6 ms·

HIV drug could be made for just $40 a year for every patient

66 points by nithinj 2y ago

justtheguy100 2y ago
(valuable thing you do) + (could be made available for nearly free!) + (Just because we want it!) Makes u think
mym1990 2y ago
Time and time again people are reminded that prices are not set based on some function of what it costs to produce the good or service, but by price discovery of the maximum amount a group of people would pay that would max out the profit. Obviously because medicine for certain diseases makes the goods and service price inelastic, depending on the disease, pricing can be set pretty high. Is it right? Nope. It is what makes the shareholders billions of dollars? Yep.
- desert_rue 2y ago
  Perhaps considering stakeholders might be a better, but harder to calculate, method. Systems don’t have to treat people for AIDs. People get less sick so they can work more and pay more taxes. Parents are around to raise their children, leading to better outcomes for everyone. Also, we can subsidize R&D (or subsidize it more). Focusing on profit only leads to human suffering.
- milesskorpen 2y ago
  Pharma companies also make and study dozens of drugs that don't make it. We need the successful drugs to fund the unsuccessful ones. Given that I believe there are still many more amazing drugs and medical interventions to be discovered, I don't think we should be reducing the profit to be earned in this space (because that's what induces people to continue to invest in research). When you look at cost per life saved, pharmaceuticals are a bargain compared to hospitals or other parts of our medical system (esp. in the US).
  - plumeria 2y ago
    Would a NASA-like agency that funds vaccine research but keeps the IP “open source” work as an alternative to regular pharma companies?
    - untaintedminty 2y ago
      NASA gets funded because it provides access to space, which is strategic concern. Open-source medical IP is not, so I guess - no.
      - whatshisface 2y ago
        The air force has its own access to space. NASA gets funded because it is popular and the United States is a democracy.
        untaintedminty 2y ago
        Fair point on air force providing strategic access to space. As for democracy, heh, let's say it's open to interpretation ;).
      - TaylorAlexander 2y ago
        Seems like eradicating disease and illness worldwide is a pretty strategic concern for humanity. I guess it’s like climate change. We can’t beat our neighbors by solving it so who cares, but these feel like things our species is really gonna have to start solving. But maybe we won’t and we will just make life unnecessarily hard for most human beings, when we could be stopping climate change and eradicating AIDS.
        untaintedminty 2y ago
        As a human being, I totally get you. We should be doing much better than this. But, realistically, governments are responsible to their electorates only. As for the global humanity, first question is who's going to foot the bill and imagine global powers today coming to a consensus on that?!
- safety1st 2y ago
  To that point, there's no way this drug is going to cost $40,000 in Uganda, because the Ugandan market will not bear that price. Usually the way it works is there is some wildly high sticker price for individual Americans, which is what that $40K probably is here, and almost everyone pays less than that. E.g. American insurance companies pay something that's still very high but lower than that. Europeans pay something lower than the American insurance companies. And lower income countries get the cheapest price of all. The article does refer to this btw, Gilead is already talking about some voluntary licensing program that'll be available so somebody can manufacture cheap generics in countries like Uganda. This is quite common with this sort of drug but people generally don't read past the headline. What's going on is simply that the pharmas have American regulators in their pockets so they can charge anything they want in the US.
- deleted 2y ago
  [deleted]
- strongpigeon 2y ago
  To be specific, that’s only true in the case of a monopoly (which patents are meant to grant). Competition is the means by which products get priced closer to their production cost.
  - Jensson 2y ago
    This is a government enforced monopoly, so no there wont be any competition for a years.
  - mym1990 2y ago
    I would not say that this only applies to monopolies. You could add in companies that have strong moats, companies and industries that are able to collude(real estate brokers). Essentially there is more room for profit as competition decreases, but it is a sliding scale and not only monopolies apply. Even in spaces where there is lots of competition, it takes time for companies to reduce prices closer to production costs, aka a race to the bottom.
Normal_gaussian 2y ago
> In a trial, the drug offered 100% protection to more than 5,000 women in South Africa and Uganda, according to results announced by Gilead last month. Is anyone familiar with what happens at the end of trials like these? I assume this was a very late stage of trial - do the participants get a lifetime of treatment? I'm doubtful 43k/yr is anywhere near affordable, amd stopping after a successful trial seems so cruel.
- sddsdd 2y ago
  In this particular trial it wasn't used for treatment but for prevention, the patients don't have HIV (and none had it at the end of the trial either because it was so successful!) That said: generally there's no guarantee of continued treatment.
jml7c5 2y ago
Does anyone have a link to the study? EDIT: The abstract is here, I think. https://programme.aids2024.org/Abstract/Abstract/?abstractid=12306 https://programme.aids2024.org/Abstract/Abstract/?abstractid...
nielsbot 2y ago
Makes me wonder how California's non-profit insulin project is going... https://calrx.ca.gov/biosimilar-insulin-initiative/ https://calrx.ca.gov/biosimilar-insulin-initiative/
- throwup238 2y ago
  Latest round of funding was delayed until next year and Civica Rx (the company that's going to make the insulin) is working on FDA approval.
- pkaye 2y ago
  They are basically working with a non-profit Civica Rx. But this project was underway before California was involved. https://civicarx.org/ https://civicarx.org/ https://www.civicainsulin.org/ https://www.civicainsulin.org/
spondylosaurus 2y ago
Far be it from me to defend the pharma industry, let alone Gilead, but I recently listened to the Acquired episode about Novo Nordisk and they threw an interesting point at me that I hadn't really considered: Running clinical trials is ridiculously expensive, and most clinical trials don't result in a drug successfully going to market, which means successful drugs need to essentially subsidize the cost of (1) their own clinical trials and (2) all those other unsuccessful trials, to boot. So that hypothetical $40/yr sales price turns a profit if you account for the cost of materials and manufacturing, but not if you also account for the cost of the Very Expensive clinical trials that had to occur to get here. Now, that said... is $42,000/yr a reasonable price? Fuck no. On a purely humanitarian level, it's unacceptable, and if we're just looking at Gilead's bottom line, I'm sure they could price this drug for a whole lot less and still recoup the cost of clinical trials (and then some). Gilead is certainly not hurting for profit here. But even if the true "break-even cost" is closer to $4,000/yr, let's say, that's still way too expensive for most people in most parts of the world. Which is where I'd get on my soapbox about single-payer healthcare and how this research should be funded by tax dollars, but my legs are too tired :P
- tdb7893 2y ago
  R&D isn't as much of the pharma budget as I thought so it's hard to blame high R&D costs as the biggest driver for how expensive drugs are. You mentioned Novo Nordisk and looking at their financials they reported a net profit of $6.8 billion in H1 against an R&D budget of $3.7 billion. Their "cost of sales" was $3.0 billion, which someone please correct me if I'm wrong, but I think includes manufacturing (but not sales/distribution). But this still means that profit was more than it's total R&D and manufacturing budget. Source: https://www.sankeyart.com/sankeys/public/all/33990/ https://www.sankeyart.com/sankeys/public/all/33990/
  - rahimnathwani 2y ago
    Is this survivorship bias?
  - unlikelytomato 2y ago
    I can understand why those numbers are turning heads in isolation. However, the headlines are always something about how a $10k should be priced at $50. I struggle to see how those kinds of pricing gaps disappear even if that profit number drops to 0.
aaron695 2y ago
[dead]
jerojero 2y ago
I'm pretty sure one of the reasons clinical trials are so expensive is regulatory capture. If the trials are expensive only the biggest of the biggest can afford them. I mean, the methods employed remain the same for years and years but the costs balloon. It doesn't have to be this way. So, I don't really swallow this "oh, but we have to have high prices because it's costly to research drugs!". If the cost of developing drugs is so high, then in my opinion we should be looking at a state-effort. But I highly doubt anyone in the pharmaceutical industry would be okay with the government setting up a program for research and development that produced open drugs. Ultimately, pharmaceuticals are not losing money. Like, at all. These are some of the most profitable businesses there are and due to the costs it's a market that's been completely captured by a few players. It's impossible for people to even think they could start a pharmaceutical company today. And I believe this is simply because they themselves benefit of this lack of access/high costs of research. I don't know, this topic makes me a bit angry and frustrated at the state of the world.
- sowbug 2y ago
  The high R&D costs justify the high profits, the high exec salaries, and the high prices. And every company can point at the others and say "see, this is what it costs to hire the best in this industry. Sorry!" It's almost as bad in Big Tech, which doesn't even have pharma's level of regulatory capture. Maybe this is all textbook supply and demand. But it sure feels broken.
- refurb 2y ago
  Ultimately, pharmaceuticals are not losing money. Like, at all. What do you mean? Plenty of start-ups go under after the drug they try to bring to market fails. Or are you just looking at the successful companies? If so, you're not look at the entire industry.
habosa 2y ago
The other comments have made the point that this is the marginal cost and ignores the fixed cost of the trials, so I’ll leave that aside (and all of the tricky morals). I just want to point out that most people on this site work in the software industry. And industry famous for having marginal costs approaching zero. We too could give away most of what we make for free or for very little money (marginal hosting costs). But few of us do. Something to think about.
Animats 2y ago
Here's the US exclusivity data for lenacapvir.[1] There are two issues - patents, and US clinical trial exclusivity. The latter is only good for five years and expires in 2027. Some of the patents have narrow claims. The one that expires in 2041 applies only to the use of this drug in patients with extensive previous treatment, not for use for prevention. It really is a new drug, so some of the other patents from 2022 will hold up. [1] https://www.accessdata.fda.gov/scripts/cder/ob/patent_info.cfm?Product_No=001&Appl_No=215973&Appl_type=N https://www.accessdata.fda.gov/scripts/cder/ob/patent_info.c...
ChrisArchitect 2y ago
Related: Release a few month ago: https://www.gilead.com/news-and-press/press-room/press-releases/2024/6/gileads-twiceyearly-lenacapavir-demonstrated-100-efficacy-and-superiority-to-daily-truvada-for-hiv-prevention https://www.gilead.com/news-and-press/press-room/press-relea... And lots of discussion: https://news.ycombinator.com/item?id=40742163 https://news.ycombinator.com/item?id=40742163
ChrisArchitect 2y ago
Related this week: Prevention of HIV https://news.ycombinator.com/item?id=41184365 https://news.ycombinator.com/item?id=41184365
throwgov 2y ago
[flagged]
decremental 2y ago
[dead]
alberth 2y ago
Isn’t the huge price to offset their upfront fixed cost? Similar to the old days when software was sold and delivered to you on a physical cdrom, and then saying “[your cdrom software] could be made for just $0.25 … why do you pay $1,000 for AutoCAD” because it took a lot of time and money for the company to create AutoCAD - and selling AutoCAD for $0.40 won’t recoup that investment cost.
- Jensson 2y ago
  Well, it is already developed why not give it to everyone who needs it? In these cases it is much better for the government to force buy the medicine for a few billions to give the company good profits for it, and then give it to everyone, instead of letting many die just because the company wants more profits. I don't think companies shouldn't be allowed to make profits, but I don't see why people can't get the drug after the company made profits. > Similar to the old days when software was sold and delivered to you on a physical cdrom Unlike software many people will die due to not being able to afford this, that makes things a bit different.
  - alberth 2y ago
    That’s why generics are allowed to be made 5-years later. It’s gives pharma those years to recoup the cost and make a profit. And then it can be mass produced as a generic by anyone.
Ekaros 2y ago
Software is essentially free to reproduce? Why isn't normal costs of software a few cents? After all it doesn't cost too much more than that to produce the copy and send it over internet? Why are all of these companies so greedy that they charge these margins of insane percentages for their software?

66 points by nithinj 2y ago

(valuable thing you do) + (could be made available for nearly free!) + (Just because we want it!) Makes u think

mym1990 2y ago

Time and time again people are reminded that prices are not set based on some function of what it costs to produce the good or service, but by price discovery of the maximum amount a group of people would pay that would max out the profit. Obviously because medicine for certain diseases makes the goods and service price inelastic, depending on the disease, pricing can be set pretty high. Is it right? Nope. It is what makes the shareholders billions of dollars? Yep.

desert_rue 2y ago
Perhaps considering stakeholders might be a better, but harder to calculate, method. Systems don’t have to treat people for AIDs. People get less sick so they can work more and pay more taxes. Parents are around to raise their children, leading to better outcomes for everyone. Also, we can subsidize R&D (or subsidize it more). Focusing on profit only leads to human suffering.
milesskorpen 2y ago
Pharma companies also make and study dozens of drugs that don't make it. We need the successful drugs to fund the unsuccessful ones. Given that I believe there are still many more amazing drugs and medical interventions to be discovered, I don't think we should be reducing the profit to be earned in this space (because that's what induces people to continue to invest in research). When you look at cost per life saved, pharmaceuticals are a bargain compared to hospitals or other parts of our medical system (esp. in the US).
- plumeria 2y ago
  Would a NASA-like agency that funds vaccine research but keeps the IP “open source” work as an alternative to regular pharma companies?
  - untaintedminty 2y ago
    NASA gets funded because it provides access to space, which is strategic concern. Open-source medical IP is not, so I guess - no.
    - whatshisface 2y ago
      The air force has its own access to space. NASA gets funded because it is popular and the United States is a democracy.
      - untaintedminty 2y ago
        Fair point on air force providing strategic access to space. As for democracy, heh, let's say it's open to interpretation ;).
    - TaylorAlexander 2y ago
      Seems like eradicating disease and illness worldwide is a pretty strategic concern for humanity. I guess it’s like climate change. We can’t beat our neighbors by solving it so who cares, but these feel like things our species is really gonna have to start solving. But maybe we won’t and we will just make life unnecessarily hard for most human beings, when we could be stopping climate change and eradicating AIDS.
      - untaintedminty 2y ago
        As a human being, I totally get you. We should be doing much better than this. But, realistically, governments are responsible to their electorates only. As for the global humanity, first question is who's going to foot the bill and imagine global powers today coming to a consensus on that?!
safety1st 2y ago
To that point, there's no way this drug is going to cost $40,000 in Uganda, because the Ugandan market will not bear that price. Usually the way it works is there is some wildly high sticker price for individual Americans, which is what that $40K probably is here, and almost everyone pays less than that. E.g. American insurance companies pay something that's still very high but lower than that. Europeans pay something lower than the American insurance companies. And lower income countries get the cheapest price of all. The article does refer to this btw, Gilead is already talking about some voluntary licensing program that'll be available so somebody can manufacture cheap generics in countries like Uganda. This is quite common with this sort of drug but people generally don't read past the headline. What's going on is simply that the pharmas have American regulators in their pockets so they can charge anything they want in the US.
deleted 2y ago
[deleted]
strongpigeon 2y ago
To be specific, that’s only true in the case of a monopoly (which patents are meant to grant). Competition is the means by which products get priced closer to their production cost.
- Jensson 2y ago
  This is a government enforced monopoly, so no there wont be any competition for a years.
- mym1990 2y ago
  I would not say that this only applies to monopolies. You could add in companies that have strong moats, companies and industries that are able to collude(real estate brokers). Essentially there is more room for profit as competition decreases, but it is a sliding scale and not only monopolies apply. Even in spaces where there is lots of competition, it takes time for companies to reduce prices closer to production costs, aka a race to the bottom.

Normal_gaussian 2y ago

> In a trial, the drug offered 100% protection to more than 5,000 women in South Africa and Uganda, according to results announced by Gilead last month. Is anyone familiar with what happens at the end of trials like these? I assume this was a very late stage of trial - do the participants get a lifetime of treatment? I'm doubtful 43k/yr is anywhere near affordable, amd stopping after a successful trial seems so cruel.

sddsdd 2y ago
In this particular trial it wasn't used for treatment but for prevention, the patients don't have HIV (and none had it at the end of the trial either because it was so successful!) That said: generally there's no guarantee of continued treatment.

jml7c5 2y ago

Does anyone have a link to the study? EDIT: The abstract is here, I think. https://programme.aids2024.org/Abstract/Abstract/?abstractid=12306 https://programme.aids2024.org/Abstract/Abstract/?abstractid...

nielsbot 2y ago

Makes me wonder how California's non-profit insulin project is going... https://calrx.ca.gov/biosimilar-insulin-initiative/ https://calrx.ca.gov/biosimilar-insulin-initiative/

throwup238 2y ago
Latest round of funding was delayed until next year and Civica Rx (the company that's going to make the insulin) is working on FDA approval.
pkaye 2y ago
They are basically working with a non-profit Civica Rx. But this project was underway before California was involved. https://civicarx.org/ https://civicarx.org/ https://www.civicainsulin.org/ https://www.civicainsulin.org/

spondylosaurus 2y ago

Far be it from me to defend the pharma industry, let alone Gilead, but I recently listened to the Acquired episode about Novo Nordisk and they threw an interesting point at me that I hadn't really considered: Running clinical trials is ridiculously expensive, and most clinical trials don't result in a drug successfully going to market, which means successful drugs need to essentially subsidize the cost of (1) their own clinical trials and (2) all those other unsuccessful trials, to boot. So that hypothetical $40/yr sales price turns a profit if you account for the cost of materials and manufacturing, but not if you also account for the cost of the Very Expensive clinical trials that had to occur to get here. Now, that said... is $42,000/yr a reasonable price? Fuck no. On a purely humanitarian level, it's unacceptable, and if we're just looking at Gilead's bottom line, I'm sure they could price this drug for a whole lot less and still recoup the cost of clinical trials (and then some). Gilead is certainly not hurting for profit here. But even if the true "break-even cost" is closer to $4,000/yr, let's say, that's still way too expensive for most people in most parts of the world. Which is where I'd get on my soapbox about single-payer healthcare and how this research should be funded by tax dollars, but my legs are too tired :P

tdb7893 2y ago
R&D isn't as much of the pharma budget as I thought so it's hard to blame high R&D costs as the biggest driver for how expensive drugs are. You mentioned Novo Nordisk and looking at their financials they reported a net profit of $6.8 billion in H1 against an R&D budget of $3.7 billion. Their "cost of sales" was $3.0 billion, which someone please correct me if I'm wrong, but I think includes manufacturing (but not sales/distribution). But this still means that profit was more than it's total R&D and manufacturing budget. Source: https://www.sankeyart.com/sankeys/public/all/33990/ https://www.sankeyart.com/sankeys/public/all/33990/
- rahimnathwani 2y ago
  Is this survivorship bias?
- unlikelytomato 2y ago
  I can understand why those numbers are turning heads in isolation. However, the headlines are always something about how a $10k should be priced at $50. I struggle to see how those kinds of pricing gaps disappear even if that profit number drops to 0.

aaron695 2y ago

[dead]

jerojero 2y ago

I'm pretty sure one of the reasons clinical trials are so expensive is regulatory capture. If the trials are expensive only the biggest of the biggest can afford them. I mean, the methods employed remain the same for years and years but the costs balloon. It doesn't have to be this way. So, I don't really swallow this "oh, but we have to have high prices because it's costly to research drugs!". If the cost of developing drugs is so high, then in my opinion we should be looking at a state-effort. But I highly doubt anyone in the pharmaceutical industry would be okay with the government setting up a program for research and development that produced open drugs. Ultimately, pharmaceuticals are not losing money. Like, at all. These are some of the most profitable businesses there are and due to the costs it's a market that's been completely captured by a few players. It's impossible for people to even think they could start a pharmaceutical company today. And I believe this is simply because they themselves benefit of this lack of access/high costs of research. I don't know, this topic makes me a bit angry and frustrated at the state of the world.

sowbug 2y ago
The high R&D costs justify the high profits, the high exec salaries, and the high prices. And every company can point at the others and say "see, this is what it costs to hire the best in this industry. Sorry!" It's almost as bad in Big Tech, which doesn't even have pharma's level of regulatory capture. Maybe this is all textbook supply and demand. But it sure feels broken.
refurb 2y ago
Ultimately, pharmaceuticals are not losing money. Like, at all. What do you mean? Plenty of start-ups go under after the drug they try to bring to market fails. Or are you just looking at the successful companies? If so, you're not look at the entire industry.

habosa 2y ago

The other comments have made the point that this is the marginal cost and ignores the fixed cost of the trials, so I’ll leave that aside (and all of the tricky morals). I just want to point out that most people on this site work in the software industry. And industry famous for having marginal costs approaching zero. We too could give away most of what we make for free or for very little money (marginal hosting costs). But few of us do. Something to think about.

Animats 2y ago

Here's the US exclusivity data for lenacapvir.[1] There are two issues - patents, and US clinical trial exclusivity. The latter is only good for five years and expires in 2027. Some of the patents have narrow claims. The one that expires in 2041 applies only to the use of this drug in patients with extensive previous treatment, not for use for prevention. It really is a new drug, so some of the other patents from 2022 will hold up. [1] https://www.accessdata.fda.gov/scripts/cder/ob/patent_info.cfm?Product_No=001&Appl_No=215973&Appl_type=N https://www.accessdata.fda.gov/scripts/cder/ob/patent_info.c...

ChrisArchitect 2y ago

Related: Release a few month ago: https://www.gilead.com/news-and-press/press-room/press-releases/2024/6/gileads-twiceyearly-lenacapavir-demonstrated-100-efficacy-and-superiority-to-daily-truvada-for-hiv-prevention https://www.gilead.com/news-and-press/press-room/press-relea... And lots of discussion: https://news.ycombinator.com/item?id=40742163 https://news.ycombinator.com/item?id=40742163

ChrisArchitect 2y ago

Related this week: Prevention of HIV https://news.ycombinator.com/item?id=41184365 https://news.ycombinator.com/item?id=41184365

throwgov 2y ago

[flagged]

decremental 2y ago

[dead]

alberth 2y ago

Isn’t the huge price to offset their upfront fixed cost? Similar to the old days when software was sold and delivered to you on a physical cdrom, and then saying “[your cdrom software] could be made for just $0.25 … why do you pay $1,000 for AutoCAD” because it took a lot of time and money for the company to create AutoCAD - and selling AutoCAD for $0.40 won’t recoup that investment cost.

Jensson 2y ago
Well, it is already developed why not give it to everyone who needs it? In these cases it is much better for the government to force buy the medicine for a few billions to give the company good profits for it, and then give it to everyone, instead of letting many die just because the company wants more profits. I don't think companies shouldn't be allowed to make profits, but I don't see why people can't get the drug after the company made profits. > Similar to the old days when software was sold and delivered to you on a physical cdrom Unlike software many people will die due to not being able to afford this, that makes things a bit different.
- alberth 2y ago
  That’s why generics are allowed to be made 5-years later. It’s gives pharma those years to recoup the cost and make a profit. And then it can be mass produced as a generic by anyone.

Ekaros 2y ago

Software is essentially free to reproduce? Why isn't normal costs of software a few cents? After all it doesn't cost too much more than that to produce the copy and send it over internet? Why are all of these companies so greedy that they charge these margins of insane percentages for their software?