7 ms·

You can't compare running a clinical trial for a drug targeting a communicable disease in the developing world to trials for treatments of complex diseases in r

You can't compare running a clinical trial for a drug targeting a communicable disease in the developing world to trials for treatments of complex diseases in rich countries where you need serology, histopathology and radiological endpoints. Worth noting as well that J&J have shut down their entire division in communicable diseases because it was so unprofitable for them. (Source: I work in this industry)

thomassmith65 2y ago
Was it 'unprofitable' as in 'losing money', or 'unprofitable' as in 'not worth the time'? If it's the latter, I don't have enough information about the rest of J&J to draw any conclusions.
- s1artibartfast 2y ago
  Financially, they are the same. If you can make more money by not doing X, than doing X, it doesnt matter.
  - interstice 2y ago
    That rules out just about any non regulated altruism. Eg open source
    - s1artibartfast 2y ago
      Charitable donations and altruism are outside the scope of financial analysis. You can donate time or money even if you are running a loss in real, nominal, or opportunity costs.
    - lend000 2y ago
      Individuals can and do make non-financially motivated decisions. But in larger groups, especially a large corporation like J&J, you can apply the law of large numbers and determine that decisions are a result of incentives (primarily money).
  - kurthr 2y ago
    I guess all doctors should be cosmetic surgeons then? Seriously, the argument is that drug companies should only do the most profitable thing? If that's the case, they deserve to have all subsidies removed, and be regulated into oblivion, because they will serve no purpose, but profit. Just see what happened with the opioid epidemic. If you're only looking at next quarters profits and destroy public trust, while skirting the legal boundaries you'll make bank until you're not. https://www.bbc.com/news/world-us-canada-60610707 https://www.bbc.com/news/world-us-canada-60610707
    - s1artibartfast 2y ago
      >Seriously, the argument is that drug companies should only do the most profitable thing? You're the first one to make any kind of suggestion for what they should do, so I'm not sure why you're jumping to that conclusion >If that's the case, they deserve to have all subsidies removed, and be regulated into oblivion, because they will serve no purpose, but profit. The purpose that they serve is to save your life with drugs. If that doesn't mean anything to you and isn't worth any money then I don't think we will find much common ground. In your analogy, drug companies are the doctors. They want to make money for saving your life. Why would you want to regulate them out of existence?
      - kurthr 2y ago
        Your response to: >Was it 'unprofitable' as in 'losing money', or 'unprofitable' as in 'not worth the time'? was: >If you can make more money by not doing X, than doing X, it doesnt matter. It's confusing, because you certainly seem to imply only doing the most profitable things. >The purpose that they serve is to save your life with drugs. If that doesn't mean anything to you and isn't worth any money then I don't think we will find much common ground. My point was that if their purpose is only to do the things that make marginally more money (while killing significant numbers of people or allowing them to die) such as the Sacklers and Purdue with Oxy, they deserve to be regulated into oblivion. If you think the heavy marketing and distribution of known addictive drugs into disadvantaged areas of the country is in the public interest, then I don't think we will find much common ground. Frankly, most doctors, biochemists, and pharma-chemists I know have little difficulty seeing this. It is about helping people not just making money, and doing otherwise while selling it as the former, is unethical.
  - antasvara 2y ago
    To J&J it doesn't matter, but it's a useful number to understand the industry as a whole. When a pharmaceutical leader says that developing new drugs "isn't profitable," it would be nice to know if that meant "clinical trials don't make as much money as cosmetic drugs" or "clinical trials actively lose us money."
  - Dylan16807 2y ago
    Financially, they are definitely not the same. A company where revenue is 90% of expenses is in big trouble. Another company that could make 120%, but is only making 110%, is doing fine. More directly: If every division is profitable, there's not a great need to cut the less-profitable divisions. And if that division was doing something useful, it can be negative for the public if it's shut down entirely, so it's worth wondering how we could save these still-profitable endeavors.
    - aleph_minus_one 2y ago
      > More directly: If every division is profitable, there's not a great need to cut the less-profitable divisions. Opportunity cost.
      - Dylan16807 2y ago
        > Opportunity cost. That's why I specifically said "great need". Opportunity cost is not usually dire. But in a global sense, shutting divisions down entirely also tends to be pretty bad in terms of opportunity cost.
    - bryanrasmussen 2y ago
      >Another company that could make 120%, but is only making 110%, is doing fine. what if every other company in your industry is making 135% and hiring all the best people away from you. Not being in line with the rest of your industry also has negative consequences for the future of a company.
      - Dylan16807 2y ago
        I assume those other companies are paying more money in this hypothetical? If so, that's the problem, not the amount of profit. Increase pay to match, making the profit 105% of expenses, is there still an issue? If there are other negative consequences I need you to explain them. (Side note, if you say everyone else is making 135%, but our company could only make 120% if we switched focus, are you sure it's not us that's paying higher salaries?)
s1artibartfast 2y ago
Just to build on this, many drug and device companies specifically run early trials in the developing world or eastern Europes specifically because the costs are so much lower. Part of the costs are labor and materials, the majority is regulatory burden. It is a well established financial de-risking activity before spending the hundreds of millions more for a US/EU trial. Edit for visibility: The drugs in this trial are all previously developed and approved by other companies, some as early as the 1950s. They ran the trials in Kazakhstan, India, and similar developing countries. They have no manufacturing and supply chain, because they buy commercially available generics off the shelf for pennies. There is a lot to say about pricing, but the guardian is shamelessly engaging in disinformation.
ramraj07 2y ago
I have heard from the same Industry people you work in that the pricing of the drug generally has nothing to do with the cost of the research or trials for that particular drug but instead just what the market will be willing to pay for it. There’s a reason humira has till ozempic been the most profitable drug - not because it was cheap to research but it was in the perfect niche where it can be charged an insane amount and a large population could pay for it. Thanks for putting the disclaimer. But your argument is still not convincing that pharma industry has no fundamental moral backbone (a reason I left it after my PhD).
- golergka 2y ago
  > I have heard from the same Industry people you work in that the pricing of the drug generally has nothing to do with the cost of the research or trials for that particular drug but instead just what the market will be willing to pay for it. If people are not willing to pay at least as much as research costs, the drug certainly won't get created.
  - reedciccio 2y ago
    What's the cost of research though, since so much of it is (at least partially) public funded? It's not an easy answer.
    - llamaimperative 2y ago
      Basic research is well-subsidized by the public (and IMO should get paid royalties if there was a good way to track attribution), but the vast majority of a drug’s cost is in its development, specifically the clinical trials.
- cactusfrog 2y ago
  People seeking to maximize profit are not in favor of expensive clinical trials and are not lying about how expensive they are.

thomassmith65 2y ago

Was it 'unprofitable' as in 'losing money', or 'unprofitable' as in 'not worth the time'? If it's the latter, I don't have enough information about the rest of J&J to draw any conclusions.

s1artibartfast 2y ago
Financially, they are the same. If you can make more money by not doing X, than doing X, it doesnt matter.
- interstice 2y ago
  That rules out just about any non regulated altruism. Eg open source
  - s1artibartfast 2y ago
    Charitable donations and altruism are outside the scope of financial analysis. You can donate time or money even if you are running a loss in real, nominal, or opportunity costs.
  - lend000 2y ago
    Individuals can and do make non-financially motivated decisions. But in larger groups, especially a large corporation like J&J, you can apply the law of large numbers and determine that decisions are a result of incentives (primarily money).
- kurthr 2y ago
  I guess all doctors should be cosmetic surgeons then? Seriously, the argument is that drug companies should only do the most profitable thing? If that's the case, they deserve to have all subsidies removed, and be regulated into oblivion, because they will serve no purpose, but profit. Just see what happened with the opioid epidemic. If you're only looking at next quarters profits and destroy public trust, while skirting the legal boundaries you'll make bank until you're not. https://www.bbc.com/news/world-us-canada-60610707 https://www.bbc.com/news/world-us-canada-60610707
  - s1artibartfast 2y ago
    >Seriously, the argument is that drug companies should only do the most profitable thing? You're the first one to make any kind of suggestion for what they should do, so I'm not sure why you're jumping to that conclusion >If that's the case, they deserve to have all subsidies removed, and be regulated into oblivion, because they will serve no purpose, but profit. The purpose that they serve is to save your life with drugs. If that doesn't mean anything to you and isn't worth any money then I don't think we will find much common ground. In your analogy, drug companies are the doctors. They want to make money for saving your life. Why would you want to regulate them out of existence?
    - kurthr 2y ago
      Your response to: >Was it 'unprofitable' as in 'losing money', or 'unprofitable' as in 'not worth the time'? was: >If you can make more money by not doing X, than doing X, it doesnt matter. It's confusing, because you certainly seem to imply only doing the most profitable things. >The purpose that they serve is to save your life with drugs. If that doesn't mean anything to you and isn't worth any money then I don't think we will find much common ground. My point was that if their purpose is only to do the things that make marginally more money (while killing significant numbers of people or allowing them to die) such as the Sacklers and Purdue with Oxy, they deserve to be regulated into oblivion. If you think the heavy marketing and distribution of known addictive drugs into disadvantaged areas of the country is in the public interest, then I don't think we will find much common ground. Frankly, most doctors, biochemists, and pharma-chemists I know have little difficulty seeing this. It is about helping people not just making money, and doing otherwise while selling it as the former, is unethical.
- antasvara 2y ago
  To J&J it doesn't matter, but it's a useful number to understand the industry as a whole. When a pharmaceutical leader says that developing new drugs "isn't profitable," it would be nice to know if that meant "clinical trials don't make as much money as cosmetic drugs" or "clinical trials actively lose us money."
- Dylan16807 2y ago
  Financially, they are definitely not the same. A company where revenue is 90% of expenses is in big trouble. Another company that could make 120%, but is only making 110%, is doing fine. More directly: If every division is profitable, there's not a great need to cut the less-profitable divisions. And if that division was doing something useful, it can be negative for the public if it's shut down entirely, so it's worth wondering how we could save these still-profitable endeavors.
  - aleph_minus_one 2y ago
    > More directly: If every division is profitable, there's not a great need to cut the less-profitable divisions. Opportunity cost.
    - Dylan16807 2y ago
      > Opportunity cost. That's why I specifically said "great need". Opportunity cost is not usually dire. But in a global sense, shutting divisions down entirely also tends to be pretty bad in terms of opportunity cost.
  - bryanrasmussen 2y ago
    >Another company that could make 120%, but is only making 110%, is doing fine. what if every other company in your industry is making 135% and hiring all the best people away from you. Not being in line with the rest of your industry also has negative consequences for the future of a company.
    - Dylan16807 2y ago
      I assume those other companies are paying more money in this hypothetical? If so, that's the problem, not the amount of profit. Increase pay to match, making the profit 105% of expenses, is there still an issue? If there are other negative consequences I need you to explain them. (Side note, if you say everyone else is making 135%, but our company could only make 120% if we switched focus, are you sure it's not us that's paying higher salaries?)

s1artibartfast 2y ago

Just to build on this, many drug and device companies specifically run early trials in the developing world or eastern Europes specifically because the costs are so much lower. Part of the costs are labor and materials, the majority is regulatory burden. It is a well established financial de-risking activity before spending the hundreds of millions more for a US/EU trial. Edit for visibility: The drugs in this trial are all previously developed and approved by other companies, some as early as the 1950s. They ran the trials in Kazakhstan, India, and similar developing countries. They have no manufacturing and supply chain, because they buy commercially available generics off the shelf for pennies. There is a lot to say about pricing, but the guardian is shamelessly engaging in disinformation.

ramraj07 2y ago

I have heard from the same Industry people you work in that the pricing of the drug generally has nothing to do with the cost of the research or trials for that particular drug but instead just what the market will be willing to pay for it. There’s a reason humira has till ozempic been the most profitable drug - not because it was cheap to research but it was in the perfect niche where it can be charged an insane amount and a large population could pay for it. Thanks for putting the disclaimer. But your argument is still not convincing that pharma industry has no fundamental moral backbone (a reason I left it after my PhD).

golergka 2y ago
> I have heard from the same Industry people you work in that the pricing of the drug generally has nothing to do with the cost of the research or trials for that particular drug but instead just what the market will be willing to pay for it. If people are not willing to pay at least as much as research costs, the drug certainly won't get created.
- reedciccio 2y ago
  What's the cost of research though, since so much of it is (at least partially) public funded? It's not an easy answer.
  - llamaimperative 2y ago
    Basic research is well-subsidized by the public (and IMO should get paid royalties if there was a good way to track attribution), but the vast majority of a drug’s cost is in its development, specifically the clinical trials.
cactusfrog 2y ago
People seeking to maximize profit are not in favor of expensive clinical trials and are not lying about how expensive they are.