4 ms·

> It already does, to a great extent, and it's so heavily involved in the process it seems natural to make them eat the costs As far as I know, the government

> It already does, to a great extent, and it's so heavily involved in the process it seems natural to make them eat the costs As far as I know, the government has minimal involvement / skin in the private development process as it stands currently, and only steps in to perform regulatory oversight and helps define trial design for regulatory approval. Almost all costs are borne by the private sector and all work is done by the private sector.

VLM 11y ago
"Almost all costs are borne by the private sector" Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. On the bad side you'd cut out a lot of middlemen. Their corporate owners finance a lot of re-election campaigns and PACs....
- Thriptic 11y ago
  > Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm not sure what this statement means. Drug development costs are accrued by the company before the drug goes to market. Costs are borne by the company's investors or offset using profits from previous ventures. Some of these profits may be from drugs meant for the elderly or they may not. > I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? No, much of the initial development capital comes from investors or from other profits which are from many sources. If you're talking about who is paying for the drug, then you're completely forgetting about private insurance companies, which spend at least as much each year on health care costs as medicare. You're also forgetting about the entire ex-US market. > On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. Government is not synonymous with efficiency, especially when there is no profit motive involved.
  - astazangasta 11y ago
    Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. In terms of R&D there is no contest. The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending.
    - Thriptic 11y ago
      > Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. I don't have the numbers so I can't speak to the overhead, but I can point at the VA health care system as a counter to your statements about government health care being efficient. > The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending. There are a number of problems with this argument. First, the NIH can afford to take a shotgun approach to research funding which pharma can't take because the risks of loss are so much lower. The NIH can give out large numbers of grants per year, have a large number of them fail to produce meaningful results, and call their work a success as long as some good work is being done. That model is untenable at the major clinical trial level because the losses would be astronomical. It's the same reason why the Y combinator investment strategy wouldn't work if you wanted to apply it to big private equity deals: You can't fail massively more than a few times before you're in trouble. Second, the standards for "success" are completely different for drug development and basic / translational research. Most basic research is looking for (at best) proof of concept in an in vitro or in silico model; most translational research is looking for efficacy in an animal model using small populations. A pharma research project has to consider statistically significant efficacy, formulation, dosing, acute and chronic direct toxicity, delivery, off target effects, drug-drug interactions, manufacturing, storage, population differences etc and are held to much higher standards at every stage than your average research lab. By the way, even with these differences in requirements, it is well known that a lot of published, NIH funded research coming out of academia is not reproducible: http://www.nature.com/nrd/journal/v10/n9/full/nrd3439-c1.html http://www.nature.com/nrd/journal/v10/n9/full/nrd3439-c1.htm..., http://www.nature.com/news/announcement-reducing-our-irreproducibility-1.12852 http://www.nature.com/news/announcement-reducing-our-irrepro... If this were to happen in pharma, you would have deaths and lawsuits.
astazangasta 11y ago
The NIH already spends about $3 billion a year on clinical trials, mostly in the form of money given to patients. Total spending on clinical trials is estimated to be about $25 billion. Not chump change, but easily fundable, and ridiculously easy to offset with the cost savings in terms of Medicare. http://report.nih.gov/categorical_spending_project_listing.aspx?FY=2014&ARRA=N&DCat=Clinical%20Trials http://report.nih.gov/categorical_spending_project_listing.a... Also, it's wrong to suggest that the costs are borne by the "private sector" when all of that private sector money is coming from monopoly rents handed to them by the government. That isn't their money, it's ours.
- Thriptic 11y ago
  > Total spending on clinical trials is estimated to be about $25 billion. Not chump change, but easily fundable, and ridiculously easy to offset with the cost savings in terms of Medicare. You're assuming that the government is as good at choosing research directions, choosing which entities to bring to trial, and running the trials as private industry. My bet would be that this is not true. > Also, it's wrong to suggest that the costs are borne by the "private sector" when all of that private sector money is coming from monopoly rents handed to them by the government. A lot of new drugs come from start up pharma companies, who are exclusively funded by investors, not the government. They don't see much, if any money from the government until they bring a drug to market. Established companies may use a mixture of funding sources to offset their development costs. Also, the notion that drug companies are purely profiting from the government is absurd. You're completely forgetting about private insurance company spending and the ex-US market, which account for enormous amounts of money.

VLM 11y ago

"Almost all costs are borne by the private sector" Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. On the bad side you'd cut out a lot of middlemen. Their corporate owners finance a lot of re-election campaigns and PACs....

Thriptic 11y ago
> Doesn't every penny of "old people drugs" development come from selling drugs to old people paid solely by medicare? I'm not sure what this statement means. Drug development costs are accrued by the company before the drug goes to market. Costs are borne by the company's investors or offset using profits from previous ventures. Some of these profits may be from drugs meant for the elderly or they may not. > I'm just saying if you trace back where those supposed private sector $$ come from, don't almost 100% of them come from the Medicare program? No, much of the initial development capital comes from investors or from other profits which are from many sources. If you're talking about who is paying for the drug, then you're completely forgetting about private insurance companies, which spend at least as much each year on health care costs as medicare. You're also forgetting about the entire ex-US market. > On the good side you'd cut out a lot of middlemen. No point paying them off thru multiple steps for doing basically nothing productive. Government is not synonymous with efficiency, especially when there is no profit motive involved.
- astazangasta 11y ago
  Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. In terms of R&D there is no contest. The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending.
  - Thriptic 11y ago
    > Government is often quite efficient. For example, public health insurance has smaller overhead (like five fold less) than equivalent private products. I don't have the numbers so I can't speak to the overhead, but I can point at the VA health care system as a counter to your statements about government health care being efficient. > The entire NIH budget produces prodigious amounts of research, from the basic to the translational, for less than what the entire pharma industry spends just to refine their drug development. The private sector sucks at research spending. There are a number of problems with this argument. First, the NIH can afford to take a shotgun approach to research funding which pharma can't take because the risks of loss are so much lower. The NIH can give out large numbers of grants per year, have a large number of them fail to produce meaningful results, and call their work a success as long as some good work is being done. That model is untenable at the major clinical trial level because the losses would be astronomical. It's the same reason why the Y combinator investment strategy wouldn't work if you wanted to apply it to big private equity deals: You can't fail massively more than a few times before you're in trouble. Second, the standards for "success" are completely different for drug development and basic / translational research. Most basic research is looking for (at best) proof of concept in an in vitro or in silico model; most translational research is looking for efficacy in an animal model using small populations. A pharma research project has to consider statistically significant efficacy, formulation, dosing, acute and chronic direct toxicity, delivery, off target effects, drug-drug interactions, manufacturing, storage, population differences etc and are held to much higher standards at every stage than your average research lab. By the way, even with these differences in requirements, it is well known that a lot of published, NIH funded research coming out of academia is not reproducible: http://www.nature.com/nrd/journal/v10/n9/full/nrd3439-c1.html http://www.nature.com/nrd/journal/v10/n9/full/nrd3439-c1.htm..., http://www.nature.com/news/announcement-reducing-our-irreproducibility-1.12852 http://www.nature.com/news/announcement-reducing-our-irrepro... If this were to happen in pharma, you would have deaths and lawsuits.

astazangasta 11y ago

The NIH already spends about $3 billion a year on clinical trials, mostly in the form of money given to patients. Total spending on clinical trials is estimated to be about $25 billion. Not chump change, but easily fundable, and ridiculously easy to offset with the cost savings in terms of Medicare. http://report.nih.gov/categorical_spending_project_listing.aspx?FY=2014&ARRA=N&DCat=Clinical%20Trials http://report.nih.gov/categorical_spending_project_listing.a... Also, it's wrong to suggest that the costs are borne by the "private sector" when all of that private sector money is coming from monopoly rents handed to them by the government. That isn't their money, it's ours.

Thriptic 11y ago
> Total spending on clinical trials is estimated to be about $25 billion. Not chump change, but easily fundable, and ridiculously easy to offset with the cost savings in terms of Medicare. You're assuming that the government is as good at choosing research directions, choosing which entities to bring to trial, and running the trials as private industry. My bet would be that this is not true. > Also, it's wrong to suggest that the costs are borne by the "private sector" when all of that private sector money is coming from monopoly rents handed to them by the government. A lot of new drugs come from start up pharma companies, who are exclusively funded by investors, not the government. They don't see much, if any money from the government until they bring a drug to market. Established companies may use a mixture of funding sources to offset their development costs. Also, the notion that drug companies are purely profiting from the government is absurd. You're completely forgetting about private insurance company spending and the ex-US market, which account for enormous amounts of money.