12 ms·
What good are whizzy new drugs if the world can't afford them?
- elektor 2y agohttps://archive.ph/x9xoO https://archive.ph/x9xoO
- boringg 2y agoMaybe pharmaceutical companies should dial back their return expectations.
- kelseyfrog 2y agoThey are owned by and have return expectation set by shareholders
- aantix 2y agoThen scale back your ROI expectations on your 401K.
- whimsicalism 2y agoIn public capital markets, this is equivalent to saying 'maybe we should devote less money to life-saving R&D'
- boringg 2y agoWhat about the Martin Shkreli incident? How does that get explained by your general broad thesis statement - 'maybe we should devote less money to life-saving R&D'?
- whimsicalism 2y agoEconomics describes human behavior in the aggregate. If the expectations for returns on pharma become substantially lower, less money will be invested in pharma and they will have less money to invest in R&D. I don't think Martin Shkreli is a challenge to that thesis.
- boringg 2y agoThe Martin Shkreli challenge is that its actually not R&D that money is being deployed its that many people (MS being one example) have found ways to capture consumer surplus in a quasi monopoly environment and then extract maximum prices to a group that has an inelastic demand. Nothing to do with deploying more R&D in this case. In terms of expectations on returns of your statement - I would be curious to see the case that increased expectations on returns correlates with positive outcomes. Sure more money in, but that does not equate to better meaningful and better results out.
- whimsicalism 2y agoThe Martin Shkreli example is perfect for you because it shows someone raising drugs but we don't have the timeframe to see someone quickly ramping up cheaper generic production because of how quickly he was jailed. His company went bankrupt due to generic competition. > Sure more money in, but that does not equate to better meaningful and better results out. I believe that spending more on R&D will cause more drugs to be developed. If you disagree, we can agree to disagree - I'm not sure it would be a productive conversation.
- boringg 2y ago
- nijuashi 2y agoMore people need to be aware of how the drug development costs are distributed. It’s the clinical trials, not R&D, which contributes to astronomical cost, and that price is emphatically NOT set by the pharmaceutical companies that the public loves to point their fingers at.
- sigspec 2y agoYou can be emphatic all you want but I refuse to believe that pharma has no say in pricing. Ludicrous.
- nijuashi 2y agoIt’s a simple math of risk vs reward. Let me explain before dismissing my argument. Do you know why there are so many “Big Pharma”? It has to be big, because most of the smaller ones simply can’t survive for long. Developing drug is a difficult process. Whopping 90% of compounds fail during the three phase clinical trial period, $40k per patient in the trial, hundreds of millions of dollars per trial. Every failed trial is a signal for career change for people who develops drugs. You think people will invest in such risky business without expecting a big reward? Asking for low drug price without lowering the clinical trial cost is assuming drugmakers can print money. Unfortunately biology doesn’t work like that. A lot of us who develop drug are doing it because we believe this is a meaningful thing we can do in the world. They are just hidden behind investors like Shkrelli, who isn’t even anywhere near the actual people who make the drug. But we do need the money to develop the drug. A lot of it. I hope you understand. The real solution is to lower the cost of the trial. And I maintain that the drug company isn’t in control of this.
- aantix 2y ago"Never have the limitations of existing insurance and payment models been more evident. " Is the limitation really the payment model? They're having trouble keeping up with demand, even at the current high prices. It appears that the innovation has to occur at scaling the manufacturing.
- FredPret 2y agoInnovation and tech progress drive prices down over time. Nathan Rothschild, richest man in the world, died from an ailment that could be cured basically for free today using penicillin. But when penicillin came out, it was an expensive and "whizzy" new drug.
- JoshTko 2y agoWhy has insulin prices gone up then?
- jrh3 2y agoWhich insulin?
- Onavo 2y agoThe ones descended from Banting, Best, and MacLeod's original invention
- jrh3 2y agoNobody has used those for years. New engineered insulins like Novolog have been going down in price for years. They can make tons of it now.
- sigspec 2y agoYou can get human insulin from Walmart for 25 a vial without a prescription. Insulin analogs are most prescribed and subject to pricing issues. Particularly important to those with insulin resistance.
- pydry 2y agoCos market consolidation and collusion is a more powerful force than technological progress.
- Ekaros 2y agoWhy smartphone prices have gone up? Or GPU prices... With insulin it is not same, but new better or changed product. Similar insulin to past is not that highly priced.
- whimsicalism 2y agoThe reality is that high drug prices are what incentivize companies to go through the process of creating/designing/trialing them. They will get cheaper with time as the techniques become commodities. The US should probably negotiate 'most favored nation' status so they get the lowest price offered among the OECD (maybe adjusted by national income per capita) such that there is less global free ridership - but even that probably won't do that much to shift the cost burden. We should also invest in lowering the costs of drug design & trialing so we can lower the risk premium and startup cost.
- tehjoker 2y agoWe could just have nationalized pharma and direct research and production rationally at lower prices. The scientists and research directions are managed for the most part by the state and organic energy already, pharma just does marketing and purchasing trials. Anyone with money (i.e. the state) could do that, probably for less.
- gruez 2y agoIf it's really easy that "anyone" can do it, wouldn't you expect investors to flood in and drive the cost of capital to near-zero?
- tehjoker 2y agoNot really, it's an expensive and risky undertaking so only very wealthy investors or the state can afford this. That doesn't mean that the investors are a value add other than providing money. Furthermore, many publicly useful innovations will not be able to capture a positive return despite being beneficial for society as a whole, so private money is actually poison.
- whimsicalism 2y agoYou would kill, at minimum, hundreds of thousands of people with your hubris. I encourage you to read some econmetrics papers on governmental success rates as 'picking winners.' They are terrible allocators and would be more likely to try to build a pharma R&D center in Michigan and Wisconsin for general election concerns.
- ianferrel 2y agoCouldn't you write this about almost any technological innovation? Traditionally, avant garde tech is very expensive and available in limited quantities, then prices come down and things become more broadly affordable. Every drug was a whizzy new drug at some point. Most of them are now common and affordable. The people who the drug will help cheaply in 20 years will benefit greatly.
- JohnMakin 2y ago“financial innovation” is a nice way to say “be less greedy”
- darth_avocado 2y agoI don’t have a problem when drugs for some obscure rare disease have an astronomical price tag associated with it. The problem starts when the cost of developing a cure for them is used as an excuse to charge $200 for a bag of saline. We have the best care in the world, but for when things go terribly wrong. And most people can barely afford it. Meanwhile, the primary care and basic affordable care is lacking.
- HybridCurve 2y agoI just paid $5.3k in the US for four 350mg doses of Albendazole (antiparasitic). This medication is something like $2 or less anywhere else in the world. This is not simply a problem with new drugs, but lack of pricing regulations from the federal government enabling pharma companies to fleece patients and insurance providers.
- goodluckchuck 2y agoOr just allow imports.
- aantix 2y agoThe U.S. subsidizes the rest of the world.
- gmm1990 2y agoand pharmaceutical company shareholders look at the operating margins of these companies
- cyanydeez 2y agoAs long as theres a bilionaire who can, who gives a shit about the world
- 1vuio0pswjnm7 2y agoWorks where archive.ph is blocked: https://beta.economist.com/by-invitation/2024/06/14/what-good-are-whizzy-new-drugs-if-the-world-cant-afford-them https://beta.economist.com/by-invitation/2024/06/14/what-goo...
- hackeraccount 2y agoIs there an example of a drug that hasn't gotten cheaper over time?
- peter-m80 2y ago"The world" !== USA