4 ms·

"India has a legal and thriving generic drug market that was built up initially via a ban on pharma patents in India (which, as an aside, shows again that a ban

by streety 17y ago

"India has a legal and thriving generic drug market that was built up initially via a ban on pharma patents in India (which, as an aside, shows again that a ban on patents can actually help create a thriving industry)." Personally I would be looking for evidence of a thriving industry in novel therapeutics, rather than generics, before considering everything hunky dory after a ban.

jacquesm 17y ago
Generics are a way of showing that the price of something is not related to its actual cost. Big Pharma uses their 'research costs money' argument to counter this, but they forget - conveniently - to mention that they spend a very large multiple of their expenses on research for the marketing department. They abuse the patent system left, right and center in order to extend the income from so called 'blockbuster' drugs at the expense of doing something innovative for a smaller group of people. Generics wouldn't stand a chance if it weren't for the price gouging going on.
- streety 17y ago
  I'm not saying the current system in US/Europe is efficient or even acceptable but it is a model that has produced novel therapeutics in the past. I think we can agree that the price is too high but hopefully we can also agree that benefits have been gained from those novel therapeutics. I got the impression that the article was generally anti-patents and I framed my response in that context. A ban on patents has been beneficial for the generics industry but if it has a higher cost in terms of stifling novel therapeutics, which also have a benefit, then it may be an overall loss for the population as a whole. In this way there is little difference between a ban on patents being good for the generics industry and strong copyright laws being good for the record industry. Both may be true but the interests of the population may not be aligned perfectly with these industries. On the other hand if research into novel therapeutics is able to thrive with a ban on patents then you get the benefits of new therapies and the affordable prices. This is what I would like to see before dismissing the patent system entirely when what may be best is a little tweaking. Finally on marketing versus R&D I'm not sure that the multiple could genuinely said to be 'very large.' This article suggests marketing:R&D is 2:1. http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050001 http://www.plosmedicine.org/article/info:doi/10.1371/journal...
  - jacquesm 17y ago
    Off label promotion, ghost writing and so called 'promotional' meetings were not included in that study. That may seem like a little bit until you realize that there are roughly 500,000 such meetings annually (2008). The spendings in that article account for only (roughly) 40% of total expenditure.
    - streety 17y ago
      Okay, google is failing to work its magic for me today. Would you be able to point me to a more inclusive estimate of the marketing to R&D spend?
      - jacquesm 17y ago
        give me a bit... ok, here is a link: http://www.allbusiness.com/company-activities-management/financial-performance/6356979-1.html http://www.allbusiness.com/company-activities-management/fin... From the same book quoted above, in 1990 it was roughly 1:3.2, since then the situation has improved a bit, but I can't find anything closer than 2004. Still, it is quite shocking when you realize that most of the marketing goes towards pushing a few, well established drugs at immense markups, and that most research is focused on either extending the life of these drugs or the introduction of replacement drugs for drugs that are on their last legs in the patent cycle. Genuine research (research which attacks problems for which no current solution exists) is a very very small fraction of total expenditure. more interesting data here: (not sure if that link works...) http://books.google.com/books?id=hJpI3Ki7MhUC&pg=PA77&lpg=PA77&dq=legal+expenditure+vs+r%26d+in+the+pharmaceutical+industry&source=bl&ots=nPEr9ejXgw&sig=qJMAguuWrr3r6eQX92rr5Fc_nS0&hl=en&ei=vLeCSuj0KoHc-Qbq3JCxCg&sa=X&oi=book_result&ct=result&resnum=3#v=onepage&q=&f=false http://books.google.com/books?id=hJpI3Ki7MhUC&pg=PA77&#3...
- yummyfajitas 17y ago
  A very large multiple? Not more than 3, and often much less. http://www.google.com/finance?q=NYSE:MRK&fstype=ii http://www.google.com/finance?q=NYSE:MRK&fstype=ii http://www.google.com/finance?q=NYSE:JNJ&fstype=ii http://www.google.com/finance?q=NYSE:JNJ&fstype=ii If you actually look at the numbers, you'll see that Big Pharma's operating expenses look much like Big Technology. http://www.google.com/finance?q=NASDAQ:INTC&fstype=ii http://www.google.com/finance?q=NASDAQ:INTC&fstype=ii http://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii http://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii Note: my 1-3 multiple is actually just the ratio of "Selling/General/Admin. Expenses, Total" / "Research & Development". It's a gratuitous overestimate, since marketing is only a fraction of "Selling/General/Admin. Expenses". That category also includes things like producing drugs, accounting, delivery, etc. But I'm too lazy to look up a more detailed balance sheet. [edit: I'm curious, why am I being downmodded? All I did was provide some facts.]
  - jacquesm 17y ago
    Very large sums of money are spent per physician (up to 65 K / annum) to promote 'new' drugs with little or no benefit over the 'old' drugs (other than the extended patents). Also there are large expenditures that are not directly in the marketing budget but that you would normally classify as marketing, these include seminars, promotional meetings with prescribers, lobbying activities and so on. enjoy the read: http://www.nybooks.com/articles/17244 http://www.nybooks.com/articles/17244
    - yummyfajitas 17y ago
      I wasn't looking at the marketing budget, but the "Selling/General/Admin. Expenses, Total" line item on the income sheet. All the items you describe (besides lobbying, which is an "Unusual expense") are included in my numbers, as I noted at the end of my post. Incidentally, I'm pretty sure your $65k/year is not typical. That would be the equivalent of having one salaried employee spending 100% of his time selling to a single doctor.
      - jacquesm 17y ago
- anamax 17y ago
  > Big Pharma uses their 'research costs money' argument to counter this, but they forget - conveniently - to mention that they spend a very large multiple of their expenses on research for the marketing department. You say that like it's a bad thing. That's dodgy at best - telling doctors what a drug does seems like a very good thing. Telling consumers that there's a drug that might help with a problem that they have seems like a good thing. (They may not be talking to a doctor about it.) However, let's go with "it just increases the numbers of people using it". If you're someone who needs that drug, increasing the number of people means that other people are helping to pay for the fixed costs. Since the "good" fixed costs are rather high, that's a good thing for you. > They abuse the patent system left, right and center in order to extend the income from so called 'blockbuster' drugs at the expense of doing something innovative for a smaller group of people. (1) There's no such connection. (2) What's stopping you from producing said "innovation"? A lot of people are quite fond of criticising other people for not doing some "easy" good, yet the critics don't bother to provide said good. This is interesting, because the domain is almost always one where "good" comes with fairly large financial rewards. If the critics are correct, they're not doing an easy good that would both provide them with considerable money (which they could use to do more good) and drive bad people out of biz.

by streety 17y ago

jacquesm 17y ago

Generics are a way of showing that the price of something is not related to its actual cost. Big Pharma uses their 'research costs money' argument to counter this, but they forget - conveniently - to mention that they spend a very large multiple of their expenses on research for the marketing department. They abuse the patent system left, right and center in order to extend the income from so called 'blockbuster' drugs at the expense of doing something innovative for a smaller group of people. Generics wouldn't stand a chance if it weren't for the price gouging going on.

streety 17y ago
I'm not saying the current system in US/Europe is efficient or even acceptable but it is a model that has produced novel therapeutics in the past. I think we can agree that the price is too high but hopefully we can also agree that benefits have been gained from those novel therapeutics. I got the impression that the article was generally anti-patents and I framed my response in that context. A ban on patents has been beneficial for the generics industry but if it has a higher cost in terms of stifling novel therapeutics, which also have a benefit, then it may be an overall loss for the population as a whole. In this way there is little difference between a ban on patents being good for the generics industry and strong copyright laws being good for the record industry. Both may be true but the interests of the population may not be aligned perfectly with these industries. On the other hand if research into novel therapeutics is able to thrive with a ban on patents then you get the benefits of new therapies and the affordable prices. This is what I would like to see before dismissing the patent system entirely when what may be best is a little tweaking. Finally on marketing versus R&D I'm not sure that the multiple could genuinely said to be 'very large.' This article suggests marketing:R&D is 2:1. http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050001 http://www.plosmedicine.org/article/info:doi/10.1371/journal...
- jacquesm 17y ago
  Off label promotion, ghost writing and so called 'promotional' meetings were not included in that study. That may seem like a little bit until you realize that there are roughly 500,000 such meetings annually (2008). The spendings in that article account for only (roughly) 40% of total expenditure.
  - streety 17y ago
    Okay, google is failing to work its magic for me today. Would you be able to point me to a more inclusive estimate of the marketing to R&D spend?
    - jacquesm 17y ago
      give me a bit... ok, here is a link: http://www.allbusiness.com/company-activities-management/financial-performance/6356979-1.html http://www.allbusiness.com/company-activities-management/fin... From the same book quoted above, in 1990 it was roughly 1:3.2, since then the situation has improved a bit, but I can't find anything closer than 2004. Still, it is quite shocking when you realize that most of the marketing goes towards pushing a few, well established drugs at immense markups, and that most research is focused on either extending the life of these drugs or the introduction of replacement drugs for drugs that are on their last legs in the patent cycle. Genuine research (research which attacks problems for which no current solution exists) is a very very small fraction of total expenditure. more interesting data here: (not sure if that link works...) http://books.google.com/books?id=hJpI3Ki7MhUC&pg=PA77&lpg=PA77&dq=legal+expenditure+vs+r%26d+in+the+pharmaceutical+industry&source=bl&ots=nPEr9ejXgw&sig=qJMAguuWrr3r6eQX92rr5Fc_nS0&hl=en&ei=vLeCSuj0KoHc-Qbq3JCxCg&sa=X&oi=book_result&ct=result&resnum=3#v=onepage&q=&f=false http://books.google.com/books?id=hJpI3Ki7MhUC&pg=PA77&#3...
yummyfajitas 17y ago
A very large multiple? Not more than 3, and often much less. http://www.google.com/finance?q=NYSE:MRK&fstype=ii http://www.google.com/finance?q=NYSE:MRK&fstype=ii http://www.google.com/finance?q=NYSE:JNJ&fstype=ii http://www.google.com/finance?q=NYSE:JNJ&fstype=ii If you actually look at the numbers, you'll see that Big Pharma's operating expenses look much like Big Technology. http://www.google.com/finance?q=NASDAQ:INTC&fstype=ii http://www.google.com/finance?q=NASDAQ:INTC&fstype=ii http://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii http://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii Note: my 1-3 multiple is actually just the ratio of "Selling/General/Admin. Expenses, Total" / "Research & Development". It's a gratuitous overestimate, since marketing is only a fraction of "Selling/General/Admin. Expenses". That category also includes things like producing drugs, accounting, delivery, etc. But I'm too lazy to look up a more detailed balance sheet. [edit: I'm curious, why am I being downmodded? All I did was provide some facts.]
- jacquesm 17y ago
  Very large sums of money are spent per physician (up to 65 K / annum) to promote 'new' drugs with little or no benefit over the 'old' drugs (other than the extended patents). Also there are large expenditures that are not directly in the marketing budget but that you would normally classify as marketing, these include seminars, promotional meetings with prescribers, lobbying activities and so on. enjoy the read: http://www.nybooks.com/articles/17244 http://www.nybooks.com/articles/17244
  - yummyfajitas 17y ago
    I wasn't looking at the marketing budget, but the "Selling/General/Admin. Expenses, Total" line item on the income sheet. All the items you describe (besides lobbying, which is an "Unusual expense") are included in my numbers, as I noted at the end of my post. Incidentally, I'm pretty sure your $65k/year is not typical. That would be the equivalent of having one salaried employee spending 100% of his time selling to a single doctor.
    - jacquesm 17y ago
anamax 17y ago
> Big Pharma uses their 'research costs money' argument to counter this, but they forget - conveniently - to mention that they spend a very large multiple of their expenses on research for the marketing department. You say that like it's a bad thing. That's dodgy at best - telling doctors what a drug does seems like a very good thing. Telling consumers that there's a drug that might help with a problem that they have seems like a good thing. (They may not be talking to a doctor about it.) However, let's go with "it just increases the numbers of people using it". If you're someone who needs that drug, increasing the number of people means that other people are helping to pay for the fixed costs. Since the "good" fixed costs are rather high, that's a good thing for you. > They abuse the patent system left, right and center in order to extend the income from so called 'blockbuster' drugs at the expense of doing something innovative for a smaller group of people. (1) There's no such connection. (2) What's stopping you from producing said "innovation"? A lot of people are quite fond of criticising other people for not doing some "easy" good, yet the critics don't bother to provide said good. This is interesting, because the domain is almost always one where "good" comes with fairly large financial rewards. If the critics are correct, they're not doing an easy good that would both provide them with considerable money (which they could use to do more good) and drive bad people out of biz.