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Fed Up with Drug Companies, Hospitals Decide to Start Their Own

nytimes.com

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Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#161

Post by AllegedAlec »

People don't seem to understand how prohibitively expensive it is to develop new drugs and get them approved for use. Yeah, drug companies charge huge premiums, and they don't like generic versions of their product, but with a good reason: they spend huge amounts of money not just to make the drugs, but also to make the process more efficient, and before they even know whether a product will be successful, they spent a fortune on research and development.

Take for example the case of Matuzumab, a medicine which was to be used against various forms of epidermal cancer. In 2007 a clinical trial failed and they had to give up on the idea. This company spent tens millions of dollars on the costs of this research, only for it to fail.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#162

Post by AstralStorm »

refurb wrote: post #148
usefulcat wrote: post #116

Earlier quoted context omitted.

And in order to get that approval, you will likely need a sample of the product that you intend to demonstrate equivalence to. Good luck getting that sample from the maker of the incumbent product who has nothing to gain and much to lose if your product were to get approved.

Not being able to get a sample to prove bioequivalence is typically very easy. There are a handful of drugs that have a REMS program whereby the manufacturer is required to restrict access. We're talking maybe a few tens of drugs. And yes, drug companies playing the game of "I'm not allowed to give you a sample" is super shady and ridiculous. Wouldn't surprise me if this gets fixed super fast.

FDA could give overriding authority to oblige manufacturers to provide a sample to the generic manufacturers for drugs older than . Of course this is bad for business.

Alternatively the generic manufacturer would have to run a phase 1 and 2 trial. (Skip requirement for phase 3) Expensive, but much less than full R&D.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#163

Post by AstralStorm »

WalterBright wrote: post #137
selectodude wrote: post #131

Earlier quoted context omitted.

Your car needs to be certified to not spew shit everywhere in the same way your drug needs to be certified to not harm people who take it. For obvious reasons, one is far more expensive to test and certify.

Is the food in your local supermarket certified to not harm people to eat it? It's regulated, and the FDA can inspect to verify compliance with regulations, but suppliers do not have to get approval from the FDA to ship.

The problem here is the scale of harm and manufacturing of inert or ineffective products, not even too mention harmful ones. This is why every formulation has to be approved.

GMP etc. Requirements have been added after some scandals with tainted stuffs making people sick instead of better.

This would be not compared to mom and pop food stand but a big supermarket chain or food manufacturer.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#164

Post by toyg »

rtpg wrote: post #125
tacon wrote: post #103

For a fantastic discussion about the Byzantine process for generic drug approval, I recommend a recent episode of EconTalk[0]. The guest wrote a book called "Drug Wars: How Big Pharma Raises Prices and Keeps Generics off the Market"[1]. When up to half a billion dollars of revenue is at stake, the drug companies have incredible incentives to delay or prevent generics coming to market. Believe or not, they often simpl…

Is this a worldwide problem? Or is this really an American failing?

Some of these techniques (like tweaking and repatenting a formula) are definitely used worldwide.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#165

Post by mft_ »

eksemplar wrote: post #151
shykes wrote: post #86

This article makes it seem like drug companies alone are responsible for predatory pricing in US healthcare, with hospitals being somehow on the consumer's side of the issue. In reality US hospitals are just as guilty of predatory behavior. If they do achieve lower costs through a new generics company, I do not trust them one bit to pass on the savings to patients. Why would they?

Drug prices is an increasing problem everywhere. Now I’m European so bare with me and my “Stalinist” ways, but I don’t see why something so essential to society is in the hands of corporations rather than the public. Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’e…

Assuming you're referring to the general development and supply of all drugs (in particular new drugs, as well as generics) the simple answer is that the process of discovering and developing new drugs is both high-risk and also heinously expensive. As such, whoever approaches it needs to have many billions to spend and --very likely-- lose. The current capitalist Pharma model has developed to suit: investors in Pharma essentially take on the risk, and the 'downside' is high drug prices to pay back the investors for their investment and its risk.

Are there alternatives? Well... * Large charities (the Gates Foundation, for example) might be able to fund development of drugs, but would be most likely to focus on a limited number of high-return, lower-risk opportunities. The Foundation's annual total spend ($4.6Bn in 2016) is roughly half of one large Pharma company's R&D spend (https://www.roche.com/research_and_development.htm), so they've clearly not got the clout to enter general drug development. * Governments might be able to enter this space, but then you're betting that a government can do it cheaper/better than big Pharma, which is a major gamble, even before you get into arguments about public- vs. private-sector efficiency. You then also run into the challenge of governments not being great at making major long-term visionary investments in a 4/5-year election cycle, the electoral unpopularity of such an approach if drugs fail, and the ethical requirement of firewalling the government development arm from the drug approval (i.e. public-health-safeguarding) arm. And again, you've got to find the money: sure, Roche's drug development spend per year is only ~a tenth of the UK NHS's annual budget... but that's a super-cash-strapped health service - diverting 10% of its budget to maybe improve things in 10 years would be a tough sell.

Any avenues I'm missing?

(Now... fully agree that it would be possible for government or non-profits to enter the generic space, but... the majority of generics make pennies, if anything, and are certainly not cash cows. For every one 'bad' case that's brought to the public attention, be it a rare antibiotic, or the price of adrenaline pens, there are countless thousands of other examples which aren't a problem. So you'd need a very flexible generics strategy to only focus on these rare 'problem' cases... and this might not even always be scientifically or legally possible.)

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#166

Post by eeZah7Ux »

nostrademons wrote: post #39
fludlight wrote: post #27

Let's say they succeed in launching a new generics company. Ten years down the line they will divest in order to build each hospital a shiny new geriatrics wing. Within six months the spun-off drug company will jack up prices and the cycle will continue.

That's pretty much the case with all of the economy, though. Industry is dominated by big companies that are overpriced and consumer-hostile; new startup enters that actually delivers a decent product at a decent price; startup becomes wildly popular because it's better than entrenched encumbents; startup founders/investors/early employees want liquidity and either sell to big competitor or go public and are forced t…

The first paragraph is true.

> people (from all backgrounds!) with chutzpah and persistence have a shot

Economic mobility is lower that what most people think across developed countries and it's decreasing.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#167

Post by [deleted] »

eksemplar wrote: post #151
shykes wrote: post #86

This article makes it seem like drug companies alone are responsible for predatory pricing in US healthcare, with hospitals being somehow on the consumer's side of the issue. In reality US hospitals are just as guilty of predatory behavior. If they do achieve lower costs through a new generics company, I do not trust them one bit to pass on the savings to patients. Why would they?

Drug prices is an increasing problem everywhere. Now I’m European so bare with me and my “Stalinist” ways, but I don’t see why something so essential to society is in the hands of corporations rather than the public. Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’e…

[deleted]

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#168

Post by EliRivers »

mft_ wrote: post #165
eksemplar wrote: post #151

Earlier quoted context omitted.

Drug prices is an increasing problem everywhere. Now I’m European so bare with me and my “Stalinist” ways, but I don’t see why something so essential to society is in the hands of corporations rather than the public. Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’e…

Assuming you're referring to the general development and supply of all drugs (in particular new drugs, as well as generics) the simple answer is that the process of discovering and developing new drugs is both high-risk and also heinously expensive. As such, whoever approaches it needs to have many billions to spend and --very likely-- lose. The current capitalist Pharma model has developed to suit: investors in Phar…

I understand the drug companies ("pharmaceutical industry" in the link below) pay about 60% of the research costs. It's a lot of it, but it's not orders-of-magnitude bigger than the public contribution.

https://www.thebalance.com/who-funds-biomedical-research-266...

Some would suggest that the drug companies actually take on the lower risk research, leaving the high risk work to be funded by other sources:

http://www.latimes.com/opinion/op-ed/la-oe-1027-mazzucato-bi...

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#169

Post by Kalium »

eksemplar wrote: post #151
shykes wrote: post #86

This article makes it seem like drug companies alone are responsible for predatory pricing in US healthcare, with hospitals being somehow on the consumer's side of the issue. In reality US hospitals are just as guilty of predatory behavior. If they do achieve lower costs through a new generics company, I do not trust them one bit to pass on the savings to patients. Why would they?

Drug prices is an increasing problem everywhere. Now I’m European so bare with me and my “Stalinist” ways, but I don’t see why something so essential to society is in the hands of corporations rather than the public. Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’e…

> Research? You could buy a lot of research for the amount of money we’re currently spending on medicine in healthcare and right now we’re really just paying a corporate tax to save lives so that some 1%’et can get even richer.

You're absolutely, completely, 100% right. That amount of money could buy an incredible amount of research!

Right now, the American government institutions that fund this kind of research are infamous for being very risk-averse. They fund research, but do so in a way that takes few chances. Younger researchers get shut out. Researchers chasing novel ideas often get shut out. After all, why fund some moonshot when there's someone with a good track record of results to fund instead?

Basically, there's ample reason to doubt that the American institutions in question could actually do better if they were handing out the funding. Oh, and the grant-giving bureaucracy is also infamous.

Re: Fed Up with Drug Companies, Hospitals Decide to Start Their Own

#170

Post by jinglebells »

cjalmeida wrote: post #75
cjalmeida wrote: post #70

Earlier quoted context omitted.

Oh please. Doctors in the US get huge amounts of money, to the point they're the actual 1%. You don't see anything like this in OCDE countries. Doctor associations all across the country create enormous barriers to the opening of new medical schools to avoid competition. Don't get me wrong, medical doctors are generally good hard working people. But we need to acknowledge they're part of the problem.

To downvoted, some data. A surgeon in CA earns on average about $400k while its peer in UK makes $100. 4x the cost of labor should partially explain why a surgery can easily cost 6 figures.

Although, remember that surgeon won't need to pay for health insurance, so that saves some cash :D
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