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> No, they acquired Pharmasset, the company that made the cure, for $11.2B. That was a pretty low-risk move. It was already an obvious money maker. Before I wa
by losvedir 7y ago
> No, they acquired Pharmasset, the company that made the cure, for $11.2B. That was a pretty low-risk move. It was already an obvious money maker.
Before I was a software developer I was in equity research, and one of the companies that we covered was Pharmasset. The whole point of these research companies is to find a winner and be acquired.
I get that it's low risk for the acquirer, but without that big payout the research and trials won't get done by the small companies, who won't be able to raise funding, etc.
- tyingq 7y agoI pointed it out because it brings some clarity to what the R&D actual costs are, and thus some clarity to whether gouging is happening.
- vilhelm_s 7y agoIsn't this evidence in the other direction: if the drug already existed and was acquired for $11 billion, then that suggests that they expect the profit to be about $11 billion. Otherwise, wouldn't they bid up the price more?
- tyingq 7y agoIn the 18 months following Sovaldi’s approval, Medicare alone spent $8.2 billion on the drug. I know that's revenue and not profit, but that doesn't even include private insurance, self pay, or sales outside the US.
- burpsnard 7y agoPresumably at least some of the seed funding for these research facilities is from the majors, who likely in turn lease research capacity to them. Interesting model