
Ability to pay? Is that a joke? Considering that 40% of Americans can't cover a $400 emergency expense[0], what makes you think they can pay $84,000 for a 12-week treatment? [0]: https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html https://money.cnn.com/2018/05/22/pf/emergency-expenses-house...
- jacquesm 7y ago
  Maximized for the total bottom line it isn't a joke. That some people die is not a consideration for those that control access to these drugs, the question is how many people should die in order for them to make the most money of the ones that stay alive. Think of the ones that die as marketing.
  - claudeganon 7y ago
    This is the only sincere appraisal of the healthcare industry in the US I’ve seen on HN in months. Thank you for your clarity.
  - lol2143651 7y ago
    The way it generally works for these drugs is the insured get it covered and the uninsured get it cheap or free.
- nkozyra 7y ago
  As with most commercial goods there's a market identified and the goods priced accordingly to maximize profit. This means that somebody is priced out no matter what. Given the state of American healthcare it's easier to reconcile if you remove the emotional part and view a drug treatment as, say, a television. If I make a 50" television and price it at $500, I accept that some people will not buy it and target my television to my intended market. What I'm saying is the drug companies are probably fine saying "ok, some people can't afford it, but we maximize profit by selling at a premium to those that can." All that said, if it's life saving you might be surprised what people can and will do, savings notwithstanding.
  - chmod775 7y ago
    > All that said, if it's life saving you might be surprised what people can and will do, savings notwithstanding. Withholding a life-saving treatment has to be criminal in some way. I just can't imagine a hospital sending people home to die because they can't pay.
chmod775 7y ago
In many other countries getting treated for hepatitis C won't cost you a dime besides your regular health insurance payment. Prices are often negotiated by health insurers and are pretty much guaranteed to be lower for that reason. Depending on what system you are in, you might never even learn what your treatment cost. Not that you should care.
- twoodfin 7y ago
  That depends on the treatment and politicians’ willingness to pay for it. Take cystic fibrosis in England: Until this year, modern, highly effective (and, yes, expensive) treatments available for years in the US—covered at low out-of-pocket cost by insurers there—were unavailable through the NHS.
  - 3fe9a03ccd14ca5 7y ago
    The exception or the rule?
  - makomk 7y ago
    The same was true of hepatitis C in England - even though NICE, the body responsible for assessing what drugs should be available on the NHS, found that the new treatments were cost effective at the price they were being sold for, the NHS balked due to the total cost of curing everyone and refused to offer it to anyone except a handful of patients who already had severe liver damage.
    - refurb 7y ago
      This is true. The new HCV drugs, even at the outrage inducing price of $90k, easily met the NICE cost effectiveness threshold. The issue was really volume. There wasn’t enough money to treat everyone.

ameister14 7y ago

Drug R&D includes failures - not saying they aren't for profit companies but there is significant cost (in the billions yearly) and risk in running a pharmaceutical research company

spaginal 7y ago

These drugs are priced this high for the sake of health insurance and the screwy pricing market based around it. When you get the final bill with the “adjustments” and “discounts” it will be far less. If you signaled to the provider you are paying cash it’s far less. My physical therapy was $1200 a visit to my insurance provider, and magically $40 out of pocket once my insurance cut off my covered trips.

Tharkun 7y ago

Drug development is incredibly costly. It's also something of a long term gamble. It can take 10-20 years to develop a new drug. A lot of that time is spent testing safety and waiting for approval. As a drug company, you need to have several new drugs in your pipeline at any given point, or you'll be seriously fucked if one (or more) of your products don't pan out. It's basically a high-risk-high-reward type of gambling situation. Imagine having thousands of people on payroll, some working on drug design, some designing experiments to test the drugs, some doing the legal paperwork to get drugs approved etc, and suddenly the patent for your best selling drug expires and your latest drug doesn't work. You're pretty much boned.

dfsegoat 7y ago

The development costs per a Forbes analysis are as follows: > "The median per-drug R&D spending of companies that developed more than six drugs – that’s only 8 companies – was $5.8 billion." ...so that is $5-6B USD per drug DEVELOPED in large companies. Gilead - maker of Sovaldi/Harvoni for HepC treatment - has been on a development tear of late, and almost certainly falls into that range IMO [2]. For companies that produce fewer drugs - the estimates are between $700M-$1B per drug. Note these are prices for drug R&D only ("development") - there is no guarantee those drugs developed make it to market ("approval") - Over 90% do not. edit: source links 1 - https://www.forbes.com/sites/matthewherper/2017/10/16/the-cost-of-developing-drugs-is-insane-a-paper-that-argued-otherwise-was-insanely-bad https://www.forbes.com/sites/matthewherper/2017/10/16/the-co... 2 - https://en.wikipedia.org/wiki/Gilead_Sciences#2010_to_2019 https://en.wikipedia.org/wiki/Gilead_Sciences#2010_to_2019

yoloClin 7y ago
I imagine those numbers wouldn't be all that reliable for a bunch of reasons - companies would have vested interests in over or under reporting costs for various reasons, technology progressions mean previously expensive to develop drugs may be cheaper if they were to be redeveloped now, and sample size probably wouldn't be large enough for the raw data to be used when bankrolling pharma research ventures. Edit: I should contextualise this by noting I have basically no experience with pharma so grain of salt blah blah
- idclip 7y ago
  I dont think you should be downvoted because thats valid, yet hard to use as an argument, paranoia. The basic assummption in cryptography is “assume the target system is already compromised” so i would wager you are partially correct. Its just that its not the whole story, especially if u think that private persons get massssive discounts if they try to privately pay (from reading below comments about quotes to insurance companies vs private people). Its a sad dynamic thats probably ruining more loves than it should.
- dfsegoat 7y ago
  I think your points are fair. Sample size for their analysis was about 100 drugs. FDA approves about 25 per year. My main point is that drug development is more expensive than most realize. Beyond R&D, a lot of that cost is in postmarketing (after approval) safety studies and surveillance- to catch side effects not observed in clinical trials. This process can be made somewhat more efficient as you suggested, but at the end of the day a human is reviewing every side effect report and reporting those back to regulatory agencies etc. I am not qualified to discuss the economics re: your point on pharma r&d - drug discovery is it’s own thing aside from actual drug development.

deleted 7y ago

[deleted]

inasio 7y ago

It cost exactly 11 billion for Gilead to "develop" Sofosbuvir (they bought Pharmasset who discovered the drug [1]) [1] https://en.wikipedia.org/wiki/Sofosbuvir#History https://en.wikipedia.org/wiki/Sofosbuvir#History

refurb 7y ago
They didn’t buy an approved drug, they bought a clinical lead. They still spent a ton getting it approved.