He [Billionaire Arnold] has spent more than $100 million in health-care-related grants since 2014. A million dollars went to Civica Rx, a nonprofit formed by seven U.S. hospital systems to make generic drugs. Up to $5.7 million is pledged to Initiative for Medicines, Access & Knowledge Inc., which files legal challenges to the validity of certain U.S. drug patents, to clear the way for lower-cost generics.
He funded research about the relationship between pharmaceutical packaging and drug costs, leading Medicare to pass new rules that took effect in 2017. The state of California, advised by an Arnold-funded group, passed a law in 2017 requiring drugmakers to justify steep price increases.
In other words, Arnold is spending money on:
- a consortium that will manufacture generics
- legal efforts to hasten the expiration of patents to provide more generics
- research on packaging
- lobbying legislatures to require justifications from drugmakers on price increases
None of this sounds like it's addressing the main problems leading to high costs:
1. The customer (patient) doesn't directly pay all costs. The economic incentive to keep prices low lies mostly with the insurance providers.
2. It takes more than a decade of research and hundreds of millions of dollars to develop a drug with a new mode of action.
3. At least 90% of these projects will fail to deliver a marketable product.
4. The amount of money spent on a drug project balloons the longer it remains viable.
5. Failure of a late-stage clinical candidate often leaves a drug company with two options: (1) kill the program; and (2) send yet another candidate through the pipeline.
6. Data on late-stage clinical failures are often tightly held in silos, preventing other companies from learning costly lessons.
He funded research about the relationship between pharmaceutical packaging and drug costs, leading Medicare to pass new rules that took effect in 2017. The state of California, advised by an Arnold-funded group, passed a law in 2017 requiring drugmakers to justify steep price increases.
In other words, Arnold is spending money on:
- a consortium that will manufacture generics
- legal efforts to hasten the expiration of patents to provide more generics
- research on packaging
- lobbying legislatures to require justifications from drugmakers on price increases
None of this sounds like it's addressing the main problems leading to high costs:
1. The customer (patient) doesn't directly pay all costs. The economic incentive to keep prices low lies mostly with the insurance providers.
2. It takes more than a decade of research and hundreds of millions of dollars to develop a drug with a new mode of action.
3. At least 90% of these projects will fail to deliver a marketable product.
4. The amount of money spent on a drug project balloons the longer it remains viable.
5. Failure of a late-stage clinical candidate often leaves a drug company with two options: (1) kill the program; and (2) send yet another candidate through the pipeline.
6. Data on late-stage clinical failures are often tightly held in silos, preventing other companies from learning costly lessons.