Anyway, Martin is running the same playbook at Turing that he did at Retrophin, which is to find some old orphan drug and raise the price by orders of magnitude. It's believed insurers won't have a choice but to pay since there are no competitors. If you want to see how this has worked out in the past, feel free to google "KV Pharmaceuticals Makena" which did something similar a few years ago, only to have it bankrupt the company (which would be an outcome completely consistent with Martin's history and tactics).
For a fun read, check out the lawsuit filed against him by Retrophin. In all my years of investing, he is one of the most unique scumbags I've ever come across.
Once I read up on Martin Shkreli I told them that I did not think it was the kind of place for me and withdrew. I have no idea if they would have hired me or anything, but just reading about him gave me a sick feeling in my stomach.
I'm honestly looking for an answer here. Maybe there is a good reason Valeant can and should be able to get away with it.
Or the government passes a law capping how much you can raise the price of a generic drug over so many years.
The case of KV Pharmaceuticals that I cited was a little different since compounding labs had already been making the drug Makena. In that case, the FDA actually sent these labs a letter essentially saying, "Go ahead and keep making the drug even though KV now has a patent for it. We are choosing to not enforce their patent because their price increase was bs."
Maybe the government can prove its worth and get off its ass and quickly figure out how to close this loophole, then go after Martin and others like him.
KV never had a patent for Makena. What they did have was "data exclusivity" which meant the FDA could not approve another version of the drug for at least 5 years.
What they were counting on was the FDA clamping down on the compounding pharmacies, since they weren't selling an approved version of the drug.
The FDA, seeing KV's strategy, declined to shutdown the compounders which resulted in KV declaring bankruptcy. KV restructured, reduced the cost of the drug and created a sustainable business. They were acquired by Valeant I believe.
Who needs morality in the free market, right?
If the FDA weren't so powerful, flawed, and easily corruptible, the strategy would make no sense.
How about a weaker FDA that allowed the import of drugs from other countries? That would create international scale competition for the US drug purchasing market.
There are lots of ways that we could get creative in solving these problems if there weren't a monolithic government agency in the way of our personal freedoms.
Seriously, it's like you're just ignoring what happens in every country that currently does have weaker systems and who look up to the strong regulatory practices of the US and Europe for exactly that reason.
Pharma companies try to put the best face on data to get a drug approved. Analysts try to approach the data in an impartial way. If an analyst looks at the data and sees issues, it makes sense both ethically and financially to push for the drug not to be approved. Ethically, if the drug doesn't work as advertised, it is better that it is not sold as a cure. Informing the FDA of your analysis is a duty. Financially, if you think the drug doesn't work, it makes sense to short the stock in the belief that it won't be approved.
Pharma companies always present it as hedge funds trying to kill their products, but if the data is strong and the drug works, the analyst could just go long on the company instead.
If I understand you (and I may not), and we were to come to the conclusion that "there ought to be a law", I have no idea how that would even be structured/written.
Remember the FDA is primarily concerned with a drug not harming people, the extent to which it's actually beneficial is of secondary interest at best: http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugs...
Uh... no. Just from that page, it states the FDA ensures "that drugs and devices are safe and effective for their intended uses". If safety was the only concern:
1) Why does the FDA approve indications?
2) Why has there been prosecution (possibly violating the first amendment) for promotion of off-label uses?
3) Why does the FDA have a "breakthrough" designation that fast tracks approvals solely based on their effectiveness?
4) Why do Pharma companies frequently run new trials using different end points in an effort to get a drug approved when the original end points they used showed no effect? Why have there been cases when the FDA didn't approve a drug because they declared the end point used in the clinical trials was meaningless for the indication?
I think it is fairly clear that a shitload of time and resources at the FDA are spent deciding whether drugs are effective and if the data from the pharmaceutical company shows effectiveness.
Edit: I should also add the whole DESI review in the 1960's shows your statement is complete nonsense. Drugs that the FDA previously approved for safety before 1962 were re-analyzed to classify their efficacy. So, the FDA reanalyzed thousands of drugs they had already determined were safe to look at whether they were effective.
Here's what the page says about new drug applications:
The IND application must contain information in three broad areas:
* Animal Pharmacology and Toxicology Studies - It must be reasonably safe.
* Manufacturing Information - The company can make consistent batches of the drug.
* Clinical Protocols and Investigator Information - Detailed protocols for proposed clinical studies to assess whether the initial-phase trials will expose subjects to unnecessary risks.
The 3 requirements around the new drug application are all safety based. Later on they look at efficacy, but it's later in the process. Efficacy doesn't mean it has to be very effective just somewhat. Read the references for your Wiki page, the FDA is concerned with removing harmful drugs.
"If an analyst looks at the data and sees issues" - what are they? A stockbroker, or pharmaceutical scientist? How many are both?
It would only make financial sense to push for the drug not to be approved -if- you had a position that made a gain from that, but let's not pretend like Martin was doing so out of any source of ethics.
There are plenty of pharma analysts who have used the same techniques who have medical degrees, have worked on clinical trial design at pharma companies, etc. They often aren't the names you see when pharma complains about people shorting their stocks because pharma only wants to point at the head of the hedge fund who has no life sciences expertise. They don't want the public to know about the dozen experts the hedge fund manager is paying to analyze the filings in order to challenge the filings and decide whether to short the stock.
No one complains if your analysis shows the molecule is great and you go long, it only becomes evil if your analysis shows the molecule is crap.
But the specific example is talking about Martin Shkreli doing this - a man whose formal education is a Bachelor of Business from CUNY.
And ethics have roots in motivations. Shkreli couldn't give two hoots whether the drugs had efficacy or not. He wanted them to fail approval only because of his position in the companies.
I'm sure Canada has decent oversight, but who wants to say that the solution is no direct US agency oversight, and that we want a "Pharmaceuticals-NAFTA"? It seems funding oversight with a "homeland" agency is one issue you could get bipartisan support on.
While sure, I doubt many have a problem with medical tourism, I'm not sure bringing drugs across the border intended for distribution without FDA approval is the answer.
On the other hand maybe countries working together at the agency level to ensure their oversight measures are in compliance with some agreed upon standard is a sane way to move forward. But then who maintains the list of approved drugs? Is that power given to some international body? Or does the FDA still have to approve drugs for distribution and only alternatives are brought in? And then what about drugs that are patented in the US (like this one), but freely available in other markets from other manufacturers?
It seems a worthy enough goal in general, but I don't think a fully libertarian approach to the problem comes close to being the right answer either.
I'm not a libertarian and I'm in favor regulations when needed, but in this case I think that recognizing drug testing and quality controls between countries that have similar standards would be a great help at curbing costs. "FDA approval" in this case should mean that the FDA could recognize that if agency X from Country Y says that a generic pharmaceutical is safe, you don't need to do the same tests again.
Of course this should work both ways - I'm from the EU, and I'd like to be able to get drugs manufactured in the US when they're cheaper and just as safe.
In other words, exactly the conditions to encourage all kinds of abuses.
Yeah, it can be worse than the current deal. Just look at the problems China has with counterfeit food.
Not sure I completely buy this argument, but there it is.
- Importing drugs from countries with reliable drug regulatory infrastructure would have substantial benefits, including a check on cost (sorely needed), and improved availability of less profitable drugs
- Other similar countries are doing this without seeing measurable negative health outcomes
then getting hung up on this 'major concern' that seems to have been rendered moot elsewhere makes most people worse off. Mentioning the existence of potential (and unlikely?) downsides is not an adequate cost-benefit analysis.
 not that it's unlikely that there will be people who try to take advantage of the system, but it seems unlikely that given appropriate regulatory care, the downsides will be unmanageable to the extent that they cause the change to allow drug imports to have an overall negative impact.
[edited for clarity, including the addition of the footnote]
I don't think anybody is suggesting mass importation of low quality Indian or Thai versions of drugs.
Both companies might be profitable on a marginal cost basis at $20/dose, but only the incumbent would be profitable on an average cost basis.
Because of this looming (unstated) threat, a competitor chooses to avoid the market.
this is in fact one of the stated goals of the patent system: a limited monopoly in exchange for the advancement of public knowledge.
Once competition returns, the price drops again, and no one makes ludicrous profits anymore. But if the expected returns in competitive conditions are miniscule, there may not be sufficient incentive to produce a competitive market for this individual drug again.
If you believe that the eventual average cost would prevent a new entrant, the new entrant would have to know (or believe that there was a high probability of) the entrenched producer would cut prices upon the second producer's entry. I do not find this to be particularly likely. In any case, the first producer would be betting on the likelyhood of the second producer's estimation of the likelyhood of a downward price change by the first. This strains credulity (, in my view). I think that if anything, your argument proves too much, as no company would even enter a competitive market if what you describe is the case.
Amazon prime costs amazon money, and the original fire tablets were sold at cost - i suspect the new 50$ tablets are not very profitable either
Walmart has commonly been accused of this practice for various products
Google's original Nexus 7 tablet
I believe Apple ended up losing money at least a quarter or two on the app store/itunes
Granted there are few examples, but its certainly prevalent enough that its a legitimate business concern - the bigger disparity is that it takes a pretty enormous size for a company to succeed in such a tactic, I doubt turing has the kind of capital to lose that the likes of Walmart, Apple, Google and Amazon do.
So, even if this company does always price their product at less than the new generics they've probably lost the trust of the buyers.
The correct way to handle this would be for the FDA to hand out compassionate use permits for patients to import their own drugs since it is clearly unavailable for a reasonable price in the US.
Completely agree that if someone is willing to pay the list price, they should be guaranteed availability within some reasonable time-frame for testing purposes.
I assume if the only drug line is effectively "shut down" then there's no way to run bio-equivalence and to bring on a new manufacturer they must test some other way? I guess whatever that procedure is, should take effect if the pills can't be ordered for testing.
Congress, controlled by Rebublicans, right now, won't let government get involved. I don't even want a cap. I would just like governmental over site/approval on Pharmacutical accuisition.
I asked my pharmacist why my generic drug(not orphan drug, noting fancy) is going up in price.
I don't know if she's right, but she told me big Pharmacutical companies are buying out generic drug companies, and raising the prices of the generic drug, or shutting the newly bought company--so they can keep supply down?
I don't know if this is going on, but i've heard it, from at least, two sources. I know it sound extreme, and hard to imagine, but these pharmacutical companies are loaded with cash? Plus, they have government protection--can't buy from Canada, etc.
So, in the end, we are going to be at their mercy?
As to just effecting Insurance Companies, my prescription formulary excludes so many drugs, or makes them difficult to buy; I pay out of pocket. These drug prices are coming out of our pockets.
(It's not just this future bottom boy at some federal correction facility, it's most of these Pharmacutical companies, or hedge funds? I can't tell the difference anymore. Oh yea, Biomarin seems just as shady, but because people don't understand what they do, they seem to just get a pass?)
Under normal market conditions, either the demand and price will naturally incentivize generics to enter the market (even at high costs), or this is really not much of a story because the total addressable market is so small that price * demand won't significantly move the needle in the books of insurance companies who will be paying for it. If total addressable market is significant and the producers can manipulate the market in ways outside of patents to abuse monopoly power, then that's the misdeed (in my opinion), not the raising of prices.
In other words, with very few exceptions it's futile to blame a company for their prices. On the other hand, if unscrupulous manipulation of a market is the culprit for unreasonable prices, that's where we should demand/enforce a higher standard.
Edit: I noticed that paulmd, further down, explained why this is important. I didn't realize the rules were this stupid. The FDA should be able to force companies to make their product available for comparison testing. It's insane that it isn't the case.
But in order to perform that testing, they need examples of the brand-name drug to test against. If a manufacturer can prevent them from gaining access to those examples, then the generic is never coming to market. They can't get a doctor to just write up a prescription for somebody, so they have to go through established distribution channels. There are a lot of other, equally nasty ways manufacturers can use to try and forestall generic versions of their drugs. It's not easy to do, because the laws are written to incentivize generic competition, but if a company thinks it's profitable enough to try (and certain factors are in their favor, like with Daraprim), they can.
The FTC has a really interesting document available on their ongoing efforts to fight anti-competitive pharmaceutical practices if you're interested:
But none of that excuses what these guys (I don't have any reasonable word to describe them). Its like saying there was this loophole that makes this kind of murder (not self defense btw.) not punishable by law so I went ahead and killed 50 people. If people dies from these diseases I don't see how it's not fair to put these guys in some murder trail. I wish we had some reliable tools to detect lies and CEOs and PR guys like these had to pass the test before such claims and actions based off such claims (we are trying to make a better drug) could be taken.
1. No one dies if they don't get See's Candies
2. There are other chocolates out there
Most people don't want to get rich slowly, as Charlie Munger says
Here the problem is that other manufacturers can't take up making these drugs at a sensible price because they have to get FDA approval for their copies, and doing that requires test comparisons with the original drug which you propose to copy to ensure that they behave identically. So either we need to change that requirement to a different testing approach (eg proving your copy is good through chemical assay rather than in a clinical trial) or by making licensing contingent on cooperation with regulatory priorities (so if you want to sell your off-patent drug, you have to make samples available to would-be competitors or provide the FDA with samples on request and at cost).
I personally find both to be morally problematic (to say the least), and unless you can establish a viewpoint neutral rule for this new criteria for nationalization (or murder), it will be enforced arbitrarily and capriciously.
There may be some practical issues (such as the regulator being a member of the same organization as the regulated producer), or issues with the scope (and scope creep) of the project, but those are only related issues.
Keep trying, don't give up
Please also review the Hacker News Guidelines.
>Be civil. Don't say things you wouldn't say in a face-to-face conversation. Avoid gratuitous negativity.
When disagreeing, please reply to the argument instead of calling names. E.g. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
What no one seems to be discussing here, is why there is such a long approval process from the FDA for generics? Ideally, someone should be able to ramp up production of this quickly, but apparently it takes years just to get the FDA to test your generic, even if its detected in the lab as being 100% chemically identical to the now expired patented drug. Turing is using this lag time to its benefit, but why aren't we yelling at the FDA to move faster on this kind of thing? I guess this might be moot because Turing can simply drop prices to scare off the investors of this hypothetical generic competitor. Say its x amount to launch this and they need to sell at $25 a pill for 10 years to break even. Turing now drops its price to $24 a pill. They're going to have a lot more flexibility here than someone entering the market from scratch and as long as they're selling above the old generic rate, they will continue to make serious money.
Also, from perhaps a less practical POV, considering what the government spends on medicare (3% of our GDP), perhaps it should be building its own generic drug producing plants. Private industry has 20 long years to make profit on patented drugs, but after that it should go into a federal program. This avoid these situations entirely, cut costs, etc. Or regulate prices on generics, or heaven forbid, finally bite the bullet and migrate into a Euro-style socialized medicine/single payer system and be able to bargain with big pharma as one 800lbs gorilla as opposed to hundreds of 6lbs capuchins.
Expecting people seeking profit to "act nice" is asinine. We can insult Shkreli all day but it doesn't change the status quo. Even if he's an outlier, how long is your average white collar criminal case resolution, assuming he's even doing something illegal? 2, 3, 4, or even 5 years? That's a long time for a drug to be off market or be unaffordable to people who need it.
Right now a lot of people are looking at this business plan with envy. In fact, this kind of generic trickery is status quo - see the "reformulations" of generics and then stopping production of that generic. The system is broken if it allows this kind of thing. What we need is a system that's not broken and that can't be gamed this easily. The current regulation model guarantees companies like Turing doing exactly this.
Sadly, online discussions often degenerate into witch-hunts with the assumption that if we stop this one guy, then everything will be fine. I guess its much less emotionally satisfying to discuss systemic political or regulatory issues.
This is an economically misguided point of view. Free market decision-making can only be argued to be optimal in a free market system, which pharma is not, a distinction which the decision-makers certainly were intelligent enough to understand. Free market mechanisms either need to be put in place, or we need to stop allowing its actors to behave as though it were one. As it stands, even from an economics point of view, this sort of behavior is simply immoral.
It gives economics a bad name when you try to argue that such decision-making is economically defensible. It is never economically optimal to make decisions that can directly lead to the deaths of citizens in the host society, in exchange for higher profits. The reading of free market theory with which most people, including its founder, would agree, is one where the goal is to maximize utility, not wealth. This is a vitally important distinction, and one that the layperson often overlooks. Without it, a free market system becomes nothing more than a war of sociopaths. 
Sadly, online discussions often degenerate into witch-hunts with the assumption that if we stop this one guy, then everything will be fine.
It's not sad at all. People are understandably outraged, as it is a natural human reaction to such callous life-and-death decision-making. If you truly believe in your statement, I'd reflect on why you are unable to relate to the majority of people around the internet who are very angry about this.
Let's invent a system that makes explicit the choice of dollars over human lives, and let's call that "the free market".
And of course, since freedom is one of those ideas that, in popular use, has been oversimplified to uselessness (e.g. freedom is good, more freedom is more good, without nuance), this "free market" thing sounds like inevitably good--the more freedom, the better, right?
Even if it makes us uncomfortable, how can you say no to the "free market"? Even if, as you yourself seem to acknowledge is vulnerable to sociopathic manipulation, if (some, maybe only a few, maybe even those sociopaths) people want to build a system that normalizes choosing dollars over lives, how can you resist the "free market"?
Easy: it's all human inventions, and I for one don't want sociopaths telling me how to build an economy.
Because assuming the majority loves buying cheap #$@!, this seems like an absolute poster child for the US government to step in and countergame him by directly funding and fast-forwarding new generics. Just announcing such intent ought to be be enough to ruin Martin Shkreli's career, no?
Building those sociopathic levers in by design? No way.
As for the enlightened self interest its really tricky. Enlightenment isn't easy and if that directly conflicts with his primary job (for business earning money) its much more difficult to address that. Also it forces enormous amount of co-ordination on the side of the customers which is difficult to achieve in every little matter. On the other hand a regulars primary job at least is to think the overall good. Now whether we can choose a proper regular or regulator having a second interest (corruption) is a different matter. The fact that we choose wrong regulator (aka the customers of regular cannot wisely choose even that) only makes me think free market can never be as rosy as some paints it to be.
Well then, we should fix the system by eliminating all people who are less then 100% perfectly rational.
You go first.
When the short term profits are great and the long term costs are too far for you to personally realize... it seems to make great sense.
Now it may not be optimal for society at large, but that doesn't matter when society at large isn't making the decision. For the one choosing, short of laws to punish them and with methods to launder any social guilt, it is economically optimal.
I would argue that human life is not limitless in utility and the free market establishes a price range on it.
Like it or not, there is a price tag on the utility of a human life. If you need to spend 100k per year on drugs to live and you cannot make 100k per year, then the free market has decided that your life is not worth the cost because you are not creating 100k worth of value to trade 100k worth of drugs you are taking out of the market.
I don't think it is reasonable to say that a market in which you arbitrarily decide that a human life has unlimited utlity is a "free" market at all. We can all agree that jacking up the price of a life-saving drug to save more money is despicable, but we would be lying to ourselves if we pretended this wasn't part of the free market.
The free market doesn't say anything about the worth of a life being only equal to how much an individual can earn. It says the market price of something is equal to what people are willing to pay for it. We have things like insurance that allow us to have more medical care than we could afford as individuals, and that is completely within the concept of a free market.
Of course you can buy insurance as a sort of reverse lottery to cover your costs. But you paid into that insurance and it is not required to cover everything. The co-pays/insurance can also bankrupt you.
And my main point still stands. If you cannot afford the cost of life saving medication, with or without insurance, then the free market has decided that your life is worth less than the cost of medication.
Saying the free market doesn't put a cost on human life and that it doesn't encourage price gouging is simply false.
In this case, it seems nearly impossible to make a concrete case that links this monopolistically-determined price increase to something that comes close to morally justifying the potential loss of human lives.
And as we know, pharma is not a free market in general, and is certainly not in this specific case, so the idea of the free market setting the price on lives seems inapplicable here.
The drug in question isn't even protected by a patent anymore. Other companies are free to create a generic version of it.
Government regulation has nothing to do with this. The free market has everything to do with this. The price of a life saving drug is worth either all your money or however much the seller wants to charge for it, as decided by the free market.
If you mean that eventually, some sort of force will break up the monopoly and find the true free market price point at the intersection of supply and demand, that is cold comfort to those who may die before that state transition completes.
But I am willing to bet that if someone started making a cheaper generic version of Daraprim, it would put on the approved list. The reason pyrimethamine isn't on the list is because no one wanted to make a generic version that hardly anyone uses for $1 per pill.
And even if it wasn't, the drug was being sold for $1 per pill just a few years ago. You can easily pay that without any insurance at all.
It is not patented, and no law forces you to only use the brand Daraprim. If someone created a generic replacement, it would be on the fast track to be approved like every other generic.
The synthesis method is even listed publicly.
The only roadblock to a generic version was because no one wanted to compete with $1/pill.
There are no unexpired patents for this product in the Orange Book Database.
There is no unexpired exclusivity for this product.
Others could go through the process to be Medicare approved, but that doesn't change that it's not subject to a free market.
Daraprim is a brand name. Pyrimethamine is the active ingredient.
When you create a generic, it must be checked that it is roughly equivalent to the approved version. Meaning there are no impurities and you digest the drug about the same rate which is determined mostly by the inactive ingredients. This process is relatively fast, often taking 1 year or less compared to the decades it takes to approve a new drug. And if you are going to be saving medicare millions of dollars, you can bet it is going to be put at the top of their todo list and will probably be tested within days.
To say that this is a government monopoly because you can't sell your drug from day 0 without any testing is quite a stretch.
To say that a market, which is regulated with government-granted monopolistic or duopolistic power, is a free market is quite a stretch.
Generics are extremely easy, cheap, and fast to pass approval.
Needing a minimal amount of time to check that your drug is roughly equivalent to an existing drug is NOT a monopoly.
>I don't see how pharma is not a free market in this case.
It's a monopoly because it has government-granted monopolistic power. Generics can go through the approval process and be granted similar power, making a duopoly.
That doesn't change the fact that it is a monopoly right now and definitely not a free market. Seems like someone has a case of confirmation bias.
The same way I don't relate to the "Obama is a Muslim" narrative on the internet or "9/11 was an inside job" narrative. I think appealing to outrage culture on the internet isn't the bulletproof argument you think it is.
For I agree with drzaiuslordofthenukedfallenearthgetyourhandsoffmeyourdamneddirtygorilla even though I think I'm not a sociopath. And that's because I also think this is an excellent case for the government to step in and provide the strong parental middle-finger to Martin Shkreli that he deserves so we can still get the free market that does bring so much good and yet also punish the sociopaths who exploit its unavoidable corner cases like this. See Goedel's incompleteness theorem about why, broadly, there will always be corner cases (yeah yeah inconsistent statements in any consistent system, sue me).
See also I prefer Obamacare because all the other attainable alternatives are worse (In the same way I would prefer single-payer like medicare, but unless Bernie Sanders is our next president, we're not getting it).
Why is the original drug required anyways? Can't you prove it's the same without it? The details are all there in the public patent.
Of course the real problem here is the subversion of the controlled-distribution mechanism to serve a private rather than a public end, a tragedy of the regulatory commons if you like. The basic idea here is good; you don't want drugs like thalidomide being freely prescribed because if they find their way to a pregnant woman consumption is likely to result in horrific birth deformities. This is an abstraction to many Americans because the FDA restricted Thalidomide early, but growing up in Europe I became aware of it from quite a young age because there was a small-but-distinct demographic cohort of people with characteristic deformities.
But what's happening here is the drug manufacturer falsely claiming that there's a serious public health risk in order to get into the controlled-distribution system, and then using that to prevent any potential competitors from entering the market. I imagine that if the FDA had declined to make any of these drugs controlled-distribution then the strategic response would have been to hire a PR firm to plant stories about how the FDA doesn't care about medical vulnerabilities.
Bill Moyers: For example, last February, before its patent expired on Namenda, its widely used drug to treat Alzheimer’s, Forest Laboratories announced it would stop selling the existing tablet form in favor of new extended-release capsules called Namenda XR.
The capsules were just a reformulated version of the tablet. But even the minor change prevented pharmacists from substituting generic versions of the tablet.
Result: Higher profits for Forest Labs and higher costs for you and me.
Another technique is for drug companies to continue to aggressively advertise prescription brands long after their 20 year patents have expired, so patients ask their doctors for them. Many doctors will comply.
America is one of few advanced nations that allow direct advertising of prescription drugs.
A fourth tactic is for drug companies to pay the makers of generic drugs to delay their cheaper versions. These so-called “pay-for-delay” agreements generate big profits for both the proprietary manufacturers and the generics. But here again, you and I pay. The tactic costs us an estimated $3.5 billion a year.
Europe doesn’t allow these sorts of payoffs, but they’re legal in the United States because the major drug makers and generics have fought off any legislative attempts to stop them.
To quote some comedian's take on this, 'in my country, your doctor tells you which drugs he wants to prescribe. In America, it's the other way around.' It's astonishing to me that direct-to-consumer pharmaceutical advertising is so rampant here, when somehow we managed to eliminate this for tobacco advertising without causing the 1st amendment to self-destruct. Besides the first-order consequences of medically ignorant consumers besieging their doctors with requests from drugs they can't even pronounce properly, it's also created this bizarre culture where illness is normative and every medical condition has to have a cute nickname or acronym - it can't be long before we start seeing people break up in soap operas because 'I love you...but my hep C isn't compatible with your A-fib!'
For one, read "the only". New Zealand was the only hold out (due to a trade agreement), but even there it's now been illegal for several years.
Is it even legal? Sounds like monopoly-forming conspiracy to me.
Not buying it. I'll buy the fallout argument, as that will hurt them monetarily, but I'm not guying them have any moral or ethical concerns with those being hurt by high drug prices.
Loaded question. This assumes they are doing it to save lives instead of doing it to make money.
And doing it to make money, given the patent system, is the less ethical option when others would do it to save lives but are now forbidden to do such.
Not really. It assumes that the drugs save lives. If you pay $X for drug that was developed to save your live or $X for an identical drug that was developed to do a job and turn a profit, it's the same $X and the same drug.
Why people are doing things is generally less important than that they are. This is one of those cases. Demanding a particular mindset when all other things are equal is a little bit silly.
It pretty much does assume it there.
And it does matter because of how one would react. If your end goal is saving lives, you wouldn't spend a lot working for a cure to baldness and you wouldn't buy rights to a drug and then jack up the price just because you could.
Preferably a sustainable course of action that allows for future actions to take place. A one-shot is generally useless on any kind of real timescale.
And who is out there willing to spend billions developing new drugs while giving them away for free? The patent system certainly isn't stopping those people.
> The patent system certainly isn't stopping those people.
The patent system does prevent people from getting at lower costs. I continue to have hope for countries that invalidate drug patents, and for further methods to be developed to drive down the cost of drug production (so as to reduce the barrier to entry for drug production).
If the patent system doesn't stop the non-profit development of drugs, then the breaking of patents and the pirating of patented drugs should in no way significantly dent pharmaceutical company profits, right?
It's from 2011, a quick search didn't find a more current report:
"After collecting data on indicators, PATH project teams use an online tool to enter results, which are aggregated by phase of development. A team developing a malaria vaccine, for example, reports completion of clinical trials with children in Mozambique. This result is aggregated with data from other teams conducting clinical trials of other products.
Top-level 2011 findings include the following:
PATH had 199 technologies and products in our development pipeline in 2011. Fifty-one products moved forward one or more phases in the pipeline. Six products were registered, three were licensed, and two were prequalified by the World Health Organization.
PATH had activities in 68 developing countries. We trained more than 91,000 people in 2011 and worked on 101 policies, strategies, and guidelines. At the global level, eight guidelines and one strategy supported by PATH’s work were approved by global decision-making bodies. At the national level, 36 policies, strategies, and guidelines supported by PATH’s work were approved.
More than 74.5 million people benefitted from PATH’s work. More than $100 million in funding was mobilized to scale up PATH-championed interventions.
PATH was awarded 83 grants valued at nearly $160 million."
Regarding the Gates Foundation, they don't directly research drugs, but contribute heavily to those working on polio, malaria, and HIV.
I like the fact that HN is a particularly civil place - it's in the guidelines. Now granted, AVG or Martin Shkreli aren't a member of the HN community in a very narrow sense (though I'm sure AVG engineers read it), unlike a startup founder. But I would appreciate it if you would hedge your statements, lead with the facts, and make them subjective.
It may sound like reserved understatement if you do so, but people here know how to read between the lines. I don't object to any of the facts you've presented, in fact your view is appreciated here, and you don't have to be "neutral", you're not Wikipedia.
I just wish you would take a moment and phrase it more carefully. HN has a rule, no gratuitious negativity, and civil discourse. (Again I'd like to emphasize that I enjoyed reading your take and the facts you've presented.)
EDIT: This comment is now at -4. I'm sorry, downvoters are not following HN policy. "Simply put, Martin is a sociopathic criminal with a well-established, and consistent track record of deceit, recklessness, failure, and just plain old stupidity" without references, and "In all my years of investing, he is one of the most unique scumbags I've ever come across" is extremely inflammatory. As you can see from the number of replies that it has generated. We don't need to make HN reddit.
The facts speak for themselves - when they're presented.
I'm with you on thinking one should be diplomatic most of the time absent full possession of the facts, but I don't think one should hedge one's personal experience as long as its appropriately qualified. In this case I saw an unusually blunt opinion, but one formed with additional information that I don't have access to. I don't take the opinion at face value, but it expands the scope of the discussion with additional data rather than being purely a reaction to the NYT article, not least because the author of the opinion is signaling a willingness to risk reputational damage by making such blunt statements.
If you try to read it literally what does "one of the most unique scumbags I've ever come across" mean exactly? It's not possible to translate this into an informative statement - it contains too little information, and "one of the most unique" is not even an oxymoron, it just has no informative content. (Some people consider "most unique" to be a grammatical error.)
So if it's a reflection of the author's emotions, it should be stated in those terms. But if the author takes a moment, he (or she) can make it far more informative. This isn't reddit.
And I'm not talking about the US, this is a world wide problem. Instead of making international treaties that make enforcing medical patents even easier, we should be talking about making the medicines we have more accessible. I don't want to live in a world were only a fortunate elite has access to modern treatments, but it looks like that's the way we're going.
It's not a huge list of medicine. It would seem to be reasonable to allow people to make and sell the meds on this list for profit, without allowing them to engage in the scumbag behaviour submitted article talks about.
I don't know if patents should be abolished completely, but if there's a discussion about a serious patent reform, we should stop considering pharmaceuticals as some kind of exception, and apply the new reform equally to everyone, instead of allowing exceptions for Big Pharma, or worse, watering down reforms to protect Big Pharma.
I don't understand why everybody's so afraid that without patents no medicine would be made anymore. On the contrary, it would force companies to work together and share the R&D, and would prevent the current inefficiency of multiple companies inventing the same wheel, doing the same studies, just because they all want to invent this medicine first.
Even better: with all the money that would be saved from not having all the bureaucracy around patents, governments could even set up their own research facilities and share all their findings with the public, making affordable and better medicine available for all mankind.
But that's a scenario based on your idea being feasible. The far more likely scenario is an even more brutal and unethical market, where companies use controlled distribution (such as with Daraprim) to prevent generics from being tested, and thus, being brought to market. Why? Because without patents, even that limited initial window for drug companies to earn back R&D costs--along with supporting the sunk R&D costs wrapped up in the larger number of drugs the fail to bring to market--exists only so long as the manufacturer is able to use whatever force is available to it it to stop generics from being produced. Far from cooperating with one another, pharmaceutical companies would have every additional incentive to stab each other in the back. Instead of skirmishes like you have now, you'd have a war to the knife.
It's easy to look at problems with the current patent system and think that they'd all magically be fixed by getting rid of them. But unintended consequences are still consequences.
For the rest, I wouldn't know why there wouldn't be multiple medicines. Labs would still come up with multiple compounds that have more or less the same result, and if not, research would continue for the people who fall outside the bell curve of the other medicine.
The whole difference would be that instead of competition, there is cooperation, and the aim is not to make money or profit, but to help humanity. This is not unrealistic, it's basically what we (at least in NL) learn in primary school: "Two know more than one", "Many hands make light work", etc. It's only that the schools after that tell us to forget it all and teach us how we need to compete each other and especially to keep everything for ourselves and never do anything without expecting something in return.
[quote]where companies use controlled distribution (such as with Daraprim) to prevent generics from being tested, and thus, being brought to market. [/quote]
This wouldn't happen, as the resulting medicine IS the generic.
The issue is that this process happens right now because of independent development due to competition. As soon as you unify multiple efforts into one cooperative effort, you no longer have multiple efforts that produce multiple viable drugs.
You're appealing to unify research efforts to put more wood behind fewer arrows to help people. And that's fine. It just that this has consequences, not all of which would likely be ones you want.
So, yes, the resulting medicine would BE the generic. And that's great! But there is a drawback. And these are just the consequences we can easily predict. We haven't even thought about the psychological effects of enforced monoculture yet.
Patents, as originally intended, are to encourage documenting the invention and the eventual transfer of this knowledge to the public sector. They were never intended to be abused and twisted for personal gain as they are today.
This is not specifically in reply to the parent, but the point fits here: I'd observe that calling for more regulation or even outright nationalization to fix this, when it's probably already illegal, is not thinking very clearly. Regulations are already failing to prevent this... how is enacting more things that make illegal things illegalier going to actually solve the problem? How is doing the same, but more, actually going to help?
By the time these companies are called out they amass huge war chests and tie these things up in the courts for years while enriching their investors and management teams.
Then, when the hammer falls, that company disintegrates on some level and, often, these management teams spread to similar companies and do it all over again.
Obviously, something is not working. When something is not working the answer is almost never 'let's keep things the same and hope it turns out better.'
It's easy to call for more regulations but it sounds a lot more to me like the core problem is a priority mismatch in enforcement. A lot harder to fix, but certainly step one seems to me to be to get people to stop calling for "more" regulation and start calling for the core problem of ineffective regulatory agencies to be addressed. Betcha if you took a look at what the relevant agencies were doing with their time instead of dealing with this, you'd be less than pleased.
But I also don't see the alternative. I don't think a free market approach would work. The government has a huge standing war chest. It can afford to take the time and expense to go after these bad actors. Even insurance companies are rightfully reluctant to take on very expensive, risky litigation and/or investigation that could run into multiple years or even decades.
The market is a wonderful tool, but it can't solve all problems. Some problems are so big that it takes the pooled resources of, essentially, everyone to fight against it.
I'm a libertarian, but I'm not an "anarchist" because I still think it makes more sense to have an industry, and an independent, focused, effective regulatory apparatus. When you fall prey to the regulatory apparatus' ploy to gain more power with yet more "regulations" by responding to their failures to use existing regulations to fix problems, you A: play a part in letting these sorts of failures slip by B: reward the regulatory apparatus' failures, creating more incentives for them to fail later and C: give them another vector to "fail" and need "more power" to fix their failures in the future.
You want regulations to work, stop falling for this obvious ploy and start holding your government servants responsible for the failures they are already abundantly equipped with the tools to solve, instead of playing the sap and joining in with the voices calling for more power, exactly as they want. They've got enough to handle this problem. Go take them to task, don't hand them more power even as they are demonstrating their manifold inadequacy to be given even what they have.
We'll see if any of this survives our current President's tenure, though.
I don't think this is illegal unless they're selling the drug below cost (dumping).
( cost of entry to market + stringent packaging requirements for these particular drugs ) / market = nobody else bothers to get in the game
The market size is likely just under the cost to establish the manufacturing capacity for the US market.
So, probably, it's setting the process up which is expensive.
It's a dark word, because it basically means: Why give people drugs for $13.50 if the disease is horrible enough that they will, in the long run, accept $750 to ease the pain or to not die.
We have laws preventing something like this, but then the industry just has to invent a "new" drug (basically the old one with a little difference in formula), sell it at a higher price and then discontinue the old drug.
Sad world, we live in.
But I think two things are happening:
1. The price of the drug was artificially deflated.
2. The somewhat-free market is deciding how to handle the correction.
If the market for this drug was interfered with and the price was not allowed to go up, who's to say the manufacturer couldn't just discontinue the product? Would that help?
Therefore it's impossible to say whether the long tail drugs that Turing is marketing would be considered under-priced in a free market. We can only say that in the current consumer-price-sensitivity short circuited market that the large pharma companies think that there are more profitable areas to put their energy than long tail drugs. And looking at it from their perspective, this seems fairly obvious. First off, these drugs represent a small part of the market. Also, even if they do covet Turing's margins, competing with Turing would diffuse the monopoly mechanism that enables Turing to secure these margins. The Nash equilibrium then would seem to be not to bother.
India makes 80% of the generic drugs used around the world.
If US hospital administrators are paying $750 a tablet, it sounds like the Indians have not bothered to apply for sales approval in the USA due to the low profit margin.
There is a little more user-friendly info here: http://www.drugs.com/availability/generic-daraprim.html
Research and trials shouldn't be done by the companies. Instead it should be done by the state, then companies should be able to bid on an exclusive contract to manufacture and sell the drug. The company that offers the lowest selling price gets the contract. After the exclusive period, it becomes a generic licensed drug, license feeds sponsor new research.
Don't know if that would work, but the current system is simply homicidal.
Just look at antidepressants, where doctors have to slog through a huge number of different options (not just different classes, like SSRIs or SNRIs, but often radically different drugs within those classes) to find the right drug therapy that works for each individual patient. Choosing the right medication, and the right dose (which can have a huge effect on how the drug functions) can mean the difference between someone living a healthy, productive life and suicide.
Drug R&D is an entirely different ballgame than basic science. And there's already countless examples of how basic science funding, from appropriations to attempts by politicians to interfere with the grants process, can be screwed up. Hell, just the amount of funding necessary to replace private drug R&D would be a significant political expenditure. And here's a fun consequence: how long will it be until some arrogant politician comes along and complains about how drugs developed with American taxpayer dollars are being provided to foreign countries? I can see it now, and it's terrifying: some bullshit slogan like "American drugs for Americans" should terrify you, too.
Even under the best case scenario, public funding would mean tradeoffs: research option A or option B, but not both if there's any overlap. And that's before politicians start playing games and before budget cuts start impacting research. Maybe the solution is to have manufacturer bids be sufficient to cover those R&D costs? Congratulations, you're right back where you started, with drug costs either the same or negligibly less. And where does the money go? If it goes into the state's general funds, politicians will use that money for their own special interests and pet projects. If it goes into an earmarked fund, politicians will cut back taxpayer funding by an equal or greater amount. You can see textbook examples of each with federal infrastructure funds and education funding in states that host lotteries "for the children."
Simple idea in theory, horrible in practice. Unintended consequences are still consequences.
As for antibiotics, that's a bit of a different case. There are a lot more arguments for public funding in these sorts of circumstances, where pharmaceutical companies can't research and bring a drug to specific, niche markets. Antibiotics are a classic example, especially when you consider the broader public health risks associated with the rise in antibiotic-resistant strains.
-They have reduced or eliminated co-pays so no patient is paying as much out of pocket as they used to
-The drug is still 50% given away to people who cannot afford it
-The company ships drugs to patients before resolving disputes with insurance providers
-Shkreli's view is that it is in the best long term interests of the public to have a drug that can be insanely profitable be insanely profitable because it creates an incentive to create another better drug
-On that line, the company is researching new alternatives to the drug which are less toxic (ie: cannabalizing its own market)
Maybe they will create a new drug with the extra money, but there is no reason to believe a generic drug manufacturer has anything in the way of research capability to do so. There is no reason to view this as anything but bullshit.
He had the company switch over to direct sales, which explains most every other point.
The only thing to note here is that they raised the price 5000% for a drug from the 40s.
It worked; the company with few economic prospects ended up being sold for $5.6 billion 
And the pharmaceuticals industry needs to just go away.
There may be a need to look at enforcing some more openness to formulas and manufacturing process so that after patents expire it's less possible to maintain an exclusive on a generic. That is consistent with the intent of patent protection and encourages open markets and competition.
But, nationalizing the industry is impossible. We don't spend anywhere near enough on medical research for it to be possible. The UK government for instance spends about £500m a year on all medical research, even if you redirected all that money into clinical trials, you would be lucky to produce a handful of drugs each year.
This is academic, perhaps, given the likelihood of it happening.
If the federal government had locked down all IT development in the 1980s as you proposing they do for pharmaceuticals, we wouldn't have this forum to comment on, much less the industry it is built around.
I don't believe that anything as extreme as the parent suggests is necessary but I do believe that we should have enforceable transparency in the pharmaceuticals industry R&D costs and/or decoupling the drug trials system so that the trials have to be carried out by an independent third party.
The only thing that made it useful though was commercialization.
Yes, the dumb pipes of internet are.
The applications, like this website, that actually make use of those dumb pipes are not.
Computers are tools. Drugs are health. They are a public good and a natural human right. Holding people's health hostage is unacceptable whether you do it with a knife in an alley, or a capitalist health system.
Mixing them up like the USA system does is a category error.
No they aren't. Saying that is equivalent to saying that you would be justified in putting a gun to a chemist's head and forcing him to make a drug for you even if he didn't want to. But there's no reason to say that your "right" to a drug trumps his right to be free from threat of violence and denial of agency.
What you're talking about is more of an entitlement than a right.
Holding people's health hostage is unacceptable whether you do it with a knife in an alley, or a capitalist health system.
Why exactly should I feel like society owes me health care that I can't pay for? Especially when the model involves a scenario where my getting health-care possibly involves using violence, or threat of violence, to make somebody else provide that care? How is that ethical?
Even from a selfish perspective, public health is so crammed with positive externalities it pays for itself.
Nobody's going to force chemists to make drugs. Instead the way tax works is that you force everyone to pay a fraction of their productivity into a fund that gets spent paying the chemist to make drugs, the pharmacist to deliver them, etc. It's very similar to insurance except that it doesn't have the perverse motivation to deny you care, and it's compulsory because a civilized society values people not writhing in pain and dying from uncured curable disease more highly than losing a fraction of their time working for the state to prevent it.
Imagine if in the early 90s we had stiffed cellular phone technology because "only the rich have access to it" or general internet/network technology because "only banks and giant corporations have access to it."
Thanks to capitalism, the technology is now so permeates all sectors of society that some have argued that access it that internet access and smart phones are a human right that should be socialized by the government.
Tax would pay their grants, tax would fund the trials, and tax would fund the production and packaging.
Do roads and public water sanitation materialize out of thin air?
Ahh, hmm, I'm wanting to ask if you know anyone working on drugs without sounding rude.
In my experience they are like doctors. Lilly researchers do enjoy the thought of helping people, but mostly in the abstract. In the concrete they like complaining about people and regulation :) they also very much like living the "good life".
I'm not saying we'd lose all drug researchers if it were nationalized, but I do think we'd lose a lot of them -- at the end of the day, most people do want money, and end up being motivated to pursue careers which are financially rewarded. A full time doctors without borders just wouldn't work IMO.
As to the claim that drugs come from universities... You can take an interesting research finding and turn it into a potential drug... but there's a tremendous amount of work remaining, which isn't particularly interesting / researchy, and still requires someone very smart to do it. Essentially the more financially motivated people in academia are the ones who volunteer for what is often a fool's errand (a failed drug). I think the "new drugs come from universities" position is also true in the sense that "biologists get degrees from university" -- but as others pointed out, that sense is true for all industries.
Researching drugs or developing IT applications are not basic commodities.
Pharma research does not have network effects
When they do get corrupt what do we do, since it's the same guys with the guns and court houses?
There are some very messed-up public works, but most of the time it works pretty well.
FWIW unlike 90% of this thread, this suggestion doesn't sound insane to me. We could look at the number of people with a disease, and the QALY swing caused by the treatment, and then pay the team which designed the drug for the patent for (expected number of treatments) * (expected gains in QALYs).
This would allow the drugs to be any price the government liked once created, but still convince financially motivated smart people to work in medicine. Bonus points if the solution included ever-rising-prices for long untreated diseases (kind of like an auction).
Want to see real innovation? See for example the home made radio receivers people made in WWII, that fit in a small tin can, or visit an Amish settlement (http://kk.org/thetechnium/amish-hackers-a/). Not to mention hacker/maker spaces and fablabs, which all work on open source principles and sustain themselves through donations or member fees.
That said, there's also application. Curiosity may lead to someone discovering a particular complex chemical, but curiosity won't turn it into a cheaply produced pill available at your corner pharmacy.
Hobbyists tinkering in a hanger did not create modern airlines - giant corporations like Boeing managed the capital required to make it happen.
Hobbyists tinkering in a garage are not going to be able to carry out years of dedicated research followed by years of study followed by years of clinical trials.
Only a sick (person/group/society/culture) would link them like this. Drugs are, in fact, dis-ease. They are the opposite of health.
Real food, real exercise, real work and real sleep. That's health. Drugs are at best dis-ease and at worst tools of predation and exploitation.
You're making my point for me.
For 20+ years, they've been moving more and more of their R&D and manufacturing overseas to save on labor costs. They then get Congress to approve of anti-competitive laws that disallow citizens from importing cheaper drugs from overseas for both use and resale. Big Pharma should have to compete on the same level as labor.
In typical US fashion, though, the profits are privatized.
Actually, I don't believe letting the government take over would be good in the long run. The most direct fix would be to immediately revoke the various laws that disallow American citizens and companies from buying approved drugs in foreign markets at massively reduced prices and then reselling them in the US.
Big pharma has for years now been slashing their US workforce and moving to third world countries. Another example of labor getting to compete in the global market, while capital enjoys privileged advantages.
And roads, electricity, emergency services, internet service...
> performing better (in every sense)
Oh, I see, you didn't really want a fair comparison. No matter how far you separate the means of two gaussians their tails will always overlap, and therefore you are tautologically correct. I'll try to remember that next time I go to pay 2x what I would pay in a contemporary social system for health insurance, I'm sure it will make me feel better.
"Socialised healthcare" is a system where a public institution puts capital to take care of a patient by using private-made products and services. i.e. the needles, IT systems, ambulances, drugs, etc, the public system is a platform, but not an industry.
Let the market be free, private companies are better at solving real problems. If the price of a drug is expensive (i) a public health system will take care of it, and (ii) new players will want a slice of that expensive drug by making one better and cheaper. This is my point. Governments are not good at making realiable and quality products and services.
A great example of this in action is the silly Post Office pre pay benefit requrement. It's making the Post Office look really bad because they appear to not have enough to operate. The truth is they operate just fine, and are self-funded. Congress changed rate structures and imposed prepament of multiple decades of benefits, both of which would make no sense to any reasonable organization.
It is strange that you seem to believe the free market is the only way to achieve efficiency.
Showing just a healthcare expenditure vs GDP figure doesn't address the root cause problem, and it defiently doesn't explain that public is better than private, and vice versa. I'm not talking out of ignorance, as my father is a orthpeadic surgeon in the public healthcare system here in Europe, and the above is a logical fallacy that doctors are well aware of.
A good example of a market which works well almost without intervention could be the coffee market, since it's really difficult to have a monopoly on any side (farming, distribution, selling) and the incentive is aligned with the customer's best interest (selling coffee to get more money). A lot of physical consumer goods are in this category.
In between, you have markets with a high cost infrastructure but where the main goal is to be a public good. These market need constant input because their interest is not entirely aligned with the consumer. ISPs can be a good example of this, if you don't put laws to correct the default behaviour, it will never work well. But with good laws, it's fixable.
At the opposite end I suspect there is markets where the private system will never work, whatever laws you put in place. Education, Health related industries, Prison and Justice system would fall in this category. There will be no law strong enough to change their incentive so it's aligned with the public.
The nationalized health care programs seem to be performing better in other countries than ours.
Or, in one extreme case - the same healthcare outcomes at 1/10th of the cost (Cuba).
>In any nationalized system with controlled prices, you will have shortages.
In any system where there is scarcity you will have shortages. Period.
The problem with US outcomes is really disparity. A lot of people have very little access to health care and that drags our averages down like crazy. If we could get these kind of "solved-problem" drugs out to everyone who needs them, our average outcomes would jump quite a bit.
Cost is a whole different situation, and that's a much more difficult one to solve. Everyone from manufacturer to insurer to doctor wants their cut, the elasticity of demand for a good without which you will die is zero, so there's very little incentive to keep cost down. There's a few places you can point that are particularly excessive (direct-to-patient marketing, excessive spending on terminal patients circling the drain, etc), but in general it's the death of a million cuts.
Pumping generics is one of those cases that's clearly abusive. With regard to the specific problem, if you try to limit their profits pharmas will simply take their ball and go home - they won't produce it. For a real-world example of this, you can no longer get the Lyme Disease vaccine for humans - nobody makes it anymore, you can only get it for the veterinary market. Evergreening is a similar problem.
In such cases the government really needs to either contract out production of a supply, at-cost (including interest, distribution, etc). If no one will do it, bite the bullet and make it ourselves. If our national labs can figure out how to manufacture high-quality biological or chemical agents, we can figure out how to make high-quality vaccines and drugs as well. Public health is a matter of national security when you get right down to it. Shouldn't we be able to ramp up production of an Ebola vaccine if we really needed it?
Pharma needs outright nationalization or competition from the public sector at the very least.
We've played these games before where monopolistic private companies threaten to flip the switch on critical services. The solution to this one is the same as it was to companies that refused to provide mail service or electricity when it "wasn't profitable enough". Nationalize them and provide it at cost. It's simple and proven. Hell, it's likely that the mere threat of it would be enough to panic pharma execs into playing ball.
A great deal of pharma profits comes from taking research from the public sector and commercializing it anyway. Cutting the fat from the process (executive salaries, marketing, bribes to doctors) would be vastly improve the efficiency of the system.
Even if research done in the private sector were 40% less efficient than that done by Pharma companies (and there's no evidence that it's any less efficient), by slashing marketing costs to zero we'd still come out ahead by nationalizing them.
The thing with marketing is that it's a win-win for the person doing the marketing. Direct-to-patient marketing has real-world returns (ask your doctor today if the purple pill is right for you!) and a rational player will put money into that investment until returns no longer exceed costs. However on the whole it drives up costs for everyone since people who don't actually need it seek treatment, and then get prescriptions. Regardless of anything else you do, you just need to outlaw direct-to-patient marketing. It's a perverse incentive and we're the only nation that allows it.
One of the reasons the US has good health outcomes for some things like cancer is because of the huge amounts of government spending.
Now, if you had said "Virtually all national healthcare system provide better care based on cost" I would have agreed with you.
Excluding 15% of the population from all but emergency care pretty much guarantees this outcome.
She wasn't there one morning and I asked where she was. She died - something to do with her kidneys and she didn't have health insurance.
Now the US gets to statistically ignore her death and claim it provides excellent health care to its citizens?
"We need to be careful when comparing US and UK cancer care"
numbers in the US are good, but not significantly better than, say, germany.
No, it's not true. In 2010-2011, US had the highest expenditure in the world on health per capita according to WHO and OECD, but those stats are combined public _and_ private expenditure.
World Bank stats show Norway & Switzerland as spending more per capita over the same period, but then says that 'data is in current U.S dollars'. The data for these stats is from WHO, so not sure if currency fluctuation or something else is a factor here?
According to , per capita public healthcare budget for 2011 was $3,768 vs. an overall spend of $9,146, so 41% of the total healthcare spend was public money.
In any case, I think all these stats can reliably posit is is that combined public and private spending on healthcare in the U.S per capita is one of the highest, if not the highest.
You really don't want medical science led by popular opinion.
The SLS program is jokingly called the Senate Launch System: https://en.wikipedia.org/wiki/Space_Launch_System
As for the NASA comparison... I don't really want drug research to be chronically underfunded.
Instead I have to go ask permission from the government, fight for funds, wait for approval, build massive infrastructure just to prove to the government I'm not wasting their money, and so on?
I've worked on government contracts - defense - most of my career. It is not a model of innovation, low costs, fast delivery, friction-less pivots, and the like. It's a story of incumbents, outdated regulations (waterfall for the win!), inability to get money for great ideas, buckets of money thrown at bad ideas, cronyism, lobbying, you get the idea.
It's trivial, and lazy, to talk about "big pharma" - to paint them as evil. Yes, there is plenty of less than stellar activity, and I had a gf that was in the business. But she also worked for a small start up that would probably be impossible under your model. That world is full of idealistic people that want to do good in the world. And yes, there is also unsavory business practices. But so much good has come from people with a dream. Bethesda is the pharma equivalent of SF in tech. Lots of money flowing, lots of great ideas, lots of moon shots, lots of quick failures, lots of success. It ain't ideal (great ideas, no funding, for example), but I'd suggest your idea needs substantial sketching out to explain how it would successfully replace this sort of activity.
edit: my first job was working for a small company that contracted for NIH. In my short time there I heard so many stories of research being started, then something becomes the hot topic of the day, funding is withdrawn to throw it at this new topic, and the old project is left to die. Not that the new topic was a bad thing to pursue, but if you keep switching focus before getting results you are wasting tons of money. The NIH is regularly criticized for taking only 1 approach to a problem - investigate drug X or treatment Y. It's unbelievably hard to convince Congress that you should spend a ton of money on a research program, but then go and run 10 other programs that assume that that research program will not pan out. No, that's stupid. It's incredibly believable. I recall pulling all nighters, being called on the phone by congressmen or their aides, trying to pull data together for a presentation on the hill to get or continue funding. Ultimately politicians were making research and health decisions. Madness. Everyone I worked with had their hearts in the right place (beware the easy, lazy assumptions!). Individual politicians that I've run across are intelligent and trying to do the right thing as they understand it, and often that understanding is very sophisticated. But the system doesn't have a heart, whether that system is capitalism, start ups, or government.
If your motivation is to make the world a better place, you just publish your idea and if it will indeed be as good as you think it is, things will roll (in the supposed system) by themselves from there on. If your motivation is to get (much) more money than you pour in it when there are lives at stake, then this rises a red flag and should be treated as a public threat.
As opposed to approaching private companies for permission, funds, approval, adhere to their compliance and management policies, and so on?
> So, I have a great but perhaps hare brained new idea for a drug/treatment. I'm willing to throw my tens of millions (heh) at it.
Your model where the financier is the same person as the scientist is not a common one.
There is a big danger in the approach I gave, but it's political interference. If the god-botherers can be forced to keep their mitts off, I expect my way would create more basic research and more simple effective drugs.
Greed motivates chasing the slight change that will let your company replace an ageing-out-of-patent drug with a freshly patented one, drugs for rich people, drugs aimed at insurance payers, and it de-motivates improving the basics.
I see those as an adverse outcomes, so I would prefer a different way of funding drug development.
"The Benefits and Savings of Publicly-Funded Clinical Trials of Prescription Drugs"
"Patent Monopolies and the Costs of Mismarketing Drugs"
And that doesn't include the tens of billions in biotech VC funding.
But my view might be myoptic, so I was double-checking.
The last number I saw was $6B invested in 2014.
Eli Lilly, for example, spent ~$4.5 billion on R&D in FY 2014 (24% of their total revenue) - http://www.lilly.com/about/key-facts/Pages/key-facts.aspx ... I'm not sure how big the VC deals were for 2014, but I feel like if you include Pfizer, Genentech, 3M, GSK, and then all the smaller ones big enough to be listed on https://en.wikipedia.org/wiki/List_of_pharmaceutical_compani..., VC funding will be maybe 2-5% of the total private pharma spend.
This is actually a lot like what Intel, Nvidia, and Google do. Basically your revenue takes over where the VCs left off. If the VCs are doing their jobs correctly, reinvested profit R&D is in aggregate much higher than VC dollars... Intel spent $3 billion last year on R&D for example... https://ycharts.com/companies/INTC/r_and_d_expense
Perhaps I am simply stating a tautology b/c of the narrow definition, but I'm on the same page with refurb.
This process can be short circuited by an acquisition, but of course the acquisition is ultimately paid for by past customer profits too.
In the context of https://news.ycombinator.com/item?id=10251676 's assertion that "Drug creation needs to be nationalized, 100% tax funded all the way from researcher to trials to manufacture, and the drugs sold at cost thereafter" which was followed by brixton's reply that "The drugs might end up being cheaper, but there will be much less research for drugs" this remains a very important point: drug R&D folk aren't in it for the VC funding... they're in it for the profit margin. If you remove that light at the end of the tunnel, there are no startups, and the smartest of us go work for the Googles of this world.
(Though FWIW I do think you, refurb, and I are all roughly on the same page if we limit our scope to startups.)
The error in your thinking is that curing a patient results in less money than just chronically treating one. Not so!
Imagine the kudos that would go to the researchers and the company that cured the common cold! And a pill for that would sell well enough to offset the losses from palliative lozenges, decongestants, etc. And it's not like they are short of other pills to sell.
Come again? Please explain how that works.
The article pointed out that the drug in question is over 60 years old. I doubt the original creators thought about profitability at a time frame where they are most probably dead anyway.
Poor people have been voting for Democrats for 50 years and they're still poor.
Getting people out of poverty is a lot more complicated than which political party one supports.
A Mayor can put together a deal that will bring an employer(and all of the jobs that it brings along) to a municipality, congress doesn't do that.
A Governor can influence the business climate of a state. There's a reason why manufacturing jobs are moving to southern states.
Greed in here can also be a cause for the tragedy of the commons, which is more serious than any opportunity progress! Because of the said greed the drugs reached agriculture having all kinds of unintended effects, the most serious of which being development of many drug-resistant pathogens.