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The million-dollar drug (2018)

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Re: The million-dollar drug (2018)

#71

Post by s1artibartfast »

nine_k wrote: post #31
joe_the_user wrote: post #10

Earlier quoted context omitted.

It's a matter of principle. Perverse principle but principle: "Why would we? [lower the price] Pricing shouldn't be a political decision. It should be a rational decision based on merits and values," he said. "Hundreds of millions of investor money has gone into the company, and if there is no return for those investments, there will be no new drugs because nobody's going to do that in the future, right?"" Which is t…

Buying the rights on drugs like this, and more important expensive drugs, an license them under a freedom-protecting license (similar to GPL) could be a major application of charity funds.

You would still have to raise several hundred millions of dollars of funding to reconduct development and clinical trials for the drug after securing the IP.

Clinical trial data and manufacturing know how cant be leveraged from the original approval.

It is incredibly difficult to get investors to fund a second round of development for a product that made it to market and still failed.

You might say this is an opportunity for the government to step in as investor, but they have little interest, knowing that they could use the same money to save many more lives in other areas.

Re: The million-dollar drug (2018)

#72

Post by dodobirdlord »

bryanrasmussen wrote: post #49
bryanrasmussen wrote: post #42

Earlier quoted context omitted.

>In the years since they refused the $1M price tag in an attempt to drive a hard bargain, the national governments and private insurance companies have no doubt spent more than $1M per patient they refused to buy a dose for. I wouldn't make the assumption on that, given the disease is potentially deadly. I would more likely make the assumption that the private insurance companies especially did the math and figured t…

obviously comparing my business as a consultant to a pharmaceutical company is like comparing a single raisin to a field of watermelons, but I am of the opinion based on reading that the benefits of spending money to reduce profits and taxes seems to be greater the larger the business, and thus that the principle must hold.

Business losses offset profit, rather than taxes owed, and though losses can be carried forward for years to offset taxes, a company does at some point need to turn a profit for the tax benefits of its losses to matter at all. The article mentions that the company took investor money for this, and it seems to be a fairly small pharma R&D company, so I doubt they have some pile of other successful drugs that they are offsetting these losses against.

But moreover, losing money for tax purposes only makes sense in a narrow window dictated by tax rate. Leaving aside tricky confounders like government R&D grants, if your corporate tax rate is say, 10%, and you have an investment opportunity that won’t turn a cash profit but will grow the value of your business by 95% of what you invest, it can make sense to make an unprofitable investment and lose 5% on it over realizing the profits, paying taxes, and losing 10% on it. But for this to make sense you have to have an investment opportunity that already very close to breakeven, corporate tax rates aren’t that high. And just throwing money away to count the losses on your taxes never makes sense.

Re: The million-dollar drug (2018)

#73

Post by s1artibartfast »

shmerl wrote: post #70
s1artibartfast wrote: post #66

Earlier quoted context omitted.

I think it makes no sense because you are greatly underestimating the cost to produce and market the drug, even after sunk costs. It could easily be many hundreds of thousands of per dose.

May be, but probably not a million. So they overpriced it and ended up not making it available at all. Also, I don't think marketing is a big issue for such drug which is the only available option for affected people.

It looks like uniQures business model is to take risky products through clinical development then sell them to other manufacturers. Faced with no buyers and large costs to keep it on the market, they chose to pull it.

We can speculate on what the cost per dose would be with no profit, but ultimately, there wasn't enough profit at a reduced price for uniQure to provide it.

The fact that no other companies are licensing the drug shows that they agree that there isn't enough of profit to be made.

Here is an article with some more information.

https://web.archive.org/web/20170901212655/http://www.fierce...

Re: The million-dollar drug (2018)

#74

Post by mmazing »

dodobirdlord wrote: post #33
d136o wrote: post #12

It seems to me that it’s not just the price of a single treatment that is too high, but also that the patients are fully recovered and don’t have to pay a recurring annual subscription fee to live normal lives. Or is that too cynical?

It is in fact too cynical. The company that wanted to sell this drug isn’t the same as the companies selling recurring treatment to people with this disorder. Your cynicism has blinded you to the fact that the marketers of this drug do not have any economic motivation to do what you are suggesting. Their economic motivation is to sell the tiny number of doses required to treat everyone in the first world (2,000-3,000…

Why not look for funding from the many sources of grants and charities that might not care about economic motivation?

Your comment seems very defeatist. Actually this whole thread seems defeatist.

Re: The million-dollar drug (2018)

#75

Post by 5tefan »

s1artibartfast wrote: post #69
5tefan wrote: post #41

Earlier quoted context omitted.

Means they recover non through this drug and recover all RD through other drugs. And let's not forget that this business often operates with sickeningly huge profit margins.

>And let's not forget that this business often operates with sickeningly huge profit margins. This is grossly misinformed Looking at the UniQure Tax filings for 2020, They had 37M in revenue, -122M in R&D expenses, and -42M in general expenses, so they were -125M in the hole that year. https://uniqure.gcs-web.com/static-files/8f960e6d-c40c-474e-...

I work in finance and of course it is not true for every company and I didn't refer to them.

From a collegue I know that they purged drugs from their portfolio because it made less than But you are right. It is very different.

Re: The million-dollar drug (2018)

#76

Post by s1artibartfast »

joe_the_user wrote: post #10
exhilaration wrote: post #5

I'm confused, they say it was priced at $1 million because that was what they felt the drug was worth compared to the ongoing therapies needed to keep these patients alive. Ok fine. But once it became clear no one was going to pay that price, wasn't there some lower price that would still earn them a profit?

It's a matter of principle. Perverse principle but principle: "Why would we? [lower the price] Pricing shouldn't be a political decision. It should be a rational decision based on merits and values," he said. "Hundreds of millions of investor money has gone into the company, and if there is no return for those investments, there will be no new drugs because nobody's going to do that in the future, right?"" Which is t…

The investors didn't want to risk throwing more good money after bad.

No other companies were interested in buying the drug and it required more costly trials and upkeep.

You drop the price and buyers are even less interested, meanwhile the costs keep coming in.

I think the mistake people are making is assuming the drug was in a position to be revenue positive at a lower cost when it wasn't.

Re: The million-dollar drug (2018)

#77

Post by s1artibartfast »

mmazing wrote: post #74
dodobirdlord wrote: post #33

Earlier quoted context omitted.

It is in fact too cynical. The company that wanted to sell this drug isn’t the same as the companies selling recurring treatment to people with this disorder. Your cynicism has blinded you to the fact that the marketers of this drug do not have any economic motivation to do what you are suggesting. Their economic motivation is to sell the tiny number of doses required to treat everyone in the first world (2,000-3,000…

Why not look for funding from the many sources of grants and charities that might not care about economic motivation? Your comment seems very defeatist. Actually this whole thread seems defeatist.

There are not many charities and grants willing to shell out a million dollars to improve one persons quality of life.

Re: The million-dollar drug (2018)

#78

Post by shmerl »

s1artibartfast wrote: post #73
shmerl wrote: post #70

Earlier quoted context omitted.

May be, but probably not a million. So they overpriced it and ended up not making it available at all. Also, I don't think marketing is a big issue for such drug which is the only available option for affected people.

It looks like uniQures business model is to take risky products through clinical development then sell them to other manufacturers. Faced with no buyers and large costs to keep it on the market, they chose to pull it. We can speculate on what the cost per dose would be with no profit, but ultimately, there wasn't enough profit at a reduced price for uniQure to provide it. The fact that no other companies are licensin…

Well, that's my point. They developed it, but no one can make it now even if it's cheap to actually make (not to pay licensing for it). Probably patents and such. Not a big fan of such kind of methodology for medicine where profits trump benefits for people.

Re: The million-dollar drug (2018)

#79

Post by dodobirdlord »

carlmr wrote: post #44
dodobirdlord wrote: post #29

Earlier quoted context omitted.

If you invalidate people’s patents for trying to sell their drug at a price high enough to recover R&D costs, they’ll just stop doing R&D for any drugs that will have niche target populations.

This isn't the same though, this is invalidating patents for drugs that have been developed that no one is producing anymore. Patent protection makes sense to inventivize development and production. In this case development already happened and only production stopped. So it doesn't make sense to uphold this patent.

If losing your patents in a position like this is a possible outcome, it changes the investment calculus. As it stands, there’s still the possibility that administrations or laws will change and governments or insurance companies will come around to wanting to buy it at a price that recovers the investment, or some other company will believe that they can persuade buyers to buy at a worthwhile price and buy the patents or the production rights off of the current owners. Or maybe some other company will profitably deploy a derivative technology and they can sue to recover some of their investment. For all of these reasons the patents and trade secrets are still worth something. If finding yourself in this position means that you are stripped of your patents and receive nothing, that makes drug R&D an even riskier investment proposition. Being stripped of patents by the government after having bankrolled clinical trials because the government refused to pay the price required to recover the investment would be a brazen show of bad faith and a real stab in the back. The patents will expire in a decade or so anyway, do we really need the government to go out of its way to screw these people out of their last possibility of making back some of the money they spent on this socially valuable work? If we think that it’s so important that this treatment be made immediately available to people at a low price, maybe the government should buy the patents early for the several hundred million dollars that they cost to produce?

Re: The million-dollar drug (2018)

#80

Post by dodobirdlord »

inter_netuser wrote: post #51
dodobirdlord wrote: post #29

Earlier quoted context omitted.

If you invalidate people’s patents for trying to sell their drug at a price high enough to recover R&D costs, they’ll just stop doing R&D for any drugs that will have niche target populations.

India has been doing this for decades. Somehow the global pharmaceutical industry didn't collapse despite of Indian drugs being exported for very cheap. It's just a lie, one of very many we tell ourselves.

The lie people tell themselves is that because India does it, everyone could do it without disrupting the rate at which new drugs are researched and brought to market.

As I’ve discussed in other comments, this is why pharma companies have to recover their entire investment off of sales in the first world. The rest of the world is never going to buy their drugs at a price that would make the R&D spending worthwhile. This is why companies sell their drugs for much cheaper in countries where incomes are much lower, and also why drugs produced and sold cheaply in other countries generally can’t be legally imported into the United States. It’s also why claims that drug prices could be lowered in the United States by importing them from countries where they are sold more cheaply are fundamentally ridiculous. The reason drug prices are high in the United States and to a lesser extent in Europe is that they are subsidizing the rest of the world by doing substantially the entirety of pharmaceutical R&D spending in the world.

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