7 ms·
Crazy how they managed to restrict the competing researchers from obtaining the drug. How did they do that? Why is the sale of a super expensive drug used exc
by planck_tonne 1y ago
Crazy how they managed to restrict the competing researchers from obtaining the drug.
How did they do that?
Why is the sale of a super expensive drug used exclusively to treat a super specific type of cancer even controlled in the first place? What is even the argument?
I couldn't think of any argument before. After reading, I can only think of "to restrict competition".
- throwanem 1y agoThe argument in essence is that only permitting pharmaceutical companies these outrageous profits will induce them to continue investing the likewise outrageous costs of new drug development now that all the low-hanging fruit like antibiotics, and sildenafil and other antihypertensives, has been picked. This extends (usually by implication) to trivial variations in molecular chemistry which have no functional effect on a medication but which are used to extend patent protections solely on the basis of a structural change - a practice also visible in the history of one family of drugs I have mentioned, and one which without some sort of justification might be taken for an example of a law's letter being abused to violate that same law's intent. Look, I didn't say I buy it. But you asked for the basic argument advocates make in support of such practices, and here it is.
- throwawaymaths 1y agoit's not a great argument since iirc half of pharmaceutical company spending is on marketing; far far outstripping r&d
- smt88 1y agoAnd a lot of pharma research is based on publicly-funded research in the first place.
- deleted 1y ago[deleted]
- nradov 1y agoSure, but that's a bit of a red herring. The largest expense in bringing a new prescription drug to market is the phase 3 clinical trial, which now costs on the order of $1B each. Those often fail, so it's a huge gamble. There is very little public funding for type of research.
- throwanem 1y agoAnd a drug like Revlimid makes its manufacturer tens to hundreds of billions; the "legacy" portfolio in which BMS classes it pulled in a cool $5.6b just in Q1 '25, of which Revlimid itself was about a sixth, or just under a billion - down by almost half year on year. See https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/doc_presentations/2025/BMY-2025-Q1-Results-Investor-Presentation.pdf https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/do..., pp. 8-9. It is as if VCs in the tech industry demanded the taxpayer guarantee them a healthy rate of profit, to a standard of health the VCs themselves are privileged to define. Indeed, as with Allred and the regional airlines, perhaps now we see whence Altman has cribbed his "innovation."
- nradov 1y agoI don't understand your point. Some drugs are enormously profitable. Others lose money. There are no taxpayer guarantees. Pharmaceutical companies on average don't generate higher shareholder returns than other industrial sectors. A few like K-V and Dendreon have even gone bankrupt. One could make an argument that taxpayer subsidized health plans which include prescription drug coverage such as Medicare Part D or Medicaid should limit the prices they are willing to reimburse on a QALY basis. And Medicare has started a limited drug price negotiation program. But generally, voters have been unwilling to accept the trade-offs inherent in drug price controls. https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026 https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price...
- throwanem 1y agoMy point is that if you want to provide support for the advocacy argument, you've quite a long way yet to go. A good place to start would be to pick any one claim you have made and attempt to substantiate it. Until then, I've nothing with which to attempt further to argue. (If you want to do something else, I can't tell what it would be.)
- tough 1y agothe argument might be, the more profits the pharma's make, the more available cash to buy out poltiicians or create SuperPAC's or whatever they have at hand.. America, the land of the dollar
- ricksunny 1y ago>America, the land of the dollar Correction: America, the land of the rent-seeking.
- bschne 1y ago2024 numbers -- Selling, General & Admin vs. R&D Roche (Pharma Division): 7533 MCHF vs. 11096 MCHF Novartis: 12566 MUSD vs. 10022 MUSD Pfizer: 14730 MUSD vs. 10822 MUSD Eli Lilly: 8594 MUSD vs. 10991 MUSD AstraZeneca: 19977 MUSD vs. 13583 MUSD Johnson & Johnson: 22869 MUSD vs. 17232 MUSD The left side here contains more than just marketing, and already "far far outstripping" seems like a mischaracterization. For comparison, the average R&D spend between these firms is bigger than the 2024 NSF budget (~9bn) and bigger than 1/4 of the 2024 NIH budget (~37bn).
- deleted 1y ago[deleted]
- dgacmu 1y agoI think you meant to say NIH for the second budget number?
- bschne 1y agocorrect, edited, thanks
- derektank 1y agoAlso worth considering that this only includes internal R&D, not R&D acquired through acquisition of smaller biotech firms (known as in process R&D). VC investment in biotech startups is, at least in part, built around the assumption that acquisition by a larger pharmaceutical company is a viable exit strategy. To take the example of Eli Lilly, I think they spent an additional 10-20% of their R&D budget on IPR&D in 2024, though this obviously can fluctuate more year to year. They acquired Morphic, which produces a pharmaceutical that treats IBS, and Scorpion Therapeutics, which produces a precision oncology treatment, this year and I'm guessing neither spent much on consumer sales.
- tptacek 1y agoThat's part of it, but pharma is also a portfolio business, like VC or music; the winners have to pay for the losers. (I don't know how much that matters in this case, where a tiny company lucked into a blockbuster and then used every lever in the system to protect their exclusivity).
- throwanem 1y agoYeah, nobody serious is really arguing the winners shouldn't pay for the losers. How many times over, though?
- tptacek 1y agoI sort of don't care, as long as investor value isn't being protected abusively, by anticompetitive schemes with the patent system and exclusivity. We pay lots of money for all sorts of things, most of which don't actually matter to our lives; pharmaceuticals matter a great deal, and I'm OK with the idea that advancements are incentivized by a time-limited lane for nosebleed pricing. (Pharmaceutical costs, all in, across the board, are a relatively small component of total health spending in the US. They're not why your health insurance is so expensive.) This is mostly a story about anticompetitive abuses, so that question isn't super relevant to the story. I'm just answering the claim that invisible marketing/SG&A costs are why drugs cost so much. They also cost a lot because most drugs fail, sometimes after billions invested.
- throwawaymaths 1y agowell but the portfolio managers in this case could really do a much better job at picking hits. we wouldn't have 20 years of failing Alzheimer's drugs if pharma identified that the protein hypothesis was junk (which people were talking about in the aughts)
- throwanem 1y agoThat's a really interesting point, yeah. Not that I'm really equipped to evaluate the technical arguments, but it's striking on reflection how absent from the discussion the question seems to be of how efficiently on average the funding to trial a given drug and indication is allocated. The governing assumption appears to be that the status quo is acceptably close to optimality.
- leereeves 1y ago> This extends (usually by implication) to trivial variations in molecular chemistry which have no functional effect on a medication but which are used to extend patent protections solely on the basis of a structural change How does that work? Does it extend patent protection on the original molecule? Or if not, what stops generic copies of the original version?
- throwanem 1y agoI found a menu. https://www.obrienpatents.com/extending-life-patents-pharmaceutical-drugs/ https://www.obrienpatents.com/extending-life-patents-pharmac...
- s1artibartfast 1y agoIt doesnt. A competitor can make generics of the original. What is does is stagger coverage with version release so that you have coverage for latest and greatest version. Generics are extremely common following patent exclusivity. By then, patients and doctors usually want the shiny new drug.
- jmward01 1y agoThis is trickle down economics for healthcare. It is stupid. No, it is worse than that, it is evil.
- photochemsyn 1y agoBayh-Dole legislation in the 1990s allowed universities to exclusively license researcher inventions to private parties. Hence: > "Celgene had acquired the rights to thalidomide patents held by researchers at Rockefeller University in 1992." Change Bayh-Dole law to non-exclusive licensing, but with some level of royalties paid to institution that originated the patent, and other corporations could have made the drug - and it would be a competitive market, so costs would drop due to lack of a monopoly on the drug. This one simple change to Bayh-Dole - 'non-exclusive' - would upset the academic-corporate apple cart well beyond pharmaceuticals. Eg the PageRank algorithm created at Stanford could not have been exclusive licensed to Google - any American corporation or person could have applied for a license to the invention, entirely erasing the benefits of a monopolistic patent to the corporation. One great benefit of this change is that corporations who wanted exclusive patents would have to finance their own private R & D divisions, instead of just capturing the output of taxpayer-financed researchers.