Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Drug Goes from $13.50 a Tablet to $750, Overnight

nytimes.com

Post reply on HN
Print view View original

451–460 of 461 posts

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#451

Post by sokoloff »

nickff wrote: post #288
sokoloff wrote: post #284

Earlier quoted context omitted.

caseysoftware's argument is not that they're trying to lure a competitor into the market, but rather the threat that, upon spending all the money to reverse-engineer the drug and enter the market, the incumbent could drop its price to $20/dose and the new entrant would be stranded with no way to recover their NRE costs in an economically relevant timeframe. Both companies might be profitable on a marginal cost basis…

Yes, I largely agree with the logic underlying your analysis (though not your conclusion), and did not mean my post to say that they were trying to lure competitors into the market, but more to say that they would (though I understand your reading of it probably makes more sense than my writing). If you believe that the eventual average cost would prevent a new entrant, the new entrant would have to know (or believe…

I'm not suggesting that companies avoid competition at all costs. I am suggesting that the right price to model when considering entering this market is $13-20, not $500+/dose.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#452

Post by codexon »

bduerst wrote: post #450
codexon wrote: post #449

Earlier quoted context omitted.

I don't think you or ken47 have more than a layman's understanding of the subject. 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…

Right - Exactly. Pharma drugs are granted monopolistic power by the government. Or even duopolistic power. That's exactly what ken47 and I are saying. To say that a market, which is regulated with government-granted monopolistic or duopolistic power, is a free market is quite a stretch.

It is becoming clear to me that you aren't even bothering to read what I wrote. So this is going to be my last reply.

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.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#453

Post by paulmd »

crdoconnor wrote: post #431
paulmd wrote: post #176

Earlier quoted context omitted.

Cuba is a really interesting example because it demonstrates the importance of least-common-denominator care. You're not getting high-tech imaging or brand new drugs, but they deliver a basic level of care pretty uniformly across its population. And the outcomes speak for themselves - on average they're just as good as the US. The problem with US outcomes is really disparity. A lot of people have very little access t…

>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. Pharma needs outright nationalization or compe…

I tend to agree with you - I'd like to see an NSF-style grant system where promising drugs are taken all the way from blue-sky to market. There they should be sold at-cost, where "cost" includes licensed production as well as amortizing the cost of development for the drug (or the average total cost of the the whole pool of drugs) over say 25 years. Apart from these issues there's simply a lot of diseases that 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.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#454

Post by dlss »

dhimes wrote: post #442
dlss wrote: post #374

Earlier quoted context omitted.

Reinvested profits?

The biotechs with which I am familiar are the early-stage research arm of the development chain. Kind of like acqui-hire startups for google. They live off of investments from vc and/or license deals for final product. My impression was vc was the bulk. But my view might be myoptic, so I was double-checking.

Ahh, okay. What ends up happening with the drug companies which aren't acquired by larger firms (in your example Google) is they begin reinvesting profits in R&D and acquiring other companies.

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

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#455

Post by DocCat »

Sadly, this is just another case of the "American way" getting in the way! Do we want our government dictating business policy, pricing our not? Is there an in between solution? I'm an ob/gyn and the drugs discussed in these comments directly impact my patients.I shrieked upon hearing the news of this hike; Thankfully I have options in my field. Don't know about general medicine, though.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#456

Post by DocCat »

Seems like just another case of a businessman enjoying a slice of "American way" pie! We can loathe or love him for it, but he is only guilty of greed. Last I looked, this crime against our brothers and sisters is not recognized by our legal system as a violation. Do we want government in the business of setting prices and controlling such things across the board, or not? I am but an ob/gyn fighting a losing healthcare battle. Both drugs discussed here directly impact my women's care; their potential well-being. Thankfully, I have alternatives in my armamentarium. I don't know about general practice colleagues.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#457

Post by thomnottom »

thomnottom wrote: post #109
bedhead wrote: post #55

I am a fund manager and I have followed Martin Shkreli since his prior company, Retrophin, went public about two years ago. Simply put, Martin is a sociopathic criminal with a well-established, and consistent track record of deceit, recklessness, failure, and just plain old stupidity. But he is also hyper-aggressive. He is currently living in Switzerland, and it's my understanding that he fled the country in order to…

When I saw the headline I had a feeling it would be Turing. I was contacted by a recruiter last year and had a couple conversations about joining them as they were looking for an IT guy - the CIO was doing all of that work and they wanted someone else to be hands-on and eventually build a team. Sounded like a great opportunity and things were progressing. Then I bothered to Google them... Once I read up on Martin Shk…

Just wanted to clarify one mistake - it was actually February of this year. I checked my emails after seeing the dates listed in the articles.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#458

Post by dhimes »

dlss wrote: post #454
dhimes wrote: post #442

Earlier quoted context omitted.

The biotechs with which I am familiar are the early-stage research arm of the development chain. Kind of like acqui-hire startups for google. They live off of investments from vc and/or license deals for final product. My impression was vc was the bulk. But my view might be myoptic, so I was double-checking.

Ahh, okay. What ends up happening with the drug companies which aren't acquired by larger firms (in your example Google) is they begin reinvesting profits in R&D and acquiring other companies. 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…

I feel like we are defining biotech differently. Pfizer I would classify as pharma- they bought the biotech Coley a few years back after Coley did some research into bladder stuff IIRC.

Perhaps I am simply stating a tautology b/c of the narrow definition, but I'm on the same page with refurb.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#459

Post by bduerst »

codexon wrote: post #452
bduerst wrote: post #450

Earlier quoted context omitted.

Right - Exactly. Pharma drugs are granted monopolistic power by the government. Or even duopolistic power. That's exactly what ken47 and I are saying. To say that a market, which is regulated with government-granted monopolistic or duopolistic power, is a free market is quite a stretch.

It is becoming clear to me that you aren't even bothering to read what I wrote. So this is going to be my last reply. 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 did read what you wrote:

https://news.ycombinator.com/item?id=10255578

>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.

Re: Drug Goes from $13.50 a Tablet to $750, Overnight

#460

Post by dlss »

dhimes wrote: post #458
dlss wrote: post #454

Earlier quoted context omitted.

Ahh, okay. What ends up happening with the drug companies which aren't acquired by larger firms (in your example Google) is they begin reinvesting profits in R&D and acquiring other companies. 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…

I feel like we are defining biotech differently. Pfizer I would classify as pharma- they bought the biotech Coley a few years back after Coley did some research into bladder stuff IIRC. Perhaps I am simply stating a tautology b/c of the narrow definition, but I'm on the same page with refurb.

I think the point is actually general enough to include every industry: VCs give you enough money to pay people to do R&D / product design until you've got a good enough product that your profits pay for the R&D / product design. In some product industries, this happens by switching to creating a new product (so 3M, GE, etc), and in some this is an endless stream of updates to the existing product (Google, Apple, Intel, etc).

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.)

Post reply on HN