3 ms·

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.

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?

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?