8 ms·

Its own bill for landmark trials of a four-drug combination treatment for drug-resistant tuberculosis came to €34m (£29m). Okay, how does that compare to what

Its own bill for landmark trials of a four-drug combination treatment for drug-resistant tuberculosis came to €34m (£29m). Okay, how does that compare to what pharma companies spend? The article cites some unrelated numbers, doesn't actually compare. A quick Google search says: The average cost of phase 1, 2, and 3 clinical trials across therapeutic areas is around $4, 13, and 20 million respectively. So... not really that different? What's the big deal here?

throwaway35777 2y ago
Don't successful drugs also have to pay for the failed trials?
- deleted 2y ago
  [deleted]
- kurthr 2y ago
  And also for failed executive pay, and failed lobbying, which are much more expensive. In some cases (like Aduhelm) the marketing started before it was shown to have efficacy... so you have to pay for that very expensive failure too. https://www.washingtonpost.com/business/2024/03/08/eli-lilly-alzheimers-donanemab-fda/ https://www.washingtonpost.com/business/2024/03/08/eli-lilly...
- jrsdav 2y ago
  This is essentially true. Pharma is incredibly expensive (for lots of different reasons), with R&D taking up a huge portion of those costs. So yes, it's safe to assume that part of the accounting around those published costs in the billions are all of the failed candidates that never even made it to trials (the failure rate varies depending on the area of biology and the type of drug, but it's generally around 9 out of every 10 candidates [1]. By the time you get to trials, that ratio gets even more abysmal). Disclaimer -- I work for Recursion, a company built around this very problem. - [1]: https://www.sciencedirect.com/science/article/pii/S2211383522000521 https://www.sciencedirect.com/science/article/pii/S221138352... - [2]: https://www.recursion.com https://www.recursion.com
  - mc32 2y ago
    R&D takes lots, but so does compliance --for good reason. But compliance costs a lot of money, directly and indirectly. Lots of people, lots of inefficient processes, etc.
  - tomrod 2y ago
    Why do the phase testing not prevent overindexing failed projects?
- darth_avocado 2y ago
  Yes. They also have to pay for the $4.2B the companies spend on lobbying efforts in 2023. https://www.nbcnews.com/investigations/lobbyists-spent-record-42-billion-2023-federal-lawmakers-rcna135943# https://www.nbcnews.com/investigations/lobbyists-spent-recor...
  - ProjectArcturis 2y ago
    Seems like a lot, but in the context of $200B spent on R&D, 2% spent on warding off confiscation is probably money well spent.
  - refurb 2y ago
    Uhhh.. $4.2B is all lobbying, not just pharma?
Retric 2y ago
The S. “Its own bill for landmark trialS of a four-drug combination treatment for drug-resistant tuberculosis came to €34m (£29m)” You’re also looking at the cost from from 2015 to 2016 where a single phase 3 trial was already 20m and $41,117 per patient. https://www.linkedin.com/pulse/clinical-trial-budget-example-patricio-ledesma https://www.linkedin.com/pulse/clinical-trial-budget-example...
- nickff 2y ago
  I don’t understand the difference you’re trying to point out. You’re both talking about the total cost for a testing a combination of drugs which required multiple phases, each of which is deemed a different trial. Am I wrong? What difference are you trying to highlight with the “s”?
  - Retric 2y ago
    Each of those different phases would have cost ~26 million (30% inflation on 2015 prices).
- cameldrv 2y ago
  The super high clinical trial costs also mean problems for any drug that isn't expected to have a large effect size, because it's hard to get statistical significance. Some trials have been controversially going for a surrogate endpoint, which makes the stats easier since you can get a continuous variable instead of a binary one, but that's also how you get aducanumab, which reduces amyloid plaque, but it's unclear if it actually helps in alzheimers. Despite this they charge $56k a year.
darth_avocado 2y ago
[flagged]
- ceejayoz 2y ago
  See also: Hollywood accounting. It's fairly easy to make something look expensive if you put your mind to it.
  - lotsofpulp 2y ago
    Not applicable here because no one is discussing drug companies negotiating percentage commissions with their scientists. If Novartis was committing fraud by misstating expenses, they would be harming their own executives who get paid in equity. And if they were inflating expenses, they would, eventually, get beat by Merck/Pfizer/Lilly/myriad other competitors. Edit to respond to below comment: Hollywood accounting is not fraud because there are no laws requiring media makers to categorize and report expenses and income a certain way for the purposes of satisfying compensation agreements with their vendors (actors/producers/directors/etc). It all depends on each individual contract. A publicly listed business, however, has to comply with myriad rules regarding reporting of cash flow and assets, so it is always nonsensical to bring up Hollywood accounting when discussing official financial figures reported to the SEC.
    - ceejayoz 2y ago
      Look expensive and actually expensive aren't the same, nor is creative accounting always fraud. That's the entire point of Hollywood accounting (which, in the Hollywood example, helps equity like Disney shareholders).
- darby_eight 2y ago
  It's almost like the market is extremely poorly suited for developing drugs
  - nradov 2y ago
    Do we have examples of non-market systems that have proven to be consistently more effective for developing drugs?
downrightmike 2y ago
How much of that is Universities doing all the leg work?
- streptomycin 2y ago
  Not much, universities basically never pay for clinical trials.
  - larkost 2y ago
    This is true, but it should also be pointed out here that Universities are where almost of all the initial research into finding and vetting candidate drugs happens, mostly on grants from the government. On the whole that is enormously costly, and the drug companies only step in to develop the drug once the lab tests are promising. It used to be that all of the profits went to the drug companies, but more recently Universities have started to claim a portion of the patent royalties, and thus the profits. I believe the first big example of this is the University of Wisconsin's royalties on Warfarin (blood thinner used as medicine in humans, and in large doses as a rat killer).
refurb 2y ago
> The average cost of phase 1, 2, and 3 clinical trials across therapeutic areas is around $4, 13, and 20 million respectively. Average cost of a phase 3 trial is a terrible representation of costs. Not all phase 3 trials are equal. For something like TB, the trial can be relatively small (huundreds of patients), and short (months). For something like heart disease drugs, the trials might be massive (tends of thousands of patients) and very long (years). Anyone can call a CRO (contract research organization) up and ask what they charged for phase 3 trials. Last I talked to them it was ~$15,000/patient/year. It's pretty easy to do the math based on that. A heart disease drug with 10,000 patients lasting 3 years will cost $450M.

throwaway35777 2y ago

Don't successful drugs also have to pay for the failed trials?

deleted 2y ago
[deleted]
kurthr 2y ago
And also for failed executive pay, and failed lobbying, which are much more expensive. In some cases (like Aduhelm) the marketing started before it was shown to have efficacy... so you have to pay for that very expensive failure too. https://www.washingtonpost.com/business/2024/03/08/eli-lilly-alzheimers-donanemab-fda/ https://www.washingtonpost.com/business/2024/03/08/eli-lilly...
jrsdav 2y ago
This is essentially true. Pharma is incredibly expensive (for lots of different reasons), with R&D taking up a huge portion of those costs. So yes, it's safe to assume that part of the accounting around those published costs in the billions are all of the failed candidates that never even made it to trials (the failure rate varies depending on the area of biology and the type of drug, but it's generally around 9 out of every 10 candidates [1]. By the time you get to trials, that ratio gets even more abysmal). Disclaimer -- I work for Recursion, a company built around this very problem. - [1]: https://www.sciencedirect.com/science/article/pii/S2211383522000521 https://www.sciencedirect.com/science/article/pii/S221138352... - [2]: https://www.recursion.com https://www.recursion.com
- mc32 2y ago
  R&D takes lots, but so does compliance --for good reason. But compliance costs a lot of money, directly and indirectly. Lots of people, lots of inefficient processes, etc.
- tomrod 2y ago
  Why do the phase testing not prevent overindexing failed projects?
darth_avocado 2y ago
Yes. They also have to pay for the $4.2B the companies spend on lobbying efforts in 2023. https://www.nbcnews.com/investigations/lobbyists-spent-record-42-billion-2023-federal-lawmakers-rcna135943# https://www.nbcnews.com/investigations/lobbyists-spent-recor...
- ProjectArcturis 2y ago
  Seems like a lot, but in the context of $200B spent on R&D, 2% spent on warding off confiscation is probably money well spent.
- refurb 2y ago
  Uhhh.. $4.2B is all lobbying, not just pharma?

Retric 2y ago

The S. “Its own bill for landmark trialS of a four-drug combination treatment for drug-resistant tuberculosis came to €34m (£29m)” You’re also looking at the cost from from 2015 to 2016 where a single phase 3 trial was already 20m and $41,117 per patient. https://www.linkedin.com/pulse/clinical-trial-budget-example-patricio-ledesma https://www.linkedin.com/pulse/clinical-trial-budget-example...

nickff 2y ago
I don’t understand the difference you’re trying to point out. You’re both talking about the total cost for a testing a combination of drugs which required multiple phases, each of which is deemed a different trial. Am I wrong? What difference are you trying to highlight with the “s”?
- Retric 2y ago
  Each of those different phases would have cost ~26 million (30% inflation on 2015 prices).
cameldrv 2y ago
The super high clinical trial costs also mean problems for any drug that isn't expected to have a large effect size, because it's hard to get statistical significance. Some trials have been controversially going for a surrogate endpoint, which makes the stats easier since you can get a continuous variable instead of a binary one, but that's also how you get aducanumab, which reduces amyloid plaque, but it's unclear if it actually helps in alzheimers. Despite this they charge $56k a year.

darth_avocado 2y ago

[flagged]

ceejayoz 2y ago
See also: Hollywood accounting. It's fairly easy to make something look expensive if you put your mind to it.
- lotsofpulp 2y ago
  Not applicable here because no one is discussing drug companies negotiating percentage commissions with their scientists. If Novartis was committing fraud by misstating expenses, they would be harming their own executives who get paid in equity. And if they were inflating expenses, they would, eventually, get beat by Merck/Pfizer/Lilly/myriad other competitors. Edit to respond to below comment: Hollywood accounting is not fraud because there are no laws requiring media makers to categorize and report expenses and income a certain way for the purposes of satisfying compensation agreements with their vendors (actors/producers/directors/etc). It all depends on each individual contract. A publicly listed business, however, has to comply with myriad rules regarding reporting of cash flow and assets, so it is always nonsensical to bring up Hollywood accounting when discussing official financial figures reported to the SEC.
  - ceejayoz 2y ago
    Look expensive and actually expensive aren't the same, nor is creative accounting always fraud. That's the entire point of Hollywood accounting (which, in the Hollywood example, helps equity like Disney shareholders).
darby_eight 2y ago
It's almost like the market is extremely poorly suited for developing drugs
- nradov 2y ago
  Do we have examples of non-market systems that have proven to be consistently more effective for developing drugs?

downrightmike 2y ago

How much of that is Universities doing all the leg work?

streptomycin 2y ago
Not much, universities basically never pay for clinical trials.
- larkost 2y ago
  This is true, but it should also be pointed out here that Universities are where almost of all the initial research into finding and vetting candidate drugs happens, mostly on grants from the government. On the whole that is enormously costly, and the drug companies only step in to develop the drug once the lab tests are promising. It used to be that all of the profits went to the drug companies, but more recently Universities have started to claim a portion of the patent royalties, and thus the profits. I believe the first big example of this is the University of Wisconsin's royalties on Warfarin (blood thinner used as medicine in humans, and in large doses as a rat killer).

refurb 2y ago

> The average cost of phase 1, 2, and 3 clinical trials across therapeutic areas is around $4, 13, and 20 million respectively. Average cost of a phase 3 trial is a terrible representation of costs. Not all phase 3 trials are equal. For something like TB, the trial can be relatively small (huundreds of patients), and short (months). For something like heart disease drugs, the trials might be massive (tends of thousands of patients) and very long (years). Anyone can call a CRO (contract research organization) up and ask what they charged for phase 3 trials. Last I talked to them it was ~$15,000/patient/year. It's pretty easy to do the math based on that. A heart disease drug with 10,000 patients lasting 3 years will cost $450M.