10 ms·

Big Pharma claims lower prices means giving up miracle medications. Ignore them

142 points by rntn 2y ago

AlbertCory 2y ago
Drug for discussion: Bimzelx (for psoriasis). This costs six figures or more per year, from what I can glean. Watching baseball a lot, I see this advertised multiple times per game, and God only knows what else they spend on marketing. (I don't have psoriasis or know anyone with it, if that matters) Looking at UCB's financials (helpfully broken out by drug), they took in $242 million on that drug alone in fiscal 2024. So that's how they can afford all those ads. It's also probably something patients would demand, and maybe even be happy to pay for out of pocket. > they will help the Medicare program cap what individual patients spend out of pocket on their prescriptions in a year at $2,000. So if you want clear skin, you probably have to pay big bucks. But maybe these immensely profitable drugs subsidize the life-saving ones.
- bryanlarsen 2y ago
  > (I don't have psoriasis or know anyone with it, if that matters) Psoriasis is very common, especially the mild forms. You probably know people who have it.
- __MatrixMan__ 2y ago
  C6552 H10132 N1750 O2029 S42, 147229.87 g·mol, what a monster. Probably not making that one in your garage.
  - exyi 2y ago
    It's apparently a monoclonal antibody (https://en.wikipedia.org/wiki/Bimekizumab https://en.wikipedia.org/wiki/Bimekizumab). That's just a protein, so it might actually be easier to make in your garage than your average small molecule ;) ... not that either would be practically possible, but it might be available in countries where they don't care too much about patents and such
    - twic 2y ago
      And if you're really willing to DIY, easier to make in your body than in your garage.
- zdragnar 2y ago
  Clear skin is the least of the problems with psoriasis. From their website: Bimzelx, alone or in combination with methotrexate, is indicated for the treatment of active psoriatic arthritis in adults who have had an inadequate response or who have been intolerant to one or more disease-modifying antirheumatic drugs (DMARDs). In other words, it's for people with bad cases who don't respond well to other drugs. Keep in mind, other drugs often come with serious complications- constant use of topical steroids will thin your skin, and give you glaucoma if you develop it and use them near your eyes. Many biologics have even worse potential side effects. On top of that, psoriatic arthritis is degenerative, if you're unlucky enough to get that too, so not treating it means not only constant pain, constant threat of skin infections from scabbing, but permanent joint damage. I ended up on Taltz, another very expensive biologic, but the eli lily foundation covered almost all of the cost since my insurance wouldn't. Before then, I looked like an alcoholic, because my nose was constantly red and inflamed, and I didn't have anything safe to put on it- glaucoma runs in my family, and I wasn't brave enough to risk anything strong enough. If that was the only problem, I might not have even gone the route of Taltz, but I was also developing it all over my body, and there wasn't much that was helping.
  - AlbertCory 2y ago
    Thanks. I finally realized I was seeing this ad constantly and decided to look into it.
    - zdragnar 2y ago
      It may not qualify as a life saving drug, but really it ought to be. The long-term quality of life with untreated and/or resistant psoriatic arthritis is awful. Also, biologic drugs are money printing machines if they survive the FDA approval process, as they can manage the symptoms but the disease itself is incurable. Since they are brand new, they need promotion to raise awareness, and they pay for themselves after a few years. Given all of that, irritating as they may be, the major ad spends make a lot of sense.
      - AlbertCory 2y ago
- Neil44 2y ago
  Obviously you need to subtract costs from that, not just production costs for this year but development costs, and the development costs of other drugs that didn't even make it to production.
  - AlbertCory 2y ago
    > Obviously Yes, it is. I didn't say it was all profit.
- fgonzag 2y ago
  My feet have had open wounds for the past year due to psoriasis (and I've gone to every dermatologist I can). It's not just clear skin, it gets very bad with quite painful wounds from the scratching. Especially in hot humid conditions, and I play tennis a lot. 3 people I train with have bad cases, as in having to stop playing for a while
- BenFranklin100 2y ago
  You seem to be implying the advertising costs are a significant driver of the price for drugs. They are not. The significant driver of the cost in drug is the development costs, including the cost of the many failures along the way. Also, in general and not specific to this case, the prices need to targeted high enough to encourage investors to invest in the first place. If prices are not set at a sufficient premium to offset the volatility and risk, in the future investors will realize biomedical research is a poor investment and put their money in less socially beneficial investments like Facebook.
  - AlbertCory 2y ago
    > You seem to be implying the advertising costs are a significant driver No, I'm not. That's in your mind. The advertising costs can be justified by their return. Business 101.
    - BenFranklin100 2y ago
      Ok good, thanks. I just wanted to clarify that point for other readers. As an aside, as someone who works in the life sciences field, I’m a bit conflicted about advertising new therapeutics. I see why it is an often necessary practice in order to raise awareness among potential patients. On the other hand, in an ideal world, primary care physicians would be up on the latest therapies and recommend them to their patients as appropriate. Sadly, that is not always the case.
      - AlbertCory 2y ago
        Good, I thought we were about to have a flame war there. People are so accustomed to everything having an ideological point that they infer one if you don't say it. Putting myself in the place of the doctor: if I say "hey, there's this new drug Bimzelx!" and then I have to tell the patient what it costs, I can imagine being happy to wait until THEY bring it up. Of course, if they just ask "are there any drugs for this?" I'd be duty-bound to answer.
- istultus 2y ago
  Like many a disease with an old name, Psoriasis refers to a localized cutaneous autoimmune disease usually treated by dermatologists, and a severe family of Rheumatic (autoimmune) diseases, part of the Spondyloarthropathy family, that happens to have a cutaneous element which is the same (and often is the first symptom). This treats the latter, debilitating and possibly life-threatening variety.
- a_puppy 2y ago
  But presumably the advertising department pays for itself, right? So if they cut the advertising department, wouldn't they have less total money in the end? The advertising supports the R&D, not competes with it. (The one exception is when two pharma companies have competing drugs that are basically equivalent. So they get trapped in a "Red Queen's race" where they both spend money on advertising to try to gain market share. In the end they've both spent a bunch of money on ads and ended up back where they started. For those cases, I think government regulation would be valuable.)
  - AlbertCory 2y ago
    You seem to have supplied your own conclusion here. I didn't say UCB should do anything in particular: cut it, increase it, or keep it the same.
  - Physkal 2y ago
    To counter a Red Queens race is to spend twice as much in advertisements?
  - sudosysgen 2y ago
    If there wasn't a competing drug there would be no need for ads, the only drug would get prescribed anyways.
    - AlbertCory 2y ago
      They want the "ask your doctor about..." bits to be heard and followed, I'm guessing. People who thought they just had to live with it will now go in and ask for Bimzelx.
      - sudosysgen 2y ago
        As someone with psoriasis, I seriously doubt anyone with severe plaque psoriasis is going to go from no treatment to monoclonal antibodies. In fact, your insurance won't even pay for it no matter how good it is unless you try other courses of treatment first. The effect is going to be changing from one course of treatment to the next, asking your doctor about it is a call to action.
- slashdave 2y ago
  > So if you want clear skin, you probably have to pay big bucks. The price is determined by what the market will bear. So, yes.
nemo44x 2y ago
What needs to happen is more and more money has to go to pharma from tax payers for novel medicine research. Today there is some, yes. But the vast majority of money comes from the markets. And anyone that has invested across the bio sector knows it’s capital intensive and almost everything fails. Money is just burned through so quickly. So yes with lower returns investors will look elsewhere. Especially since overall pharma doesn’t really outperform. There’s no alpha across the sector. So the money has to come from somewhere. If not then yes, innovation will slow down.
- riffraff 2y ago
  There's a problem with this line of thinking: the rest of the world already pays the same medicines less.
  - nemo44x 2y ago
    You’re not serious, are you? The USA consumer subsidizes everyone else in many cases. Similarly to how the USA taxpayer subsidizes the protection of trade, supply lines, and logistics through her mighty military. Just compare the small and mid cap bio market of the USA to the rest of the world. These are the companies that get acquired by the large caps once they’ve gone through a P1 or P2 successfully. But most die before acquisition. This is where the real work happens in most cases.
  - istultus 2y ago
    The rest of the world has governments that negotiate directly the Pharma companies and strike up deals that subsidize the first X doses per year per Y number of people. Once the limit is passed it's the same for everyone - pay the price or find an alternative. NB that this doesn't happen only with US companies, e.g. Roche is very profitable selling Million-dollar-per-course cancer treatments. But in general, the fact that Pharma companies can sell at "full price" in the US subsidizes the drugs for the rest of the world.
  - LorenPechtel 2y ago
    The problem here is the idea that medicines have a particular price. In reality you have a very big bill for developing it. A substantial bill for tooling up to actually be able to produce it. And typically a small bill for each unit you produce. Now, I would like to see the developed world all pay the same price. But it wouldn't end up being the UHC-negotiated rates. I actually consider negotiation (or this dictate pretending to be negotiation) a bad thing. Instead: You must sell to the US market at a rate no greater than you sell to any developed country. This is measured as net $ vs doses. No playing games with rebates, no playing games with giving them some for free. Reciprocity is encouraged, make the playing field level. The US would benefit, the rest of the developed world would be screaming bloody murder.
lvl155 2y ago
US pharma already benefits from academic research which is paid for by tax money. This is a classic example of socializing the costs and privatizing the profits. Often times, you’re looking at 10-100x the cost for “statistically significant” uplift in efficacy. What happened to value-based medicine?
- gruez 2y ago
  Nobody is forcing you to buy the more expensive drug. You can always use the older generic version.
  - mesk 2y ago
    Well, 'somebody' might be forcing you, the illness itself, because the generic drug might not be good enough in your case.
    - gruez 2y ago
      >because the generic drug might not be good enough in your case. The comment I was replying to: >Often times, you’re looking at 10-100x the cost for “statistically significant” uplift in efficacy. What happened to value-based medicine? If that's the case, sounds like the extra cost is worth it.
  - murphyslab 2y ago
    You cannot always obtain a generic version; sometimes not even the original version. Drug manufacturers regularly take approved medicines, which are off-patent and non-exclusive, due to safety reasons (side-effects, risks to patients) or due to commercial reasons: high cost of production, low demand, or possibly to increase demand for an exclusive alternative. The FDA maintains a list of "List of Off-Patent, Off-Exclusivity Drugs without an Approved Generic": https://www.fda.gov/drugs/abbreviated-new-drug-application-anda/list-patent-exclusivity-drugs-without-approved-generic https://www.fda.gov/drugs/abbreviated-new-drug-application-a... See also: https://en.wikipedia.org/wiki/List_of_withdrawn_drugs https://en.wikipedia.org/wiki/List_of_withdrawn_drugs There are also perverse incentives at play and it often isn't easy to get a generic approved, especially if the original drug was already removed from market, under biosimilar regulations: https://prospect.org/health/2024-03-14-novo-nordisk-discontinues-insulin-levemir/ https://prospect.org/health/2024-03-14-novo-nordisk-disconti...
jimmar 2y ago
Why not make these same arguments for cars, food, or anything else that we buy? Just have the government negotiate maximum prices that manufacturers can charge. Maybe AI will help make cars cheaper in the future.
- cerved 2y ago
  Is the US government not already negotiating the prices for cars and food it buys?
  - doctorpangloss 2y ago
    I'm not sure why you are being downvoted. Import bans on food and vehicle tariffs suggest the US has to deal with a lot of complexity regarding cars and food prices. Drugs are no exception. If only there were any easy answer.
  - twoodfin 2y ago
    If the Secret Service doesn’t like what GM charges for a few dozen black Escalades, they can’t take a haircut on GM’s revenue for every one it sells to the general public. But that’s how the IRA works. Also, the way Medicare Part D was set up, the government doesn’t buy the drugs in the first place. Private insurers negotiate their rates and then are reimbursed. They already have significant market incentive and power to negotiate lower prices.
  - AnthonyMouse 2y ago
    The US government typically puts out purchases for bidding. They need so many SUVs of a particular size so they receive bids from Ford and GM and whoever else and pick the lowest bid that satisfies the contract. They aren't setting the price, the sellers are, by bidding on the contract. The government just picks the lowest one. The issue with drugs under patent is that the alternatives are often not as good. If the FBI needs a vehicle, it doesn't really matter if it's a Ford or a Chevy, but sometimes a drug under patent is quite a lot better than the available generic and then the seller can command a much higher price than the competition. Which is whole point of the patent system. In exchange for funding the research/trials you get a temporary monopoly on the drug and get to charge the monopoly price until the patent expires. They're now proposing a different system where instead of taking bids, the government dictates the price and can blacklist the entire drug company if they don't accept the government's price for every individual drug. That's price controls and the result is consistently under-production. For commodities that means shortages, for R&D it means fewer new drugs.
saulrh 2y ago
If funding pharmaceutical research is a common public interest, then it should be funded the way all common public interests should be: taxes. Taxes pay for the weather predictions that make modern agriculture possible. Taxes pay for the basic physics research that keeps Moore's Law on track. Taxes pay for the transportation and logistics infrastructure that make the modern economy possible. Taxes pay for the fire engines that might keep your house from burning down some day. Taxes can and should pay for the pharmaceutical research that makes modern medicine effective. This kind of generalized "everybody needs it but no single person can pay for it and trying to do it through capitalism distorts everything" benefit is precisely what taxes are designed for.
- gruez 2y ago
  Right, but what sort of taxes? If the answer is "just an overall tax on everything", then that's basically the status quo, with all the accompanying "socializing the costs and privatizing the profits" (eg. [1]). If it's tax on the industry in question specifically, then that's something that's not usually done. For instance, you mention "Taxes pay for the basic physics research that keeps Moore's Law on track", but to my knowledge there's no semiconductor tax to attempt to recoup the cost of that research. The same goes for agriculture. You might have a point for roads since they're financed via a fuel excise tax, but it doesn't generalize to ocean/air freight. [1] https://news.ycombinator.com/item?id=41351872 https://news.ycombinator.com/item?id=41351872
  - spondylosaurus 2y ago
    Half-joking, half-serious counter: why not socialize the costs and socialize the profits, too? Think big!
    - doctorpangloss 2y ago
      Public universities and their hospital systems are the largest employers in many cities and states. The status quo is already somewhat socialized. Like some dollars from expensive hospital procedures and drug research royalties go to the insanely bloated admins of these university-hospital systems, paying salaries of people who basically could be eliminated overnight and no one would notice, who are working 11am to 4pm 3 days a week, and whose primary qualification is graduating the same university system and occasionally being the partner or relative of another employee of it. On the one hand you imagine something that is Socialized, in some imaginary way, in your head, that only you know, fine. But think critically about whom is employed by pharmaceuticals, how did they get to that station in life, and maybe it starts to look like things being socialized more than they seem.
Noumenon72 2y ago
Am I summarizing this article right? * The US premium paid is 150% of R&D costs, therefore cutting it will only cut spending on the costs that aren't R&D * M&A did not drop in the first year of the program, which covered 10 drugs, therefore the program will have no effect once phased in * We think AI might develop new drugs for us someday, so it's safe to throw away the existing system today Not very solid reasons to go after the golden goose!
- twoodfin 2y ago
  You forgot putting “price controls” in scare quotes while describing the program matter-of-factly as “negotiation”. If you dive into the details of the law, it’s a “negotiation” only in the sense that drugmakers can choose to sell anything to Medicare or nothing at all if they don’t like the proposed price on any one drug. The penalties for “walking away” from that price are not limited to failing to make sales to Part D insurers. (Remember: Medicare doesn’t have its own formulary, that’s the Part D insurers’ role.) Also you don’t have to know much about the history of this law to know the non-partisan Congressional Budget Office thinks we’re going to fail to achieve a dozen or so blockbuster drugs over the next decade due to this “negotiation”: https://www.hks.harvard.edu/publications/biopharma-venture-capital-and-inflation-reduction-act https://www.hks.harvard.edu/publications/biopharma-venture-c...
  - LorenPechtel 2y ago
    Note that the track record of government dictating what they'll pay for drugs is shortages. You drive prices as low as the drug companies can afford and the result is the drug companies don't make enough to pay for ensuring regular supplies even when things go wrong. One plant has a problem and a whole bunch of patients don't get what they need. The government has caused chronic supply problems this way before and I do not trust them not to do so again.
    - FireBeyond 2y ago
      The flip side, government paying X for Y doses of drugs, is a captive market where the drug companies will charge what they like because they know the government has little to no choice but to pay.
mschuster91 2y ago
First, one thing to keep in mind: "Big Pharma" is the medical equivalent of "venture capital" in technology. They buy up a lot of patents and very early stage startups in the hope that 1 or 2 of 100 investments actually strike it big, and that explains a part of why new medical innovations cost so much - all the loss has to be distributed. > It is a harrowing proposition: that in trying to control drug prices for 67 million Medicare patients now, we might inadvertently prevent the development of future drugs that could save lives. Implied, if not stated outright, is that we’re putting a cure for cancer or Alzheimer’s or some other intractable disease in jeopardy. Well... given that a lot of the fundamental research in pharmaceuticals happens at universities and/or on taxpayer grants, what exactly is preventing the US government from taking over the later stages of development and the associated risk itself, and only use external providers for manufacturing at scale? Of course, it's a rhetorical question. The answer is two-fold here - primarily the obvious: large parts of the US (and most Western nations facing similar questions) prefer a "small state", preferably as small as possible. But there's also a second answer... the US' very dark history in government-run medicine. The Tuskeegee syphilis study, the consistent discrimination against PoC and women in medical research, MKULTRA or the US just about permanently burning all of its trust across the world by using "vaccination drives" as a pretext to verify Bin Laden's presence in that compound in Pakistan [1] - antivaxxers, Covid deniers and their ilk didn't sprout up from nothing, they have very fertile soil. [1] https://www.npr.org/2021/09/06/1034631928/the-cias-hunt-for-bin-laden-has-had-lasting-repercussions-for-ngos-in-pakistan https://www.npr.org/2021/09/06/1034631928/the-cias-hunt-for-...
- iris700 2y ago
  The main expense is the testing needed to bring the drug to market, the cost of initial research is peanuts compared to that
  - mschuster91 2y ago
    Yep and that should be taken on by the government.
Kye 2y ago
What good is a miracle if the only people who can afford it don't need it because they can afford to maintain their health?
- pg_bot 2y ago
  Would you rather live in the world where we don't have a solution or the world where the solution is expensive now but will eventually become cheap?
  - passwordoops 2y ago
    Under our current system, the trend is for drug prices to increase https://www.aarp.org/politics-society/advocacy/info-2024/rx-drug-price-watch.html https://www.aarp.org/politics-society/advocacy/info-2024/rx-...
    - doctorpangloss 2y ago
      This doesn't really say what you think it says. In fact there is a great deal of uncertainty regarding future drug prices, and it is one of many factors rattling biotech investment.
      - passwordoops 2y ago
        It seems I didn't say what you think I said. And we're talking pharma inflating prices to increase dividend/buybacks/exec compensation rather than investing in R&D. Different ball of wax from biotech startups looking for investment
    - pg_bot 2y ago
      https://pubmed.ncbi.nlm.nih.gov/34904207/ https://pubmed.ncbi.nlm.nih.gov/34904207/ https://www.statista.com/statistics/825214/atorvastatin-out-of-pocket-cost/ https://www.statista.com/statistics/825214/atorvastatin-out-... https://www.statista.com/statistics/825187/lininopril-out-of-pocket-costs-us/ https://www.statista.com/statistics/825187/lininopril-out-of... https://www.statista.com/statistics/825259/albuterol-out-of-pocket-cost-us/ https://www.statista.com/statistics/825259/albuterol-out-of-... https://www.statista.com/statistics/825193/levothyroxine-out-of-pocket-cost-us/ https://www.statista.com/statistics/825193/levothyroxine-out... https://www.statista.com/statistics/825244/amlodipine-besylate-out-of-pocket-cost/ https://www.statista.com/statistics/825244/amlodipine-besyla... https://www.statista.com/statistics/822626/gabapentin-out-of-pocket-price/ https://www.statista.com/statistics/822626/gabapentin-out-of... https://www.statista.com/statistics/825200/metformin-hydrochloride-out-of-pocket-cost-us/ https://www.statista.com/statistics/825200/metformin-hydroch... https://www.statista.com/statistics/825281/losartan-potassium-out-of-pocket-cost/ https://www.statista.com/statistics/825281/losartan-potassiu... These are some of the most prescribed drugs in America, the trend is quite clear. Every drug except albuterol and levothyroxine has decreased dramatically in price. Levothyroxine's patent expired this year so there will be some time before prices go down. Albuterol is expensive because the inhaler had to change the propellant to remove CFCs and there is a new patent on the hydrofluoroalkanes (HFAs) that has yet to expire.
RcouF1uZ4gsC 2y ago
> Most other wealthy countries, like Australia and the UK, use the government’s central role in their health care system to negotiate lower prices while also fostering their own medical innovation sectors. These wealthy countries are relying on the US to subsidize their medical innovation. The US drug market is the one where the profits are and which determines how much investment is worth it.
- doctorpangloss 2y ago
  How would this be disproven? What would you observe? This should hint to you why, despite sounding reasonable, what you said isn't a common-sense, no-evidence-needed or even wholly-formed idea.
a_puppy 2y ago
I don't think this article's analysis makes sense. If pharma companies lose revenue, they have to cut something. Presumably the intention is to force them to cut profits. 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... They found that the average profit margin across the pharma industry was around 20%. So even if pharma companies cut their profits to zero, prices would only drop 20%, right? And even the idea of cutting profits to zero isn't realistic. Pharma investment is similar to venture capital; investors make risky bets in the hopes that a few of them will pay off big. Why would investors agree to take that risk if they get zero profit in return? Some people propose things like "the government should fund drug development". OK, that's a fine proposal; it has pros and cons. But that's a very different proposal than "the government should institute price caps on privately-developed drugs". Don't try to justify the latter proposal by conflating it with the former.
- AnthonyMouse 2y ago
  > Some people propose things like "the government should fund drug development". OK, that's a fine proposal; it has pros and cons. Not only that, it's complementary to private investment. Did public investment produce a valuable new drug? Great! Make sure the law doesn't allow anyone to patent drugs developed entirely with public funding so it immediately becomes a cheap generic. But if a different drug is developed with private financing under the assumption that they'll get returns during the patent term to justify the cost and risk, well, that's why they're doing it. And paying a higher price for that drug is better than not having it all, or else why is anybody willing to pay the higher price for it?
- rileymat2 2y ago
  But doesn’t the high price come, largely from government blessed IP creating an artificial monopoly? Controlling prices in the context of a created monopoly makes some sense to me. But yes, balancing incentives is critical.
- complaintdept 2y ago
  Pharma spends more on marketing drugs than developing them. If marketing drugs is prohibited, especially through dubious kickback schemes with doctors and hospitals, there'd be a lot more room for lowering prices. The profit motive really doesn't deliver great outcomes in medicine, between the enormous information asymmetry between patient and doctor (and even other doctors), doctors with perverse financial incentives, and believing (whether it's true or not) that your life or wellbeing are on the line if you're wrong, it's ideal for all sorts of chicanery. (/rant)

142 points by rntn 2y ago

Drug for discussion: Bimzelx (for psoriasis). This costs six figures or more per year, from what I can glean. Watching baseball a lot, I see this advertised multiple times per game, and God only knows what else they spend on marketing. (I don't have psoriasis or know anyone with it, if that matters) Looking at UCB's financials (helpfully broken out by drug), they took in $242 million on that drug alone in fiscal 2024. So that's how they can afford all those ads. It's also probably something patients would demand, and maybe even be happy to pay for out of pocket. > they will help the Medicare program cap what individual patients spend out of pocket on their prescriptions in a year at $2,000. So if you want clear skin, you probably have to pay big bucks. But maybe these immensely profitable drugs subsidize the life-saving ones.

bryanlarsen 2y ago
> (I don't have psoriasis or know anyone with it, if that matters) Psoriasis is very common, especially the mild forms. You probably know people who have it.
__MatrixMan__ 2y ago
C6552 H10132 N1750 O2029 S42, 147229.87 g·mol, what a monster. Probably not making that one in your garage.
- exyi 2y ago
  It's apparently a monoclonal antibody (https://en.wikipedia.org/wiki/Bimekizumab https://en.wikipedia.org/wiki/Bimekizumab). That's just a protein, so it might actually be easier to make in your garage than your average small molecule ;) ... not that either would be practically possible, but it might be available in countries where they don't care too much about patents and such
  - twic 2y ago
    And if you're really willing to DIY, easier to make in your body than in your garage.
zdragnar 2y ago
Clear skin is the least of the problems with psoriasis. From their website: Bimzelx, alone or in combination with methotrexate, is indicated for the treatment of active psoriatic arthritis in adults who have had an inadequate response or who have been intolerant to one or more disease-modifying antirheumatic drugs (DMARDs). In other words, it's for people with bad cases who don't respond well to other drugs. Keep in mind, other drugs often come with serious complications- constant use of topical steroids will thin your skin, and give you glaucoma if you develop it and use them near your eyes. Many biologics have even worse potential side effects. On top of that, psoriatic arthritis is degenerative, if you're unlucky enough to get that too, so not treating it means not only constant pain, constant threat of skin infections from scabbing, but permanent joint damage. I ended up on Taltz, another very expensive biologic, but the eli lily foundation covered almost all of the cost since my insurance wouldn't. Before then, I looked like an alcoholic, because my nose was constantly red and inflamed, and I didn't have anything safe to put on it- glaucoma runs in my family, and I wasn't brave enough to risk anything strong enough. If that was the only problem, I might not have even gone the route of Taltz, but I was also developing it all over my body, and there wasn't much that was helping.
- AlbertCory 2y ago
  Thanks. I finally realized I was seeing this ad constantly and decided to look into it.
  - zdragnar 2y ago
    It may not qualify as a life saving drug, but really it ought to be. The long-term quality of life with untreated and/or resistant psoriatic arthritis is awful. Also, biologic drugs are money printing machines if they survive the FDA approval process, as they can manage the symptoms but the disease itself is incurable. Since they are brand new, they need promotion to raise awareness, and they pay for themselves after a few years. Given all of that, irritating as they may be, the major ad spends make a lot of sense.
    - AlbertCory 2y ago
Neil44 2y ago
Obviously you need to subtract costs from that, not just production costs for this year but development costs, and the development costs of other drugs that didn't even make it to production.
- AlbertCory 2y ago
  > Obviously Yes, it is. I didn't say it was all profit.
fgonzag 2y ago
My feet have had open wounds for the past year due to psoriasis (and I've gone to every dermatologist I can). It's not just clear skin, it gets very bad with quite painful wounds from the scratching. Especially in hot humid conditions, and I play tennis a lot. 3 people I train with have bad cases, as in having to stop playing for a while
BenFranklin100 2y ago
You seem to be implying the advertising costs are a significant driver of the price for drugs. They are not. The significant driver of the cost in drug is the development costs, including the cost of the many failures along the way. Also, in general and not specific to this case, the prices need to targeted high enough to encourage investors to invest in the first place. If prices are not set at a sufficient premium to offset the volatility and risk, in the future investors will realize biomedical research is a poor investment and put their money in less socially beneficial investments like Facebook.
- AlbertCory 2y ago
  > You seem to be implying the advertising costs are a significant driver No, I'm not. That's in your mind. The advertising costs can be justified by their return. Business 101.
  - BenFranklin100 2y ago
    Ok good, thanks. I just wanted to clarify that point for other readers. As an aside, as someone who works in the life sciences field, I’m a bit conflicted about advertising new therapeutics. I see why it is an often necessary practice in order to raise awareness among potential patients. On the other hand, in an ideal world, primary care physicians would be up on the latest therapies and recommend them to their patients as appropriate. Sadly, that is not always the case.
    - AlbertCory 2y ago
      Good, I thought we were about to have a flame war there. People are so accustomed to everything having an ideological point that they infer one if you don't say it. Putting myself in the place of the doctor: if I say "hey, there's this new drug Bimzelx!" and then I have to tell the patient what it costs, I can imagine being happy to wait until THEY bring it up. Of course, if they just ask "are there any drugs for this?" I'd be duty-bound to answer.
istultus 2y ago
Like many a disease with an old name, Psoriasis refers to a localized cutaneous autoimmune disease usually treated by dermatologists, and a severe family of Rheumatic (autoimmune) diseases, part of the Spondyloarthropathy family, that happens to have a cutaneous element which is the same (and often is the first symptom). This treats the latter, debilitating and possibly life-threatening variety.
a_puppy 2y ago
But presumably the advertising department pays for itself, right? So if they cut the advertising department, wouldn't they have less total money in the end? The advertising supports the R&D, not competes with it. (The one exception is when two pharma companies have competing drugs that are basically equivalent. So they get trapped in a "Red Queen's race" where they both spend money on advertising to try to gain market share. In the end they've both spent a bunch of money on ads and ended up back where they started. For those cases, I think government regulation would be valuable.)
- AlbertCory 2y ago
  You seem to have supplied your own conclusion here. I didn't say UCB should do anything in particular: cut it, increase it, or keep it the same.
- Physkal 2y ago
  To counter a Red Queens race is to spend twice as much in advertisements?
- sudosysgen 2y ago
  If there wasn't a competing drug there would be no need for ads, the only drug would get prescribed anyways.
  - AlbertCory 2y ago
    They want the "ask your doctor about..." bits to be heard and followed, I'm guessing. People who thought they just had to live with it will now go in and ask for Bimzelx.
    - sudosysgen 2y ago
      As someone with psoriasis, I seriously doubt anyone with severe plaque psoriasis is going to go from no treatment to monoclonal antibodies. In fact, your insurance won't even pay for it no matter how good it is unless you try other courses of treatment first. The effect is going to be changing from one course of treatment to the next, asking your doctor about it is a call to action.
slashdave 2y ago
> So if you want clear skin, you probably have to pay big bucks. The price is determined by what the market will bear. So, yes.

nemo44x 2y ago

What needs to happen is more and more money has to go to pharma from tax payers for novel medicine research. Today there is some, yes. But the vast majority of money comes from the markets. And anyone that has invested across the bio sector knows it’s capital intensive and almost everything fails. Money is just burned through so quickly. So yes with lower returns investors will look elsewhere. Especially since overall pharma doesn’t really outperform. There’s no alpha across the sector. So the money has to come from somewhere. If not then yes, innovation will slow down.

riffraff 2y ago
There's a problem with this line of thinking: the rest of the world already pays the same medicines less.
- nemo44x 2y ago
  You’re not serious, are you? The USA consumer subsidizes everyone else in many cases. Similarly to how the USA taxpayer subsidizes the protection of trade, supply lines, and logistics through her mighty military. Just compare the small and mid cap bio market of the USA to the rest of the world. These are the companies that get acquired by the large caps once they’ve gone through a P1 or P2 successfully. But most die before acquisition. This is where the real work happens in most cases.
- istultus 2y ago
  The rest of the world has governments that negotiate directly the Pharma companies and strike up deals that subsidize the first X doses per year per Y number of people. Once the limit is passed it's the same for everyone - pay the price or find an alternative. NB that this doesn't happen only with US companies, e.g. Roche is very profitable selling Million-dollar-per-course cancer treatments. But in general, the fact that Pharma companies can sell at "full price" in the US subsidizes the drugs for the rest of the world.
- LorenPechtel 2y ago
  The problem here is the idea that medicines have a particular price. In reality you have a very big bill for developing it. A substantial bill for tooling up to actually be able to produce it. And typically a small bill for each unit you produce. Now, I would like to see the developed world all pay the same price. But it wouldn't end up being the UHC-negotiated rates. I actually consider negotiation (or this dictate pretending to be negotiation) a bad thing. Instead: You must sell to the US market at a rate no greater than you sell to any developed country. This is measured as net $ vs doses. No playing games with rebates, no playing games with giving them some for free. Reciprocity is encouraged, make the playing field level. The US would benefit, the rest of the developed world would be screaming bloody murder.

lvl155 2y ago

US pharma already benefits from academic research which is paid for by tax money. This is a classic example of socializing the costs and privatizing the profits. Often times, you’re looking at 10-100x the cost for “statistically significant” uplift in efficacy. What happened to value-based medicine?

gruez 2y ago
Nobody is forcing you to buy the more expensive drug. You can always use the older generic version.
- mesk 2y ago
  Well, 'somebody' might be forcing you, the illness itself, because the generic drug might not be good enough in your case.
  - gruez 2y ago
    >because the generic drug might not be good enough in your case. The comment I was replying to: >Often times, you’re looking at 10-100x the cost for “statistically significant” uplift in efficacy. What happened to value-based medicine? If that's the case, sounds like the extra cost is worth it.
- murphyslab 2y ago
  You cannot always obtain a generic version; sometimes not even the original version. Drug manufacturers regularly take approved medicines, which are off-patent and non-exclusive, due to safety reasons (side-effects, risks to patients) or due to commercial reasons: high cost of production, low demand, or possibly to increase demand for an exclusive alternative. The FDA maintains a list of "List of Off-Patent, Off-Exclusivity Drugs without an Approved Generic": https://www.fda.gov/drugs/abbreviated-new-drug-application-anda/list-patent-exclusivity-drugs-without-approved-generic https://www.fda.gov/drugs/abbreviated-new-drug-application-a... See also: https://en.wikipedia.org/wiki/List_of_withdrawn_drugs https://en.wikipedia.org/wiki/List_of_withdrawn_drugs There are also perverse incentives at play and it often isn't easy to get a generic approved, especially if the original drug was already removed from market, under biosimilar regulations: https://prospect.org/health/2024-03-14-novo-nordisk-discontinues-insulin-levemir/ https://prospect.org/health/2024-03-14-novo-nordisk-disconti...

jimmar 2y ago

Why not make these same arguments for cars, food, or anything else that we buy? Just have the government negotiate maximum prices that manufacturers can charge. Maybe AI will help make cars cheaper in the future.

cerved 2y ago
Is the US government not already negotiating the prices for cars and food it buys?
- doctorpangloss 2y ago
  I'm not sure why you are being downvoted. Import bans on food and vehicle tariffs suggest the US has to deal with a lot of complexity regarding cars and food prices. Drugs are no exception. If only there were any easy answer.
- twoodfin 2y ago
  If the Secret Service doesn’t like what GM charges for a few dozen black Escalades, they can’t take a haircut on GM’s revenue for every one it sells to the general public. But that’s how the IRA works. Also, the way Medicare Part D was set up, the government doesn’t buy the drugs in the first place. Private insurers negotiate their rates and then are reimbursed. They already have significant market incentive and power to negotiate lower prices.
- AnthonyMouse 2y ago
  The US government typically puts out purchases for bidding. They need so many SUVs of a particular size so they receive bids from Ford and GM and whoever else and pick the lowest bid that satisfies the contract. They aren't setting the price, the sellers are, by bidding on the contract. The government just picks the lowest one. The issue with drugs under patent is that the alternatives are often not as good. If the FBI needs a vehicle, it doesn't really matter if it's a Ford or a Chevy, but sometimes a drug under patent is quite a lot better than the available generic and then the seller can command a much higher price than the competition. Which is whole point of the patent system. In exchange for funding the research/trials you get a temporary monopoly on the drug and get to charge the monopoly price until the patent expires. They're now proposing a different system where instead of taking bids, the government dictates the price and can blacklist the entire drug company if they don't accept the government's price for every individual drug. That's price controls and the result is consistently under-production. For commodities that means shortages, for R&D it means fewer new drugs.

saulrh 2y ago

If funding pharmaceutical research is a common public interest, then it should be funded the way all common public interests should be: taxes. Taxes pay for the weather predictions that make modern agriculture possible. Taxes pay for the basic physics research that keeps Moore's Law on track. Taxes pay for the transportation and logistics infrastructure that make the modern economy possible. Taxes pay for the fire engines that might keep your house from burning down some day. Taxes can and should pay for the pharmaceutical research that makes modern medicine effective. This kind of generalized "everybody needs it but no single person can pay for it and trying to do it through capitalism distorts everything" benefit is precisely what taxes are designed for.

gruez 2y ago
Right, but what sort of taxes? If the answer is "just an overall tax on everything", then that's basically the status quo, with all the accompanying "socializing the costs and privatizing the profits" (eg. [1]). If it's tax on the industry in question specifically, then that's something that's not usually done. For instance, you mention "Taxes pay for the basic physics research that keeps Moore's Law on track", but to my knowledge there's no semiconductor tax to attempt to recoup the cost of that research. The same goes for agriculture. You might have a point for roads since they're financed via a fuel excise tax, but it doesn't generalize to ocean/air freight. [1] https://news.ycombinator.com/item?id=41351872 https://news.ycombinator.com/item?id=41351872
- spondylosaurus 2y ago
  Half-joking, half-serious counter: why not socialize the costs and socialize the profits, too? Think big!
  - doctorpangloss 2y ago
    Public universities and their hospital systems are the largest employers in many cities and states. The status quo is already somewhat socialized. Like some dollars from expensive hospital procedures and drug research royalties go to the insanely bloated admins of these university-hospital systems, paying salaries of people who basically could be eliminated overnight and no one would notice, who are working 11am to 4pm 3 days a week, and whose primary qualification is graduating the same university system and occasionally being the partner or relative of another employee of it. On the one hand you imagine something that is Socialized, in some imaginary way, in your head, that only you know, fine. But think critically about whom is employed by pharmaceuticals, how did they get to that station in life, and maybe it starts to look like things being socialized more than they seem.

Noumenon72 2y ago

Am I summarizing this article right? * The US premium paid is 150% of R&D costs, therefore cutting it will only cut spending on the costs that aren't R&D * M&A did not drop in the first year of the program, which covered 10 drugs, therefore the program will have no effect once phased in * We think AI might develop new drugs for us someday, so it's safe to throw away the existing system today Not very solid reasons to go after the golden goose!

twoodfin 2y ago
You forgot putting “price controls” in scare quotes while describing the program matter-of-factly as “negotiation”. If you dive into the details of the law, it’s a “negotiation” only in the sense that drugmakers can choose to sell anything to Medicare or nothing at all if they don’t like the proposed price on any one drug. The penalties for “walking away” from that price are not limited to failing to make sales to Part D insurers. (Remember: Medicare doesn’t have its own formulary, that’s the Part D insurers’ role.) Also you don’t have to know much about the history of this law to know the non-partisan Congressional Budget Office thinks we’re going to fail to achieve a dozen or so blockbuster drugs over the next decade due to this “negotiation”: https://www.hks.harvard.edu/publications/biopharma-venture-capital-and-inflation-reduction-act https://www.hks.harvard.edu/publications/biopharma-venture-c...
- LorenPechtel 2y ago
  Note that the track record of government dictating what they'll pay for drugs is shortages. You drive prices as low as the drug companies can afford and the result is the drug companies don't make enough to pay for ensuring regular supplies even when things go wrong. One plant has a problem and a whole bunch of patients don't get what they need. The government has caused chronic supply problems this way before and I do not trust them not to do so again.
  - FireBeyond 2y ago
    The flip side, government paying X for Y doses of drugs, is a captive market where the drug companies will charge what they like because they know the government has little to no choice but to pay.

mschuster91 2y ago

First, one thing to keep in mind: "Big Pharma" is the medical equivalent of "venture capital" in technology. They buy up a lot of patents and very early stage startups in the hope that 1 or 2 of 100 investments actually strike it big, and that explains a part of why new medical innovations cost so much - all the loss has to be distributed. > It is a harrowing proposition: that in trying to control drug prices for 67 million Medicare patients now, we might inadvertently prevent the development of future drugs that could save lives. Implied, if not stated outright, is that we’re putting a cure for cancer or Alzheimer’s or some other intractable disease in jeopardy. Well... given that a lot of the fundamental research in pharmaceuticals happens at universities and/or on taxpayer grants, what exactly is preventing the US government from taking over the later stages of development and the associated risk itself, and only use external providers for manufacturing at scale? Of course, it's a rhetorical question. The answer is two-fold here - primarily the obvious: large parts of the US (and most Western nations facing similar questions) prefer a "small state", preferably as small as possible. But there's also a second answer... the US' very dark history in government-run medicine. The Tuskeegee syphilis study, the consistent discrimination against PoC and women in medical research, MKULTRA or the US just about permanently burning all of its trust across the world by using "vaccination drives" as a pretext to verify Bin Laden's presence in that compound in Pakistan [1] - antivaxxers, Covid deniers and their ilk didn't sprout up from nothing, they have very fertile soil. [1] https://www.npr.org/2021/09/06/1034631928/the-cias-hunt-for-bin-laden-has-had-lasting-repercussions-for-ngos-in-pakistan https://www.npr.org/2021/09/06/1034631928/the-cias-hunt-for-...

iris700 2y ago
The main expense is the testing needed to bring the drug to market, the cost of initial research is peanuts compared to that
- mschuster91 2y ago
  Yep and that should be taken on by the government.

Kye 2y ago

What good is a miracle if the only people who can afford it don't need it because they can afford to maintain their health?

pg_bot 2y ago
Would you rather live in the world where we don't have a solution or the world where the solution is expensive now but will eventually become cheap?
- passwordoops 2y ago
  Under our current system, the trend is for drug prices to increase https://www.aarp.org/politics-society/advocacy/info-2024/rx-drug-price-watch.html https://www.aarp.org/politics-society/advocacy/info-2024/rx-...
  - doctorpangloss 2y ago
    This doesn't really say what you think it says. In fact there is a great deal of uncertainty regarding future drug prices, and it is one of many factors rattling biotech investment.
    - passwordoops 2y ago
      It seems I didn't say what you think I said. And we're talking pharma inflating prices to increase dividend/buybacks/exec compensation rather than investing in R&D. Different ball of wax from biotech startups looking for investment
  - pg_bot 2y ago
    https://pubmed.ncbi.nlm.nih.gov/34904207/ https://pubmed.ncbi.nlm.nih.gov/34904207/ https://www.statista.com/statistics/825214/atorvastatin-out-of-pocket-cost/ https://www.statista.com/statistics/825214/atorvastatin-out-... https://www.statista.com/statistics/825187/lininopril-out-of-pocket-costs-us/ https://www.statista.com/statistics/825187/lininopril-out-of... https://www.statista.com/statistics/825259/albuterol-out-of-pocket-cost-us/ https://www.statista.com/statistics/825259/albuterol-out-of-... https://www.statista.com/statistics/825193/levothyroxine-out-of-pocket-cost-us/ https://www.statista.com/statistics/825193/levothyroxine-out... https://www.statista.com/statistics/825244/amlodipine-besylate-out-of-pocket-cost/ https://www.statista.com/statistics/825244/amlodipine-besyla... https://www.statista.com/statistics/822626/gabapentin-out-of-pocket-price/ https://www.statista.com/statistics/822626/gabapentin-out-of... https://www.statista.com/statistics/825200/metformin-hydrochloride-out-of-pocket-cost-us/ https://www.statista.com/statistics/825200/metformin-hydroch... https://www.statista.com/statistics/825281/losartan-potassium-out-of-pocket-cost/ https://www.statista.com/statistics/825281/losartan-potassiu... These are some of the most prescribed drugs in America, the trend is quite clear. Every drug except albuterol and levothyroxine has decreased dramatically in price. Levothyroxine's patent expired this year so there will be some time before prices go down. Albuterol is expensive because the inhaler had to change the propellant to remove CFCs and there is a new patent on the hydrofluoroalkanes (HFAs) that has yet to expire.

RcouF1uZ4gsC 2y ago

> Most other wealthy countries, like Australia and the UK, use the government’s central role in their health care system to negotiate lower prices while also fostering their own medical innovation sectors. These wealthy countries are relying on the US to subsidize their medical innovation. The US drug market is the one where the profits are and which determines how much investment is worth it.

doctorpangloss 2y ago
How would this be disproven? What would you observe? This should hint to you why, despite sounding reasonable, what you said isn't a common-sense, no-evidence-needed or even wholly-formed idea.

a_puppy 2y ago

I don't think this article's analysis makes sense. If pharma companies lose revenue, they have to cut something. Presumably the intention is to force them to cut profits. 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... They found that the average profit margin across the pharma industry was around 20%. So even if pharma companies cut their profits to zero, prices would only drop 20%, right? And even the idea of cutting profits to zero isn't realistic. Pharma investment is similar to venture capital; investors make risky bets in the hopes that a few of them will pay off big. Why would investors agree to take that risk if they get zero profit in return? Some people propose things like "the government should fund drug development". OK, that's a fine proposal; it has pros and cons. But that's a very different proposal than "the government should institute price caps on privately-developed drugs". Don't try to justify the latter proposal by conflating it with the former.

AnthonyMouse 2y ago
> Some people propose things like "the government should fund drug development". OK, that's a fine proposal; it has pros and cons. Not only that, it's complementary to private investment. Did public investment produce a valuable new drug? Great! Make sure the law doesn't allow anyone to patent drugs developed entirely with public funding so it immediately becomes a cheap generic. But if a different drug is developed with private financing under the assumption that they'll get returns during the patent term to justify the cost and risk, well, that's why they're doing it. And paying a higher price for that drug is better than not having it all, or else why is anybody willing to pay the higher price for it?
rileymat2 2y ago
But doesn’t the high price come, largely from government blessed IP creating an artificial monopoly? Controlling prices in the context of a created monopoly makes some sense to me. But yes, balancing incentives is critical.
complaintdept 2y ago
Pharma spends more on marketing drugs than developing them. If marketing drugs is prohibited, especially through dubious kickback schemes with doctors and hospitals, there'd be a lot more room for lowering prices. The profit motive really doesn't deliver great outcomes in medicine, between the enormous information asymmetry between patient and doctor (and even other doctors), doctors with perverse financial incentives, and believing (whether it's true or not) that your life or wellbeing are on the line if you're wrong, it's ideal for all sorts of chicanery. (/rant)