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Novo Nordisk facing pressure as study finds $1k drug can be made for $5

fortune.com

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Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#91

Post by andrewstuart »

So this boils down simply to cost based pricing versus value based pricing.

Novo Nordisk is applying a pricing strategy that reflects demand and what people are willing to pay.

https://en.wikipedia.org/wiki/Value-based_pricing

There are many, many MANY people in this world will to pay for this on the basis of value. Heck if I had a lazy $5,000 I'd buy 5 months worth of the stuff and I'd be extremely happy with my purchase and I would not care what it cost to make.

Losing 20 kilos is easily worth $5K to me.

The only problem is I can't get it at any price - Wegovy is simply not available here in Australia and for all I know it might take 10 years until they can make enough to supply the market.

If someone could get it for me I would pay them except I'd never trust the black market - you're unlikely to be getting the real thing.

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#92

Post by acchow »

lostlogin wrote: post #48
karles wrote: post #9

Producing it is not the hard part. Researching it is... And you are not paid for your research "up front". It's added to the cost afterwards.

There is an awful lot of sympathy for the drug company in this thread. You are correct, research and approval is expensive. But at some point there is a limit. Things like insulin are long paid off, and the pricing there has generated controversy. People have been charged $1000 a month for it [1]. What’s fair? They are screaming out to be regulated when they behave so badly, and that’s what’s happened with insulin. […

> Things like insulin are long paid off, and the pricing there has generated controversy. People have been charged $1000 a month for it [1].

Humalog and NovoLog both have expired patents. There are newer, better insulins. But these drugs were state of the art just 25 years ago.

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#93

Post by nabla9 »

There is currently a supply problem. Novo Nordisk is building more capacity, but it takes time. Meantime those who are willing to pay more for it, get it. Mostly citizens of rich countries.

Novo Nordisk is controlled by the Novo Nordisk Foundation (> 77.1% of votes, 28.1% of capital) with aim to make a positive impact on health, science, and society by generating long-term returns on the assets of the Novo Nordisk Foundation.

One of the reasons why Novo Nordisk has been so successful is because their owner takes a long term view in R&D unlike purely profit-seeking owner.

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#94

Post by consumer451 »

karles wrote: post #9

Producing it is not the hard part. Researching it is... And you are not paid for your research "up front". It's added to the cost afterwards.

According to Acquired.fm, they are required to sell their products at cost in Denmark, and allowed to make up for that around the world. I am curious for feedback here on the accuracy of this information.

I can't believe that I'm sharing YouTube shorts on HN, but this is the best way to share this info at the moment:

https://www.youtube.com/shorts/IVut-PE6LCA

https://www.youtube.com/watch?v=lsCvQSNsaVk

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#95

Post by lostlogin »

acchow wrote: post #92
lostlogin wrote: post #48

Earlier quoted context omitted.

There is an awful lot of sympathy for the drug company in this thread. You are correct, research and approval is expensive. But at some point there is a limit. Things like insulin are long paid off, and the pricing there has generated controversy. People have been charged $1000 a month for it [1]. What’s fair? They are screaming out to be regulated when they behave so badly, and that’s what’s happened with insulin. […

> Things like insulin are long paid off, and the pricing there has generated controversy. People have been charged $1000 a month for it [1]. Humalog and NovoLog both have expired patents. There are newer, better insulins. But these drugs were state of the art just 25 years ago.

The older products are much more expensive in the US too. It’s price gouging, and that’s when regulation has been imposed.

The newer products are cheaper elsewhere in the world. The US is getting ripped off by big pharma.

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#96

Post by yread »

karles wrote: post #9

Producing it is not the hard part. Researching it is... And you are not paid for your research "up front". It's added to the cost afterwards.

Pharma stocks actually underperform compare to other companies. So, it's not like pharma companies are making insane profits. Research, regulation, approvals and failures are expensive

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#97

Post by pstrateman »

lostlogin wrote: post #87
zachmu wrote: post #73

Earlier quoted context omitted.

When people complain about being forced to pay thousands a month for insulin, they're talking about the newest synthetic insulins that were developed very recently at substantial costs. They could take the older insulins for $50 a month, no one is stopping them. It's just that those older products are less convenient.

So why is older insulin more expensive in the US than elsewhere, by a large margin? https://www.visualcapitalist.com/cost-of-insulin-by-country/ https://www.rand.org/pubs/research_reports/RRA788-2.html https://worldpopulationreview.com/country-rankings/cost-of-i...

Only the last one makes the distinction between modern synthetics and basic insulin.

Frankly the US pays for the cost of the research while the rest of the world just pays for the cost of production.

If you want to fix the cost of insulin products (and many other drugs) in the US you need to figure out how to make everybody else pay for the true costs.

Edit: also your last source there doesn't even know what it's talking about Novolin is a generic brand name for 3 distinct products that have distinct pricing.

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#98

Post by lxgr »

nvy wrote: post #86
briandear wrote: post #79

Earlier quoted context omitted.

Should they not profit on that capital invested for that research? Do landlords drop rents when the loan is paid off? Of course not, they’re going to price rents what the market supports. Competition is what makes markets work. Invent a drug? And someone else invents a similar drug? Prices will go down.

There's no free market for lifesaving drugs. Just extortion.

Is it ethical for a doctor to accept payment for life-saving services, then?

A much more interesting discussion could be had around who pays for it (and how, and how the prices come to be as high etc.) – because somebody ultimately does.

Re: Novo Nordisk facing pressure as study finds $1k drug can be made for $5

#100

Post by maxcoder4 »

nvy wrote: post #86
briandear wrote: post #79

Earlier quoted context omitted.

Should they not profit on that capital invested for that research? Do landlords drop rents when the loan is paid off? Of course not, they’re going to price rents what the market supports. Competition is what makes markets work. Invent a drug? And someone else invents a similar drug? Prices will go down.

There's no free market for lifesaving drugs. Just extortion.

That sounds noble but... What do you propose? Free drugs for everyone? If nobody is allowed to profit on researching drugs, nobody has a reason to sponsor drug development - which is very expensive.

Of course I agree this market should be regulated - like we regulate it in Europe - but at the end some company is investing into drug research in order to make a profit.

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