3 ms·

> My understanding is the funding for the trials was partly from NIAID. I have no particular insight into the pricing of this drug, but in general, NIAID fundi

by timr 6y ago

> My understanding is the funding for the trials was partly from NIAID. I have no particular insight into the pricing of this drug, but in general, NIAID funding doesn't get anywhere close to the level of investment needed to bring a drug to market (NIAID's total budget is something like $5Bn. A single drug can easily require that much money to go to market). Moreover, it isn't a bright-line distinction between public and private funding: if a novel drug is developed (entirely privately) against a target for which academic researchers once received public funds, does it count as public funding? There's a huge gray area in between. Nearly all drugs can be characterized as "publicly funded", if you look hard enough. Rules like this sound great, but in practice, they'll lead to perverse incentives (like drug companies completely avoiding targets from the academic world, in the previous example). Nobody rational wants to spend billions of dollars doing late-stage development and clinical trials to be torpedoed by a researcher who took a small amount public funding decades prior.

akiselev 6y ago
> I have no particular insight into the pricing of this drug, but in general, NIAID funding doesn't get anywhere close to the level of investment needed to bring a drug to market (NIAID's total budget is something like $5Bn. A single drug can easily require that much money to go to market). According to [1] "the estimated median capitalized research and development cost per product was $985 million, counting expenditures on failed trials." That billion dollar figure is risk adjusted per product meaning that's the cost of all R&D and clinical trials against the number of products that hit the market. A lucky startup can pull off a successful trial for a few hundred million (i.e. Sofosbuvir), if not tens of millions for an orphan drug. The most expensive ("oncology and immuno-modulatory drugs" which are similar in complexity to HIV therapeutics) come in at a median of $2.8 billion and a mean of $4.5 billion but only because of an extreme outlier, Dupixent, which cost over $6 billion to develop. Dupixent costs $40k/year and has a much larger target market than this HIV treatment (IIRC on the order of 10 to 100x). This HIV injection is far more likely to be discounted in the developing world so the sticker price likely reflects that too. A $5 billion a year budget can go very far and the people should get the rewards for taking the risk, especially for a disease like HIV that has significant quality of life impacts on vulnerable populations. [1] https://jamanetwork.com/journals/jama/article-abstract/2762311 https://jamanetwork.com/journals/jama/article-abstract/27623...
- pgt 6y ago
  Genuinely curious - why do these drugs cost so much? Can we make it cheaper? I know there’s a lot of hit & miss and that the cost of the drug also covers the misses, but it feels like we should be able to do this for millions, not billions.
  - ryanmercer 6y ago
    https://www.pcisynthesis.com/want-to-know-why-early-drug-development-costs-so-much/ https://www.pcisynthesis.com/want-to-know-why-early-drug-dev... and http://sitn.hms.harvard.edu/flash/2020/modern-drug-discovery-why-is-the-drug-development-pipeline-full-of-expensive-failures/ http://sitn.hms.harvard.edu/flash/2020/modern-drug-discovery... are decent reads. Mostly it's the complexity of the compounds involved, the supply chain, and regulatory costs.
    - s1artibartfast 6y ago
      And the the time value of money. see my sibling post.
  - s1artibartfast 6y ago
    It has to do with the time value of money and long development timelines. Here is a great blog post from a scientist trying to find investors for drug to cure his wife's terminal disease.[1] >it takes a hundred dollars of drug revenue 17 years from now to motivate someone to invest one dollar today. No wonder drugs are expensive. That is a 10,000% return on investment required to break even. http://www.cureffi.org/2019/04/29/financial-modeling-in-rare-disease http://www.cureffi.org/2019/04/29/financial-modeling-in-rare...
    - deleted 6y ago
      [deleted]
  - akiselev 6y ago
    It genuinely takes a massive amount of labor using mostly highly paid professionals like doctors, nurses, and research scientists. Even before any trials start, the support materials for a premarketing application for a drug are usually in the thousands of pages and include clinical trial protocols that describe minutiae like how blood samples will be drawn so data is comparable between hospitals. Then you have to find participating hospitals, PIs, and patients which means lots of negotiation and patient screenings and TV/radio/web advertising. Then you have to manufacture the drugs in small to medium quantities. Then you have to actually run the trials which means paying a lot of people and most if not all of their medical care related to the clinical trial. Phase I trials, for example, are usually carried out under constant medical supervision and push the dosage as high as they can until 50% of the cohort will no longer tolerate it. That alone is usually thousands or tens of thousands per day per patient. By the time you get to phase III where you have hundreds to thousands of patients, you're shelling out up to $1k per patient for the incentive and $100-1k per checkup for the length of the trial. A 1k person phase III can easily cost tens of millions in labor just to administer the drug and collect samples once a month for a year. Data provenance and normalization is important so a not insignificant chunk of this time is largely unavoidable paperwork.

by timr 6y ago

akiselev 6y ago

> I have no particular insight into the pricing of this drug, but in general, NIAID funding doesn't get anywhere close to the level of investment needed to bring a drug to market (NIAID's total budget is something like $5Bn. A single drug can easily require that much money to go to market). According to [1] "the estimated median capitalized research and development cost per product was $985 million, counting expenditures on failed trials." That billion dollar figure is risk adjusted per product meaning that's the cost of all R&D and clinical trials against the number of products that hit the market. A lucky startup can pull off a successful trial for a few hundred million (i.e. Sofosbuvir), if not tens of millions for an orphan drug. The most expensive ("oncology and immuno-modulatory drugs" which are similar in complexity to HIV therapeutics) come in at a median of $2.8 billion and a mean of $4.5 billion but only because of an extreme outlier, Dupixent, which cost over $6 billion to develop. Dupixent costs $40k/year and has a much larger target market than this HIV treatment (IIRC on the order of 10 to 100x). This HIV injection is far more likely to be discounted in the developing world so the sticker price likely reflects that too. A $5 billion a year budget can go very far and the people should get the rewards for taking the risk, especially for a disease like HIV that has significant quality of life impacts on vulnerable populations. [1] https://jamanetwork.com/journals/jama/article-abstract/2762311 https://jamanetwork.com/journals/jama/article-abstract/27623...

pgt 6y ago
Genuinely curious - why do these drugs cost so much? Can we make it cheaper? I know there’s a lot of hit & miss and that the cost of the drug also covers the misses, but it feels like we should be able to do this for millions, not billions.
- ryanmercer 6y ago
  https://www.pcisynthesis.com/want-to-know-why-early-drug-development-costs-so-much/ https://www.pcisynthesis.com/want-to-know-why-early-drug-dev... and http://sitn.hms.harvard.edu/flash/2020/modern-drug-discovery-why-is-the-drug-development-pipeline-full-of-expensive-failures/ http://sitn.hms.harvard.edu/flash/2020/modern-drug-discovery... are decent reads. Mostly it's the complexity of the compounds involved, the supply chain, and regulatory costs.
  - s1artibartfast 6y ago
    And the the time value of money. see my sibling post.
- s1artibartfast 6y ago
  It has to do with the time value of money and long development timelines. Here is a great blog post from a scientist trying to find investors for drug to cure his wife's terminal disease.[1] >it takes a hundred dollars of drug revenue 17 years from now to motivate someone to invest one dollar today. No wonder drugs are expensive. That is a 10,000% return on investment required to break even. http://www.cureffi.org/2019/04/29/financial-modeling-in-rare-disease http://www.cureffi.org/2019/04/29/financial-modeling-in-rare...
  - deleted 6y ago
    [deleted]
- akiselev 6y ago
  It genuinely takes a massive amount of labor using mostly highly paid professionals like doctors, nurses, and research scientists. Even before any trials start, the support materials for a premarketing application for a drug are usually in the thousands of pages and include clinical trial protocols that describe minutiae like how blood samples will be drawn so data is comparable between hospitals. Then you have to find participating hospitals, PIs, and patients which means lots of negotiation and patient screenings and TV/radio/web advertising. Then you have to manufacture the drugs in small to medium quantities. Then you have to actually run the trials which means paying a lot of people and most if not all of their medical care related to the clinical trial. Phase I trials, for example, are usually carried out under constant medical supervision and push the dosage as high as they can until 50% of the cohort will no longer tolerate it. That alone is usually thousands or tens of thousands per day per patient. By the time you get to phase III where you have hundreds to thousands of patients, you're shelling out up to $1k per patient for the incentive and $100-1k per checkup for the length of the trial. A 1k person phase III can easily cost tens of millions in labor just to administer the drug and collect samples once a month for a year. Data provenance and normalization is important so a not insignificant chunk of this time is largely unavoidable paperwork.