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Open Letter from Gilead CEO: Remdesivir Pricing

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Re: Open Letter from Gilead CEO: Remdesivir Pricing

#81

Post by kenhwang »

entee wrote: post #52
trowawee wrote: post #13

American taxpayers contributed at least $70m to the development of this drug[0] and our reward is to be gouged by Gilead. It's the exact same shit they've pulled with Truvada[1] and it's grotesque. [0]: https://www.citizen.org/article/the-real-story-of-remdesivir... [1]: https://www.nytimes.com/2018/07/16/opinion/prep-hiv-aids-dru...

$70M is a fraction of what it has taken to get Remdesivir to the point where it is today. The argument that government is paying twice for drugs is usually deeply misleading, though in this case it did sponsor some trials. Usually government funds pay for understanding biology and pharma pays for figuring out how to drug those findings. It’s a symbiotic process, and depends on drug discovery being a lucrative busines…

Thanks for this. I knew at a distance how the pharma industry worked, but this filled in a lot of the gaps.

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#82

Post by kenhwang »

kgwgk wrote: post #77
kenhwang wrote: post #70

Earlier quoted context omitted.

I briefly worked for GSK. It's not like the inefficiencies are limited to only US companies because they can charge more. Nor have I seen the public sector run any more efficiently or effectively (and it's often worse). The reality is that it takes a very large organization to develop a drug and large orgs tend to be run inefficiently.

> It's not like the inefficiencies are limited to only US companies because they can charge more. US companies cannot really charge more than European companies [+]. They all charge more in the US and less elsewhere. [+] In general, there are also cases where the same drug is marketed by a US company in the US and a non-US company in the rest of the world.

The US companies inherently had a home field advantage. Yet non-US companies were willing to jump through the hoops to follow the US drug funding model. If their original funding and development mechanism were sufficient or better, why go through the trouble? Why did all of them do it?

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#83

Post by zimpenfish »

number6 wrote: post #38
kenhwang wrote: post #23

Earlier quoted context omitted.

It typically costs ~$2B to develop a new drug. Taxpayer contributions are practically negligible.

Has anyone checked the $2B or is this what pharma tells?

Derek Lowe has an article about it that might help.

https://blogs.sciencemag.org/pipeline/archives/2017/10/18/dr...

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#84

Post by cjhopman »

jjeaff wrote: post #54

When you need a whole letter to explain the new price, you know it's going to be loaded with crap and the price will be excessive. This one doesn't disappoint.

That's bullshit. Companies have "whole letter"s for pretty much everything they do. Gilead had a "whole letter" when they said they'd provide 1.5 million doses for free. Was that also loaded with crap and the "$0" price excessive?

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#86

Post by ageitgey »

chrisco255 wrote: post #76
ageitgey wrote: post #37

Earlier quoted context omitted.

There are hundreds of trials in various states of completion for hydroxychloroquine [1]. At least 10 of them specifically call out using it in combination with zinc, though some completed trials that don't specifically call it out in the title also used zinc if you read the papers. There are about 35 trials in various states of completion of remdesivir [2]. If hydroxychloroquine actually does anything, we'll eventual…

Here's a recent study from France on 3700 patients treated with HCQ+AZ and it shows a 66% reduction in hospitalizations: https://www.sciencedirect.com/science/article/pii/S147789392...

I would love for HCQ to be shown to be effective, but this pre-print study is not super convincing.

First, this is not a randomized trial with a control group. It's a retrospective look at patients in Marseille where they gave HCQ+AZ by default to all patients who would take it and then compared those patients against the small number of people who either refused it or were too at risk of side effects to get it.

If you look at the breakdown of the groups, it's comically unbalanced. Of the 3,737 people they tracked, only 162 didn't receive HCQ or AZ. And the rate of heart disease in those 162 untreated people was 2.7x the rate in the group treated with HCQ+AZ (11.1% vs 4%)! Furthermore, only 28 of the 162 untreated people were in the high risk >= 65 age group. No deaths in any group were reported under the age of 60.

In other words, if you compare a couple tens of people with 2.7x the rate of chronic heart disease to a random assortment of other people, you get numbers that may or may not mean anything.

Meanwhile, there are other studies with proper control groups and balanced patient enrollment that show no benefit of HCQ and lots more studies still in progress that test it in different doses and times of administration. At the end of the day, you have to follow the best evidence.

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#87

Post by cjhopman »

trowawee wrote: post #13

American taxpayers contributed at least $70m to the development of this drug[0] and our reward is to be gouged by Gilead. It's the exact same shit they've pulled with Truvada[1] and it's grotesque. [0]: https://www.citizen.org/article/the-real-story-of-remdesivir... [1]: https://www.nytimes.com/2018/07/16/opinion/prep-hiv-aids-dru...

This is actually pretty much the dumbest argument if you take just a moment to think about it.

Imagine some drug that costs $100 million to develop and that the most it can earn in the market is $70 million at a price of $1000. Okay, but then the government thinks it's really important to provide, so it's going to subsidize the development to the tune of $40 million. The drug company could then spend $60 million for development and earn $70 million. Over the typical drug development and sales lifetime, that's actually a quite mediocre return, but let's not worry about that.

But wait, the government paid 40% of the development cost. Why the fuck should that company be able to charge $1000, they should only be able to charge 60% of that, they should charge $600. Well, then they are fucked because they are right back at the same equation for whether it is profitable to work on that drug.

In general, with a moment's thought, any intelligent person will realize that expecting discounts on products based on how much the development was subsidized by the government completely obviates the entire point of subsidies.

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#89

Post by kenhwang »

DanBC wrote: post #69
kenhwang wrote: post #50

Earlier quoted context omitted.

Europe is one of the primary reasons US drug pricing is so messed up. Many European countries negotiate drug pricing on cost to manufacturer (practically nothing) with a negotiated slim profit margin. Then the drug companies just offload the rest of the R&D cost onto the US consumer. But, almost the entire cost of a drug is in the R&D. Imagine if the rest of the world only paid for CPUs based on the per unit cost of…

> Then the drug companies just offload the rest of the R&D cost onto the US consumer. But, almost the entire cost of a drug is in the R&D. How much do drug companies spend on advertising in EU vs US?

Usually the marketing spend ranges from half to double the spend compared to R&D. However, advertising (specifically the direct to consumer variety that's uniquely allowed in the US) only consists of ~10% of the marketing budget. Over half the marketing budget is free samples and a quarter is physician outreach/training, which happens in both the EU and US.

So there's potential for ~3-7% cost improvement if direct-to-consumer advertising is banned in the US.

US pharma R&D intensity averages ~40%, which is more than double of Europe's average intensity.

Re: Open Letter from Gilead CEO: Remdesivir Pricing

#90

Post by votepaunchy »

hkt wrote: post #40
splintercell wrote: post #32

Earlier quoted context omitted.

Are these drug companies British?

Some. American drugs companies too, though. They want our bargaining power to be mediated by the coming UKUSA trade agreement so we have to pay through the nose like Americans do. At the moment they either sell to us or lose out on our custom (the NHS is not above refusing to buy a drug on expense grounds). They're trying to make this impossible for us to do by levering political power, because single payer healthcar…

> They're trying to make this impossible for us to do by levering political power, because single payer healthcare doesn't permit them to abuse their market power over here.

You’re saying that if you joined some sort of union that you could negotiate from a much stronger position, similar to single-payer healthcare?

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