
Health care veteran tries to upend the system and bring drug prices down - vo2maxer
https://www.statnews.com/2020/01/12/venture-capitalist-alexis-borisy-bring-down-drug-prices/
======
s1artibartfast
It is unclear what differentiates EQRx from other pharma companies. As the
article points out:

>The idea of creating a “fast-follower” — a new drug that is much like an
existing one — is anything but new.

All I see is the claim to come in with competitive pricing - something else
that is anything but new.

>But fast-followers do not compete on price, because lowering price has not
historically resulted in selling more units of a drug.

~~~
snarf21
It is also weird that he talks about the reason he raised prices at companies
in the past was because it was fiduciary to shareholders. Then he starts a new
company with VC money. I might be more believing if the company was a B corp.

We need a different approach to drug development that is not this. The big
issue with drugs is that there are only legal protections for generics and
other countries have far different bargaining power. We need some kind of
shared risk and reimbursement model with every country having access to the
ability to buy or create generics based on them paying to support the
research. This is something that could be easily spearheaded by a Gates
foundation or its ilk.

~~~
s1artibartfast
What do you mean by there are only legal protections for generics? As I
understand it, original developers have the protections, not generics .

------
DataDrivenMD
'Robert Nelsen, of ARCH Venture Partners, said he invested because “I think
it’s really cool and I like throwing rocks into the pond.”'

Definitely a bold approach that will require lots of cash up front, which
explains the $200M round. It will be interesting to see how many VCs let their
FOMO get the best of them and fund the first credible copy-cat pitch they
hear. After all, there is only one Alexis Borisy out there.

It will also be interesting to see what kind of tech or novel operational
methodology is developed to deliver on their promise to lower costs. I'll also
be interested to see whether they demonstrate substantive progress by the time
they raise their next round.

------
dpflan
> “I’ve spent the last 25 years creating breakthrough new medicines,” Borisy
> said in an interview. “We’ve ratcheted up the prices on them ever higher,
> frankly, because we can,” he said. “And the reality is we can create a lot
> of these great new medicines, and turn that into a viable business charging
> a lot less for them. This is not fantasy world. This is something that can
> be done.”

Is he saying that he has participated in price increases because he could?

~~~
trekrich
yea i suppose so, but then something in his world changed. And he thought
maybe we can change this for the better. I would be interested to see what it
was. Maybe he can just make more money doing this.

~~~
toast0
It sounds like the idea is to spend less money on research by seeking to make
equivalents (but not generics? and not infringing patents) and then sell them
for less. And, presumably, encourage pharmacies to fill with theirs instead of
the original.

If the development costs really are lower, and the targeted drugs have enough
of a market, it seems totally reasonable to reduce end user costs and still
make a bunch of money.

~~~
s1artibartfast
I'm still skeptical. It seems like this approach would be harder than making a
biosimilar drug, which still takes >$100 million and 5-8 years.

Pharmacies are not allowed to fill will biologic generics without FDA bio-
interchangeable approval, which no biologic in the US has obtained. They would
not be able to substitute an alternative drug either.

------
BarelyLit
>Gleevec, the Novartis cancer drug, was approved in 2001 and turned a form of
leukemia into a chronic disease. It initially cost $24,000 a year, but the
list price reached $100,000 a year by the time it went generic in 2016

Novartis increased the price by about $5k a year. That's insane, I don't think
this should be legal. How come there are no laws that keep the prices of
medication under control?

~~~
drcross
In the best functioning capitalist systems it's the role of government to
prevent monopolies. This is why I enjoy living in Europe, where we have
reasonable costs for things like medicine, mobile plans, internet costs,
insurance and the like. It sounds like the US has devolved to a crony
capitalist system and it's not working for the benefit of the citizens.

~~~
ridewinter
The common trope is that European price controls hinder innovation in
pharmaceuticals [1]. I've read that American pharmaceutical firms spend 4x in
R&D per capita than European counterparts.

Counterpoints?

[1]
[https://www.nature.com/articles/nrd2293](https://www.nature.com/articles/nrd2293)

~~~
bildung
The 4x spend on research per capita seems to be true. I looked into that
before and found that the absolute spend is about $59 billion in the US and
probably about $30 billion in the EU [0,1]. With the US population at 327
million and the EU population at 514 million the 1:4 factor seems about right.

But there is another factor which IMO is important: The domestic spend on
pharmaceuticals. The US healthcare system seems to be more pharmaceutical
friendly. Yearly US spend on pharmaceuticals alone is about $330 billion [2],
while yearly EU spend on "medical goods", which I assume to include
pharmaceuticals, seems to be only €120 billion [3].

So pharmaceutical spend per capita is _also_ about 1:4 when compared to the
EU, not just R&D.

As production usually follows consumption (which is why e.g. every US and EU
car producer has domestic factories in China), one could also argue that the
high US health care costs are the reason why so many US pharma companies
exist.

[0]
[https://www.healthaffairs.org/do/10.1377/hblog20170307.05903...](https://www.healthaffairs.org/do/10.1377/hblog20170307.059036/full/#one)

[1] [https://www.vfa.de/download/the-pharmaceutical-industry-
in-g...](https://www.vfa.de/download/the-pharmaceutical-industry-in-
germany.pdf)

[2] [https://www.actuary.org/content/prescription-drug-
spending-u...](https://www.actuary.org/content/prescription-drug-spending-us-
health-care-system)

[3] [https://ec.europa.eu/eurostat/statistics-
explained/index.php...](https://ec.europa.eu/eurostat/statistics-
explained/index.php/Healthcare_expenditure_statistics)

~~~
rayiner
OECD tracks pharmaceutical spend directly. It’s about $1,200 per capita in the
US, versus about half that in say Spain or France.
[https://data.oecd.org/chart/5OrU](https://data.oecd.org/chart/5OrU). Richer
countries like Australia, Canada, and Switzerland spend $850+.

~~~
bildung
Thanks! Way better source.

------
keenmaster
EQRx could potentially lower drug prices, but only because of competition and
not out of the goodness of their hearts. Few companies deliberately lower
profits without exogenous pressure. If a company has a 20 year monopoly on a
drug and a similar drug shows up before the patent expires, competition will
somewhat bring down prices. I say somewhat because healthcare is a convoluted
opaque mess.

------
bobosha
>Drug companies like to quote statistics that prescription drugs represent
only a tenth of medical costs.

How true is the claim that drug costs are ~10-15% of the final cost to
patients? Apparently, It's the caregivers (hospitals, doctors, nurses etc.)
who make up the vast majority of the final bill.

