“Corporate rip-off:” White House slams Big Pharma’s drug price reform attacks
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FWIW read about the Bayh Dole Act first. Saves a lot of time correcting comments like yours because you have zero right to complain while that law exists.
But you not always correct as the most recent example, liraglutide and semaglutide (based on liraglutide), was financed by Novo Nordisk. In some cases, the University holds the patents like with Warfarin:
While I agree companies should be paying more, there is zero expectation that the politicians in the government and university will give back any substantial return to research. The Wisconsin Alumni Research Foundation (WARF) webpage says it gave $134.1 million to the UW system but has an endowment of over $3 billion.
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Yes, and those patents spur the willingness to actually spend money on R&D to create valuable (and many not-so-valuable) drugs.
The level of profitability that society is content with and that investors require to continue to invest is, to me, what is in question.
Shkreli did a few things, but I was picking on the generic in particular. Educate me if I'm wrong but he was ripping everyone off on the generic because he was the only game in town and thus had a temporary monopoly on productive capacity for that medication.
I will never defend large profit margins on generics. They should be regulated like utilities such that investors can make reasonable and reliable profits; enough to attract them into the business for low-risk returns, but never enough to screw over consumers/insurers (the latter of which will eventually screw over consumers/taxpayers).
I will admit that without more transparency we really don't know how this all plays out. But the gross number of drugs that have been introduced has climbed over time per the CBO report I referred to. Now it doesn't make a judgement on the actual usefulness of all those drugs. Some may be "remixes" of the same old drug. I'm well aware of the BS games they play there too.
Agree there are major problems with pricing in the US. If the US actually reforms things such that prices are more like the rest of the world, it will be interesting to see what happens with drug development. My theory is that the US is subsidizing the world by paying outrageous amounts. In other words if everyone paid that much, the companies couldn't do as much R&D. Maybe we'll see but I'm sick of the high prices here.
What I believe is that in general, a company should be entitled to make a profit based on what the market will bear. IF people don't want to pay it, the company will fail, or the product will fail. But problems arise when there's a monopoly (like the one for patent holders). Even now there are some limits. Some states have rejected paying for Wegovy and the like saying that sure, it lowers medical costs for patients but it's so expensive that we come out ahead by just eating those higher costs of obesity.
But more importantly, I believe monopoly holders do have to be regulated because monopoly definitionally means no competition. And without competition, the free market does a horrible job of providing goods/services at reasonable prices.
I'm really not sticking up for the industry here. They do many, many bullshit things. I've personally had to pay through the nose for things that shouldn't be expensive. We all know stories about people who can't afford what they need. MUCH work is needed to make this better.
But as a principal, capital has to be attracted based on a risk/return proposition. I don't know where or how to draw the line for profits vs. incentives.
But I think about Alzheimer's where the amount of money that has been spent with no return is massive (many billions). And we desperately need something that works. If there's not a huge payoff then no one will do the work. The only alternative is taxpayer funded research. Some of this happens of course, but yet here we are after decades and it hasn't happened. We need as much help as we can get and unfortunately, most people are motivated by money.
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Side question: can you point me to data on this? Not doubting you, but would be interested to see. I'd assume that the numbers are roughly equivalent to US firms.
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Shkreli bought the brand name version of the drug, Daraprim, the only version that was available in the US, and then blocked the production of generics via means ultimately ruled to be illegal.
Shkreli’s infamous price-gouging scheme finally shut down in $40M settlement
The trial against Martin Shkreli is slated to begin next week.
arstechnica.com
Pyrimethamine - Wikipedia
That was a case of an orphan drug though, one where there's a single supplier because the drugs is so cheap and the market for it so small that it's not worth it for any competitor pharmaceuticals to produce a generic, at least at the original sane pricing. So it's not the same as the patent monopoly on a drug, but it illustrates another area where the free market fails in supplying appropriate health care.
Orphan drug - Wikipedia
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Seems to be a variation of the Wookie defence
“If you can't dazzle them with brilliance, baffle them with bullshit.”
“If you can't dazzle them with brilliance, baffle them with bullshit.”
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They’re literally designed to maximize profit potential for the patent holder. I tire of lobbyist arguments that ought to be shredded by even a high school-level formal debate.
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I wish people stop saying research are all done by federal grants and what not. The fundamental sciences, yes. The government funded organizations may provided the root of concept. However, there are still the basic R&D, animals study, clinical study, process development, assay method development to monitor the products/manufacturing, etc. Those works are not cheap. I am not on the bean counter side of things, so I do know breakdown.
Moreover, drugs fail all the time during clinical trials. Small clinical based drugs companies fail all the time (companies with no commercial products). I was laid off when my company failed on some clinical trials. This is no uncommon in biotech space.
Drugs probably should be cheaper. Legacy drugs, which have its R&D paid off, certainly should be a lot cheaper. However, the road from fundamental sciences to actual products are not cheap or ever certain. Ever if you have good products, it may not be financially profitable to make such products (that is another can of worms).
Moreover, drugs fail all the time during clinical trials. Small clinical based drugs companies fail all the time (companies with no commercial products). I was laid off when my company failed on some clinical trials. This is no uncommon in biotech space.
Drugs probably should be cheaper. Legacy drugs, which have its R&D paid off, certainly should be a lot cheaper. However, the road from fundamental sciences to actual products are not cheap or ever certain. Ever if you have good products, it may not be financially profitable to make such products (that is another can of worms).
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Oh yeah, right, market really works so well. Especially for, let me check, orphan drugs.
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Is anyone else getting an evil vibe from that pic? It seems to be oozing from the guy, and it's worse the longer I look. I mean, it's appropriate, but still.
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The only way that healthcare get politicized in the civilized world is when arguments start as to how much MORE to spend rather than less. Healthcare is Canada where I live and all other developed nations is about doing more and how much more we can afford as a population. Every other nation does it differently with consistently better outcomes for ALL patients.
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Conservatives believe it's immoral to consider the outcomes of things when evaluating whether those things are good or bad.
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I dunno, fam. Even if you're right, I don't think "Won't someone think of the shareholders?" is gonna fly really well in this thread.
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Most of these universities do get a share of royalties on that research. Which is a good thing, as it helps go back to fund the university and the department.
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can't put a corporation in jail, but you could prevent them from doing business for the time of the sentence.
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NO. They did not have the political capital to do this. There was NEVER enough votes in Congress to do this. You know this.
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Insulin is by large generic that has been around for a very long time. There are some special recipes for people that cannot use the generic stuff, but that is less than 1% of the market.
Have a look at the price for insulin in Europe and Asia and it becomes very clear that even $35 per month is a rip-off.
For perspective, I have a special needs cat (diabetes) and animal drugs are frequently more expensive than human drugs. I pay for a 60 day supply currently a bit over $10.
Medicare/Medicaid should be able to negotiate like any government entity in the World that has Universal Healt hCare.
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Sure... except I, as a tax payer who also helps fund the university and the department, do not get to reap the rewards of that.
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ResemblesPrison
Ars Centurion
Obviously, and again, that was kind of my point. I was aiming for a more than trivial surface level critique, which never goes well here.
I’m happy people realize capitalism bad, disappointed by the lack of engagement with Why and How.
Democrats exist to stall and block change, republicans are arsonists who pull everything further right in service of capital, then democrats block any further progress back to the “left”. Both exist to serve the ruling class and interests of capital only. Minimal concessions are made to prevent outright rebellion but as capital consolidates the ruling class increase spending on the repressive apparatus of the state to further prevent and punish dissent.
That’s why this paradigm will never give us healthcare. Never.
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I would say it’s more accurate to say that this cult uses the label “conservative” as a cover to try to legitimize their hate.
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Surely Big Pharma would never lie to the public or game the healthcare system. It is utterly altruistic, caring only for the health and well-being of society. Profits hardly enter into the equation. It's but a coincidence that most drugs are made for pennies on the dollar.
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LOL, fair enough.
It’s always hard to talk healthcare economics, but when the trade group is publicly lying in a way that insults our intelligence people just want to burn the whole thing down.
I’m also a human and these pricks really annoy me as well.
In reality, shareholders have made a lot of good things possible over the decades (in and out of pharma), but there is such a thing as taking things too far, which is where we’ve been with the pharma industry for a long time now.
Maybe at some point they get what’s coming to them and more. Maybe then they learn to be more reasonable human beings/corporate citizens. We can only hope.
Edit: grammar.
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Then you had a really funny way of blaming Democrats for not doing something that was never possible in the first fucking place.
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Thanks. In essence, US pays 3x for brand names And close to 2x for generics vs rest of world.
No bueno and not acceptable.
Paying more should mean more value delivered. Not happening here, probably for mostly regulatory capture reasons.
Maybe general inflation will result in the political will to do something about this.
Edit: important typo.
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I don’t understand - you are not a bean counter so you do know the breakdown?
Take Pfizer. In 2022 they had 100bn revenue, around 12bn on R&D. about the same on selling and admin (aka advertising), and about the same in dividends and shares. J&J similar numbers on expenses on lower revenue. Pfizer dropped 40% revenue in 2023, similar outgoings.
basically, pfizer’s revenue on cominarty in 2022 was 30 bb, and thus the same as the entire R&D budget of Pfizer in 2022 and 2023 combined with J&J 2023 R&D. R&D costs are not the problem.
ETA for comparison Ford paid out 5b in dividends on 176bn revenue in 2023. compared to Pfizer‘s 9 on 60.
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Apologize, I mean I do not know the exact budget/breakdown. I am in tech.Op. side. My take is most big companies are not doing the R&D themselves now. The new drugs are coming from middle or small size companies. They are hoping to hit commercial success or get buyout. Covid vaccines were from smaller companies. Pfizer did come in and offer manufacturing and scale up expertise later.
A lot of these clinical stage companies do get investment from big pharm (or VC). Not sure if big pharm. classifying those as R&D. I would assume so for their own tax benefit.
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You may think that but many things can’t be built (or can’t be made commercially and commonly available) without capital formation.
Investors must be willing to risk capital for the potential of returns, or else you just can’t make progress.
I hate to bring up Tesla because Elon is such a douche (I’m being polite here) but despite him, Tesla helped advance and popularize the EV a lot. This is good for us all in terms of climate change.
You may remember the problems they had scaling model 3 production.
If it hadn’t been for the investors who were willing to buy new shares, Tesla almost certainly would have gone bankrupt. They were burning cash at an extraordinary rate before they got it together.
Not all companies are good for society by any means. But it’s easy to believe that shareholders at least occasionally make a positive difference in the world, whether they meant to or not.
Edit: clarity
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ResemblesPrison
Ars Centurion
More a commentary on the typical perception that Democrats “could” “if only!”. Which is basically the only platform they run on anymore, when the deeper reality is that it’s that they both can’t and won’t effect change.
It’s disappointing how many people buy the grift that they’re ideologically opposed to republicans or represent some kind of binary choice.
Critiquing republicans and their actions and ideology is so trivial as to be totally unnecessary.
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They certainly lower prices for the buyers that are covered by the negotiated agreement. But they also certainly raise prices for every buyer who is not. Americans literally subsize the rest of the world this way. And you can easily see this here for anyone who has insurance vs. those who do not. Insurance companies pay less for drugs than individuals do, as a general rule, even if in many cases an individual who takes the initiative can get costs lowered to something near what the insurers pay through various discount plans. BTDT when helping my brother who had no insurance.
And the really crazy thing most people don't realize is that you can often buy generic drugs CHEAPER without using your insurance, because insurance companies use co-pays higher than cost on generics to help subsidize the cost of the drugs that cost more than the copay. As an example, I am on a drug where through the pharmacy discount plan I can buy three months worth for the price of my monthly copay if I go through insurance. And pharmacies are not allowed by law to TELL you that, you have to figure it out yourself.
The trick is EVERYONE should be covered in the negotiation by having a national health plan that can negotiate prices for the entire population. I wonder if that has been tried anywhere... /s
As one who got his professional career start at a health insurer, when the revolution comes, the execs for that entire industry plus big pharma should be first against the wall. It's all deeply offensive to me.
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Semiconductor R&D is expensive, yes. But wanna know what’s more expensive? Building big gigantic fabs that count as assets. Software R&D is simply never going to be that high, unless you’re OpenAI. Whereas in pharma there are lots of companies whose entire existence is R&D, trying to find the next big thing and sell it to someone bigger for a pay day.
None of those markets are the difference between life and death either
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Nothing has ever gone generic and gotten cheaper in your lifetime? You don't believe the news about insulin prices?
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There's a strong case to be made that a well-functioning patent system encourages innovation, which drives costs down in the long run. How well that describes our system is left as an exercise for the reader.
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