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Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

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Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#51

Post by criddell »

deepnotderp wrote: post #15
StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

This is great, we're trying everything except what the real problem is! Look at the Martin shkreli situation, there was another one like that before too. How did patents play a role there? High profit margins are not a bad thing, as long as people can still afford them. What we need is the proper type of regulations, I agree we need to streamline the fda process, but that alone is not going to solve things. There are…

I like the march-in rights idea. It sounds similar to eminent domain. If eminent domain can be used to expropriate private property for public use, it seems like there could be something similar for intellectual property.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#52

Post by jedberg »

StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

I agree with your overall point but

> If it's safe enough for Western Europe, it's probably safe enough for Americans.

Tell that to all the thalidomide kids in Europe. That's probably the best example of where the FDA saved a lot of lives.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#53

Post by protomyth »

If the government really wanted to lower the price of drugs it would pay for the FDA clinical trials[1] and lengthen the amount of time a drug company can collect royalties. I remember when I was at a place that did clinical trials the cost of one protocol was $50,000 a day because of all the test kits that needed to have lab work done each day and the drug company only really had 3 years to get back its investment (plus pay for new research and have some profit) before the generics could happen. Cost of manufacture and distribution (just like software) is not the problem.

With the extends royalty period have a required pricing structure that has a set price to prevent gouging.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#54

Post by afandian »

dethswatch wrote: post #14
StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

>It costs a quarter to manufacture each pill but the >manufacturers charge several dollars for that pill. What are the manufacturing costs for software?

All software is different. I'm only replying because my first answer is "nothing", then I thought about it.

One data point from my experience:

- developer time to prepare, document a build, release notes

- build engineer to submit, check build, co-ordinate

- build machine hardware

- build machine OS license

- cryptographic signing hardware

- QA engineer time to test

- QA automation engineer's time to set up tests and maintain them

- QA test suite of machines for compatibility matrix

- technical writer for documentation

- distribution infrastructure / CDN

- support calls for new version

Another data point from my experience:

- about 2 minutes of developer time

- gratis open source build infrastructure

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#55

Post by jedberg »

FireBeyond wrote: post #38
jostmey wrote: post #23

Earlier quoted context omitted.

The US pays an unfair burden to cover the cost of developing new drugs. That said, many drug companies seem more concerned with selling drugs that are barely better than a placebo and have cut back on research efforts.

Not really. The top two spending R&D pharma firms are the Swiss Novartis, and Hoffman-La Roche. J&J, despite having 40% higher revenues ($70B vs $50B) spent nearly $2B less ($8.2B versus $9.9B) on R&D.

Yeah but those companies sell their drugs for a lot more in the US than elsewhere.

Basically, because the US is wealthy and much less regulated, drug companies from around the world make up a lot of their costs by selling things for more here, especially since private insurers have to pick up the tab in most cases.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#56

Post by paulsutter »

StClaire wrote: post #7

It costs a quarter to manufacture each pill but the manufacturers charge several dollars for that pill. But they don't just price gouge. Drug companies need to file patents on their drug almost as soon as they sketch they come up with drug. From there they need at least 8 years to get through the FDAs approval process, so the manufacturers don't get nearly as much exclusive time with their IP as other industries. (Th…

Peter Thiel associate Jim O'Neill is under consideration to run the FDA. He wants to go to a progressive approval scheme that could significantly shorten the time to market for new treatments:

https://www.forbes.com/sites/patrickcox/2016/12/14/trumps-fd...

https://www.bloomberg.com/politics/articles/2016-12-07/trump...

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#57

Post by FireBeyond »

maxerickson wrote: post #45
FireBeyond wrote: post #38

Earlier quoted context omitted.

Not really. The top two spending R&D pharma firms are the Swiss Novartis, and Hoffman-La Roche. J&J, despite having 40% higher revenues ($70B vs $50B) spent nearly $2B less ($8.2B versus $9.9B) on R&D.

They market drugs in the US though. (I don't think the 'the US bears the burden' argument is especially compelling, I'm just saying that the country where a business is located doesn't reveal where it gets revenue)

Right, and that's really what I'm getting at. The only country in the world (except maybe NZ, who was in the process of phasing it out, and only allowed it as part of a trade deal with the US) where Rx meds are advertised to consumers.

Even with marketing spends of 20-25% of revenue, and R&D spends of 10% (and profit margins of typically 20%+), pharma has still managed to convince many Americans that they are struggling, and Americans are feeling the burden, of the US subsidizing the world's drug research (even though the two largest researching firms in the world aren't the US).

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#58

Post by FireBeyond »

jedberg wrote: post #55
FireBeyond wrote: post #38

Earlier quoted context omitted.

Not really. The top two spending R&D pharma firms are the Swiss Novartis, and Hoffman-La Roche. J&J, despite having 40% higher revenues ($70B vs $50B) spent nearly $2B less ($8.2B versus $9.9B) on R&D.

Yeah but those companies sell their drugs for a lot more in the US than elsewhere. Basically, because the US is wealthy and much less regulated, drug companies from around the world make up a lot of their costs by selling things for more here, especially since private insurers have to pick up the tab in most cases.

When a quarter of their revenue goes on sales and marketing that is pretty subjectively "unnecessary" I don't they can claim with a straight face that it's "subsidizing the world". Especially when they're already making $14B a year in profit, in J&J's case.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#59

Post by akiselev »

koolba wrote: post #19
dethswatch wrote: post #14

Earlier quoted context omitted.

>It costs a quarter to manufacture each pill but the >manufacturers charge several dollars for that pill. What are the manufacturing costs for software?

Shhh! Our whole racket is based on pricing our services on value while pricing our cost of goods on production inputs. It's not "fair" to let other industries do that right?

If the US government forbid any federal or state agency from even negotiating software prices with volumes in the tens of millions (ala Medicare/Medicaid), the vast majority of pure research feeding the industry was publicly funded, and the market was as economically opaque and uncompetitive as healthcare then yes the two industries would be comparable.

Re: Trump Sends Pharma Stocks Down with New Tweet on Drug Prices

#60

Post by cmdrfred »

StClaire wrote: post #44
perseusprime11 wrote: post #34

Earlier quoted context omitted.

Still does not address how generic drugs with the same chemicals cost a fraction of those from Big Pharma.

Generic manufacturers don't spend money on R&D

Yes they do. They have to prove that their version of the drug works in the same manner as the original via clinical trials.
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