7 ms·

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 interest

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.
- cyberax 2y ago
  In general, pharma companies actually spend more on RnD than any other company type, except for the semiconductor development. That's mostly because around 90% of all drugs fail clinical tests.
- a_puppy 2y ago
  Novo Nordisk won the lottery by developing Ozempic, an extraordinarily successful drug. (See e.g. https://www.nytimes.com/2023/08/28/business/denmark-ozempic-wegovy.html https://www.nytimes.com/2023/08/28/business/denmark-ozempic-...) If you cherry-pick the most successful pharma companies, of course they're going to look unreasonably profitable. For a fair comparison, you need to look at the global pharma industry as a whole. To start the discussion, I found this analysis of global pharma industry profitability: https://www.ispor.org/docs/default-source/euro2023/poster-ispor-profitability-291023130819-pdf.pdf?sfvrsn=cd54cb76_0 https://www.ispor.org/docs/default-source/euro2023/poster-is... Note that only 55% of the pharma companies even made a profit; the other 45% lost money. And the average profit margin was around 20%. So even if pharma companies voluntarily relinquished all profits, drugs would only be 20% cheaper! The fundamental issue is that drug development is simply expensive. When people get angry about pharma profits, they're barking up the wrong tree.
- victorbjorklund 2y ago
  That is like looking at a lottery winner and say "clearly gambling on the lottery is profitable”. You have too look at the industry as a whole and not the outliers.
seanmcdirmid 2y ago
We should also see if we could make clinical trials cheaper. So many people have their hands in the American healthcare cookie jar that costs are as insane as profits. Could better tech help? Or is it just another X industrial complex with with self interest that needs to be worked through?
- mattmaroon 2y ago
  This is definitely part of the solution. It’s a regulatory problem as much as anything else. I can’t even fathom how many drugs didn’t make it to market because of how hard it is even to get a great one across the finish line. I think a lot of it comes back to the Hippocratic principle of first do no harm, which sounds lovely, but mathematically speaking is an obvious disaster in instances like this.
bdzr 2y ago
> 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). Is it unacceptable if the company decides not to make the drug in the first place? The default alternative isn't that we have the drug for less, it's not having it at all.
- TaylorAlexander 2y ago
  Elaborate on “default alternative”? Aren’t there many alternatives? Why is one a default?
  - _aavaa_ 2y ago
    The option of doing nothing would be the default since it doesn’t cost them any time, people, or resources. Any other option requires sustained positive actions on their part. There are many versions, alternatives, to what that course would take, but it wouldn’t be the default since they require work. They are already not making drugs for any number of diseases and illnesses, that’s the default. To change course on those they need a good reason.
    - mattmaroon 2y ago
      I’ve been not inventing drugs for 44 consecutive years. All this time I didn’t even know I was just defaulting.
    - TaylorAlexander 2y ago
      Huh. I suppose I meant that if we as a society decide we don’t want them to charge a lot for drugs, an alternative is publicly funded drug research. “Not making drugs” doesn’t strike me as an alternative solution.
- HeatrayEnjoyer 2y ago
  The default alternative is not charging obscene prices.
TaylorAlexander 2y ago
To me it seems obvious that the correct solution to this dilemma is to publicly fund all medical research. All other approaches feel like band aids we are forced to implement because we’re simply doing it the wrong way, expecting private companies to pay for public benefit research.
- 2Gkashmiri 2y ago
  [flagged]
dlss 2y ago
I'd love to see drug trials funded by tax dollars, ideally informed by a legal prediction market on which trials are likely to succeed or fail. The people betting on pharma stocks would likely prefer betting directly on trials, since stock prices move for all kinds of unrelated reasons -- it'd be a new asset class. I'm skeptical about single payer healthcare though :p
alwa 2y ago
I wonder if it’s useful to consider the $40,000 price tag as the price that’s only practically relevant on an actuarial kind of level, as “0.35% of our pool of insureds who will be very expensive to us whether treated or untreated” rather than “hey sick person, here’s a $40K bill.” As I understand it Gilead in particular seem to be pretty good about using those cold-hearted, “lifetime cost-effectiveness-ratio” sticker prices to effectively subsidize enormous quantities of affordable or free, high-quality drug in those poorer parts of the world that are bearing the brunt of the HIV epidemic. If the premise of insurance is pooling risk, is it inconsistent for the drug manufacturer to coldly calculate the “fair” price of the drug in proportion to its economic value—that is, the savings it brings over a given patient’s lifetime—then do their humanitarian discounting from that starting point? They license their HIV patents to the UN Patent Pool so that generic manufacturers can produce them freely for low- and middle-income regions [0], they cover people’s insurance copays if their rich-world insurance bills for access to the drugs [1], and they provide access to the HIV drugs for free to uninsured people in the US [2]. As distasteful as the sticker prices are, I’ve always gotten the sense that you kind of have to play that twisted game if you’re going to get anything shipped at scale and stay in the pharma business. And that Gilead in particular have bent over backward both to focus their research on serious disease that primarily affects marginal and disadvantaged populations, and to make sure that their therapies actually make it out into the lives of the greatest possible number of patients. [0] https://medicinespatentpool.org/ https://medicinespatentpool.org/ [1] https://www.gileadadvancingaccess.com/patient https://www.gileadadvancingaccess.com/patient [2] https://www.gilead.com/hiv-facts/expanding-access https://www.gilead.com/hiv-facts/expanding-access
- ijidak 2y ago
  Wow. Thank you for breaking this down in such detail. I didn't realize how much Gilead does. Yeah, the reality of drug costs leaves no great options. It's capitalism. Capitalism leads both to breakthroughs and to expensive drugs. It's just a sad situation all around. But, it's awesome to hear what companies are trying to do.
  - alwa 2y ago
    Indeed. It sucks, but developing the quasi-vaccine thing and proving it works seems pretty cool, regardless of what comes next. Sure beats chasing pills for boners and hair loss. Now things look good for this drug (after decades of false starts on long-acting HIV vaccines and prophylactics). And MSF and the usual (tireless, wonderful, humane) vocal advocates seem to be calling for affected countries to license production compulsively should Gilead attempt to license it on bad-faith terms. Seems like a good sign, though I’m not in a position to understand how serious those kinds of threats might be. Wish I could access the session about this $40/pppy cost estimate, but the abstract seems to be here: https://programme.aids2024.org/Abstract/Abstract/?abstractid=12306 https://programme.aids2024.org/Abstract/Abstract/?abstractid... The way the abstract is phrased, it sounds to me to be in the spirit of “we’re doing this cost analysis because we bet this stuff will soon become available to the worst-affected regions at close to that price, with or without Gilead doing the right thing. So we figure we should see how that fits into our public health planning.” Could be a total misreading, but a person can hope :)
YetAnotherNick 2y ago
> how this research should be funded by tax dollars Tax dollars of which country? No country would want to pay for research requiring 100s of billions of dollars, that would benefit everyone else equally.
- spondylosaurus 2y ago
  You'd be surprised! Humira, the best-selling drug of all time, partly owes its existence to taxpayer-funded researchers in the UK. And then of course the irony is that AbbVie made a killing selling it in the US (and milking their US-specific patents for as long as humanly possible while patients in the UK were using cheaper generics...)
  - YetAnotherNick 2y ago
    > partly owes its existence to taxpayer-funded researchers in the UK. Can you give a source of this? By government funded, most would mean grants not investment and expecting return from other country.
    - spondylosaurus 2y ago
      https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5058633/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5058633/ The phage display technology that opened the door to Humira manufacturing was independently developed by three organizations, including the MRC Laboratory in the UK. The MRC went on to partner with some for-profit biotech/pharma companies to bring Humira to market. The other two organizations that made their own phage display breakthroughs were the Scripps Research Institute (US nonprofit that gets a lot of government funding/grants) and the DKFZ (German national research organization, not sure about their funding but definitely not a typical pharma joint). The big deal with Humira is that it's the first fully human monoclonal antibody to hit the shelves, and phage display is what made that possible.
CSSer 2y ago
> how this research should be funded by tax dollars To be fair, some of it is. Conveniently, this rarely seems to be mentioned when they talk about this. The NIH hands out nearly $45 billion in grants annually[0]. [0]https://www.nih.gov/grants-funding https://www.nih.gov/grants-funding
- ethn 2y ago
  Sure however the vast majority of costs come from the government regulation in the first place. Consumers of course bear the cost, however this doesn't necessarily mean we should remove these expensive regulations, one can argue they are beneficial. If we assume they are beneficial, this also doesn't mean the government should subsidize it less but instead more to continue to allow the production of drugs. If we artificially require a price, many of these drugs would simply not be developed. I'm under the persuasion that the future of healthcare is a voucher system to allow the competitive bidding of drugs/insurance to remain as well as the maintenance of the quality and quantity of medical research. Many countries purport to have better medical systems however we find that the American payers subsidize the rest of the world––with the USA producing more medical research than the rest of the world combined. In a single healthcare system, the prices of drugs deemed essential will skyrocket while others will simply be excluded by the bureau. This then creates a cost on the tax payers through the inflation/excess tax required by the national budget to afford it. While at the same time the single healthcare system has little incentive to improve its efficiency of administration until it's fully deteriorated and governmental intervention promises a revamp which may still be ineffective. The voucher system allows many insurance companies to exist, allowing the quality of insurance provided treatments to remain through that competition on their varied administrative strategies. While at the same time consumers with varying degrees of medicinal concerns can choose the right programme for themselves––opting to even pay beyond the sum provided by the voucher. This way it's no longer only affordable through a corporate benefit and the buyer group is available instead through a national benefit.
mattmaroon 2y ago
That’s pretty much common knowledge. Most drugs cost a lot to get to market and next to nothing to manufacture. I’m always amazed by how many people have strong opinions about the industry but don’t even know the 101 stuff. Corporations don’t exist to recoup costs. They exist to make lots of money. That’s why they spend billions coming up with drugs like this and getting them approved. It’s easy to take the short view of the system (“we need to force them to not make nearly as much as they can on this patent because people are dying”) rather than the long view (“we want companies to spend billions to cure diseases and that means having them make tens or hundreds of billions even though people unnecessarily die until the patent expires because the alternative is no such medicines at all”). But them’s the options.
- deschutes 2y ago
  It may be obvious but rarely is it the focus of public discourse on drug companies. Basically the only thing that gets discussed is the apparent naked greed of drug research companies. Frankly it's a miracle that we have private companies bringing novel and life changing drugs to market, and the ability to make obscene profits off these massively speculative investments is probably the main reason. That's not to dismiss criticism of them, but to me it's obvious, especially if you take a slightly longer view that these companies are in fact making lives better. The real estate market is a much better example of the harmful effects of terminal greed. Unfortunately so much of the population is in on it now nobody has the fucking balls to stop the music.
  - spondylosaurus 2y ago
    I don't think it's even obvious/common knowledge in public discourse, to be honest. (Case in point: this Guardian article doesn't mention it at all, only mentioning the cost of materials and manufacturing.) To some extent it may not even matter, since the effects of (negative) public opinion are tangible regardless of whether those opinions are fully informed of all the facts. (And even as someone who's aware of a slightly above-average number of facts, my own opinion skews pretty negative.) God knows these companies aren't in the red, trials or no trials; most consumers are just gonna look at the record profits, then back at their pharmacy bill, and go "Hey, wait a minute..."
emacsen 2y ago
As you say it's not a binary. Insurance providers can negotiate on drug prices, and they can certainly negotiate based on many factors. In many countries, either the government is the provider or the government works with providers to set a price for drugs, and in doing so, both sides are heavily motivated.
MangoCoffee 2y ago
I used to work for a compounding pharmacy supplier. They also teach you how to make patent-expired drugs. From what I understand, drugs indeed cost a lot to bring to market. If I remember correctly, new drugs are usually granted a 20-year patent, after which anyone can produce a generic version. We can debate whether 20 years is too long or too short for a pharmaceutical company to recoup costs and make a profit, but at least drug patents do eventually expire.
- tourmalinetaco 2y ago
  Patents are a lot fairer than copyright at least. Imagine if it took 100+ years for a drug to reach generic status?
dyauspitr 2y ago
Even though I find it hard to defend $42k/year, there must be a reason the US is pretty much the only country that comes up with these breakthrough drugs on a regular basis. It’s basically an adage at this point that the US populace is subsidizing medical breakthroughs for the entire world.
m463 2y ago
I agree that $42,000/yr is too much (and the article did mention they have a global plan). but as to ridiculously expensive trials etc... Is it harder for a company to get funded to drive a disease to extinction?

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.
cyberax 2y ago
In general, pharma companies actually spend more on RnD than any other company type, except for the semiconductor development. That's mostly because around 90% of all drugs fail clinical tests.
a_puppy 2y ago
Novo Nordisk won the lottery by developing Ozempic, an extraordinarily successful drug. (See e.g. https://www.nytimes.com/2023/08/28/business/denmark-ozempic-wegovy.html https://www.nytimes.com/2023/08/28/business/denmark-ozempic-...) If you cherry-pick the most successful pharma companies, of course they're going to look unreasonably profitable. For a fair comparison, you need to look at the global pharma industry as a whole. To start the discussion, I found this analysis of global pharma industry profitability: https://www.ispor.org/docs/default-source/euro2023/poster-ispor-profitability-291023130819-pdf.pdf?sfvrsn=cd54cb76_0 https://www.ispor.org/docs/default-source/euro2023/poster-is... Note that only 55% of the pharma companies even made a profit; the other 45% lost money. And the average profit margin was around 20%. So even if pharma companies voluntarily relinquished all profits, drugs would only be 20% cheaper! The fundamental issue is that drug development is simply expensive. When people get angry about pharma profits, they're barking up the wrong tree.
victorbjorklund 2y ago
That is like looking at a lottery winner and say "clearly gambling on the lottery is profitable”. You have too look at the industry as a whole and not the outliers.

seanmcdirmid 2y ago

We should also see if we could make clinical trials cheaper. So many people have their hands in the American healthcare cookie jar that costs are as insane as profits. Could better tech help? Or is it just another X industrial complex with with self interest that needs to be worked through?

mattmaroon 2y ago
This is definitely part of the solution. It’s a regulatory problem as much as anything else. I can’t even fathom how many drugs didn’t make it to market because of how hard it is even to get a great one across the finish line. I think a lot of it comes back to the Hippocratic principle of first do no harm, which sounds lovely, but mathematically speaking is an obvious disaster in instances like this.

bdzr 2y ago

> 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). Is it unacceptable if the company decides not to make the drug in the first place? The default alternative isn't that we have the drug for less, it's not having it at all.

TaylorAlexander 2y ago
Elaborate on “default alternative”? Aren’t there many alternatives? Why is one a default?
- _aavaa_ 2y ago
  The option of doing nothing would be the default since it doesn’t cost them any time, people, or resources. Any other option requires sustained positive actions on their part. There are many versions, alternatives, to what that course would take, but it wouldn’t be the default since they require work. They are already not making drugs for any number of diseases and illnesses, that’s the default. To change course on those they need a good reason.
  - mattmaroon 2y ago
    I’ve been not inventing drugs for 44 consecutive years. All this time I didn’t even know I was just defaulting.
  - TaylorAlexander 2y ago
    Huh. I suppose I meant that if we as a society decide we don’t want them to charge a lot for drugs, an alternative is publicly funded drug research. “Not making drugs” doesn’t strike me as an alternative solution.
HeatrayEnjoyer 2y ago
The default alternative is not charging obscene prices.

TaylorAlexander 2y ago

To me it seems obvious that the correct solution to this dilemma is to publicly fund all medical research. All other approaches feel like band aids we are forced to implement because we’re simply doing it the wrong way, expecting private companies to pay for public benefit research.

2Gkashmiri 2y ago
[flagged]

dlss 2y ago

I'd love to see drug trials funded by tax dollars, ideally informed by a legal prediction market on which trials are likely to succeed or fail. The people betting on pharma stocks would likely prefer betting directly on trials, since stock prices move for all kinds of unrelated reasons -- it'd be a new asset class. I'm skeptical about single payer healthcare though :p

alwa 2y ago

I wonder if it’s useful to consider the $40,000 price tag as the price that’s only practically relevant on an actuarial kind of level, as “0.35% of our pool of insureds who will be very expensive to us whether treated or untreated” rather than “hey sick person, here’s a $40K bill.” As I understand it Gilead in particular seem to be pretty good about using those cold-hearted, “lifetime cost-effectiveness-ratio” sticker prices to effectively subsidize enormous quantities of affordable or free, high-quality drug in those poorer parts of the world that are bearing the brunt of the HIV epidemic. If the premise of insurance is pooling risk, is it inconsistent for the drug manufacturer to coldly calculate the “fair” price of the drug in proportion to its economic value—that is, the savings it brings over a given patient’s lifetime—then do their humanitarian discounting from that starting point? They license their HIV patents to the UN Patent Pool so that generic manufacturers can produce them freely for low- and middle-income regions [0], they cover people’s insurance copays if their rich-world insurance bills for access to the drugs [1], and they provide access to the HIV drugs for free to uninsured people in the US [2]. As distasteful as the sticker prices are, I’ve always gotten the sense that you kind of have to play that twisted game if you’re going to get anything shipped at scale and stay in the pharma business. And that Gilead in particular have bent over backward both to focus their research on serious disease that primarily affects marginal and disadvantaged populations, and to make sure that their therapies actually make it out into the lives of the greatest possible number of patients. [0] https://medicinespatentpool.org/ https://medicinespatentpool.org/ [1] https://www.gileadadvancingaccess.com/patient https://www.gileadadvancingaccess.com/patient [2] https://www.gilead.com/hiv-facts/expanding-access https://www.gilead.com/hiv-facts/expanding-access

ijidak 2y ago
Wow. Thank you for breaking this down in such detail. I didn't realize how much Gilead does. Yeah, the reality of drug costs leaves no great options. It's capitalism. Capitalism leads both to breakthroughs and to expensive drugs. It's just a sad situation all around. But, it's awesome to hear what companies are trying to do.
- alwa 2y ago
  Indeed. It sucks, but developing the quasi-vaccine thing and proving it works seems pretty cool, regardless of what comes next. Sure beats chasing pills for boners and hair loss. Now things look good for this drug (after decades of false starts on long-acting HIV vaccines and prophylactics). And MSF and the usual (tireless, wonderful, humane) vocal advocates seem to be calling for affected countries to license production compulsively should Gilead attempt to license it on bad-faith terms. Seems like a good sign, though I’m not in a position to understand how serious those kinds of threats might be. Wish I could access the session about this $40/pppy cost estimate, but the abstract seems to be here: https://programme.aids2024.org/Abstract/Abstract/?abstractid=12306 https://programme.aids2024.org/Abstract/Abstract/?abstractid... The way the abstract is phrased, it sounds to me to be in the spirit of “we’re doing this cost analysis because we bet this stuff will soon become available to the worst-affected regions at close to that price, with or without Gilead doing the right thing. So we figure we should see how that fits into our public health planning.” Could be a total misreading, but a person can hope :)

YetAnotherNick 2y ago

> how this research should be funded by tax dollars Tax dollars of which country? No country would want to pay for research requiring 100s of billions of dollars, that would benefit everyone else equally.

spondylosaurus 2y ago
You'd be surprised! Humira, the best-selling drug of all time, partly owes its existence to taxpayer-funded researchers in the UK. And then of course the irony is that AbbVie made a killing selling it in the US (and milking their US-specific patents for as long as humanly possible while patients in the UK were using cheaper generics...)
- YetAnotherNick 2y ago
  > partly owes its existence to taxpayer-funded researchers in the UK. Can you give a source of this? By government funded, most would mean grants not investment and expecting return from other country.
  - spondylosaurus 2y ago
    https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5058633/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5058633/ The phage display technology that opened the door to Humira manufacturing was independently developed by three organizations, including the MRC Laboratory in the UK. The MRC went on to partner with some for-profit biotech/pharma companies to bring Humira to market. The other two organizations that made their own phage display breakthroughs were the Scripps Research Institute (US nonprofit that gets a lot of government funding/grants) and the DKFZ (German national research organization, not sure about their funding but definitely not a typical pharma joint). The big deal with Humira is that it's the first fully human monoclonal antibody to hit the shelves, and phage display is what made that possible.

CSSer 2y ago

> how this research should be funded by tax dollars To be fair, some of it is. Conveniently, this rarely seems to be mentioned when they talk about this. The NIH hands out nearly $45 billion in grants annually[0]. [0]https://www.nih.gov/grants-funding https://www.nih.gov/grants-funding

ethn 2y ago
Sure however the vast majority of costs come from the government regulation in the first place. Consumers of course bear the cost, however this doesn't necessarily mean we should remove these expensive regulations, one can argue they are beneficial. If we assume they are beneficial, this also doesn't mean the government should subsidize it less but instead more to continue to allow the production of drugs. If we artificially require a price, many of these drugs would simply not be developed. I'm under the persuasion that the future of healthcare is a voucher system to allow the competitive bidding of drugs/insurance to remain as well as the maintenance of the quality and quantity of medical research. Many countries purport to have better medical systems however we find that the American payers subsidize the rest of the world––with the USA producing more medical research than the rest of the world combined. In a single healthcare system, the prices of drugs deemed essential will skyrocket while others will simply be excluded by the bureau. This then creates a cost on the tax payers through the inflation/excess tax required by the national budget to afford it. While at the same time the single healthcare system has little incentive to improve its efficiency of administration until it's fully deteriorated and governmental intervention promises a revamp which may still be ineffective. The voucher system allows many insurance companies to exist, allowing the quality of insurance provided treatments to remain through that competition on their varied administrative strategies. While at the same time consumers with varying degrees of medicinal concerns can choose the right programme for themselves––opting to even pay beyond the sum provided by the voucher. This way it's no longer only affordable through a corporate benefit and the buyer group is available instead through a national benefit.

mattmaroon 2y ago

That’s pretty much common knowledge. Most drugs cost a lot to get to market and next to nothing to manufacture. I’m always amazed by how many people have strong opinions about the industry but don’t even know the 101 stuff. Corporations don’t exist to recoup costs. They exist to make lots of money. That’s why they spend billions coming up with drugs like this and getting them approved. It’s easy to take the short view of the system (“we need to force them to not make nearly as much as they can on this patent because people are dying”) rather than the long view (“we want companies to spend billions to cure diseases and that means having them make tens or hundreds of billions even though people unnecessarily die until the patent expires because the alternative is no such medicines at all”). But them’s the options.

deschutes 2y ago
It may be obvious but rarely is it the focus of public discourse on drug companies. Basically the only thing that gets discussed is the apparent naked greed of drug research companies. Frankly it's a miracle that we have private companies bringing novel and life changing drugs to market, and the ability to make obscene profits off these massively speculative investments is probably the main reason. That's not to dismiss criticism of them, but to me it's obvious, especially if you take a slightly longer view that these companies are in fact making lives better. The real estate market is a much better example of the harmful effects of terminal greed. Unfortunately so much of the population is in on it now nobody has the fucking balls to stop the music.
- spondylosaurus 2y ago
  I don't think it's even obvious/common knowledge in public discourse, to be honest. (Case in point: this Guardian article doesn't mention it at all, only mentioning the cost of materials and manufacturing.) To some extent it may not even matter, since the effects of (negative) public opinion are tangible regardless of whether those opinions are fully informed of all the facts. (And even as someone who's aware of a slightly above-average number of facts, my own opinion skews pretty negative.) God knows these companies aren't in the red, trials or no trials; most consumers are just gonna look at the record profits, then back at their pharmacy bill, and go "Hey, wait a minute..."

emacsen 2y ago

As you say it's not a binary. Insurance providers can negotiate on drug prices, and they can certainly negotiate based on many factors. In many countries, either the government is the provider or the government works with providers to set a price for drugs, and in doing so, both sides are heavily motivated.

MangoCoffee 2y ago

I used to work for a compounding pharmacy supplier. They also teach you how to make patent-expired drugs. From what I understand, drugs indeed cost a lot to bring to market. If I remember correctly, new drugs are usually granted a 20-year patent, after which anyone can produce a generic version. We can debate whether 20 years is too long or too short for a pharmaceutical company to recoup costs and make a profit, but at least drug patents do eventually expire.

tourmalinetaco 2y ago
Patents are a lot fairer than copyright at least. Imagine if it took 100+ years for a drug to reach generic status?

dyauspitr 2y ago

Even though I find it hard to defend $42k/year, there must be a reason the US is pretty much the only country that comes up with these breakthrough drugs on a regular basis. It’s basically an adage at this point that the US populace is subsidizing medical breakthroughs for the entire world.

m463 2y ago

I agree that $42,000/yr is too much (and the article did mention they have a global plan). but as to ridiculously expensive trials etc... Is it harder for a company to get funded to drive a disease to extinction?