How pharmaceutical industry financial modelers think about rare diseases
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Re: How pharmaceutical industry financial modelers think about rare diseases
#2I met a PHD chemist who spent 30 years developing drugs. Over that period he developed 20,000 APIs. 4 were approved. 1 made it to the market.
Re: How pharmaceutical industry financial modelers think about rare diseases
#3I met a PHD chemist who spent 30 years developing drugs. Over that period he developed 20,000 APIs. 4 were approved. 1 made it to the market.
Sounds like a very fruitful career then.
A recent read of mine was "The Drug Hunters" [1] which talks about the "highly improbable quest" for a drug that actually makes it to market, and the history of those that have.
Author stated it was not uncommon for some researchers to never have a single discovered API make it to market in a total 20-30 yr career.
1 - https://www.amazon.com/Drug-Hunters-Improbable-Discover-Medi...
Re: How pharmaceutical industry financial modelers think about rare diseases
#4This article does a good job showing how big an impact the concept of "time value of money" can have on a multi-year investment of any kind - pharmaceutical or not. (Particularly since many of us in software are effectively investing nontrivial amounts of our salary in illiquid investments.)
I'd imagine that many tend to think of a $X investment as a $X investment... but if that investor could get effectively compounded interest/returns, even at a single-digit rate, in another investment, they could be risking many times $X by forgoing that investment to take the one in question. Take a look at the chart and formulas in https://en.wikipedia.org/wiki/Time_value_of_money and https://en.wikipedia.org/wiki/Discounted_cash_flow . Important stuff to know regardless of how large a financial decision one wants to make.
And in the context of highly risky drug development, in a capitalist society it's a miracle that niche drugs are researched at all. It speaks to the passion of scientists like the author who endeavor constantly to develop tooling and processes to accelerate/de-risk drug research enough to be an attractive investment in today's increasingly optimized society.
Re: How pharmaceutical industry financial modelers think about rare diseases
#5Throws a little doubt on those who say the money is in the treatment and not the cure :).
Re: How pharmaceutical industry financial modelers think about rare diseases
#6Shorten or remove the patent benefits awarded to new drugs, and the calculus changes dramatically.
Re: How pharmaceutical industry financial modelers think about rare diseases
#7This article does a good job showing how big an impact the concept of "time value of money" can have on a multi-year investment of any kind - pharmaceutical or not. (Particularly since many of us in software are effectively investing nontrivial amounts of our salary in illiquid investments.) I'd imagine that many tend to think of a $X investment as a $X investment... but if that investor could get effectively compoun…
This is nicely stated. There is much wrong with the pharmaceutical industry including pay-to-delay generics, and abusive pricing non-innovative drugs, and that needs too be fixed.
Maybe more importantly, effectively communicating the costs and risks of drug development has, and the magnitude of the impact of successful drugs have on the improvement of health care is something the industry has done poorly.
Re: How pharmaceutical industry financial modelers think about rare diseases
#8Shorten or remove the patent benefits awarded to new drugs, and the calculus changes dramatically.
The only change I can see is needing to increase the cost of the medicine to make up for the reduced exclusivity period, or a reduced incentive to research medicine.
Re: How pharmaceutical industry financial modelers think about rare diseases
#9Throws a little doubt on those who say the money is in the treatment and not the cure :).
not exactly -- it's more that the money is in whatever they can get passed through clinical trials. if that's a cure, great. if not, it'll still sell.
there is no inherent incentive to deliver a cure from a drug product, provided that there is no competitor drug. luckily, there's also no realistic incentive to sit on a cure because it can be priced to be profitable even if the cure makes itself obsolete, which is extremely unlikely in any event.
Re: How pharmaceutical industry financial modelers think about rare diseases
#10I was surprised that this article didn't mention the Orphan Drug Act of 1983, which was passed by congress to facilitate the development of drugs for rare diseases (many other countries have similar legislation).
This act gives tax incentives, subsidies, lowers clinical trial requirements and increases exclusivity for the development of "orphan drugs", which otherwise might not be economically viable to develop. That said, if a condition is rare enough, there's probably no amount of tax incentives that's going to induce a for-profit company to go through the significant costs and hassle of bringing a drug to market.