Dutch join backlash at expensive drugs by making their own • Hacker News Board

Re: Dutch join backlash at expensive drugs by making their own

#31

Post by rayiner » Sat, Mar 09, 2019, 12:24 PM UTC

eecc wrote: post #29

rayiner wrote: post #26

Earlier quoted context omitted.

Typical R&D spend in pharma as percentage of revenues is 10-20%. That’s in the same range as Google, Intel, or Microsoft, which are widely considered to be very efficient structures for turning money into innovation. By your reasoning, we could cut out a lot of the fat and get better R&D for less by nationalizing Google.

Of the main customer of Google was the government itself then why not? (The point is: it’s not. So so what’s your point?)

Who the customer is has no bearing on whether a company spending 15% of revenues on R&D is a sign of efficiency or inefficiency. If your premise was true—that you can achieve increased efficiency by nationalizing research because it lets you cut out the other costs of running a company, then that principle would be applicable to Google as well as Novartis.

Re: Dutch join backlash at expensive drugs by making their own

#32

Post by suddenstutter » Sat, Mar 09, 2019, 12:35 PM UTC

stretchwithme wrote: post #7

I think it would be better to have bounties for cures rather than patents for drugs you have to take forever. Pay a fixed price that is easy for innovators to understand and maybe the energy will focus on what we really want.

[dead]

Re: Dutch join backlash at expensive drugs by making their own

#33

Post by fouc » Sat, Mar 09, 2019, 12:42 PM UTC

eecc wrote: post #27

rayiner wrote: post #23

Earlier quoted context omitted.

> The killer detail (in the article) is that 1/3 of the (small) development cost of 40 million were borne by the Dutch tax payer. How did that patent end up in a big pharma portfolio? It says so in the first few paragraphs: Novartis licensed (bought) the right to sell the drug in Europe. The patents remain with the hospital. The hospital that developed the drug is a public hospital associated with a public university…

The article reads as follows: “Novartis bought the rights to Lutathera with a $3.9-billion-euro takeover of French company AAA last year.” Where exactly does it say that the patents have remained with the hospital?

Buying the rights means licensing the rights of the patent, otherwise it would've said "Novartis bought the patent to Lutathera"

Re: Dutch join backlash at expensive drugs by making their own

#34

Post by sykhotic » Sat, Mar 09, 2019, 1:02 PM UTC

rayiner wrote: post #31

eecc wrote: post #29

Earlier quoted context omitted.

Of the main customer of Google was the government itself then why not? (The point is: it’s not. So so what’s your point?)

Who the customer is has no bearing on whether a company spending 15% of revenues on R&D is a sign of efficiency or inefficiency. If your premise was true—that you can achieve increased efficiency by nationalizing research because it lets you cut out the other costs of running a company, then that principle would be applicable to Google as well as Novartis.

But if twice as much is spent on marketing then in the case of pharmaceuticals it appears this is inefficient. These drugs tend to be necessary for people in ways that Google is not. There are cases where people live in penury due to high drug costs. From the perspective of beneficial to society it seems from my perspective that this is inefficient. Whether or not Google is efficient isn’t relevant in this matter as far as I can tell.

The typical argument for justifying high drug costs is that it costs lots of money to do R&D. This argument loses weight when the marketing costs are twice the R&D costs. Further to this point is the fact that the actual discovers aren’t the ones getting the big rewards of their discoveries. So it all appears inefficient in ways that don’t matter when applied to Google due to the fact that ultimately we are talking about peoples’ financial and physical health.

Re: Dutch join backlash at expensive drugs by making their own

#35

Post by mft_ » Sat, Mar 09, 2019, 1:07 PM UTC

netjiro wrote: post #22

zaroth wrote: post #12

Earlier quoted context omitted.

I think you have cause and effect reversed. They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion. Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies whic…

> Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. This is a _myth_ Big Pharma is an insanely inefficient structure for turning money into useful R&D results. Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money…

Do you really think that the marketing spend doesn't result in greater returns than without the spend in the first place?

If a company could increase its bottom line by cancelling marketing spend, that's an easy equation to figure out.

Or... maybe (profit after marketing - marketing spend) > (profit without marketing).

And as (in a reasonable stable company) the research spend will be related to profit... marketing spend likely does result in more money being available for research.

Re: Dutch join backlash at expensive drugs by making their own

#36

Post by Entalpi » Sat, Mar 09, 2019, 1:16 PM UTC

rayiner wrote: post #26

netjiro wrote: post #22

Earlier quoted context omitted.

> Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. This is a _myth_ Big Pharma is an insanely inefficient structure for turning money into useful R&D results. Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money…

Typical R&D spend in pharma as percentage of revenues is 10-20%. That’s in the same range as Google, Intel, or Microsoft, which are widely considered to be very efficient structures for turning money into innovation. By your reasoning, we could cut out a lot of the fat and get better R&D for less by nationalizing Google.

Lets not say that Google and Pharma companies operate under the same conditions. There are enough of brainjuice in the world to study both in isolation.

Re: Dutch join backlash at expensive drugs by making their own

#37

Post by sykho » Sat, Mar 09, 2019, 2:00 PM UTC

mft_ wrote: post #35

netjiro wrote: post #22

Earlier quoted context omitted.

> Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. This is a _myth_ Big Pharma is an insanely inefficient structure for turning money into useful R&D results. Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money…

Do you really think that the marketing spend doesn't result in greater returns than without the spend in the first place? If a company could increase its bottom line by cancelling marketing spend, that's an easy equation to figure out. Or... maybe (profit after marketing - marketing spend) > (profit without marketing). And as (in a reasonable stable company) the research spend will be related to profit... marketing s…

In European countries the marketing spend is essentially zero for all companies since they are banned from advertising. As you say, marketing clearly does increase profits for the pharmaceutical companies in the U.S. However, from a societal point of view it seems to me that it is much better for society for there to be no marketing of drugs. My wife is a physician and listening to her and her colleagues they all hate drug company TV commercials.

The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits. They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people. There is also the fact that in a system like the U.S. where people have large out of pocket expenses at the point of contact with the health care system having companies maximize profits for a particular life saving drug causes some people to view said maximization with disgust.

Re: Dutch join backlash at expensive drugs by making their own

#38

Post by vonmoltke » Sat, Mar 09, 2019, 2:06 PM UTC

netjiro wrote: post #22

zaroth wrote: post #12

Earlier quoted context omitted.

I think you have cause and effect reversed. They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion. Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies whic…

> Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. This is a _myth_ Big Pharma is an insanely inefficient structure for turning money into useful R&D results. Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money…

> Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D.

That is also a myth, perpetuated by people who do not understand how to read an income statement. Please provide a source for that, and if the source is or is using the SG&A line from an income statement, it's wrong.

Re: Dutch join backlash at expensive drugs by making their own

#39

Post by vonmoltke » Sat, Mar 09, 2019, 2:08 PM UTC

sykho wrote: post #37

mft_ wrote: post #35

Earlier quoted context omitted.

Do you really think that the marketing spend doesn't result in greater returns than without the spend in the first place? If a company could increase its bottom line by cancelling marketing spend, that's an easy equation to figure out. Or... maybe (profit after marketing - marketing spend) > (profit without marketing). And as (in a reasonable stable company) the research spend will be related to profit... marketing s…

In European countries the marketing spend is essentially zero for all companies since they are banned from advertising. As you say, marketing clearly does increase profits for the pharmaceutical companies in the U.S. However, from a societal point of view it seems to me that it is much better for society for there to be no marketing of drugs. My wife is a physician and listening to her and her colleagues they all hat…

> In European countries the marketing spend[ing] is essentially zero for all companies since they are banned from advertising.

Companies are prohibited from advertising to doctors? I thought it was just direct-to-consumer.

Re: Dutch join backlash at expensive drugs by making their own

#40

Post by radicalbyte » Sat, Mar 09, 2019, 2:17 PM UTC

Luc wrote: post #28

radicalbyte wrote: post #24

It's worth noting that pharmacists in The Netherlands have a doctorate and the same training requirements as MDs (the study last until 24/25 with no skip years). The requirements are considerably lower in other countries (in the UK for example they just need a BSc). Source: my wife is a pharmacist and could have worked in the UK after only completing 1/3rd of her study.

It's a 6 year study, but like the study for Medical Doctor, at the end you have a Masters diploma, not a Phd/Doctorate. Source: apotheek.nl e.a.

That's what I said :)

A doctorate* (nl: doctorandus) which takes 6 years to earn (3-4 years BSc then 1-2 years MSc to use the English terms) followed by a 1 year specialization for public pharmacist. Exactly the same as the MDs (also doctorandus) have to do.

It's not a PhD; although I assume that you'd want to go that route if you're more interested in the research (I'm assuming that a PhD in Pharmacology is a thing). I tried convincing my wife to do it but she feels that she helps others more by being more hands on.

I think the confusion comes because a doctorate and a PhD are different things and different countries and disciplines use different terminology. I just about understand the Dutch system now but I'll never understand the German system.