This is such a complicated issue, I'd highly recommend the following as a primer:<p><a href="https://www.forbes.com/sites/matthewherper/2015/10/13/four-reasons-drugs-are-expensive-of-which-two-are-false" rel="nofollow">https://www.forbes.com/sites/matthewherper/2015/10/13/four-r...</a><p>Also Derek Lowe is invariably awesome in this space, one highlight:<p><a href="https://blogs.sciencemag.org/pipeline/archives/2019/02/05/targets-versus-drugs" rel="nofollow">https://blogs.sciencemag.org/pipeline/archives/2019/02/05/ta...</a><p>Drugs occasionally need to be expensive, particularly on-patent drugs, to make the endeavor worthwhile. That said, it's a two-way street. Making drugs insanely expensive (as has been happening more recently) is breaking the implicit trust that those in the medical field must work hard to maintain. Traditionally pharma was careful not to abuse the inherent "your money or your life" dynamic, it seems these days that is breaking down. It's sad because for very powerful drugs (i.e. gene therapy treatments) the cost is actually quite high to even make the drug (I've heard quotes in the 100's of K even in the 1-2 M), which means the treatment has to be expensive. That said we need to work hard to bring that down, and there's absolutely no place for the kinds of shenanigans going on with insulin among others:<p><a href="https://www.nytimes.com/2019/01/18/opinion/cost-insurance-diabetes-insulin.html" rel="nofollow">https://www.nytimes.com/2019/01/18/opinion/cost-insurance-di...</a><p>With abusive practices like this, how can you ask patients to trust you when you say, "yes but this time I actually need it to be this high"?
Interestingly in the case of the the Abiraterone example used in the article, none of the R&D was even done by JNJ. The original work was done at The Institute of Cancer Research, an academic/charity drug discovery institute. JNJ actually only market this drug because of acquisitions rather than R&D efforts. Which is the way that a lot of pharma is going these days, letting smaller biotechs take the high risk of developing a therapeutic and buying them up before FDA/EMA approval.
Patent expirations don't factor into this article very much, but there's this:<p><i>The simple explanation for excessive drug prices is monopoly pricing. Through patent protection and FDA marketing exclusivity, the U.S. government grants pharmaceutical companies a monopoly on brand-name drugs. But monopolies are a recipe for excessive prices. A company will raise prices until its profits start to drop.</i><p>That monopoly is very fleeting.<p>By the time a drug makes it to market, it's typically been about ten years since the patent was issued. That gives a drug company about 8 or so years of exclusivity before any other drug maker can produce the drug without infringement.
The answer will always be, "more expensive than they are now". It's not like there will ever be a point at which more money, if available, could not in any way be used for some kind of drug research that might be useful. It's like saying "how much money do you need in order to keep from ever dying?" There will always be health problems, and there will always be some at least semi-plausible way in which we could spend money to try to research a way to at least ameliorate the condition.<p>So, this doesn't mean we shouldn't spend some money, or even a lot. But, it will never be enough, so at some point we will have to say, "we could spend more, and it might give us a little more life, but let's not."<p>I don't think we're remotely ready for that conversation.
If you’re going to rip sick people off to pad your bottom line and reward your executives and shareholders, at least have the courage to be upfront about it.<p>It’s weird to say this, but maybe the world needs more Martin Shkreli’s. That way there’s no room to doubt the motivations of virtually all large drug companies (at least in the US).
It's the ultimate prediction problem. And short term, computational bio methods are driving R&D costs up, not down. But arguably, techniques like DeepFold constitute current best hope<p><a href="https://moalquraishi.wordpress.com/2018/12/09/alphafold-casp13-what-just-happened/" rel="nofollow">https://moalquraishi.wordpress.com/2018/12/09/alphafold-casp...</a>
However expensive it is, it should cost the same in all markets globally, whether it's being purchased by a patient in cash, by an NGO, by a state Healthcare system, or by an insurance company. I'm tired of paying a five hundred percent markup to subsidize markets thousands of miles away.
Why is it expected that private industry the only funder of research? Isn't that something that governments should have a stake in and also fund basic scientific research in?<p>That's like saying, how expensive does an iphone need to be to fund material science research?
When the question is stated like that it becomes really questionable whether cost of drugs should have anything to do with drug research cost.<p>Those two things look like they should be completely separate, done by separate entities with separate funding.
This article fails to mention the Quality Adjusted Life Year (QALY) concept. In theory we ought to set maximum prices that third-party payers (governments and private insurance) would pay for drugs based on how many years the drug would add to the patient's life and how much it would improve the patient's quality of life. Setting that maximum insured price would allow the free market to work through price signals and encourage drug companies to focus their research on areas most likely to deliver real benefits to public health. The US federal government currently values a human life at something in the range of $100K per year for regulatory purposes so that would give a starting point.<p>Of course the notion of setting limits on drug prices is politically fraught due to misguided concerns over "socialism", "big government", "death panels", etc.<p><a href="https://en.wikipedia.org/wiki/Quality-adjusted_life_year" rel="nofollow">https://en.wikipedia.org/wiki/Quality-adjusted_life_year</a>
They can be free (edit: or rather the patent burden can be eliminated), and we can fund research in different ways.<p>Dean Baker has been banging on about this for years.
This article raises important issues but it also cherry picks some findings and makes some unsupported claims. I am not able to link / dig up sources for all of the below, but I should probably do so at some point bc there is a lot of incomplete and biased info out there (on all sides)<p>- article claims that spending on meds is biggest source of overspending compared to other developed countries. The article they link to only evaluates a few specific cost areas and does not present sufficient evidence to support the claim in the article. Under 10% of US healthcare spend is on rx drugs, that's middle-of-the-pack compared to OECD. Biggest driver of us HC spend is hospital and physician care (50% of spend). Also hospital spend has grown faster than drug spend last few years. <a href="https://www.cdc.gov/nchs/fastats/health-expenditures.htm" rel="nofollow">https://www.cdc.gov/nchs/fastats/health-expenditures.htm</a><p>- the study that analyzes cost of developing cancer drugs ignores cost of failure. The article i think mentions that one study includes cost of failure for cancer drugs but puts failure rate at 25%; I don't know what sample they are looking at or how they define failure, but historically cancer drugs have a less than 10% chance of getting approved from phase 1<p>- the article says that most cost is "early" and cheap i.e. in phase 2 failure. It is true that 60%+ of phase 2 fail, but phase 2 failure is not early or cheap. The article mentions the cost of running a phase 2 study but ignores all the costs required to get to phase 2. It can cost $100-200M+ Just to get to phase 2 and only 35-40% of drugs make it past that. Only mentioning the cost of a phase 2, and not all the stuff that is before phase 2, is misleading and makes me wonder whether the authors are biased. Phase 2 failure is the biggest driver of cost of drug development. Paul et al 2010 nature rev drug discovery<p>- it criticizes the tufts studies bc the numbers are proprietary. That's fair but just bc the dataset isn't public doesn't mean the results are wrong. The studies the article mentions to "refute" the tufts data are even more flawed than the tufts one (see above point about the cancer drug cost study that ignores cost of failure).<p>- mentions the tufts study includes "capitalized" costs. Even excluding those costs, the cost of developing a drug is over $1B<p>- mentions that companies only develop cancer drugs because they are most profitable. But doesn't mention that developing drugs for almost any other indication is not profitable. If developing drugs was really so cheap and profitable, pharma would be developing a lot more drugs than it is<p>- does not discuss the declining returns to pharma r&d, erooms law, and pharmas use of the balance sheet to fund r&d in recent years because pharma r&d is failing and they have to buy drugs from startups<p>- ignores all r&d spend by non big pharma. Most drugs are developed by small companies not pharma, but pharma buys the small companies before the drugs are commercialized. So all the industry's profits accrue to big pharma but r&d costs are spread out<p>To me, the fact that this article makes claims that either neglect nuance or are unsupported by the articles they link to, that they criticize certain articles that support high cost of r&d but do not criticize articles that show low cost of r&d, and the use of either misleading, wrong or unexplained data points makes me strongly think this is a biased article