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How pharmaceutical industry financial modelers think about rare diseases

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Re: How pharmaceutical industry financial modelers think about rare diseases

#71

Post by bluGill »

Circuits wrote: post #44

I would assume that somewhere on the bottom line there is an analysis of what the drug itself is doing. For instance, does the drug cure something or does it treat the symptoms of something? I imagine most of former are thrown out right off the bat. What we need is a system for testing, developing and selling medications that is less effected by the human condition. Perhaps, we should close the private sector and han…

The problem is as a taxplayer I have a cost/benefit that is different depending on if I know someone with the condition in question. Have same cancer as my mom: throw a ton of money at it. Have some other cancer not in my family: waste of money, people die all the time. Of course that is a strawman, nobody is that bad, but the point is eventually we have to decide how much to put into trying to find a cure. However the point still stands, whoever is going to pay for this needs to decide how much is worth spending and that will be argued.

Re: How pharmaceutical industry financial modelers think about rare diseases

#72

Post by jonlucc »

boyband6666 wrote: post #59
Vaslo wrote: post #12

Earlier quoted context omitted.

I was joking a bit. I agree with your last statement, and I'd argue as well that if you had the cure to say, cancer, you could charge whatever you wanted for it (at least in the short term). When it comes to money, you just can't take it with you, and you'll spend pretty seriously to improve your lifespan.

The people who say pharma don't want cures generally don't understand the industry. A cure is worth more than a chronic treatment, and the article does an excellent job of explaining time preference (his 8% discount) - having a treatment you can sell for more years isn't worth much when you discount it all. Fundamentally companies have to follow the science. If the science is there for cures, that is what is pursued.…

I truly believe that people don't really understand how difficult cures are. It's not that we in pharma don't want to cure things, we just don't know how. Also, most pharma and biotech companies are built around a small number of mechanisms. Many pharma companies only make small molecules or large molecules, but don't touch potential siRNA, CRISPR, or stem cell therapies.

Take diabetes for example. By the time a Type I diabetic is diagnosed as diabetic, they've lost a huge portion of their beta cells (something like 80% if I remember correctly). It is very hard to slow the destruction of those cells and harder to completely stop future islet mayhem. It's nearly impossible to regrow them with the information we have now. Even if it is possible to regrow those cells, can it be done by giving a drug, or a drug coctail? Maybe not. Maybe it has to be a stem cell treatment. Or an order of magnitude more difficult to discover: a stem cell treatment in conjunction with drug(s). Will that kind of therapy come out of a big pharma company? Maybe with partnerships with other companies or an acquisition, but the people who make small molecules probably don't know a whole lot about convincing stem cells to become beta cells; it's just a different set of skills.

Re: How pharmaceutical industry financial modelers think about rare diseases

#73

Post by pmyteh »

refurb wrote: post #34
vibrio wrote: post #7

Earlier quoted context omitted.

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.

There is much wrong with the pharmaceutical industry including pay-to-delay generic I disagree on this one. Pay-to-delay is just the branded drug manufacturer and the generic company splitting the difference through negotiation. What you end up with something in-between the two potential outcomes. Situation: branded drug has 2 more years of patent life, but generic company wants to challenge it; neither party is sure…

> Everybody gets something from the deal

Everyone except the patient, who continues to pay the exclusivity premium but would (assuming option 2) have paid less.

Re: How pharmaceutical industry financial modelers think about rare diseases

#74

Post by bluGill »

hammock wrote: post #54
lotsofpulp wrote: post #8

Earlier quoted context omitted.

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.

With shorter patents, or no patents, the business model changes. What is changes to is hard to predict. However, we can guess that drugs would price out LESS on average due to generics coming in sooner.

We can also guess that few drugs would come out.

Re: How pharmaceutical industry financial modelers think about rare diseases

#75

Post by thousandautumns »

modzu wrote: post #26

Pharmaceutical companies typically claim that the reason for high drugs prices is because of the amount that they spend on research and development (R&D). According to the industry, it costs USD $2.6 billion to bring a drug to market [1]. Critics counter that companies are more focused on and spend more on promotion than on R&D. Gagnon and Lexchin produced figures that showed that in the United States in 2004 the ind…

And? The arguments about marketing are completely non-sensical. People treat pharma companies marketing budgets being as large as they are as some indictment of the industry, but its not like they are just throwing money at marketing because they like to burn cash. Money spent on marketing is money that the company has determined will result in a greater return in sales and is therefore a calculated investment. If the company were to learn that their marketing was more costly than the money it generated, they would be eager to cut back on marketing. The revenue then available for the company to use for operating expenses, including R&D, is therefore greater than it would be if the company conducted no marketing.

There are plenty of arguments to be had about how the pharmaceutical industry operates and how/should they be regulated in ways that other industries aren't, but the idea that marketing budgets are the reason for high drug prices is moronic.

Re: How pharmaceutical industry financial modelers think about rare diseases

#76

Post by bluGill »

lotsofpulp wrote: post #23
ekianjo wrote: post #20

Earlier quoted context omitted.

You can't just reduce the patent period without reducing the regulatory process that is required to get stuff approved. It would not work otherwise.

I hope we're not on the path to reducing rigorous testing and vetting of medicines in exchange for cheaper prices. Medical science is extremely hard, and verifying cause and effect in a system as complex as the human body takes significant resources. People want cheap, people want safe, people want well qualified individuals pursuing these advances. What people don't want is higher taxes to enable government funding…

Note that even if government pays, the costs still exist. Maybe the government can decide researchers are worth less money, but or some such - if they are willing to drive researches in it for money out (everybody is in it for money at some point, as you need to eat and you like other luxuries money can buy: the only question is when it is worth leaving).

Re: How pharmaceutical industry financial modelers think about rare diseases

#77

Post by loceng »

dcx wrote: post #42

This is an impressive article and an impressive couple. From the site's about page: My name is Eric Vallabh Minikel and I’m on a lifelong quest to develop a treatment or cure for human prion diseases. I originally trained as a city planner at M.I.T. and was working as a software engineer and data analyst in the transportation sector when, in December 2011, I got some bad news. My wife and the love of my life, Sonia V…

It's instances like these that I believe why the medical-pharma industrial complex isn't necessary, and likely more inefficient and soaking up more money - directing them towards profits, or other less efficiently than individuals who are passionate for a solution; yes, we need the institutions like Harvard Medical School to support these people - however the capitalism that then takes advantage of innovation through rent-seeking behaviour for cures is questionable.

Re: How pharmaceutical industry financial modelers think about rare diseases

#78

Post by SirLuxuryYacht »

gumby wrote: post #38

Having been through the early phases of this (both as bench scientist and management, up through Phase II) I can say that this author's analysis is right on. There is a macro wrinkle he doesn't mention and that makes things worse: as we increasingly succeed on stopping the big killers (e.g. lung cancer, CIs, various accidents that constituted most of the causes of death into the 1990s) the histogram of death starts t…

> histogram of death

Not something you read everyday!

How does your "wrinkle" make things necessarily worse? All [men] must die (sorry) at some point so succeeding at removing the biggest killers would give more people a second chance to die of something else later. Just because we cure cancer won't mean that there are suddenly more causes of death, just that the people who would have died from cancer will die of a variety of other existing things.

Anyway, your point likely still stands. It makes sense that companies will have to spread resources across a diversifying research field once the big killers become treatable.

edit: format

Re: How pharmaceutical industry financial modelers think about rare diseases

#79

Post by vibrio »

refurb wrote: post #34
vibrio wrote: post #7

Earlier quoted context omitted.

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.

There is much wrong with the pharmaceutical industry including pay-to-delay generic I disagree on this one. Pay-to-delay is just the branded drug manufacturer and the generic company splitting the difference through negotiation. What you end up with something in-between the two potential outcomes. Situation: branded drug has 2 more years of patent life, but generic company wants to challenge it; neither party is sure…

If the patent is invalidated, then what provides the generic company with exclusivity for two years-- I thought the regulatory exclusivity provided to first-in generics was only 6 months?

Re: How pharmaceutical industry financial modelers think about rare diseases

#80

Post by selimthegrim »

chadash wrote: post #10

I 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…

Avik Roy has an absolutely blood-boiling section of this report devoted to ways companies are gaming the Orphan Drug Act

https://docs.house.gov/meetings/GO/GO00/20190129/108817/HHRG...

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