3 ms·

The latter, as these companies were perfectly profitable even if they wouldn't charge inflated prices in the US. Not quite as profitable as currently, but still

by tfourb 3y ago

The latter, as these companies were perfectly profitable even if they wouldn't charge inflated prices in the US. Not quite as profitable as currently, but still not going bankrupt.

HDThoreaun 3y ago
They would absolutely stop doing clinical trials if they couldnt charge US prices. Sure theyd still be profitable, but we'd never get any new drugs since they cost a billion dollars to prove efficacy and safety.
- tfourb 3y ago
  Let's do some basic back-of-the-napkin math: Say the development of a drug costs $1 Billion on average and that only every tenth drug gets approval. So you are looking at a $10 Billion cost for every successful drug development. But you can then sell this drug exclusively under current patent laws for about 20 years, worldwide. By that calculation, you'd need to sell 1.000.000 doses of the drug for a price of $500 each every year to break even. That sounds trivial to achieve given that there are 7 billion people alive and innovative drugs will go for vastly more than that even in strictly regulated markets like many European countries (my son gets a pretty advanced drug that costs about $12.000 (EDIT: yearly) to procure but which is covered by our (national) insurance scheme). Additionally, a lot of the cost of basic drug research is actually covered by government-financed research, not private investment. If you are still worried, you could use a prize model, similar to what was done during covid: Identify certain qualities that a new drug should have (i.e. be an effective vaccine against malaria) and guarantee a big enough market (i.e. promise to buy at least 1 Billion doses at $10 each) and you can bet that there'll be plenty of companies trying to get at that money.
  - HDThoreaun 3y ago
    I think a prize model is a great idea and have been happy to see the US gov doing some work to move toward an implementation.

by tfourb 3y ago

The latter, as these companies were perfectly profitable even if they wouldn't charge inflated prices in the US. Not quite as profitable as currently, but still not going bankrupt.

HDThoreaun 3y ago

They would absolutely stop doing clinical trials if they couldnt charge US prices. Sure theyd still be profitable, but we'd never get any new drugs since they cost a billion dollars to prove efficacy and safety.

tfourb 3y ago
Let's do some basic back-of-the-napkin math: Say the development of a drug costs $1 Billion on average and that only every tenth drug gets approval. So you are looking at a $10 Billion cost for every successful drug development. But you can then sell this drug exclusively under current patent laws for about 20 years, worldwide. By that calculation, you'd need to sell 1.000.000 doses of the drug for a price of $500 each every year to break even. That sounds trivial to achieve given that there are 7 billion people alive and innovative drugs will go for vastly more than that even in strictly regulated markets like many European countries (my son gets a pretty advanced drug that costs about $12.000 (EDIT: yearly) to procure but which is covered by our (national) insurance scheme). Additionally, a lot of the cost of basic drug research is actually covered by government-financed research, not private investment. If you are still worried, you could use a prize model, similar to what was done during covid: Identify certain qualities that a new drug should have (i.e. be an effective vaccine against malaria) and guarantee a big enough market (i.e. promise to buy at least 1 Billion doses at $10 each) and you can bet that there'll be plenty of companies trying to get at that money.
- HDThoreaun 3y ago
  I think a prize model is a great idea and have been happy to see the US gov doing some work to move toward an implementation.