My line of thinking has always been that developing and selling drugs is very expensive. Without the possibility of being acquired and selling a vial for five figures, there's no way it would have existed in the first place.
Going off the numbers in the article, MNK sold $1B last year. At $34K/vial that's about almost 12 vials per infant (2,500/yr) per year. (Assuming the course of treatment is one year)
When the vials were selling for $40 each, they would have brought in $1.2MM - I'm no expert, but that doesn't even sound like enough to rent a lab and hire scientists/technicians.
The real headline of this article should be, "MNK settles $100MM lawsuit over anti-competitive drug pricing behavior" (or something more catchy) -- That, to me, is the real interesting bit.
How regulations work around drug pricing is where media focus should be, and there are just as many soundbites in that discussion for the media to latch on to as well.
Of course, we know from history that it existed for $40 a vial. Looking into it, it was identified in the 1930s and a synthetic analogue was developed in the 1960s.
I imagine the one weird trick they were using to bring down costs is only to devote a small number of days each year to producing the particular drug. It'd be interesting to see the current production costs.
One way to deal with this problem is simply to take away the drug patent if a company is found to engage in this sort of behavior, make that law. Their drug becomes a generic to be manufactured by other companies if they are found to be profiteering off a drug. Then under threat of losing it all hanging over their heads, drug companies will behave themselves.
How do you decide what is profiteering, let the courts decide, just pass the law and then pass the judgment to the courts. They will use common law and all the other stuff they have under their belt to make that decision, economic theory and what not.
The point is to get business strategists to understand that there is a risk of bluntly increases prices to make a profit.
How would you define "profiteering?" By granting them the patent we have eliminated all possibility of competition, giving them the ability to charge whatever they want, anchored by what the desperate are willing to pay instead of the cost of production. To what extent can they use this power before people get up in arms about it?
I think we need to rethink the entire system. There should be incentives for drug research and discovery, but we still need a functioning competitive market if we expect prices to stay at reasonable levels. One idea is, rather than giving the discoverer monopoly rights, require anyone else who produces the drug to pay a percentage of their production costs as a royalty. This preserves the competitive advantage of the company that discovered the drug, but anchors the consumer price to the cost of production.
They also would simply refuse to research and develop any new drugs under that regulatory environment. Drug companies are. not benevolent entities, they are as cuththroat, or even moee so than Wall Street.
The real issue is the cost and length of clinical trials. I know this can be lowered somewhat by allowing computational models, but it is a difficult problem to solve unless biotech goes through the same garage Revolution as the PC
One way to address this is to create different standards of evaluation and to adjust the legal liabilities accordingly.
What I mean (very roughly) is something like:
Untested => you are on your own, don't imagine you can sue anyone if something goes wrong, this is the default
Conditional => some basic efficacy/safety protocols have been evaluated, some limited liability for the drug companies,
Approved => full suite of evaluation done, liability still capped but at a much higher level then Conditional
There would still be legal safeguards around fraudulent or negligent practices of course that wouldn't be constrained by the capped liability I suggested above.
This is a terrible idea. The judiciary is there to adjudicate conflicts based on the law as created through the legislative process. Not to craft their own laws.
I couldn't see anything in the article (or the linked press release) to indicate whether the settlement included reducing the price to something less outrageous.
Going off the numbers in the article, MNK sold $1B last year. At $34K/vial that's about almost 12 vials per infant (2,500/yr) per year. (Assuming the course of treatment is one year)
When the vials were selling for $40 each, they would have brought in $1.2MM - I'm no expert, but that doesn't even sound like enough to rent a lab and hire scientists/technicians.
The real headline of this article should be, "MNK settles $100MM lawsuit over anti-competitive drug pricing behavior" (or something more catchy) -- That, to me, is the real interesting bit.
How regulations work around drug pricing is where media focus should be, and there are just as many soundbites in that discussion for the media to latch on to as well.