9 ms·

Please give us all your money

20 points by baha_man 17y ago

Estragon 17y ago
There has to be a business model for passing these savings on to US consumers. It's much like the dilemma big publishers are facing: If you sell through the internet from a country like India, shipping the drugs in anonymous packages, how is US law enforcement going to stop you without substantially infringing on other people's liberty?
- mhb 17y ago
  The "savings" are the difference between the cost of manufacturing drugs (negligible) versus amortizing the development and approval cost (enormous). Very smart people are already spending a lot of money and effort to reduce drug development cost. Reform the FDA to reduce approval cost. Mandate lower drug prices in some other way and say goodbye to future new drugs.
  - ZeroGravitas 17y ago
    "Mandate lower drug prices in some other way and say goodbye to future new drugs." Or find new, different, better ways to promote and reward invention and say hello to lots more future drugs. Patents are broken, even if you agree with them in principle. See software patents for an area where they are broken beyond repair. Medical patents distort the market a great deal. See the comments on the original article for various dubious schemes that only make sense under the current patent regime.
patio11 17y ago
I can think of no better way to convince drug companies to stop making treatments for the world's poor, and start pouring even more of their research into lifestyle drugs for the world's rich (cholesterol medication, anti-depressants, anti-allergy medications, Viagra, etc etc), then stealing their stuff and calling them mass murderers for having the gall to make it. See: malaria. The existing, cheap, mostly efficacious, patent-unencumbered drugs face permanent lack of supply. Last time I checked exactly one company bothers to make them -- there just isn't any money in it. [Edit: A quick Google suggests my memory is failing me.] Drug-resistant malaria is on the rise, and the drug companies pretty much won't touch malaria drugs with a 30 foot pole. If they make something that works, it will be promptly stolen under the color of law. Or they could pump a few hundred million into another promising drug which will be overprescribed to rich Americans, and make billions. Hmm. Decisions, decisions.
- mcantelon 17y ago
  The drugs that were pirated weren't made for poor countries in the first place. They were made for rich countries and the drug companies in question get compensated for their research by their sales in these rich countries. I don't think drug companies are going to stop researching drugs that will make them money in rich countries.
DanielBMarkham 17y ago
Patents are a trade-off. In return for exclusively selling something for ten years, I spend a lot of time and money inventing something lots of people want to pay for. Seems to me like a fair deal -- if the time limit is truly ten years, if the people who are the market are the same people who will benefit at the end of the period, and if patents are not overly-broad. That's a lot of ifs, but it works in the U.S. The problem is that the market in the U.S. is nowhere indicative of the market in the third world, yet the drug companies want the same trade-off to apply everywhere. To this author's point, that doesn't seem to work so well. Having said that, the answer isn't so easy either. Once you start using government force (or ignoring compliance) to appropriate other people's IP, the incentive goes away. Of course you can argue that there are other incentives: altruism, government mandates, public-funded research. But all of those things haven't proven to be very effective, no matter how much hand-waving or yelling the supporters do. This is not an easy problem.
alan-crowe 17y ago
The missing bit of this story is that governments have two ways to promote the development of new drugs and can run both in parallel. First is by passing patent laws. The attractive property here is that the government is not paying out on research that fails. Private business does that and has to suck up the losses. The other side of this coin is the big "windfall" from monopoly profits when the research succeeds. What seems like a shrewd incentive scheme ex ante, seems immoral ex post. The second way is by funding research in national laboratories out of general taxation. The problem is that the government keeps paying for research that fails, and since success is rare the process is hard to manage. At what point does the government admit that a research institution has lost its focus and should be closed? This second way raises awkward questions. Having worked in government funded research myself I'm painfully aware of how easy it is to persuade one-self of the merits of long term research over short term research to the extent that one wanders off into the wilderness and never achieves anything. The profit motive is one way of countering this tendency. Are there other ways? They need to work better than the profit motive, but that is setting the bar pretty low. I think Ben Goldacre could better spend his time talking about the psychology of being a researcher. The second route is seen by many as a money-pit, but there is much new thinking on Public Choice Theory and Mechanism Design. Are we not ripe for some new and better ways of running publicly funded research? If we never get round to thinking about these issues, then the mocking title of "Please give us all your money" also works well as an attack on publicly funded science.
- DanielBMarkham 17y ago
  One of the things we find in startups is that people consistently confuse ideas with executing the ideas to make real change. An idea is that drug X does well in vitro under certain conditions. Real change is a development, certification, marketing, sales, and accounting system that lets drug X actually help people. Ideas are cheap. Execution is tough. I might have a drug that cures cancer, but if I can't prove it, if I can't get funding, if I can't get certification, if I can make the drug, warehouse it, distribute it, etc -- it's just an idea. This is why the argument does not work against general science. General science is all about ideas -- that's all there is. Making drugs is about delivering solutions to people. They're two different things.
frig 17y ago
The moral calculus here is so obvious you have to have your head screwed-on sideways not to see it. Let's reduce it to the level of individual decisions. I have a terminal disease. "Pharma Joe" invented a recipe for substance S that will cure my disease; there's no known cure for my disease at this time other than substance S. My options are: (i) try to negotiate with Joe to get his permission to make a batch of substance S, thereby continuing to live (ii) use publicly-available information to make a batch of substance S, thereby continuing to live (iii) not acquiring substance S, thereby resigning myself to die soon Joe would prefer that I choose (i) or (iii); I prefer options (i) or (ii). When we can arrive at an agreeable (i) there's not much to talk about; things are only interesting when Joe wants me to pick option (iii) and I want option (ii). What is Joe's argument for why I ought to pick (iii) instead of (i)? It amounts to: - sure, you could save your own life by making a batch of S - but if you do that then I won't keep inventing substances like S, and thus in the future some other person will have a disease for which there is no cure, b/c Joe's retargeted his research to penis pills - so the right thing to do is to go off in a corner and die (and quietly, please), so that someone else in the future might live It's not surprising that this is spectacularly unconvincing on two levels: - Joe's asking someone to choose to die so someone else might benefit at some point in the future; aside the usual aversion to Christ-like self-sacrifice on the part of individuals, it's more than a little cheeky of Joe to insist on my making such an extreme sacrifice for the greater good when Joe himself is unwilling to make a lesser sacrifice (reduced profits) for the greater good (we know he's unwilling to do this b/c we were unable to arrive at a mutually-satisfactory arrangement in (i), like selling at prices the about-to-be deceased can afford) - it's also unconvincing because the real "future proposition" isn't "I die but Joe invents substance T that cures some other disease saving other people's lives"; it's "Joe invents substance T that could cure some other disease but then some other schmuck is going to be in the same position of being unable to afford it and having this same conversation; my death just kicks the can down the road" ...and thus most international agreements that allow Joe color of law to enforce (iii) for "the greater good (of Joe)" have been agreed to as riders on larger treaties and whatnot, making it unsurprising that impoverished countries with disease epidemics try to wiggle around such terms as much as possible. It's of course absolutely the case that widespread choice of (ii) does disincentivize further research on drugs targeting problems (ii)-choosing populations opt for; it's not like the people making these decisions don't understand the consequences...they've weighed the pros and cons and decided that the best option (unsurprisingly) is to put their lives ahead of someone else's intellectual property and deal with the fallout as it comes. Even if you really think you'd put someone else's IP ahead of your life -- which I doubt you would, if it ever came to that -- it's not Joe's place to decide that I ought to die for the greater good.
antipaganda 17y ago
I'm shocked that none of you have seen the real problem here. It was right there at the end of the article - this is a small percentage of the market we're talking about here, 1% in Africa, similarly small numbers in the rest of the third world. What does that tell us? It tells us that the only reason big pharma even bothers to fight for their patent is because they are legally forced to do so; if some idiot in the US can make a case that they're not defending their market, they might have it taken away. They don't care about poor people healing themselves; they care about relatively rich people in the US buying generic drugs because they're cheaper, even though US society can afford to pay for it. Drug companies aren't monsters, they're corporations - machines for making money, pure and simple. They're just doing what's required of them. Change the patent laws - and the diplomatic pressures of the US State Department - to allow third-world companies to sell generic drugs to people in third-world countries, and not people in first-world countries, and bam! Problem solved.

20 points by baha_man 17y ago

There has to be a business model for passing these savings on to US consumers. It's much like the dilemma big publishers are facing: If you sell through the internet from a country like India, shipping the drugs in anonymous packages, how is US law enforcement going to stop you without substantially infringing on other people's liberty?

mhb 17y ago
The "savings" are the difference between the cost of manufacturing drugs (negligible) versus amortizing the development and approval cost (enormous). Very smart people are already spending a lot of money and effort to reduce drug development cost. Reform the FDA to reduce approval cost. Mandate lower drug prices in some other way and say goodbye to future new drugs.
- ZeroGravitas 17y ago
  "Mandate lower drug prices in some other way and say goodbye to future new drugs." Or find new, different, better ways to promote and reward invention and say hello to lots more future drugs. Patents are broken, even if you agree with them in principle. See software patents for an area where they are broken beyond repair. Medical patents distort the market a great deal. See the comments on the original article for various dubious schemes that only make sense under the current patent regime.

patio11 17y ago

I can think of no better way to convince drug companies to stop making treatments for the world's poor, and start pouring even more of their research into lifestyle drugs for the world's rich (cholesterol medication, anti-depressants, anti-allergy medications, Viagra, etc etc), then stealing their stuff and calling them mass murderers for having the gall to make it. See: malaria. The existing, cheap, mostly efficacious, patent-unencumbered drugs face permanent lack of supply. Last time I checked exactly one company bothers to make them -- there just isn't any money in it. [Edit: A quick Google suggests my memory is failing me.] Drug-resistant malaria is on the rise, and the drug companies pretty much won't touch malaria drugs with a 30 foot pole. If they make something that works, it will be promptly stolen under the color of law. Or they could pump a few hundred million into another promising drug which will be overprescribed to rich Americans, and make billions. Hmm. Decisions, decisions.

mcantelon 17y ago
The drugs that were pirated weren't made for poor countries in the first place. They were made for rich countries and the drug companies in question get compensated for their research by their sales in these rich countries. I don't think drug companies are going to stop researching drugs that will make them money in rich countries.

DanielBMarkham 17y ago

Patents are a trade-off. In return for exclusively selling something for ten years, I spend a lot of time and money inventing something lots of people want to pay for. Seems to me like a fair deal -- if the time limit is truly ten years, if the people who are the market are the same people who will benefit at the end of the period, and if patents are not overly-broad. That's a lot of ifs, but it works in the U.S. The problem is that the market in the U.S. is nowhere indicative of the market in the third world, yet the drug companies want the same trade-off to apply everywhere. To this author's point, that doesn't seem to work so well. Having said that, the answer isn't so easy either. Once you start using government force (or ignoring compliance) to appropriate other people's IP, the incentive goes away. Of course you can argue that there are other incentives: altruism, government mandates, public-funded research. But all of those things haven't proven to be very effective, no matter how much hand-waving or yelling the supporters do. This is not an easy problem.

alan-crowe 17y ago

The missing bit of this story is that governments have two ways to promote the development of new drugs and can run both in parallel. First is by passing patent laws. The attractive property here is that the government is not paying out on research that fails. Private business does that and has to suck up the losses. The other side of this coin is the big "windfall" from monopoly profits when the research succeeds. What seems like a shrewd incentive scheme ex ante, seems immoral ex post. The second way is by funding research in national laboratories out of general taxation. The problem is that the government keeps paying for research that fails, and since success is rare the process is hard to manage. At what point does the government admit that a research institution has lost its focus and should be closed? This second way raises awkward questions. Having worked in government funded research myself I'm painfully aware of how easy it is to persuade one-self of the merits of long term research over short term research to the extent that one wanders off into the wilderness and never achieves anything. The profit motive is one way of countering this tendency. Are there other ways? They need to work better than the profit motive, but that is setting the bar pretty low. I think Ben Goldacre could better spend his time talking about the psychology of being a researcher. The second route is seen by many as a money-pit, but there is much new thinking on Public Choice Theory and Mechanism Design. Are we not ripe for some new and better ways of running publicly funded research? If we never get round to thinking about these issues, then the mocking title of "Please give us all your money" also works well as an attack on publicly funded science.

DanielBMarkham 17y ago
One of the things we find in startups is that people consistently confuse ideas with executing the ideas to make real change. An idea is that drug X does well in vitro under certain conditions. Real change is a development, certification, marketing, sales, and accounting system that lets drug X actually help people. Ideas are cheap. Execution is tough. I might have a drug that cures cancer, but if I can't prove it, if I can't get funding, if I can't get certification, if I can make the drug, warehouse it, distribute it, etc -- it's just an idea. This is why the argument does not work against general science. General science is all about ideas -- that's all there is. Making drugs is about delivering solutions to people. They're two different things.

frig 17y ago

The moral calculus here is so obvious you have to have your head screwed-on sideways not to see it. Let's reduce it to the level of individual decisions. I have a terminal disease. "Pharma Joe" invented a recipe for substance S that will cure my disease; there's no known cure for my disease at this time other than substance S. My options are: (i) try to negotiate with Joe to get his permission to make a batch of substance S, thereby continuing to live (ii) use publicly-available information to make a batch of substance S, thereby continuing to live (iii) not acquiring substance S, thereby resigning myself to die soon Joe would prefer that I choose (i) or (iii); I prefer options (i) or (ii). When we can arrive at an agreeable (i) there's not much to talk about; things are only interesting when Joe wants me to pick option (iii) and I want option (ii). What is Joe's argument for why I ought to pick (iii) instead of (i)? It amounts to: - sure, you could save your own life by making a batch of S - but if you do that then I won't keep inventing substances like S, and thus in the future some other person will have a disease for which there is no cure, b/c Joe's retargeted his research to penis pills - so the right thing to do is to go off in a corner and die (and quietly, please), so that someone else in the future might live It's not surprising that this is spectacularly unconvincing on two levels: - Joe's asking someone to choose to die so someone else might benefit at some point in the future; aside the usual aversion to Christ-like self-sacrifice on the part of individuals, it's more than a little cheeky of Joe to insist on my making such an extreme sacrifice for the greater good when Joe himself is unwilling to make a lesser sacrifice (reduced profits) for the greater good (we know he's unwilling to do this b/c we were unable to arrive at a mutually-satisfactory arrangement in (i), like selling at prices the about-to-be deceased can afford) - it's also unconvincing because the real "future proposition" isn't "I die but Joe invents substance T that cures some other disease saving other people's lives"; it's "Joe invents substance T that could cure some other disease but then some other schmuck is going to be in the same position of being unable to afford it and having this same conversation; my death just kicks the can down the road" ...and thus most international agreements that allow Joe color of law to enforce (iii) for "the greater good (of Joe)" have been agreed to as riders on larger treaties and whatnot, making it unsurprising that impoverished countries with disease epidemics try to wiggle around such terms as much as possible. It's of course absolutely the case that widespread choice of (ii) does disincentivize further research on drugs targeting problems (ii)-choosing populations opt for; it's not like the people making these decisions don't understand the consequences...they've weighed the pros and cons and decided that the best option (unsurprisingly) is to put their lives ahead of someone else's intellectual property and deal with the fallout as it comes. Even if you really think you'd put someone else's IP ahead of your life -- which I doubt you would, if it ever came to that -- it's not Joe's place to decide that I ought to die for the greater good.

antipaganda 17y ago

I'm shocked that none of you have seen the real problem here. It was right there at the end of the article - this is a small percentage of the market we're talking about here, 1% in Africa, similarly small numbers in the rest of the third world. What does that tell us? It tells us that the only reason big pharma even bothers to fight for their patent is because they are legally forced to do so; if some idiot in the US can make a case that they're not defending their market, they might have it taken away. They don't care about poor people healing themselves; they care about relatively rich people in the US buying generic drugs because they're cheaper, even though US society can afford to pay for it. Drug companies aren't monsters, they're corporations - machines for making money, pure and simple. They're just doing what's required of them. Change the patent laws - and the diplomatic pressures of the US State Department - to allow third-world companies to sell generic drugs to people in third-world countries, and not people in first-world countries, and bam! Problem solved.