Indian Government uses special powers to slash cancer drug price by 97% • Hacker News Board

Re: Indian Government uses special powers to slash cancer drug price by 97%

#81

Post by w1ntermute » Tue, Mar 13, 2012, 1:35 PM UTC

nknight wrote: post #78

w1ntermute wrote: post #73

Earlier quoted context omitted.

I don't think there's an unbreakable bond between profitability and sustainability. To use a tech industry analogy, despite making insane profits off of Windows as it is (and has been for 20 years), Microsoft has realized that we've entered a post-PC world, and modified Windows to run on new form factors, such as the tablet.

I really don't see your point. Microsoft's basic business model hasn't changed, their products are just evolving. Drug companies make new drugs and refine old ones all the time. Other than whining by obviously-biased spokespeople for the drug industry, I have no reason to believe their business model can't be sustained indefinitely under the current regulatory regimes.

Like the GP post says, things are changing for big pharma, just as they are for MS. There's no way to keep up these prices, and the corresponding R&D costs, when (and not if, because it will happen) healthcare gets nationalized and you have one government representative with the monopsonistic power to really drive prices down.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#82

Post by nikcub » Tue, Mar 13, 2012, 1:37 PM UTC

w1ntermute wrote: post #69

Does anyone else find it appalling that the American government and American companies have the gall to complain about intellectual property violations in developing countries like China and India? Until the late 1800s, American IP law explicitly excluded foreigners from IP rights. That's right, forget about lax enforcement (like you often see in developing nations nowadays) - you could violate foreign IP rights in p…

It isn't just with IP protection, but also CO2 emissions, restricting nuclear technology, military powers.

A big case of 'do as I say not as I do' designed to retain the status quo in the order of the world.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#83

Post by GuyCall » Tue, Mar 13, 2012, 1:38 PM UTC

I have no idea when it was first public knowledge that the Indian Govt were considering this option and when it was finalised. But since Bayer AG's share price in part the markets sentiment of their potential future earnings, and their share price has done reasonable well over recent years, I suspect the market doesn't see this as a major issue.

Bayer's current market cap is a fairly significant EUR45.93bn. So even with the "patent cliff" that JunkDNA discusses, it seems people still expect big pharma to be profitable.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#84

Post by crusso » Tue, Mar 13, 2012, 1:38 PM UTC

noble wrote: post #30

mattmanser wrote: post #22

Earlier quoted context omitted.

You seem very poorly informed about the subject. While I don't agree with the vast amount of lobbying a lot of pharma companies do, which in itself increases costs, the costs of R&D and the process of approval are huge. Get rid of drug patents, bye bye new drugs without direct g'vmt funding. Drugs are trivial to reverse engineer, incredibly expensive to invent. There is also a massive amount of drugs that go nowhere,…

The problem is that the govt is providing an artificial barrier to entry by other companies which protects the profits of the big pharma. Because of it the pharma companies have no incentive to reduce prices . They would rather spend the money on lobbying

Very true, so it's ironic that so many posters in this thread are advocating knee-jerk solutions that hand even more of the pharmaceutical industry over to the government.

Our government is fundamentally broken and the source of a good portion of the problems in the health care industry... so let's sprinkle some more government in there!

Seriously, the government has plenty that it can do by providing more transparency in the industry, streamlining and correcting problems in the Patent office and at the FDA, stopping collusion and price fixing, and examining the length of patent-granting-monopolies to ensure that profiteering isn't too far out of whack.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#85

Post by MengYuanLong » Tue, Mar 13, 2012, 1:41 PM UTC

arkitaip wrote: post #3

Bayer shareholders should hold the senior management accountable for not caring enough to bring the drug to more than 2% of the Indian market.

Surely this was market was considered but more likely than not abandoned due to fears of arbitrage?

Re: Indian Government uses special powers to slash cancer drug price by 97%

#86

Post by nikcub » Tue, Mar 13, 2012, 1:43 PM UTC

ThomPete wrote: post #29

The reason why it's expensive to develop drugs is in large parts because of the process involved to get the approval. Couldn't you turn this on it's head? What if the companies could expense the cost of getting the approval. I.e. the tax payers pay for drugtesting and approval process. Wouldn't this make sense? Since it's in the publics interest to get safe medicin, shouldn't they/we pay for that part.

because drugs are a hit based business. a large number don't get through the approval process. your proposal would socialize and subsidize the downsides of an already very profitable drug industry while privatizing the upside

Re: Indian Government uses special powers to slash cancer drug price by 97%

#87

Post by disgruntledphd2 » Tue, Mar 13, 2012, 1:48 PM UTC

relix wrote: post #66

ttt_ wrote: post #34

Earlier quoted context omitted.

>> however because of such decisions companies will find it risky to invest in life saving drug research. I disagree. That mentality is precisely the reason that they are overpricing now (and always have done so) as much as they can. People will always need life saving drugs, and ordinary drugs as well. Terminal and cronical patients will always try both traditional and new drugs (or the state will provide it to them…

You're talking about an infinite timeline where they are the sole seller of a drug that is used indefinitely. This is false. When patents expire the drug is also made by generic drug making companies for cheap. So upper bound of getting a ROI is the lifetime of a patent (30 years for drugs iirc, 10 years longer because it takes about 10 years to develop, so still effectively 20 years). For every drug that is successf…

Well, personally, I think the model is broken. One of the real issues here is that there are effective treatments for many conditions which do not get to market because they are unpatentable. For instance, St John's wort, which is about as effective as SSRI's is rarely used because it hasn't been through enough trials.

Claiming that the cost of clinical trials is the major reason that the drugs need to be priced that high is true, as far as it goes. The issue is that the pharmacuetical companies lobby for more regulation to keep out other treatments not backed by themselves. In addition, they focus on drugs that can cure lifestyle choices (obesity, for example) as rich people can afford them and these will provide a good ROI. Malaria, a disease which is eminently treatable is not focused on as it is a disease which effects poor people.

Another major issue is that the companies suppress negative research and studies which show defects in their products. Its an extremely broken system.

What I would propose is the following:

1) new development of drugs should be carried out by private companies and universities.

2) Patents arising from this research should be under a compulsory licensing scheme, based on the outcome of clinical trials.

3) Clinical trials should be paid for directly by healthcare systems, to avoid duplication of research and to prevent the suppression of negative research.

4) Manufacturing should be completely separate companies who can tool up and down plants. Currently, plants get built in anticipation of approval and then shut down if problems arise, which is extremely wasteful.

This would allow the private sector to retain development and manufacturing (but in different companies) and the governments would have much more incentive to conduct good clinical trials, and the results would be public so others could re-analyse the data and find better links with conditions, drugs and outcomes.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#88

Post by betterth » Tue, Mar 13, 2012, 1:51 PM UTC

nknight wrote: post #78

w1ntermute wrote: post #73

Earlier quoted context omitted.

I don't think there's an unbreakable bond between profitability and sustainability. To use a tech industry analogy, despite making insane profits off of Windows as it is (and has been for 20 years), Microsoft has realized that we've entered a post-PC world, and modified Windows to run on new form factors, such as the tablet.

I really don't see your point. Microsoft's basic business model hasn't changed, their products are just evolving. Drug companies make new drugs and refine old ones all the time. Other than whining by obviously-biased spokespeople for the drug industry, I have no reason to believe their business model can't be sustained indefinitely under the current regulatory regimes.

Did you read his post about the patent cliff?

The majority of blockbuster drugs are about to go off of patent protection. This is where the majority (if not all) of the profit in the industry comes from, as well as a huge chunk of the rests of their costs.

It's an interesting time in the industry but the patent cliff is real and the industry is going to change quite a bit more in the next few years.

The model is absolutely unsustainable - there isn't enough blockbusters in the pipeline to replace the current, not by a very long shot. And we know what is in in the pipeline because remember it takes 7-11 years to bring a candidate from preclinical through FDA approval, so we have a very good idea of what's coming out (and what's not).

Re: Indian Government uses special powers to slash cancer drug price by 97%

#89

Post by chollida1 » Tue, Mar 13, 2012, 1:57 PM UTC

Stanford has a set of awesome podcasts called Entrepreneurial thought leaders (http://ecorner.stanford.edu/podcasts.html).

One of the more recent ones was from a serial entrepreneur in the medial space.

He said the reason that drugs take so long to produce is the FDA process. Now the FDA is housed by smart people but you have to look at it from their prespective.

They can accept or reject drugs. If they reject a drug then there is no serious problem that can come back and bite them.

If they accept a drug, there is no real upside to them.

They get no bonus for accepting the drug, however if the drug turns out to actually harm people then they are squarely in the cross hairs.

This leads to the question of why would the FDA accept any drug without being 100% sure, and with medicine there is no such thing as 100% sure.

Re: Indian Government uses special powers to slash cancer drug price by 97%

#90

Post by betterth » Tue, Mar 13, 2012, 1:58 PM UTC

tripzilch wrote: post #65

JunkDNA wrote: post #36

I worked in the drug R&D business for over 8 years. I still follow the industry closely. Some things always get lost in these discussions. First, manufacturing an existing drug is absurdly cheap. Modern industrial chemistry ensures this for all small molecule drugs (note that this is not the same case for the "biologics" which are often fiendishly difficult to make). Almost all the cost in a drug is the manufacturer…

But most of those R&D costs are for getting "FDA" approval. I don't see why India (or anyone, really) should pay for lining the pockets of the USA's inefficient and corrupt bureaucratic machinery. Or I could be wrong and those $12B really goes into equipment and lab workers wages, but you won't blame me for finding it real hard to believe until I see at least a rough breakdown of how those costs are summed up. From t…

The majority of the money goes into Phase III clinical trials. Don't bash the FDA - they're the most evidence based, scientifically minded regulatory body in our government.

Preclinical and Phase I - II trials aren't too expensive, in the order of millions of dollars.

But also remember, for every ~10,000 candidates that enter preclinical trials, about 1-2 will actually pass FDA approval.

The billion number isn't just for one drug, it's also for the 10,000 failures that you had to weed through to find that one drug.

Phase I is safety trials in healthy humans (young males generally). Phase II starts using it in the target population (the sick) and begins looking at dosing requirements and preliminary efficacy data.

But the big one, Phase III, that's the big group, expensive, efficacy trial. This is the trial that has to prove, beyond a shadow of a doubt scientifically, that the drug does what they say it does. A good Phase III trial can cost in the hundreds of millions of dollars easy. I've heard of $250,000,000 Phase III trials before.

If "the most rigorous evidence requirement in the world" is your example of "inefficient and corrupt", than I guess we'll just disagree.

But the FDA is the most strict drug regulatory body in the world, and the amount of evidence for efficacy that they require from the industry is truly impressive and truly does warrant the billions price tag.