5 ms·

There's a big difference between the types of research that big pharma and academia undertake. To be very general about it, corporate R&D is a lower-risk endea

by samch 12y ago

There's a big difference between the types of research that big pharma and academia undertake. To be very general about it, corporate R&D is a lower-risk endeavor. They focus on getting reasonably-well-proven ideas to market. For them, there is always a clear end game of passing the regulatory hurdles, ramping up manufacturing, and handling distribution and marketing efforts. In academia, researchers don't typically set out with an end game like that. They see a set of problems, and they want to test hypotheses to see if they can find ways to solve those problems. Again, in the most general sense, they aren't think entrepreneurially about scaling their technology or clearing various FDA milestones. They've done the hard part in terms of isolating the proteins or synthesizing compounds. Maybe they've even run preliminary tests to prove efficacy in certain ways. For our researchers, their next step isn't to cash out. They want to get more funding for their labs to hire more postdocs to investigate more hypotheses and get more work published. No, they never complain when their piece of the pie trickles down to them from all of the royalty splits and cost recoveries. Still, that's not what they live for. We have had a few researchers make the leap to the corporate world after their ideas have been proven, but that's definitely an exception. The important part here is that these inventors never know ahead of time if their ideas will ever pan out or get of of their lab. It's all a big risk. They apply for grants, the government reviews those applications, they decide if the risk is worth it based on a number of factors, and if all works out the researcher gets a chance to prove out their ideas. This early-stage, high-risk investigation is really rare in corporate R&D. In fact, even after some of our technologies have received traction and attention, there is often still too much risk for big pharma to jump on board. In recent years, we've had to get creative with funding sources and early-stage VCs to build startups around certain technologies we believe in just to get them to the point that a bigger partner is willing to jump in.

themartorana 12y ago
But then, that's my point. The initial, very high risk is underwritten by tax dollars. Only after something is proven to a degree, only after a certain amount of risk is removed, does corporate step in. But then the rewards are realized by the corporation. I have no issue with the university getting some additional funding to keep working, and I don't see anything wrong with the inventor getting a taste. But the idea that there is no product incentive without insane IP monopolies for the corporation - the same one that sat out the riskiest part of the whole deal - is wrong on every level. Where there is any profit potential so will there be a profiteer. The heaviest risk is borne by the taxpayer, and yet they are then asked to pay exorbitantly for the final product, which is often a burden too difficult to bear. It's mind numbing to me then any argument which tries to convince me of how this system is even close to the best we can do.
- samch 12y ago
  I hear what you're saying, but I'm not seeing a proposed alternative. Say the government allocated $500k to early-stage research for a particular drug. Would we then want the taxpayers to fund a startup company to see if that drug can be scaled and work its way to early stage trials? Should the government then, seeing that progress, step in again and fund the full set of trials and a manufacturing facility and a marketing campaign to get this drug to the taxpayers who need it? Maybe you're suggesting that the first step would be to repay the government some or all of the grant money. Well, maybe it's a bit surprising, but there's not a way to do that in the US. I suppose that the pharma companies should be sending a lot of corporate tax revenue back to the government, but I'd imagine there could be loopholes there. Not every country is like this. Some countries like Singapore actually demand a cut of action in return for the grant money [1]. Maybe we'd just do away with the concept of patents. Then, the government could fund the early stage research and the fruit of that would be open to all. Now, who would step up the plate and do all the heavy lifting to get the drug to market? Once it's been approved by the FDA, any pharma company domestic or foreign could simply make a generic version without having to incur all of the enormous costs associated with getting it approved in the first place. So, my guess is that we wouldn't see many new drug developments coming out and new form of IP protection would have to be put in place to encourage new developments. Since so much of the world simply tags along with our FDA protections, maybe we convince them to chip in on the costs. We'd basically tell to the other industrialized nations that unless they help carry the cost of drug research and development, no new medicines for them. I doubt that would fly. I don't know. I'm out of ideas here. Any other suggestions? 1. http://www.a-star.edu.sg/ http://www.a-star.edu.sg/
  - themartorana 12y ago
    Government not placing requirements around grant money (with regards to the potential final product) is on the government to be sure. I don't know if the Singapore model is appropriate, or perhaps requirements around maximum allowable profit margins on drugs created in-part with government grants, but one or the other would at least be honest. No patents is a bit harsh, but short-run patents aren't. But let's be clear about generics - the global generics marketplace is closing in on $500B/year [0], so again, I rather flippantly dismiss any and all cries of "without 20 year patents we wouldn't get any new drugs!" Making generics is still rather expensive, and the market is incredibly large. I don't know about doing away with patent protections completely, but 20 years (yes I know that includes testing, but companies can apply for a patent extension) is outlandish, and stops so many people globally from getting access to drugs in the name of profiteering. In fact, it's gotten so ridiculous that countries - including one of the largest emerging markets in the world, India - are just ignoring US patents and developing generics. When countries start risking international trade ties with the US over drug patents and access to life-saving treatments for 3rd-world markets, something is amiss. As for other first-world (and large 3rd-world) countries chipping in for FDA testing, I imagine they would, if a US-based company was not then granted a price-gouging monopoly over that research worldwide. That doesn't appear to be an option you mention. [0] http://www.bccresearch.com/market-research/pharmaceuticals/generic-drugs-markets-phm009g.html http://www.bccresearch.com/market-research/pharmaceuticals/g...

by samch 12y ago

themartorana 12y ago

But then, that's my point. The initial, very high risk is underwritten by tax dollars. Only after something is proven to a degree, only after a certain amount of risk is removed, does corporate step in. But then the rewards are realized by the corporation. I have no issue with the university getting some additional funding to keep working, and I don't see anything wrong with the inventor getting a taste. But the idea that there is no product incentive without insane IP monopolies for the corporation - the same one that sat out the riskiest part of the whole deal - is wrong on every level. Where there is any profit potential so will there be a profiteer. The heaviest risk is borne by the taxpayer, and yet they are then asked to pay exorbitantly for the final product, which is often a burden too difficult to bear. It's mind numbing to me then any argument which tries to convince me of how this system is even close to the best we can do.

samch 12y ago
I hear what you're saying, but I'm not seeing a proposed alternative. Say the government allocated $500k to early-stage research for a particular drug. Would we then want the taxpayers to fund a startup company to see if that drug can be scaled and work its way to early stage trials? Should the government then, seeing that progress, step in again and fund the full set of trials and a manufacturing facility and a marketing campaign to get this drug to the taxpayers who need it? Maybe you're suggesting that the first step would be to repay the government some or all of the grant money. Well, maybe it's a bit surprising, but there's not a way to do that in the US. I suppose that the pharma companies should be sending a lot of corporate tax revenue back to the government, but I'd imagine there could be loopholes there. Not every country is like this. Some countries like Singapore actually demand a cut of action in return for the grant money [1]. Maybe we'd just do away with the concept of patents. Then, the government could fund the early stage research and the fruit of that would be open to all. Now, who would step up the plate and do all the heavy lifting to get the drug to market? Once it's been approved by the FDA, any pharma company domestic or foreign could simply make a generic version without having to incur all of the enormous costs associated with getting it approved in the first place. So, my guess is that we wouldn't see many new drug developments coming out and new form of IP protection would have to be put in place to encourage new developments. Since so much of the world simply tags along with our FDA protections, maybe we convince them to chip in on the costs. We'd basically tell to the other industrialized nations that unless they help carry the cost of drug research and development, no new medicines for them. I doubt that would fly. I don't know. I'm out of ideas here. Any other suggestions? 1. http://www.a-star.edu.sg/ http://www.a-star.edu.sg/
- themartorana 12y ago
  Government not placing requirements around grant money (with regards to the potential final product) is on the government to be sure. I don't know if the Singapore model is appropriate, or perhaps requirements around maximum allowable profit margins on drugs created in-part with government grants, but one or the other would at least be honest. No patents is a bit harsh, but short-run patents aren't. But let's be clear about generics - the global generics marketplace is closing in on $500B/year [0], so again, I rather flippantly dismiss any and all cries of "without 20 year patents we wouldn't get any new drugs!" Making generics is still rather expensive, and the market is incredibly large. I don't know about doing away with patent protections completely, but 20 years (yes I know that includes testing, but companies can apply for a patent extension) is outlandish, and stops so many people globally from getting access to drugs in the name of profiteering. In fact, it's gotten so ridiculous that countries - including one of the largest emerging markets in the world, India - are just ignoring US patents and developing generics. When countries start risking international trade ties with the US over drug patents and access to life-saving treatments for 3rd-world markets, something is amiss. As for other first-world (and large 3rd-world) countries chipping in for FDA testing, I imagine they would, if a US-based company was not then granted a price-gouging monopoly over that research worldwide. That doesn't appear to be an option you mention. [0] http://www.bccresearch.com/market-research/pharmaceuticals/generic-drugs-markets-phm009g.html http://www.bccresearch.com/market-research/pharmaceuticals/g...