5 ms·

So $200/pill for something that costs them $0.25 to make. That's still obscene.

thrance 1y ago
Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites.
- tptacek 1y ago
  Are you thinking this through? It costs billions of dollars to bring a new drug to market --- before sales, admin, and marketing costs --- and most attempts to bring drugs to market fail. In the very best case for the public, the drugs are incredibly cheap to manufacture; that's an achievement for a pharma company. Do you see how the incentives work here?
  - thrance 1y ago
    Are you arguing this can't be achieved by the public sector too? Or that pharma companies don't make obscene margins?
    - tptacek 1y ago
      I'm arguing that the logic in the comment I responded to is dubious, for the reasons I gave.
      - thrance 1y ago
        You just gestured vaguely about it being expensive and "incentives". I would like to know why you believe the private sector is uniquely equipped to "bring drugs to the market" and why you think having middlemen is more efficient than not having them.
        tptacek 1y ago
        No, I simply pointed out that it costs billions to bring a drug to market --- before marketing --- and that you can't plausibly recoup those expenses for a cost-plus priced product. Do you have a response to that? I'm not interested in expanding the argument.
        thrance 1y ago
        I don't think we need to recoup those expenses. Fund R&D with public money, once a drug is developed and tested it becomes a common good and should pay for itself with the gain of productivity obtained from a healthier population.
        tptacek 1y ago
        Again: I'm really not interested in litigating how drug production would function under an entirely different economic system, only in pointing out an issue with the logic you used in critiquing this system.
        thrance 1y ago
        It's becoming increasingly difficult to understand what you're even arguing about. My original comment was: > Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites. If a company sells a pill for $100 that cost them $2 to manufacture, that's a 5000% markup. Indeed, they would need to recoup R&D expenditures, but I am arguing for a system where we don't need to, because R&D is paid for by the state, and we don't need to turn a profit once the product has been developed. Where's the logic flaw?
        tptacek 1y ago
        No, it's obviously not a "5000%" markup, because the pharma company doesn't just pay its COGS.
    - agumonkey 1y ago
      Honest question, are there simulations about thirty of medicine if pharma margins were near zero ?
  - A_D_E_P_T 1y ago
    > It costs billions of dollars to bring a new drug to market Have you ever wondered why this is the case? In the "Golden Age" of pharmaceutical development -- from roughly 1930 through 1962 -- it cost orders of magnitude less, adjusted for inflation, was much faster, and outcomes were no worse. I'd argue that the new (post-1962) Phases II and III -- drug efficacy studies -- are wholly unnecessary and are indeed unethical. First, because you can't even presume to gauge a drug's "efficacy" without huge and exorbitantly expensive trials -- and, even then, trials can be inconclusive. Second, because the FDA selectively ignores efficacy data. See, e.g,. flibanserin and certain Alzheimer's drugs that have been approved recently. This was scandalous, but not nearly scandalous enough. Third, the statistically sound way to find both rare harms and true-to-life benefits is to watch how a drug behaves in millions of real patients, not in a few thousand volunteers. Modern electronic-health-record feeds, claims databases, and wearable data streams let regulators run near-real-time Bayesian safety signals across populations that dwarf any Phase III cohort; the surveillance network that caught rofecoxib’s cardiovascular signal in 2004 had orders-of-magnitude more patient exposure than the approving trials, and today’s infrastructure is far denser. It would literally be 10x faster, 100x cheaper, and 100x easier to grant conditional approval after Phase I and then run postmarketing surveillance. You'd better signal-to-noise on both efficacy and harm at a small fraction of the cost and time. It's downright perverse to outlaw early access to promising investigational drugs, forcing patients to wait 8-12 years, and then foot them with a multibillion-dollar bill for ritualized trials that are unnecessary -- for the same ends could have been attained in far better ways.
    - firejake308 1y ago
      You have an interesting argument here. It sounds like you're saying that once you've proven safety in Phase I trials, and you can skip to the large, post-market Phase IV studies to do the dose-finding and efficacy-proving that would traditionally be done in smaller Phase II and III trials. As long as the drug is not dangerous, which can be proven by the Phase I trial, there is no need for the masses to wait for slow Phase II/III trials because in the worst-case scenario, the drug is safe but not effective, which is an acceptable outcome. So far, I find this pretty convincing. However, I would raise two objections. 1. Without a Phase III trial that proves effectiveness, payers do not have sufficient motivation to purchase a drug that may or may not work. One solution would be to have the producer of the drug offer the drug for free/cheap until it demonstrates effectiveness, but that becomes a lot more expensive when you have a larger cohort. This is admittedly an implementation detail that could be sorted out, but it's a very important detail that would have to be addressed for this plan to work in the real world. The bigger problem is: 2. The best way to prove that a drug works is a large, randomized controlled trial. Your proposal is definitely an improvement over current trials in terms of making them larger, which would help to improve statistical power (and also get potentially helpful drugs into the hands of patients, of course). However, without the "ritual" of a Phase III trial, you lose randomization and you lose the placebo control. These are big losses that make statistical interpretation of results very hard because they open up the door to many potential confounders. As you mentioned, Bayesian signals can try to control for some of these confounders, but you can never be confident that you've considered every possible variable, whereas randomized placebos can eliminate almost all confounders. So ultimately, I think that Phase III effectiveness trials are necessary in order to prove effectiveness because the statistics with post-market Phase IV trials will never be as "clean" as an RCT. And if we were to delete Phase III trials and skip straight to Phase IV, we would never again be able to confidently say whether or not a drug works. Thus, the ethical cost of making patients wait a few years for the Phase III trials to finish is outweighed by the benefit of being able to say with confidence that the drug works for the rest of eternity.
Lalo-ATX 1y ago
the way I'd look at is what's the return-on-capital for pharmaceuticals as a whole. Generally I think (this is highly subjective and irrational, of course) that I'd be comfortable with a 10%-20% return-on-capital overall. Lower than that and I'd think that risky drugs couldn't get funding; higher and I'd think there's too much rent-seeking. Perhaps some economists have studied what an optimal ROC might be for pharmaceuticals. In any case, the gross margin per-pill doesn't really tell you anything about ROC. 99.875% is astounding, but what was invested to get to that point - including the drugs that never made it to market?
- firejake308 1y ago
  > Celgene said it spent $800 million to develop Revlimid and spent several hundred million more on additional trials to study the use of the drug in other cancers. Those combined figures represent about 2% to 3% of Revlimid sales through 2018. These guys are making 300% ROI in annual revenue from their one-time investment into R&D. In order for that to be fair (in line with your 20% average ROI target), they would need to be testing 15 new drugs per year, and if all of the others had failed, then it would be fair to markup the one that succeeded by this amount. But according to the Wikipedia page, the company has investigated less than 10 drugs in their entire existence, much less 15 drugs per year.

Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites.

tptacek 1y ago
Are you thinking this through? It costs billions of dollars to bring a new drug to market --- before sales, admin, and marketing costs --- and most attempts to bring drugs to market fail. In the very best case for the public, the drugs are incredibly cheap to manufacture; that's an achievement for a pharma company. Do you see how the incentives work here?
- thrance 1y ago
  Are you arguing this can't be achieved by the public sector too? Or that pharma companies don't make obscene margins?
  - tptacek 1y ago
    I'm arguing that the logic in the comment I responded to is dubious, for the reasons I gave.
    - thrance 1y ago
      You just gestured vaguely about it being expensive and "incentives". I would like to know why you believe the private sector is uniquely equipped to "bring drugs to the market" and why you think having middlemen is more efficient than not having them.
      - tptacek 1y ago
        No, I simply pointed out that it costs billions to bring a drug to market --- before marketing --- and that you can't plausibly recoup those expenses for a cost-plus priced product. Do you have a response to that? I'm not interested in expanding the argument.
        thrance 1y ago
        I don't think we need to recoup those expenses. Fund R&D with public money, once a drug is developed and tested it becomes a common good and should pay for itself with the gain of productivity obtained from a healthier population.
        tptacek 1y ago
        Again: I'm really not interested in litigating how drug production would function under an entirely different economic system, only in pointing out an issue with the logic you used in critiquing this system.
        thrance 1y ago
        It's becoming increasingly difficult to understand what you're even arguing about. My original comment was: > Which is why there should be no patents in healthcare. Most research is already publicly-funded, production and distribution should be too. We could drown in cheap medicine, instead we artificially increase the prices by 5000% to fatten the pockets of already super-wealthy parasites. If a company sells a pill for $100 that cost them $2 to manufacture, that's a 5000% markup. Indeed, they would need to recoup R&D expenditures, but I am arguing for a system where we don't need to, because R&D is paid for by the state, and we don't need to turn a profit once the product has been developed. Where's the logic flaw?
        tptacek 1y ago
        No, it's obviously not a "5000%" markup, because the pharma company doesn't just pay its COGS.
  - agumonkey 1y ago
    Honest question, are there simulations about thirty of medicine if pharma margins were near zero ?
- A_D_E_P_T 1y ago
  > It costs billions of dollars to bring a new drug to market Have you ever wondered why this is the case? In the "Golden Age" of pharmaceutical development -- from roughly 1930 through 1962 -- it cost orders of magnitude less, adjusted for inflation, was much faster, and outcomes were no worse. I'd argue that the new (post-1962) Phases II and III -- drug efficacy studies -- are wholly unnecessary and are indeed unethical. First, because you can't even presume to gauge a drug's "efficacy" without huge and exorbitantly expensive trials -- and, even then, trials can be inconclusive. Second, because the FDA selectively ignores efficacy data. See, e.g,. flibanserin and certain Alzheimer's drugs that have been approved recently. This was scandalous, but not nearly scandalous enough. Third, the statistically sound way to find both rare harms and true-to-life benefits is to watch how a drug behaves in millions of real patients, not in a few thousand volunteers. Modern electronic-health-record feeds, claims databases, and wearable data streams let regulators run near-real-time Bayesian safety signals across populations that dwarf any Phase III cohort; the surveillance network that caught rofecoxib’s cardiovascular signal in 2004 had orders-of-magnitude more patient exposure than the approving trials, and today’s infrastructure is far denser. It would literally be 10x faster, 100x cheaper, and 100x easier to grant conditional approval after Phase I and then run postmarketing surveillance. You'd better signal-to-noise on both efficacy and harm at a small fraction of the cost and time. It's downright perverse to outlaw early access to promising investigational drugs, forcing patients to wait 8-12 years, and then foot them with a multibillion-dollar bill for ritualized trials that are unnecessary -- for the same ends could have been attained in far better ways.
  - firejake308 1y ago
    You have an interesting argument here. It sounds like you're saying that once you've proven safety in Phase I trials, and you can skip to the large, post-market Phase IV studies to do the dose-finding and efficacy-proving that would traditionally be done in smaller Phase II and III trials. As long as the drug is not dangerous, which can be proven by the Phase I trial, there is no need for the masses to wait for slow Phase II/III trials because in the worst-case scenario, the drug is safe but not effective, which is an acceptable outcome. So far, I find this pretty convincing. However, I would raise two objections. 1. Without a Phase III trial that proves effectiveness, payers do not have sufficient motivation to purchase a drug that may or may not work. One solution would be to have the producer of the drug offer the drug for free/cheap until it demonstrates effectiveness, but that becomes a lot more expensive when you have a larger cohort. This is admittedly an implementation detail that could be sorted out, but it's a very important detail that would have to be addressed for this plan to work in the real world. The bigger problem is: 2. The best way to prove that a drug works is a large, randomized controlled trial. Your proposal is definitely an improvement over current trials in terms of making them larger, which would help to improve statistical power (and also get potentially helpful drugs into the hands of patients, of course). However, without the "ritual" of a Phase III trial, you lose randomization and you lose the placebo control. These are big losses that make statistical interpretation of results very hard because they open up the door to many potential confounders. As you mentioned, Bayesian signals can try to control for some of these confounders, but you can never be confident that you've considered every possible variable, whereas randomized placebos can eliminate almost all confounders. So ultimately, I think that Phase III effectiveness trials are necessary in order to prove effectiveness because the statistics with post-market Phase IV trials will never be as "clean" as an RCT. And if we were to delete Phase III trials and skip straight to Phase IV, we would never again be able to confidently say whether or not a drug works. Thus, the ethical cost of making patients wait a few years for the Phase III trials to finish is outweighed by the benefit of being able to say with confidence that the drug works for the rest of eternity.

Lalo-ATX 1y ago

the way I'd look at is what's the return-on-capital for pharmaceuticals as a whole. Generally I think (this is highly subjective and irrational, of course) that I'd be comfortable with a 10%-20% return-on-capital overall. Lower than that and I'd think that risky drugs couldn't get funding; higher and I'd think there's too much rent-seeking. Perhaps some economists have studied what an optimal ROC might be for pharmaceuticals. In any case, the gross margin per-pill doesn't really tell you anything about ROC. 99.875% is astounding, but what was invested to get to that point - including the drugs that never made it to market?

firejake308 1y ago
> Celgene said it spent $800 million to develop Revlimid and spent several hundred million more on additional trials to study the use of the drug in other cancers. Those combined figures represent about 2% to 3% of Revlimid sales through 2018. These guys are making 300% ROI in annual revenue from their one-time investment into R&D. In order for that to be fair (in line with your 20% average ROI target), they would need to be testing 15 new drugs per year, and if all of the others had failed, then it would be fair to markup the one that succeeded by this amount. But according to the Wikipedia page, the company has investigated less than 10 drugs in their entire existence, much less 15 drugs per year.