10 ms·
When it costs billions to develop a new drug due to onerous testing regulations, that's what happens. Ultimately returns in every industry tend towards zero. I
by ikeboy 7y ago
When it costs billions to develop a new drug due to onerous testing regulations, that's what happens.
Ultimately returns in every industry tend towards zero. If we made it cheaper to develop new drugs it would extend the lifespan of the industry somewhat but not indefinitely. At some point diminishing returns take over and investment must go down.
- toomuchtodo 7y agoHow much is spent on marketing in comparison? Only in the US and New Zealand can you market drugs directly to the public. I sense an opportunity to destroy an unnecessary cost.
- ikeboy 7y agoIf you believe the market is choosing to waste money on ineffective marketing, sure. Do you have any particular reason to think that? Why would you expect return on capital to go up without marketing?
- deleted 7y ago[deleted]
- MiroF 7y agoUnnecessary from a benefit to society perspective - the marketing might be very effective for them but that is besides the point. If nobody is marketing, that definitely might increase return on capital.
- jogjayr 7y agoYou only need one participant in the market to start advertising and seeing profits, and then everyone else has to follow suit. Collectively the money may still be wasted because no one's relative market position changes very much.
- jessaustin 7y agoAs much as the erection drug ads annoy me, this argument may prove too much... It may be that humans would be happier and the economy more efficient if all marketing were outlawed?
- asdfasgasdgasdg 7y agoThe marketing may be effective and still unnecessary. For example, consider a simified world model where drug A and drug B are identical, and are the two widely known solutions to a given condition. In a world where no marketing is done, people with the condition will randomly buy A or B, with roughly a 50% chance of either outcome, assuming they cost the same amount. In a world where A spends half their revenue on marketing, people start buying A more than B. If B responds by also spending $50 on marketing, we go back to the world where each is purchased roughly equally, but now the marketing budget has to come out of the pocket of either the company owners or drug purchasers. If you pass a law banning drug marketing, you may be able to get the same health outcomes with less overhead. Of course, this ignores all the hypothetical cases where marketing helps, like increasing awareness of a beneficial treatment that was not previously well known.
- rayiner 7y ago$6 billion for direct to consumer marketing. Versus $71 billion in R&D.
- toomuchtodo 7y ago8 percent is not insignificant IMHO. Appreciate the legwork to post this.
- ceejayoz 7y ago> When it costs billions to develop a new drug due to onerous testing regulations, that's what happens. This does not explain the increase in cost of insulin, which was invented in 1923.
- ikeboy 7y agoYou can buy the formulation that was invented in 1923 for cheap. It's newer formulations that are expensive, and those are still protected by patents.
- ceejayoz 7y agohttps://en.wikipedia.org/wiki/Regular_insulin https://en.wikipedia.org/wiki/Regular_insulin > In the United Kingdom 1,000 iu costs the NHS £7.48, while in the United States this amount is about $134.00.
- ikeboy 7y agohttps://www.snopes.com/fact-check/insulin-walmart-vial/ https://www.snopes.com/fact-check/insulin-walmart-vial/
- opencl 7y agoInsulin is a great example of abuse of the patent system. The original patents for all of the major modern insulin formulations expired years ago, but the manufactures filed new patents years and even decades after the products had already been on the market to extend patent protection from 20 years to 30+.
- djpowell 7y agoThe NHS pays £14 - £28 a vial for those newer formulations.
- ikeboy 7y agoGood for them. Maybe if we fixed the patent system (government enforced monopoly) we'd be in a similar position.
- nradov 7y agoThe testing regulations are not onerous. They are necessary to ensure that new medications are both safe and effective. I often see vague complaints about the regulations, but no one seems to have specific suggestions about how to lower drug development costs while still protecting patients.
- ikeboy 7y agohttps://www.fdareview.org/issues/theory-evidence-and-examples-of-fda-harm/ https://www.fdareview.org/issues/theory-evidence-and-example... Specific suggestion: get rid of efficacy requirement, keep safety requirement. Let doctors decide what works, as they currently do for off-label uses just fine.
- cat199 7y agoso, in effect, subsidize pharma via selling placebo effect?
- ikeboy 7y agoNo.
- RcouF1uZ4gsC 7y agoFor many medicines, you really can't separate efficacy from safety. As an extreme case, take for example cancer drugs. They typically have high side effects and every year, a certain proportion of the people taking them, die from the side effects. That is an acceptable risk because there is evidence that they are efficacious in treating cancer. If they are not efficacious, that is a completely unacceptable risk. Less extreme are antibiotics which can also have bad side effects, but are useful drugs because they actually kill bacteria. If they did not, the side effects would be unacceptable.
- ikeboy 7y agoShould a doctor be making that decision, or should the government? Or should the government make that decision for on-label uses and doctors make that decision for off-label uses? That's the status quo. Whatever argument you have for one half of that is an argument against the other half.
- mumblemumble 7y agoGiven that closer research is finding that a lot of popular drugs and treatments actually do more harm than good, I don't think it's so easy to characterize the current testing regulations as onerous. The current regime in the USA didn't happen for nothing. It's well-known now that pharma companies had long been exploiting the file drawer effect and p-hacking to inflate the apparent safety and efficacy of their drugs in their FDA filings. The decision a couple decades ago to cut that off did dramatically reduce the rate at which drugs win approval, and that's a very good thing.
- ikeboy 7y agohttps://www.fdareview.org/issues/theory-evidence-and-examples-of-fda-harm/ https://www.fdareview.org/issues/theory-evidence-and-example... This provides what to me is compelling evidence that the efficacy requirement by the FDA is wasteful.
- UnFleshedOne 7y ago> Thus, he concluded, “(the) penalties imposed by the marketplace on sellers of ineffective drugs prior to 1962 seem to have been enough of a deterrent to have left little room for improvement by a regulatory agency” Amount of homeotherapy currently on the shelves bring "penalties imposed by the marketplace on sellers of ineffective drugs" into a sharp contrast... People will take pure water if you tell them it works. EDIT: But I suppose a complex measure of: removing efficacy requirements AND banning advertising to both consumers and doctors AND mandating pre-regisration of trials might lead to more drugs on the market with companies using efficacy trials to compete with each other and doctors selecting best drugs based on cost/benefit/harm analysis. I'm sure there are loopholes that would be promptly exploited in this scheme given enough incentive though.
- a1369209993 7y ago> People will take pure water if you tell them it works. To be fair, if you tell them it works, people will take pure water and show noticable improvments over non-treatment. Personally I just take the placebo effect directly though.