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There's not a single drug company on the market that stops charging a high price for a drug as soon its covered its research expenditure.
you also need to cover the cost of the 100 drugs that failed at various stages of the pipeline. Not saying that it's not a screwed up industry, but stories like these distort the problem as well
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I get that point, but given that Ozempic sells for significantly less in other countries I think it's worth considering why it's that much more expensive in the US
It's because those other countries are free riders. I think we should do the same thing in reverse on limiting CO2 emissions. How does that sound?
It's not like the board at Novo has a board meeting where they decide "we hate the US so lets charge them more for our products"
The simple fact is that the US has higher drug prices because it has created a healthcare system that allows pharmaceutical companies to charge much more for their products
The way to lower drug prices is to change the system to prevent that
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There's not a single drug company on the market that stops charging a high price for a drug as soon its covered its research expenditure.
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.
Profit enough to survive. But don't take more than your worth. Tbh profiting off medicine is about as low as profiting off weapons manufacturing. You literally make money out of the misery of others.
Thank f#@k I live in a country that has free healthcare. The concept of privatizing the health of your citizens and letting a select few profit from that is absolutely batshit insane.
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so it would be better for orzempic to cost $850,000 and limit its indication to people with MODY? How is that realistic? TBH I have way less a problem with pharma industry being allowed to make profits than health insurance companies. In fact the US is about the only country in the world that allows profits from health insurance.
I don't see health insurance making profit being unreasonable. That is key reason why anyone would run an insurance scheme. Now the USA model is entirely wrong. But fundamentally, to offer insurance you must get something out of it.
every other country only allows them to exist as not-for-profits.
whereas expensive medicines just make health insurance less profitable.
This is the basic principle behind why the US spends the most in the world on healthcare to achieve among the worst outcomes (e.g. same life expectancy as most undeveloped 3rd world countries)
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> This is a diabetes drug. There has to be a biochemical catch here. What if there isn't a catch? Sometimes technology really does just improve the human condition with no serious downsides. Consider refrigeration or sanitary surgical techniques.
I was wondering this. How often does it turn out that a drug has no serious downsides? I guess penicillin was, if you're not allergic. (There is microbes evolving antibiotic resistance, but that's probably not a concern for ozempic.)
Of course, the marginal cost of production is low at scale. Most of the mark-up is for advertising and overhead. Also, once it goes generic that will hurt future sales too.
No, it’s for the massive upfront cost of research and regulatory approval. The stuff basically sells itself at this point; marketing probably doesn’t even register in their budget for it.
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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 tal…
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. […
1. Expensive drugs are expensive to compete again. Any new entrant will have an uphill climb. They will need a new way to solve the problem, so it doesn’t infringe on the incumbents patents.
2. Drug manufacturing is still a niche business. In many other advanced industries, the tooling has become commoditized leading to a lower bar for entry and increase in competition. Repairing phone displays and soldering memory modules is now possible at home. Pharma is still waiting for that 3D printer/indie moment.
I don’t know if it’s even possible - we’re talking about chemicals and amino acids here. Every drug will need a different set of ingredients (not that different from cooking food).
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No, it’s for the massive upfront cost of research and regulatory approval. The stuff basically sells itself at this point; marketing probably doesn’t even register in their budget for it.
that is what overhead is
We could have all kinds of interesting discussions around the parallels between research funding and tech VCs, sprawling regulations and delayed approval procedures etc., but even in a libertarian utopia without an FDA I think you'll find that all researches like getting paid at the end of the month consistently, and not just the few that do eventually hit the jackpot.