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A million-dollar drug

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Re: A million-dollar drug

#91

Post by derefr »

rayiner wrote: post #47
mabbo wrote: post #24

The point of the patent system is that we are giving inventors a time-limited monopoly on their invention in exchange for them sharing it with the world. We all benefit because we have access to this new invention and soon can make it ourselves, and the inventor has an incentive to promote and sell as much as they can while they own the monopoly. But it's not working here. The patent holder is effectively saying soci…

It's bad to analyze this issue through the medium of a long-form article, which wraps the story up in emotional narrative. Here is a better write-up in the MIT Technology review: https://www.technologyreview.com/s/601165/the-worlds-most-ex... . The gist of the problem is this: > The Amsterdam company spent more than $100 million testing the drug and carving a path through Europe’s medical rules and regulations, which…

The drug didn't cost $100 million to make. It cost $100 million to prove that it works in order to get it approved for sale in Europe.

In a world where you could just put a drug on the market (where "the market" is, say, hospitals), the drug would have cost far less, and so the inventor would need to recoup far less.

Note that I'm not arguing for complete deregulation of drug manufacturing. Testing for product integrity through factory audits and the like is the original—and still core—purpose of bodies like the FDA and its EU equivalent(s). You want to know that your "ibuprofen, 20mg" indeed contains 20mg of ibuprofen in each pill, and nothing else.

But that's cheap! That doesn't cost a hundred million dollars to do. Proving product integrity is something that any food processing plant manages on the regular, not to mention manufacturers of generic/non-patented drugs.

If we stop with the need to prove—with overwhelming statistical power—the safety-and-efficacy of a molecule that we're planning to dispense to fewer than 1000 people (and even then only through doctors who can carefully monitor them for adverse reactions), the pharma industry would go back to being just another quiet industry that makes stuff, instead of the crazy behemoth it is.

Yes, certainly, there should be a stringent process before you stick something on a store shelf for OTC purchase. But most drugs never seek to be OTC anyway. Prescription drugs require an interaction with a prescribing doctor, a dispensing pharmacist, and possibly (in in-patient settings) a bunch of watchful nurses. Why, also, must they require an interaction with a standards body regulating the molecule they're composed of? The patients who were in the clinical trial itself got effectively the same treatment, minus the standards body, and they were all fine.

Maybe that's what I'm saying: why not just allow any random chemical to be given to people (without intention of standards-body registration) as long as the prescribing doctor is willing to do clinical-trial-like monitoring for adverse side-effects?

Re: A million-dollar drug

#92

Post by mistermann »

irq11 wrote: post #87
JamesBarney wrote: post #56

Earlier quoted context omitted.

But of that 100 million dollars the bulk was safety testing due to regulation. So you're right it doesn't make economics sense but for a specific reason. As a society we have to strike a balance between safety and efficiency. And I don't think we've struck the right balance. Many times erroring too much on the side of safety, especially with rarer and more fatal diseases without good current treatments.

You’re focusing on the wrong thing. Even if you ignored the cost of regulation and development, the company who was producing this drug would need to spend millions of dollars a year on production just to keep a safe supply available. With a pool of a few hundred patients, all of whom are “cured” for a decade, it’s going to be an expensive drug no matter what regulatory system is in place.

How do they make it in a lab to develop it initially? How is that possible, but it isn't possible to make small batches on demand?

Re: A million-dollar drug

#93

Post by wpietri »

quotemstr wrote: post #59
wpietri wrote: post #39

Earlier quoted context omitted.

I don't think he understands pricing at all. Market price isn't arrived at via a rational process. It's an inherently social process arrived at by negotiation between producers and consumers. And it's especially weird that he thinks pricing shouldn't be political when his product has a government-granted monopoly and the bulk of its customers will be government-run health-care systems and government-licensed insurers…

> I don't think he understands pricing at all. Market price isn't arrived at via a rational process. It's an inherently social process arrived at by negotiation between producers and consumers. Are you suggesting that prices don't have anything to do with scarcity and are just set arbitrarily by social forces? That doesn't seem quite right.

What would make you think negotiation is arbitrary? I my experience, it's all about specifics.

I don't see a reason to think true scarcity matters at all here. The hard part about generally isn't making doses 100 through infinity. The hard part is making the first dose, and to a lesser extent the next few. This is why drugs get special patent protection. That is, artificial, government-enforced scarcity.

Re: A million-dollar drug

#94

Post by thereisnospork »

derefr wrote: post #91
rayiner wrote: post #47

Earlier quoted context omitted.

It's bad to analyze this issue through the medium of a long-form article, which wraps the story up in emotional narrative. Here is a better write-up in the MIT Technology review: https://www.technologyreview.com/s/601165/the-worlds-most-ex... . The gist of the problem is this: > The Amsterdam company spent more than $100 million testing the drug and carving a path through Europe’s medical rules and regulations, which…

The drug didn't cost $100 million to make. It cost $100 million to prove that it works in order to get it approved for sale in Europe . In a world where you could just put a drug on the market (where "the market" is, say, hospitals), the drug would have cost far less, and so the inventor would need to recoup far less. Note that I'm not arguing for complete deregulation of drug manufacturing. Testing for product integ…

>Maybe that's what I'm saying: why not just allow any random chemical to be given to people (without intention of standards-body registration) as long as the prescribing doctor is willing to do clinical-trial-like monitoring for adverse side-effects?

Snake oil, first. Imagine if e.g. Herbalife could claim their pills cure cancer? Good luck getting signal through all that noise.

Second, the inevitable democratic anger of the masses when the next 'cure for the common cold' (which I'd be happy to sell you, btw) starts killing people.

Not to say there aren't (large) improvements possible to the regulatory process, but the process itself exists for some very important reasons.

Re: A million-dollar drug

#95

Post by SilasX »

ericflo wrote: post #90
SilasX wrote: post #84

Earlier quoted context omitted.

What would it look like for economics not to “drive decisions”? Spend unbounded money to save each life? That doesn’t make sense either. What decision mechanism do yo prefer, and how would it work differently here? Why would that outcome be better? Remember, even the much-lauded European health care systems didn’t feel it passed the cost benefit test, and they’re supposed to be the model of “not letting people die fo…

You quoted me, but missed the important word - these decisions. It's a tragedy of the commons type thing, and we can carve out specific solutions to that, as we do for these types of situations. Where the European healthcare bureaucracy draws their specific moral lines has no bearing on my overall argument.

But what is “these” and why would the same points not apply?

The fewer people that are suffering a given disease, the lower return to curing it. Moralizing doesn’t change that; it just means you’re willing to prioritize it over cures that help more people.

Yes, creation of disease cures is a tragedy of the commons, but the point is that there are worse tragedies of the commons. What consistent, defensible decision procedure favors a different response to this one?

Re: A million-dollar drug

#96

Post by panzagl »

derefr wrote: post #91
rayiner wrote: post #47

Earlier quoted context omitted.

It's bad to analyze this issue through the medium of a long-form article, which wraps the story up in emotional narrative. Here is a better write-up in the MIT Technology review: https://www.technologyreview.com/s/601165/the-worlds-most-ex... . The gist of the problem is this: > The Amsterdam company spent more than $100 million testing the drug and carving a path through Europe’s medical rules and regulations, which…

The drug didn't cost $100 million to make. It cost $100 million to prove that it works in order to get it approved for sale in Europe . In a world where you could just put a drug on the market (where "the market" is, say, hospitals), the drug would have cost far less, and so the inventor would need to recoup far less. Note that I'm not arguing for complete deregulation of drug manufacturing. Testing for product integ…

So maybe it should be more like the UL model? Let the insurance companies fund the proof of safety/efficacy, but it's not mandatory.

Re: A million-dollar drug

#97

Post by irq11 »

mistermann wrote: post #92
irq11 wrote: post #87

Earlier quoted context omitted.

You’re focusing on the wrong thing. Even if you ignored the cost of regulation and development, the company who was producing this drug would need to spend millions of dollars a year on production just to keep a safe supply available. With a pool of a few hundred patients, all of whom are “cured” for a decade, it’s going to be an expensive drug no matter what regulatory system is in place.

How do they make it in a lab to develop it initially? How is that possible, but it isn't possible to make small batches on demand?

They had a staff of skilled people who had been working on the project for years, most likely in an (expensive) laboratory that was purpose-built for the task of producing a transgenic virus destined for humans.

It’s not cheap to produce at any scale, and it’s typically more expensive to do small-scale production.

A million dollars can barely fund a startup for a year; it’s insane to think you can maintain a drug production facility on a tiny budget like that.

Re: A million-dollar drug

#98

Post by hummingurban »

To me, this is akin to a game company raising the price of a game. The costs are already sunk. The only thing that counts is setting a price on copies of that game. Those who pirate copies of the game incur to loss of revenue because those people would've never been able to pay for it. It becomes a question of projecting the maker's morals onto those who did not pitch to the coffer instead enjoying the game like a dirty thief. This is crazy, the only loss to the manufacturer is the uncomfortable idea people are enjoying or benefiting from your creation for free. Yet there are developers who happily contribute to open source projects and games with little to no recognition or reward.

Likewise with drug manufacturing, it's the same idea. It's illegal to copy a pharmaceutical drug and take it yourself and others without the approval of the patent holder. Yet, it is the patent holding party that determines how many licensed copies it is willing to sell. Thus, they are able to take the moral high ground in pricing this drug, but it's the same principle as above-pony up for my idea, shame on you for benefitting from it and not contributing to my wealth.

I really do think this company is out of touch with reality. All in all, I feel like this only earns them bad press, especially after Martin Shrekli debacle. There's also a potential for a lawsuit, based on human rights I'm sure.

Re: A million-dollar drug

#99

Post by ekianjo »

gus_massa wrote: post #75
JamesBarney wrote: post #56

Earlier quoted context omitted.

But of that 100 million dollars the bulk was safety testing due to regulation. So you're right it doesn't make economics sense but for a specific reason. As a society we have to strike a balance between safety and efficiency. And I don't think we've struck the right balance. Many times erroring too much on the side of safety, especially with rarer and more fatal diseases without good current treatments.

Also the 100 million is used to distinguish between real medicine and snake oil. Also, is this treatment better than the current treatment? How can you be sure without a clinical trial?

You cant even do a proper clinical trial if there are only 300 patients in the whole of Europe who have the disease. You are missing the point.

Re: A million-dollar drug

#100

Post by ekianjo »

maxander wrote: post #85
skadamou wrote: post #54

Earlier quoted context omitted.

This is an excellent response and you clearly understand the issue well. I'm curious though, what do you think about the long term effects of continuing to practice gene therapy? Sure, the cost for treating the first few patients will be exorbitant but wouldn't we expect researchers to find ways to bring costs down over time? How will we know if this is even possible if we abandon gene therapy at such an early stage?…

The inherent cost of manufacturing the drug is relatively negligible. The problem is the cost of development and deployment, and the tiny customer (patient) population to spread that cost around to. A gene therapy for a more prevalent disorder would not have the same problems, or at least not as badly.

No, its only negligible for small molecules. Making proteins/biologics is much more expensive, and this is where many new drugs are headed. Plus the investment required to design the process and build facilities is far from negligible either.
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