4 ms·

Is it only me that finds it depressing that modern journalism would try to stir a controversy around the drug's price instead of celebrating a new and better cu

by eliben 12y ago

Is it only me that finds it depressing that modern journalism would try to stir a controversy around the drug's price instead of celebrating a new and better cure for a disease that only had much worse, and no less expensive, cures in the past?

RodericDay 12y ago
If the comment section is to be believed, this was in large part funded by the government and a good example of "socialized costs, privatized profits". So, no? It seems perfectly apt.
- refurb 12y ago
  The comment section is not to be believed. The cost to develop Sovaldi was chiefly born by private investors. I don't know the details, but there may have been publicly funded research that helped discover the drug, but that is likely a fraction of the hundreds of millions of dollars it cost to develop. A good analogy would be to say that since the US gov't created the internet, Google shouldn't be charging much money at all for its services. EDIT: It appears that the discovery of sofosbuvir (Sovaldi) was done at a private company.[1] Of course it never would have been discovered without the work of NIH funded research, but it's unfair to say the cost of R&D was born by the public. [1]http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Antiviral_Drug/Sofosbuvir%20discovery%2010.pdf http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Anti...
- nemo 12y ago
  It's a little different than that. The first drug, Solvadi, was developed by the company Pharmasset. Pharmasset did get some government grants to develop Solvadi, though the cost to develop the drug was much higher than the amount of the grants. Gilead paid a massive amount to buy out Pharmasset with the plan of recouping the elevated buyout costs by charging a huge sum for Solvadi. They could have paid much less to buy out Pharmasset and charged far less for the drug, but chose profit over any other interest. Pharmasset had been planning to sell Sovaldi (and the new drug) for a tiny fraction of what Gilead is now charging. The new drug, Harvoni, is a refinement of Sovaldi Pharmasset was working on. While Gilead is already fairly close to recouping their buyout money, they are charging even more for Harvoni. The costs are being taken from the public in that many Hep. C patients are too poor to have insurance so Medicaid is giving a huge amount of cash to Gilead, though the initial research grants were only around $1 mil.
  - Scoundreller 12y ago
    I think the price of a drug is decoupled from the cost of developing/acquiring the rights to that drug. Whether a drug cost $1 or $1 billion to develop, the seller/marketer will try to charge whatever the market can bear to maximize revenue (which could still result in a loss). They aren't trying to recoup $1.1 or $1.1b respectively, they're going for the max in either case.
    - refurb 12y ago
      A good friend of mine works in pharmaceutical pricing and this is exactly how works. You price to what the market will bear. The "market" includes physicians, insurance companies, the gov't and patients.
  - refurb 12y ago
    While Gilead is already fairly close to recouping their buyout money, they are charging even more for Harvoni. What do you mean? They paid $11B for PharmAsset. Then they had to spend more money to get Sovaldi through phase 3 clinical trials, then they had to spend money to get ready to launch the drug, etc, etc. Right now they've made ~$10B on Sovaldi. That's gross, not net. Take out all the costs of those sales and it's like around 30-50%. So they've made $3-5B in profit, but spent $15B-$20B to get the drug to market. They aren't even close to breaking even yet.
    - nemo 12y ago
      Being something like 25-30% of the way there this soon seemed fairly close to me, given the rate of revenue.
- deleted 12y ago
  [deleted]
Scoundreller 12y ago
A better way of assessing a drug, or any health-care intervention really, is through methods such as cost per QALY (quality-adjusted life year). Some interventions are "cheap" per person, but have an NNT (number needed to treat) of >100. In other words, 100+ people need to be treated (and paid for) just to prevent one bad event. Other treatments are "cheap" per-year, but have to be taken for years/decades. Indeed in this case, the new treatment course is 8 weeks instead of 12, so an increased cost per-pill can still make sense economically.

by eliben 12y ago

RodericDay 12y ago

If the comment section is to be believed, this was in large part funded by the government and a good example of "socialized costs, privatized profits". So, no? It seems perfectly apt.

refurb 12y ago
The comment section is not to be believed. The cost to develop Sovaldi was chiefly born by private investors. I don't know the details, but there may have been publicly funded research that helped discover the drug, but that is likely a fraction of the hundreds of millions of dollars it cost to develop. A good analogy would be to say that since the US gov't created the internet, Google shouldn't be charging much money at all for its services. EDIT: It appears that the discovery of sofosbuvir (Sovaldi) was done at a private company.[1] Of course it never would have been discovered without the work of NIH funded research, but it's unfair to say the cost of R&D was born by the public. [1]http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Antiviral_Drug/Sofosbuvir%20discovery%2010.pdf http://www.chem.wisc.edu/deptfiles/chem345-gellman/Sp13/Anti...
nemo 12y ago
It's a little different than that. The first drug, Solvadi, was developed by the company Pharmasset. Pharmasset did get some government grants to develop Solvadi, though the cost to develop the drug was much higher than the amount of the grants. Gilead paid a massive amount to buy out Pharmasset with the plan of recouping the elevated buyout costs by charging a huge sum for Solvadi. They could have paid much less to buy out Pharmasset and charged far less for the drug, but chose profit over any other interest. Pharmasset had been planning to sell Sovaldi (and the new drug) for a tiny fraction of what Gilead is now charging. The new drug, Harvoni, is a refinement of Sovaldi Pharmasset was working on. While Gilead is already fairly close to recouping their buyout money, they are charging even more for Harvoni. The costs are being taken from the public in that many Hep. C patients are too poor to have insurance so Medicaid is giving a huge amount of cash to Gilead, though the initial research grants were only around $1 mil.
- Scoundreller 12y ago
  I think the price of a drug is decoupled from the cost of developing/acquiring the rights to that drug. Whether a drug cost $1 or $1 billion to develop, the seller/marketer will try to charge whatever the market can bear to maximize revenue (which could still result in a loss). They aren't trying to recoup $1.1 or $1.1b respectively, they're going for the max in either case.
  - refurb 12y ago
    A good friend of mine works in pharmaceutical pricing and this is exactly how works. You price to what the market will bear. The "market" includes physicians, insurance companies, the gov't and patients.
- refurb 12y ago
  While Gilead is already fairly close to recouping their buyout money, they are charging even more for Harvoni. What do you mean? They paid $11B for PharmAsset. Then they had to spend more money to get Sovaldi through phase 3 clinical trials, then they had to spend money to get ready to launch the drug, etc, etc. Right now they've made ~$10B on Sovaldi. That's gross, not net. Take out all the costs of those sales and it's like around 30-50%. So they've made $3-5B in profit, but spent $15B-$20B to get the drug to market. They aren't even close to breaking even yet.
  - nemo 12y ago
    Being something like 25-30% of the way there this soon seemed fairly close to me, given the rate of revenue.
deleted 12y ago
[deleted]

Scoundreller 12y ago

A better way of assessing a drug, or any health-care intervention really, is through methods such as cost per QALY (quality-adjusted life year). Some interventions are "cheap" per person, but have an NNT (number needed to treat) of >100. In other words, 100+ people need to be treated (and paid for) just to prevent one bad event. Other treatments are "cheap" per-year, but have to be taken for years/decades. Indeed in this case, the new treatment course is 8 weeks instead of 12, so an increased cost per-pill can still make sense economically.