5 ms·

I'm no fan of pharma industry but there's an unfounded and troubling assumption embedded in this comment: that any drug price over cost-to-manufacture can only

I'm no fan of pharma industry but there's an unfounded and troubling assumption embedded in this comment: that any drug price over cost-to-manufacture can only be extortion. How do people recoup R&D costs (which are the vast majority of costs in getting a new drug onto the market)?

asveikau 2y ago
Doesn't the government also fund a lot of pharma R&D? Here's a 2019 article that came up in a Google search: Taxpayers funded this HIV research. The government patented it. Now a company profits https://www.latimes.com/business/la-fi-gilead-sciences-truvada-hiv-prep-20190327-story.html https://www.latimes.com/business/la-fi-gilead-sciences-truva...
- tptacek 2y ago
  Taxpayers fund all sorts of stuff that is ultimately commercialized!
  - kiba 2y ago
    The outcome for taxpayer ROI should be about the benefit to the public at large regardless of who commercialized it. Commercialization should eventually lead to better and cheaper version of the technology, which increases benefit to the public. Of course, the people who worked to commercialize it deserve pay for their work, so the question is exactly how much.
  - asveikau 2y ago
    So that's an argument that the government and the public should get a return on that investment, or profits should be constrained. Or an argument against exclusive rights being in private hands.
    - sroussey 2y ago
      Universities certainly do. IP transfer is big business. Subsidies for oil, not so much.
    - ToValueFunfetti 2y ago
      The public gets access to a life-saving drug that otherwise would not exist, which is exactly what the government is paying for. You can reasonably argue they they should get more, but arguing that they should get some ROI is moot; they're already getting a tremendous ROI
      - asveikau 2y ago
        The public gets the privilege to be price gouged for stuff their taxes paid for. Doesn't sound like a good deal. Many will not have access at higher costs. Price gouging restricts access.
        ToValueFunfetti 2y ago
        Are you saying the public would prefer that the drug not exist over the drug being expensive? If not, the public is getting a return. Like I said, it is reasonable to argue that the public deserves more return, ie. that it's a bad deal. But the argument that it's paid for by taxes and therefore should provide value to the public falls short of disagreeing with the status quo.
        asveikau 2y ago
        I'm saying it may as well not exist for people who can't afford it. You might say it's worse than not existing when it does exist but they can't have it because you would rather people die than receive treatment, due to your weird ideas about people making money and how justified that is. Your bend over backwards justification of greed over human life is rather insane.
        tptacek 2y ago
        It clearly seems not to be the case that this treatment "might as well not exist" for people who can't afford it, in that it has been administered to many people in Sub-Saharan Africa, and likely will continue to be. Further: omit things like your last sentence from your comments; they hurt your case.
- pfisherman 2y ago
  The government funds a lot of early stage preclinical research. These are the inexpensive stages of the pipeline. As soon as you move into humans you can add another 2 or 3 zeros to your burn rate. It is not politically feasible for the public sector to fund later stages. The numbers are just too big. Just think of the campaign ads that would run around $200M late stage failure funded by the government. The reason why mega giant pharma companies exist is because they make enough money and are capitalized enough to withstand multiple $100M failures without going belly up.
chimeracoder 2y ago
Gilead's R&D costs for Truvada as PrEP were literally almost zero. They paid none of the costs for actually conducting the trials. Their only contribution was that they donated the actual pills used in the trials - in other words, the unit price of 30 pills per person for the duration of the trial. PrEP has been pure, risk-free profit for Gilead.
- yieldcrv 2y ago
  Although this is a discussion about costs I just want to point out that the government has assumed the role of telling everyone how to take risks for its economy, and literally all you have to do is do that, successfully, and it will privilege your rewards by reducing risk on profits or reducing taxes This is not controversial when you look at the state’s role in these outcomes
- deleted 2y ago
  [deleted]
- jayshua 2y ago
  Gilead claims that is false and that they spent 1.1 billion on developing Truvada. https://www.gilead.com/news-and-press/company-statements/gilead--sciences--statement--on--inaccurate--reporting--on--truvada https://www.gilead.com/news-and-press/company-statements/gil...
  - comex 2y ago
    The $1.1 billion figure is for Truvada total, not for PrEP specifically. It’s perhaps notable that Gilead chose not to break that down, given that the original claim they were responding to was about PrEP specifically.
    - chimeracoder 2y ago
      > The $1.1 billion figure is for Truvada total, not for PrEP specifically. It’s perhaps notable that Gilead chose not to break that down, given that the original claim they were responding to was about PrEP specifically. And even then it's a dishonest claim. Half of that $1.1 billion is the amount of money they paid to acquire another biotech company in a firesale. It's beyond disingenuous for them to claim all of that towards the amount they spent developing Truvada, since they received way more assets in that sale than just the patent for one drug.
WalterSear 2y ago
> the vast majority of costs in getting a new drug onto the market Debatable. > according to these firms' annual reports, 16 percent of revenues was taken as profit, and • 31 percent went for marketing and administration. That's nearly three times as much as their R&D spending. https://www.bu.edu/sph/files/2015/05/Pharmaceutical-Marketing-and-Research-Spending-APHA-21-Oct-01.pdf https://www.bu.edu/sph/files/2015/05/Pharmaceutical-Marketin...
- Auracle 2y ago
  Marketing gets them more money, which then increases the amount they can put into R&D. They aren’t spending on marketing without expecting a return.
  - sethammons 2y ago
    They shouldn't make tv ads; they should be in a white paper that doctors read.
    - Auracle 2y ago
      Maybe, but even people with chronic conditions might not go to doctors often. They see an ad for a new medicine for their disease, they go to the doctor, it works better, and hooray. Maybe doctors should be able to send out email blasts to people, but I'm guessing that's not HIPAA friendly. Also, I've had online ads aimed at oncologists served to me for different medications. I think the fact that there are both TV ads for cancer medications and online ads aimed at oncologists says a lot about the fact that a ton of doctor's aren't keeping up with what's new, even in something as critical and limited in scope as specific cancers are.
  - WalterSear 2y ago
    R&D is still not where the vast majority of their money is spent.
smt88 2y ago
I think it's perfectly fine to assume that it's a form of extortion to profit from life-saving products, which is why some people agree that pharmaceuticals shouldn't be a for-profit industry at all.
scotty79 2y ago
To find the correct pricing you just check how much shareholders make. If they get unreasonably high return on their investment that means the company is overcharging. Tax shareholders on their gains and rebate customers if the company doesn't adjust the price.
mock-possum 2y ago
It’s life-saving medication. It should be freely available to everyone, period. If we’re not willing to question the degree to which big pharma ought to profit off of controlling access to scientific miracles, the least we could do is use taxes to subsidize the cost - “I can’t afford it” should not be a reason to not be on PrEP. Anyone should be able to walk into a CVS and walk out with 2-1-1 dose, as easily as they’d pick up the morning after pill, or a bottle of aspirin.
borggambit 2y ago
[flagged]

asveikau 2y ago

Doesn't the government also fund a lot of pharma R&D? Here's a 2019 article that came up in a Google search: Taxpayers funded this HIV research. The government patented it. Now a company profits https://www.latimes.com/business/la-fi-gilead-sciences-truvada-hiv-prep-20190327-story.html https://www.latimes.com/business/la-fi-gilead-sciences-truva...

tptacek 2y ago
Taxpayers fund all sorts of stuff that is ultimately commercialized!
- kiba 2y ago
  The outcome for taxpayer ROI should be about the benefit to the public at large regardless of who commercialized it. Commercialization should eventually lead to better and cheaper version of the technology, which increases benefit to the public. Of course, the people who worked to commercialize it deserve pay for their work, so the question is exactly how much.
- asveikau 2y ago
  So that's an argument that the government and the public should get a return on that investment, or profits should be constrained. Or an argument against exclusive rights being in private hands.
  - sroussey 2y ago
    Universities certainly do. IP transfer is big business. Subsidies for oil, not so much.
  - ToValueFunfetti 2y ago
    The public gets access to a life-saving drug that otherwise would not exist, which is exactly what the government is paying for. You can reasonably argue they they should get more, but arguing that they should get some ROI is moot; they're already getting a tremendous ROI
    - asveikau 2y ago
      The public gets the privilege to be price gouged for stuff their taxes paid for. Doesn't sound like a good deal. Many will not have access at higher costs. Price gouging restricts access.
      - ToValueFunfetti 2y ago
        Are you saying the public would prefer that the drug not exist over the drug being expensive? If not, the public is getting a return. Like I said, it is reasonable to argue that the public deserves more return, ie. that it's a bad deal. But the argument that it's paid for by taxes and therefore should provide value to the public falls short of disagreeing with the status quo.
        asveikau 2y ago
        I'm saying it may as well not exist for people who can't afford it. You might say it's worse than not existing when it does exist but they can't have it because you would rather people die than receive treatment, due to your weird ideas about people making money and how justified that is. Your bend over backwards justification of greed over human life is rather insane.
        tptacek 2y ago
        It clearly seems not to be the case that this treatment "might as well not exist" for people who can't afford it, in that it has been administered to many people in Sub-Saharan Africa, and likely will continue to be. Further: omit things like your last sentence from your comments; they hurt your case.
pfisherman 2y ago
The government funds a lot of early stage preclinical research. These are the inexpensive stages of the pipeline. As soon as you move into humans you can add another 2 or 3 zeros to your burn rate. It is not politically feasible for the public sector to fund later stages. The numbers are just too big. Just think of the campaign ads that would run around $200M late stage failure funded by the government. The reason why mega giant pharma companies exist is because they make enough money and are capitalized enough to withstand multiple $100M failures without going belly up.

chimeracoder 2y ago

Gilead's R&D costs for Truvada as PrEP were literally almost zero. They paid none of the costs for actually conducting the trials. Their only contribution was that they donated the actual pills used in the trials - in other words, the unit price of 30 pills per person for the duration of the trial. PrEP has been pure, risk-free profit for Gilead.

yieldcrv 2y ago
Although this is a discussion about costs I just want to point out that the government has assumed the role of telling everyone how to take risks for its economy, and literally all you have to do is do that, successfully, and it will privilege your rewards by reducing risk on profits or reducing taxes This is not controversial when you look at the state’s role in these outcomes
deleted 2y ago
[deleted]
jayshua 2y ago
Gilead claims that is false and that they spent 1.1 billion on developing Truvada. https://www.gilead.com/news-and-press/company-statements/gilead--sciences--statement--on--inaccurate--reporting--on--truvada https://www.gilead.com/news-and-press/company-statements/gil...
- comex 2y ago
  The $1.1 billion figure is for Truvada total, not for PrEP specifically. It’s perhaps notable that Gilead chose not to break that down, given that the original claim they were responding to was about PrEP specifically.
  - chimeracoder 2y ago
    > The $1.1 billion figure is for Truvada total, not for PrEP specifically. It’s perhaps notable that Gilead chose not to break that down, given that the original claim they were responding to was about PrEP specifically. And even then it's a dishonest claim. Half of that $1.1 billion is the amount of money they paid to acquire another biotech company in a firesale. It's beyond disingenuous for them to claim all of that towards the amount they spent developing Truvada, since they received way more assets in that sale than just the patent for one drug.

WalterSear 2y ago

> the vast majority of costs in getting a new drug onto the market Debatable. > according to these firms' annual reports, 16 percent of revenues was taken as profit, and • 31 percent went for marketing and administration. That's nearly three times as much as their R&D spending. https://www.bu.edu/sph/files/2015/05/Pharmaceutical-Marketing-and-Research-Spending-APHA-21-Oct-01.pdf https://www.bu.edu/sph/files/2015/05/Pharmaceutical-Marketin...

Auracle 2y ago
Marketing gets them more money, which then increases the amount they can put into R&D. They aren’t spending on marketing without expecting a return.
- sethammons 2y ago
  They shouldn't make tv ads; they should be in a white paper that doctors read.
  - Auracle 2y ago
    Maybe, but even people with chronic conditions might not go to doctors often. They see an ad for a new medicine for their disease, they go to the doctor, it works better, and hooray. Maybe doctors should be able to send out email blasts to people, but I'm guessing that's not HIPAA friendly. Also, I've had online ads aimed at oncologists served to me for different medications. I think the fact that there are both TV ads for cancer medications and online ads aimed at oncologists says a lot about the fact that a ton of doctor's aren't keeping up with what's new, even in something as critical and limited in scope as specific cancers are.
- WalterSear 2y ago
  R&D is still not where the vast majority of their money is spent.

smt88 2y ago

I think it's perfectly fine to assume that it's a form of extortion to profit from life-saving products, which is why some people agree that pharmaceuticals shouldn't be a for-profit industry at all.

scotty79 2y ago

To find the correct pricing you just check how much shareholders make. If they get unreasonably high return on their investment that means the company is overcharging. Tax shareholders on their gains and rebate customers if the company doesn't adjust the price.

mock-possum 2y ago

It’s life-saving medication. It should be freely available to everyone, period. If we’re not willing to question the degree to which big pharma ought to profit off of controlling access to scientific miracles, the least we could do is use taxes to subsidize the cost - “I can’t afford it” should not be a reason to not be on PrEP. Anyone should be able to walk into a CVS and walk out with 2-1-1 dose, as easily as they’d pick up the morning after pill, or a bottle of aspirin.

borggambit 2y ago

[flagged]