4 ms·

Shame the life saving drug is rediculously expensive. I dont normally subscribe to bug pharma being greedy, but this one seems like a compelling case for that.

Shame the life saving drug is rediculously expensive. I dont normally subscribe to bug pharma being greedy, but this one seems like a compelling case for that. The canadian gov (PMPRB) tried to do sonething about that but i think they backed down

BurningFrog 3y ago
It's better to think of it as math. Developing drugs is very expensive, and the few that turn out to be effective need to be priced to pay for all those costs. The alternative is pretty much to not develop new drugs.
- maxerickson 3y ago
  A foundation provided $150 million to develop one of the drugs in the combination and then sold the royalty rights to it for $3.3 billion: https://web.archive.org/web/20141227030211/http://www.cff.org/aboutCFFoundation/PressRoom/PressReleases/PressReleaseArchive/11-19-Transformational-Royalty-Sale.cfm https://web.archive.org/web/20141227030211/http://www.cff.or... https://en.wikipedia.org/wiki/Ivacaftor#Economics https://en.wikipedia.org/wiki/Ivacaftor#Economics Hard to argue that the $3.15 billion is a development cost. I guess Vertex could have dumped billions more into making and marketing the combination.
  - BurningFrog 3y ago
    Sure, this drug ends up being profitable. But most of them also cost $150M to develop while making $0. As a whole, I don't think the pharmacy industry is unusually profitable.
    - ddeck 3y ago
      Perhaps not unusually, but there is some evidence that they are more profitable than comparably sized non-pharma companies. >"from 2000 to 2018, the median net income (earnings) expressed as a fraction of revenue was significantly greater for pharmaceutical companies compared with nonpharmaceutical companies (13.8% vs 7.7%)." Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7054843/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7054843/
  - cyberax 3y ago
    The clinical trials alone cost more than that.
    - maxerickson 3y ago
      These studies put it in the ballpark of $100 million: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7295430/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7295430/ https://publichealth.jhu.edu/2018/cost-of-clinical-trials-for-new-drug-FDA-approval-are-fraction-of-total-tab https://publichealth.jhu.edu/2018/cost-of-clinical-trials-fo... And then the effect from these drugs seems to be blatant (which generally ends up making the trials cheaper). Did you see some information particular to these drugs that made them especially costly?
bdcravens 3y ago
I'm not sure how the accounting works out for Vertex, but they provide copay assistance even for high incomes. I have CF, and take Trikafta. I have an above market developer income, and I pay nothing for Trikafta due to their copay assistance (it's the only copay assistance program that's available to me, given my income)
- Scoundreller 3y ago
  But what does your insurance company pay?
  - bdcravens 3y ago
    According to my insurance, $30,080.44. Per month.
refurb 3y ago
It's ridiculously expensive because it's a rare disease. The total investment to bring this drug to market is in the range of hundreds of millions of dollars. Recouping that expense when there are only hundreds of patients in the US or thousands across the global requires a price that is far higher than normal medications. Then layer on top the 1 in 20 chance that a drug actually makes it to market after that investment and the math starts to make sense.
- Scoundreller 3y ago
  Tens of thousands of patients in USA, and given the massive longevity improvements, that count will go up. And add to that a likely increase in childbirths by CF patients. People can save a bundle of money if they take advantage of the fact that it's a CYP-3A4 substrate, but I'm not going there and don't officially recommend this. But if you're lost in the woods and there's some grapefruits around....
- bawolff 3y ago
  > The total investment to bring this drug to market is in the range of hundreds of millions of dollars. Recouping that expense when there are only hundreds of patients in the US or thousands across the global requires a price that is far higher than normal medications. So lets assume the drug cost 180 million to develop. There are currently 30,000 people with CF in united states. At the current price point they would recoup that cost within 2 months just from usa sales. This is a drug cf suffers would have to take for the rest of their life. Its reasonable its more expensive than you average drug, but the $310,000 per year for these pills still seems excessive. Especially when its basically a death sentence without them so their customers are really held over a barrel.
  - refurb 3y ago
    There are currently 30,000 people with CF in united states. This drug can only be used by CF patients with a specific mutation, not the entire population. And I wouldn't assume $180M since this treatment is a combination of 3 different drugs all with their own development pathway and safety testing. Then you need to look at the actual cost of manufacturing the drug, packaging it, delivering it to patients and all the salaries of the people it takes to do that. Sales of $180M is not profit, it's revenue. Don't get me wrong, they are making a profit, but pharma company profit margins are usually in the 20-30% range and that's for the successful ones, not including all the companies that spend $100M and fail with nothing to show for it. Then add on top the remaining patent life which is usually less than 10 years, after which the cost of the drug will plummet and the originator company will stop making money.
monero-xmr 3y ago
Seizing the profits from successful drugs is a one-time event. After that, you won’t see any new drugs.

BurningFrog 3y ago

It's better to think of it as math. Developing drugs is very expensive, and the few that turn out to be effective need to be priced to pay for all those costs. The alternative is pretty much to not develop new drugs.

maxerickson 3y ago
A foundation provided $150 million to develop one of the drugs in the combination and then sold the royalty rights to it for $3.3 billion: https://web.archive.org/web/20141227030211/http://www.cff.org/aboutCFFoundation/PressRoom/PressReleases/PressReleaseArchive/11-19-Transformational-Royalty-Sale.cfm https://web.archive.org/web/20141227030211/http://www.cff.or... https://en.wikipedia.org/wiki/Ivacaftor#Economics https://en.wikipedia.org/wiki/Ivacaftor#Economics Hard to argue that the $3.15 billion is a development cost. I guess Vertex could have dumped billions more into making and marketing the combination.
- BurningFrog 3y ago
  Sure, this drug ends up being profitable. But most of them also cost $150M to develop while making $0. As a whole, I don't think the pharmacy industry is unusually profitable.
  - ddeck 3y ago
    Perhaps not unusually, but there is some evidence that they are more profitable than comparably sized non-pharma companies. >"from 2000 to 2018, the median net income (earnings) expressed as a fraction of revenue was significantly greater for pharmaceutical companies compared with nonpharmaceutical companies (13.8% vs 7.7%)." Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7054843/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7054843/
- cyberax 3y ago
  The clinical trials alone cost more than that.
  - maxerickson 3y ago
    These studies put it in the ballpark of $100 million: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7295430/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7295430/ https://publichealth.jhu.edu/2018/cost-of-clinical-trials-for-new-drug-FDA-approval-are-fraction-of-total-tab https://publichealth.jhu.edu/2018/cost-of-clinical-trials-fo... And then the effect from these drugs seems to be blatant (which generally ends up making the trials cheaper). Did you see some information particular to these drugs that made them especially costly?

bdcravens 3y ago

I'm not sure how the accounting works out for Vertex, but they provide copay assistance even for high incomes. I have CF, and take Trikafta. I have an above market developer income, and I pay nothing for Trikafta due to their copay assistance (it's the only copay assistance program that's available to me, given my income)

Scoundreller 3y ago
But what does your insurance company pay?
- bdcravens 3y ago
  According to my insurance, $30,080.44. Per month.

refurb 3y ago

It's ridiculously expensive because it's a rare disease. The total investment to bring this drug to market is in the range of hundreds of millions of dollars. Recouping that expense when there are only hundreds of patients in the US or thousands across the global requires a price that is far higher than normal medications. Then layer on top the 1 in 20 chance that a drug actually makes it to market after that investment and the math starts to make sense.

Scoundreller 3y ago
Tens of thousands of patients in USA, and given the massive longevity improvements, that count will go up. And add to that a likely increase in childbirths by CF patients. People can save a bundle of money if they take advantage of the fact that it's a CYP-3A4 substrate, but I'm not going there and don't officially recommend this. But if you're lost in the woods and there's some grapefruits around....
bawolff 3y ago
> The total investment to bring this drug to market is in the range of hundreds of millions of dollars. Recouping that expense when there are only hundreds of patients in the US or thousands across the global requires a price that is far higher than normal medications. So lets assume the drug cost 180 million to develop. There are currently 30,000 people with CF in united states. At the current price point they would recoup that cost within 2 months just from usa sales. This is a drug cf suffers would have to take for the rest of their life. Its reasonable its more expensive than you average drug, but the $310,000 per year for these pills still seems excessive. Especially when its basically a death sentence without them so their customers are really held over a barrel.
- refurb 3y ago
  There are currently 30,000 people with CF in united states. This drug can only be used by CF patients with a specific mutation, not the entire population. And I wouldn't assume $180M since this treatment is a combination of 3 different drugs all with their own development pathway and safety testing. Then you need to look at the actual cost of manufacturing the drug, packaging it, delivering it to patients and all the salaries of the people it takes to do that. Sales of $180M is not profit, it's revenue. Don't get me wrong, they are making a profit, but pharma company profit margins are usually in the 20-30% range and that's for the successful ones, not including all the companies that spend $100M and fail with nothing to show for it. Then add on top the remaining patent life which is usually less than 10 years, after which the cost of the drug will plummet and the originator company will stop making money.

monero-xmr 3y ago

Seizing the profits from successful drugs is a one-time event. After that, you won’t see any new drugs.