There are times where the government, can, and should drop in and buy the entire IP associated with a medication. This price should be set with a council of various representatives, and it should not be something that the drug manufacturing company can reject.
Most of the research here is already partially funded by the tax payer through Government funds of colleges, etc etc anyway.
This isn't even something unheard of. The US has the power to unilaterally cancel patents.
For what price?
This is part of the cost of doing business. If a drug company is going to close shop and want to go operate in Europe or China, that's a risk we should be fine taking.
Thats the government funded universities.
Solving obesity is free. For the vast majority of people, Ozempic or Wigovy is solving a motivation/discipline problem, not an obesity problem.
> This price should be set with a council of various representatives, and it should not be something that the drug manufacturing company can reject.
Any other authoritarian ideas? What a great way to destroy innovation.
The world runs on value. Coat is simply a limiting factor in the floor that something can be made for.
Obviously not, silly. A product is a product. It doesn't matter if it saves millions of lives, ends them, or nothing in between - companies should be free to charge whatever they want, and if you judge them negatively for that, you're clearly in the wrong.
I can't believe I have to explain this!
I'd invert that: on the scale of a population, motivation and discipline are empirically not the cure for obesity. The statistics and the studies are on my side here. I agree that it would be convenient if that strategy, which we've been trying for about 80 years now, suddenly turned out to work. But my guess is doubling down on it wouldn't be any more effective than it has been, so let's take this new approach, which appears to work much better, seriously.
Drug X was funded for development for $XXX million because it was perceived to have a strong positive expected ROI dependent on selling the drug for $Y leading to an expected value of $ZZZ million.
If you're offering $ZZZ million for it then the drug companies won't complain but you're just having the public pay the total cost up front. If you're offering substantially less than $ZZZ million, then the drug company will not invest $XXX million because you've just slashed he potential ROI.
I think this comment perfectly proves that this is relevant.
Manufacturing is quite relevant. If the actual cost of "discovered and proved effective" is far lower than claimed, then manufacturability becomes a concern. If the cost of discovery and proven effectiveness is borne by governments and universities, then the manufacturing is the only cost borne by the pharmaceutical companies.
Put it another way: if making new drugs was so cheap and easy, drug companies would be doing that in competition with each other, and prices would be low as a result of that competition.
There would need to be consistent support for such a drug development program even though most attempts will fail and "breakthrough" drugs will arrive irregularly, separated by many years. It is politically difficult to maintain that sort of long term support in a system where voters and representatives are swayed by short-term arguments to cut programs that don't show results.
It was a learning experience: always look in the place where the thing is. It saves a lot of time. Her problem was that she first checked all the places it wasn't.
Private R&D can still fund development and set prices how they want. But they’ll have to compete with publicly funded alternatives.
The shame is that NIH already provides an incredible quantity of funding, but it certainly doesn’t result in the US getting any better drug prices…
Why not take the extra step then? Government funds the research, result is free-to-use for all.
Or: drug developed through research mostly at public institutions like universities etc? -> sorry, no patent 'protection' then.
Pharmaceutical companies could then produce whatever they consider worthwhile. But... squeezing buyers too hard? Competitor will step in with a cheaper offer.
Which from the perspective of generic manufacturers, the drugs are discovered and proved effective by the Magic Drug Fairy.
(Making a limited point separate from my general opinions of Big Drug, etc.)
However, this must be based on their actual cost and not an arbitrary figure, which in the article was revealed to be roughly $34M real cost compared to $3B as it was advertised for lobbying purposes.
What is the best way to protect private ventures but also prevent them from sucking the public funds and the entire population dry? Transparency. Let's see where the money is being spent and compare it with other companies to see what's really happening here. The society doesn't allow vital resources like water, and recently internet be priced at extraordinary numbers, and control how much profit you can make. Maybe there should be even a cap at 100% profit, or 300%, or let's say 500%. But once a company starts selling a life saving drug at 17 thousand times the cost of developing AND manufacturing it, then there's something definitely wrong in that industry and the market must be investigated.
This is true even if you find it the first place you look.
A big part of the issue is too readily discounting or assuming where it isn’t too early. It’s often better to methodically search sections and areas at a time in a thorough process of elimination even of places you know it isn’t, just as a matter of practicality, and so the process of elimination is actually fully eliminating possibilities, and not just confirming biases.
It was also NIH research and money that lead to discovery of the drugs in the first place.
It's about 1/10th that in the UK (not even counting the NHS's "confidential discount"); https://www.spglobal.com/marketintelligence/en/news-insights....
And the research is not paid for by the taxpayer. The NIH budget is $20B per year. Pharma R&D is $200B per year.
And you have to be very careful about what counts as R&D, for example Merck reported $30B in R&D, but one half of that was actual for mergers and acquisitions (of research related companies). I have yet to find anyone who has good numbers on this, which is why the study in this article is interesting: it sounds like the article is going to be very transparent about what it means.
And for absolute candor here, you have to remember that once the NIH grants arrive at a university somewhere between 15% and 60% (really, it varies wildly) is taken off the top for University expenses, some of which are related to the research (e.g.: building costs), and some of which are not (arguably: university administration).
PS: I can't currently afford semaglutide but require it to offset the side-effects of mirtazapine. Resting HR: 110(!), BP: 175/95, BMI: 32.0. Perhaps I should find a cheap way to visit France or maybe someone in France would send me a year's worth if I paid them.
What side-effects? I take the same medication.
More likely they are two different treatments that maybe take the same general approach. If the publicly funded one is available at cost, the private one would have to be significantly better to make any money.
It would be great if the public developed useful, novel drugs. But if you're proposing a system where the private side can still develop them, patent them, and sell them at a high price; then it's not really different from today. You shouldn't assume that both parties would solve problems independently and redundantly. It doesn't even really make sense to pursue alternative development. If there's a cure for X; are you REALLY going to encourage public researchers to find a different cure for the same thing to try and lower the cost of the drug? That sounds like a very ineffective approach.
PSA: If some is prone to major depression - exercise, going outside regularly, and avoiding alcohol aren't vague suggestions doctors make casually, they're pretty close to life-saving.
They are. There is intense competition and lots of venture capital and research grants to fund research.
> prices would be low as a result of that competition.
Why? Patents end competition as soon as the research is successful. They have to compete to research the drug - and we see a vibrant competitive market for research - but they don't have to compete to sell the drug. We see this even when there are multiple brands competing to sell generic versions of drugs they didn't discover or spend R&D on.
There is simply no market forces to lower medically necessary drug prices. The market is captive (people will die without certain medication), and thanks to patents, there is often no competition for years to allow people to price shop.
I can buy ibuprofen or acetaminophen or aspirin for cheap at any drug store, because there is a competitive market for OTC pain meds. There is no OTC market for insulin, and people will die without it. Unsurprisingly, insulin is much more expensive, despite being discovered by a university and being over 100 years old.
PreP (prevents HIV) research was entirely funded by US taxes, and the pills costs $2000/mo - despite being available from multiple companies including available as a generic. Why are companies that didn't pay to research the drug (and didn't take US Gov money to research it) charging $2000/mo? The only cost they incurred was manufacturing.
I assume this is all an analogy for the cost of research, and how not every research opportunity pans out?
I think it's a cute analogy, but we have plenty of drugs that are decades old, research costs long paid off, and people die because they can't afford them. This isn't an economics 101 essay prompt, the costs of medicine have life-or-death implications.
As the go-to example, insulin was discovered in a university more than 100 years ago. The patent was famously sold for $1, so the research "cost" to the drug companies is negligible. The price didn't decrease in the US until 2023, when the government capped the price at $35/mo - an 70+% reduction. The cost in other countries is still less than 30% of the US price. This is basically the equivalent to someone telling your wife where the doodad was, and her pretending it takes 10 minutes to find.
PreP, which prevents HIV, was entirely funded by the US Government - both research and manufacturing costs - and its manufactured by several companies who weren't involved in the research. The average prescription cost was >2000/mo from every source until the government stepped in. That's more than some people's monthly salary. This is basically like someone handing the doodad to your wife, and her pretending it is a full-time job to find.
One can get a patent on a drug, but not on other drugs treating the same condition. We see many similar drugs developed that don't infringe each others' patents. If they are all effective, then the drug makers will be competing with each other, even if the drugs are under patent protection.
In which case, shouldn't I be asking you what optimal profit looks like? Why would that be a question to me, when I was listing it as a problem with profit models?
If that wasn't your argument, then I have no idea what you're arguing.
(But I will go ahead and answer, which is that individual affordability should not be a factor in buying medicine, which implies that normal patent-and-profit models are not the way to go.)
This sounds like the government just seizing assets once they realize they are valuable.
What do you feel might be the consequences of this?
But I'd love for you to tell me the truth about insulin, because I'm sure that the law(s) that attempted to cap prices had nothing to do with the prices being lowered to that exact amount at the exact same time?
Perhaps a quick self test would be to hypothesize the cost of Novolog before this law and then look up the price in old archives.
I usually do these self-tests to check whether my belief systems are accurate. But if you don’t want to, I’m not one to chastise. I just wouldn’t want to converse.
Novolog in 2024 is cheaper than almost any point in the history of (that version of) the drug. "Strangely", Novolog and competition (eg. Humalog) increase prices almost in perfect lockstep, for decades, dramatically outpacing inflation, which is not typically how prices look in a competitive market. Decades after the "cost of research" should be priced in. The obvious reason for this, is that the drug is a medical necessity and consumers can't shop around, so typical market dynamics don't work, allowing companies to raise prices without repercussions. Furthermore, drug companies voluntarily stopping production of cheaper, older, off-patent insulin products - not a single one has been stopped for safety reasons, and clinic benefits of new products since the 1921 patent are minimal.
In the 2020s, US politicians started publicly criticizing drug companies for their prices of insulin. Then they introduced a slew of bills intending to cap the price at $35/mo - a 70% reduction. Several bills failed to be passed, but one managed to pass. In that time, all major insulin manufacturers announced they were "voluntarily" reducing their prices to $35/mo (or lower) - set to take affect the same time as the above mentioned law.
Not sure how you think the history of insulin technology really relates to this, other than the 1982 recombinant DNA insulin was promised to be cheaper? It doesn't work meaningfully better for most patients. When recombinant DNA insulin ("human insulin") was first sold in the US in 1982, it was priced at $0.5/day (1.5 in 2024), while traditional "animal" insulin was closer to $0.3/day (0.95 in 2024). It was special because it promised unlimited supply, with minimal risk of shortages. Eli Lilly said, in 1982, that they expect the price to drop over time. The first time that it was cheaper (inflation adjusted) was 2024 when the new US law went into affect. Oh, this only applies to the US, elsewhere the prices have been low and dropping consistently, even from Eli Lilly.
What's truly damning, is that the clinical benefits of the insulin invented since that first University of Toronto $1 patent version is pretty minimal compared to the UT version from 1921. You can make snide comments of "wading in the shallows" discussing new technology, but the original patent would still have provided comparable medical outcomes to the millions of people who need insulin in 2024.
Is it possible you're defending the actions of a giant corporation that raised the prices of a medically necessary drug out of greed, and now you're re-writing history for them to justify your defense? Maybe you need to devise a new self-test to check your belief systems.
Citations:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10718803/
Inflation Calculator: https://www.minneapolisfed.org/about-us/monetary-policy/infl...
Archival News from 1982 and
https://www.washingtonpost.com/archive/politics/1982/10/30/f...
https://www.nytimes.com/1982/10/30/us/a-new-insulin-given-ap...
Acquired companies in drug development are essentially spending investor money on R&D until: a) they get to market standalone (unlikely, risky, too expensive), b) the clinical trials fail hopelessly early on, or c) they get acquired by a drug company with a large balance sheet and expertise to finish trials and commercialize the drug.
Because M&A includes likely profits for the sellers?
As a simple example using unrealistically low figures: if I spend $100 developing a drug, and the drug is so good that you decide it's worth buying the patent from me for $1M, you surely wouldn't argue that $1M has been spent on R&D?
But before you complain about that, R&D paid to universities also include overhead for the universities, and it is quite significant. In US it is over 50%. The universities partly act like investors in this way, the administration invest money (e.g. start-up grants, some professor salary) into research groups and expect them to bring external grants, and the overhead partially pays for that.
Depending on what you want to measure, you need to include the cost of people and resources involved in the production of the thing you want, and not just the marginal unit cost of the thing. It may not be easy to draw the line, but you have roughly two choices:
1. Deduct a reasonable percentage from both university grants and M&A
2. Accept that without profit, people would not have funded certain research (which carries risks and requires selection), so you include those as costs of doing business in your assessment
Another way to think about it is that the money you spend on research itself containts other people's profits too. If you buy equipment, the equipment company makes a profit. Staff has savings. The govt always takes a cut. It's profit all the way down.
"Let's reimport drugs then"
"No! The poor drug companies! How could they survive!"
https://investor.lilly.com/news-releases/news-release-detail...
A drug comes before the FDA for approval, and it is opened up for comment. Shkreli lodges an objection to approval of this drug.
Why? Because it's unsafe? No - trials thus far have shown it to be safer than existing drugs.
Why? Because it's less effective? No - it's also been shown to be more effective than existing drugs.
Perhaps it's more expensive? No - cost of R&D and production, and estimated retail costs are expected to be lower than existing drugs.
Huh, odd. So why did Shkreli oppose this drug getting to the market?
Because he and his company had just bought the patent to one of those 'existing drugs' recently, and this drug coming to market would torpedo demand for his drug, and torpedo the profitability of his investment in buying the patent.
Fuck Martin Shkreli.
One of the "good" things about it is that it lends well to combinations with other drugs if it's not working on its own.
> PSA: If some is prone to major depression - exercise, going outside regularly, and avoiding alcohol aren't vague suggestions doctors make casually, they're pretty close to life-saving.
Agreed, exercise has very much saved my life.