6 ms·

To all those pulling out pitchforks and torches, how do they think these drugs get discovered and more importantly, proved safe and efficacious for a given huma

by shiven 12y ago

To all those pulling out pitchforks and torches, how do they think these drugs get discovered and more importantly, proved safe and efficacious for a given human disease? Do they have any idea how much it actually costs? Sure, the Shylocks in "management" are greedy for their pound of flesh (and which industry does not have those?), but there is a genuine cost to finding these chemical/biologic agents. The days of Alexander Fleming and Jonas Salk are long gone. Just as the days of one-off genius chemists/physicists/mathematicians/explorers now exist only in history books. Original research & discovery, that is not of mere academic interest, that yields actual usable products, that people can put inside their bodies, is a non-trivial investment of manpower and resources that carries excruciating risk. This ain't some app you can write in your jammies, that can be MVPd by Tuesday and pitched to VCs over next Sunday's brunch. As to the public funding of such endeavors, that is a subject for another post(s), requiring a larger keyboard than the one on my smartphone :P

harshreality 12y ago
Have you looked at the pricing structure offered under insurance, vs the pricing structure offered for the uninsured? Guess who's paying the $1000/pill? Guess who's not? If they needed to charge everyone on the order of $1000/pill to recoup expenses, that would be one thing. That's not the issue, since they are offering it to most people (who do have insurance) at dramatically lower prices. I know HNers are in love with market segmentation, but isn't there an ethical problem with using price to segment a market for treatment for serious medical problems based on who has insurance and who doesn't? It's been a while since the first thread on this, but I'll just quote from the sovaldi website: We believe that cost should not be a barrier to receiving treatment. That’s why the makers of SOVALDI offer a co-pay coupon. If you are eligible, you may pay no more than $5 per co-pay. The SOVALDI co-pay coupon program will cover the out-of-pocket costs of your SOVALDI prescriptions after you pay the first $5 per prescription fill, up to a maximum of 20% of the catalog price of a 12-week regimen of SOVALDI. The coupon can be applied to up to 6 fills So, if your health insurance pharmacy coverage were 80/20, instead of paying your end (20%) out of pocket, you'd pay $5 per fill. So you're paying very close to $0 per pill, instead of $1000. Well, ignoring your deductable, which might be significant, but the obamacare max is $6350, so that's an order of magnitude cost decrease for the Sovaldi prescription even if you have no other out of pocket healthcare costs that year. The only remaining, meaningful question is: how much are insurance companies paying Gilead per pill?
- 2bthrowaway 12y ago
  My insurance was gutted and my deductible went from 200 to 2000 a month during treatment of this. I was accepted into the 5$ program. I told them I couldn't afford it. Getting approved took 10 minutes. One other thing to note is this drug doesn't work alone. You have to take it with Ribasphere, which can also be costly.
- UnoriginalGuy 12y ago
  I've said it before and I'll say it again, one of the opportunities "Obamacare" missed out on was capping the level of discount insurance companies can get relative to the uninsured (both from hospitals but also from drug companies). Right now the typical discount falls between 50% and 90% depending on the treatment and agreements made. If "Obamacare" had capped insurance discounting to something like 35-40% (which is still perfectly reasonable) we would have seen uninsured patient's costs drop between 10% and 60%. As it stands Hospitals and drug companies know that insurance will negotiate a discount so they just increase the cost to compensate. Instead of something costing 3K with a 0% discount, it is 4.8K with a 60% "discount." If discounting were scrapped altogether it would be a huge "win" for almost everyone (e.g. reduced management overhead at hospitals, uninsured patients, et al). The only party who wins by the current discounting culture is the insurance companies as it acts as a giant "lock in." Even if you're wealthy and can afford your own treatment insurance still makes sense as you'll get a huge discount not otherwise available.
  - Gustomaximus 12y ago
    To take it further, would it be so bad to have a rule that hospitals have stick to their own openly set rate cards (no discounts or rebates etc)? This way the playing field is significantly leveled for people and companies. Hospitals can openly compete with each other but not in behind the scene deals.
takeda 12y ago
Note that it is $1,000 / pill. The problem is that to cure the disease the cost really is $84,000 / person. That's almost two years of median salary for average family before taxes.
- throwketchup 12y ago
  Yea, and the previous treatment (which only managed the disease, not cured it) was around $300k per person over their expected lifetime.
zurn 12y ago
> Original research & discovery, that is not of mere academic interest [...] Lots of major therapies are discovered on the publicly funded research side. Don't conflate that sector of research with "mere academic interest", scientists on the public side are frequently even more motivated to find practical therapies.
- shiven 12y ago
  Don't conflate that sector of research with "mere academic interest", scientists on the public side are frequently even more motivated to find practical therapies. If motivation alone were enough for scientists, most diseases would already be cured! Now, how do I know that? Because, I'm one. Currently, my post-doctoral research is focused on structure guided drug design against HIV and Cancer targets, working closely with industrial groups. Other researchers in the group work on Hepatitis C targets, so I'm familiar with challenges. In the past, I worked at a drug discovery start-up on metabolic disease targets. With over a decade in the field, I guess I might know what I'm talking about :-) But hey! I'm open to new ideas for improvement. I'll be happy to write more if HNers are interested.
  - zurn 12y ago
    Very cool. I think the patents and funding related problems are largely public policy / IPR legislation related. There are some interesting proposals out there about how to fix the loss of utility caused by the current model. For example, public side could buy patents outright and make them free-to-use.

by shiven 12y ago

harshreality 12y ago

Have you looked at the pricing structure offered under insurance, vs the pricing structure offered for the uninsured? Guess who's paying the $1000/pill? Guess who's not? If they needed to charge everyone on the order of $1000/pill to recoup expenses, that would be one thing. That's not the issue, since they are offering it to most people (who do have insurance) at dramatically lower prices. I know HNers are in love with market segmentation, but isn't there an ethical problem with using price to segment a market for treatment for serious medical problems based on who has insurance and who doesn't? It's been a while since the first thread on this, but I'll just quote from the sovaldi website: We believe that cost should not be a barrier to receiving treatment. That’s why the makers of SOVALDI offer a co-pay coupon. If you are eligible, you may pay no more than $5 per co-pay. The SOVALDI co-pay coupon program will cover the out-of-pocket costs of your SOVALDI prescriptions after you pay the first $5 per prescription fill, up to a maximum of 20% of the catalog price of a 12-week regimen of SOVALDI. The coupon can be applied to up to 6 fills So, if your health insurance pharmacy coverage were 80/20, instead of paying your end (20%) out of pocket, you'd pay $5 per fill. So you're paying very close to $0 per pill, instead of $1000. Well, ignoring your deductable, which might be significant, but the obamacare max is $6350, so that's an order of magnitude cost decrease for the Sovaldi prescription even if you have no other out of pocket healthcare costs that year. The only remaining, meaningful question is: how much are insurance companies paying Gilead per pill?

2bthrowaway 12y ago
My insurance was gutted and my deductible went from 200 to 2000 a month during treatment of this. I was accepted into the 5$ program. I told them I couldn't afford it. Getting approved took 10 minutes. One other thing to note is this drug doesn't work alone. You have to take it with Ribasphere, which can also be costly.
UnoriginalGuy 12y ago
I've said it before and I'll say it again, one of the opportunities "Obamacare" missed out on was capping the level of discount insurance companies can get relative to the uninsured (both from hospitals but also from drug companies). Right now the typical discount falls between 50% and 90% depending on the treatment and agreements made. If "Obamacare" had capped insurance discounting to something like 35-40% (which is still perfectly reasonable) we would have seen uninsured patient's costs drop between 10% and 60%. As it stands Hospitals and drug companies know that insurance will negotiate a discount so they just increase the cost to compensate. Instead of something costing 3K with a 0% discount, it is 4.8K with a 60% "discount." If discounting were scrapped altogether it would be a huge "win" for almost everyone (e.g. reduced management overhead at hospitals, uninsured patients, et al). The only party who wins by the current discounting culture is the insurance companies as it acts as a giant "lock in." Even if you're wealthy and can afford your own treatment insurance still makes sense as you'll get a huge discount not otherwise available.
- Gustomaximus 12y ago
  To take it further, would it be so bad to have a rule that hospitals have stick to their own openly set rate cards (no discounts or rebates etc)? This way the playing field is significantly leveled for people and companies. Hospitals can openly compete with each other but not in behind the scene deals.

takeda 12y ago

Note that it is $1,000 / pill. The problem is that to cure the disease the cost really is $84,000 / person. That's almost two years of median salary for average family before taxes.

throwketchup 12y ago
Yea, and the previous treatment (which only managed the disease, not cured it) was around $300k per person over their expected lifetime.

zurn 12y ago

> Original research & discovery, that is not of mere academic interest [...] Lots of major therapies are discovered on the publicly funded research side. Don't conflate that sector of research with "mere academic interest", scientists on the public side are frequently even more motivated to find practical therapies.

shiven 12y ago
Don't conflate that sector of research with "mere academic interest", scientists on the public side are frequently even more motivated to find practical therapies. If motivation alone were enough for scientists, most diseases would already be cured! Now, how do I know that? Because, I'm one. Currently, my post-doctoral research is focused on structure guided drug design against HIV and Cancer targets, working closely with industrial groups. Other researchers in the group work on Hepatitis C targets, so I'm familiar with challenges. In the past, I worked at a drug discovery start-up on metabolic disease targets. With over a decade in the field, I guess I might know what I'm talking about :-) But hey! I'm open to new ideas for improvement. I'll be happy to write more if HNers are interested.
- zurn 12y ago
  Very cool. I think the patents and funding related problems are largely public policy / IPR legislation related. There are some interesting proposals out there about how to fix the loss of utility caused by the current model. For example, public side could buy patents outright and make them free-to-use.