I worked in the drug R&D business for over 8 years. I still follow the industry closely. Some things always get lost in these discussions. First, manufacturing an existing drug is absurdly cheap. Modern industrial chemistry ensures this for all small molecule drugs (note that this is not the same case for the "biologics" which are often fiendishly difficult to make). Almost all the cost in a drug is the manufacturer recouping R&D costs. These costs have been spiraling out of control for 10 years. They are astronomical. A recent Forbes analysis pegs the cost of a new drug with failures of drugs in development folded in anywhere from $3 billion to $12 billion depending on the manufacturer (excellent context and discussion here: http://pipeline.corante.com/archives/2012/02/10/the_terrifyi...).
You don't need to be an industry expert to grok that those numbers are wildly unsustainable. It is not possible to keep spending the amount companies spend to make new drugs. In the past, companies would inflate the price in the USA to make up for reduced prices elsewhere. But with all the recent healthcare reform in the USA, that strategy is ending.
To add insult to injury, the vast majority of the most commonly used drugs will lose patent protection in the next couple of years. In the industry they call this the patent cliff. There will not be enough new drugs to offset all the ones that go generic.
This move by India is a symptom of the wider drug industry problems. There will be more of these kinds of moves in the future. The industry has been searching for ways to more effectively make drugs and have it not be so expensive. But so far they have been striking out for 10 years running. The current strategy is to lay off most of their r&d workforce and offshore and outsource this part of the business.
Somewhere out there, a business model is waiting to be found. Whoever cracks that nut and becomes the Southwest of the drug industry is going to make a fortune.
They also spend a significant amount of money on government fines due to corrupt practices (i.e. killing people). They are now the single most corrupt industry, paying significantly more fines per year than the entire military industrial complex:
If you took the time to look at the link I posted that talks about the Forbes piece, you'd see that they specifically excluded the cost of marketing from the analysis of how much it costs to put out a new drug. When companies do marketing, they expect it to more than pay for itself, clearly it is, or they wouldn't be spending so much on it. I know people don't like to hear it, but marketing products does lead to more sales.
Trust me, having worked in an R&D organization, there was no want for more funding. There was an incredible level of funding. If the problem in the drug industry is simply that not enough is being spent on R&D, that is easily correctable. Unfortunately for all of us, that's not the problem.
Of course one expects marketing mental diseases to be effective! 'Its not your fault, take a pill and it will all go away' certainly has mass emotional appeal. However, the article is not too convincing about the methodology of excluding marketing expenses.
First - and I know that I'm going to hear about this from some people - you might assume that different companies are putting different things under the banner of R&D for accounting purposes. But there's a limit to how much of that you can do. Remember, there's a separate sales and marketing budget, too, of course, and people never get tired of pointing out that it's even larger than the R&D one. So how inflated can these figures be?
Not particularly powerful evidence here: a vague notion of a limit, and a rhetorical question. Corporate accounting statements are generally only accountable to the board of directors, who might be perfectly happy with pushing the limit on creative accounting while the stock goes up. When aimed at investors other than the board, and especially when used by citizens attempting to assess the social value of institutions, accounting statements are better treated as marketing materials themselves.
We can discuss evidence when the CFOs of these corporations open their daily work to a public VNC session.
"If the problem in the drug industry is simply that not enough is being spent on R&D, that is easily correctable. Unfortunately for all of us, that's not the problem."
The problem with the drug industry is basically that many of their most important epistemological assumptions are largely incorrect. The reason the entire industry is about to go under isn't because all the easy cures have been taken, it's because they started to buy into their own bullshit. Their astronomical R&D costs and terrible success rates are largely their own fault, so I don't really buy this high cost of R&D argument as a reason for not making the drugs more widely available. I won't bother rehashing all of the epistemological problems with allopathic medicine here, but I was link to this video which talks about why the ubiquitous mouse model is so problematic:
Keep in mind that the majority of the cost that gets put under the "advertising" label is actually free samples. Those effectively lower the cost of care for patients, it's not just money spent on madison avenue.
There's no need for free samples in the UK[1], there's no direct marketing to patients, and yet we had to pass laws to stop marketing aimed at doctors.
Pharmaceutical companies were spending around £10,000 per GP per year. (About 40,000 GPs in UK * £10,000 == £400,000,000) Because of our PPRS that figure is probably one of the lowest in Europe.
The UK spends about £11billion per year on medication. Of that about £8billion is spent on branded medication. We have regulation schemes aimed at driving costs down.
The market and regulation of medication is baffling with many hidden effects. Here's some ridiculously in-depth information about the UK Pharmaceutical Price Regulation Scheme, and about regulation of meds in Europe.
[1] - because any medication is only £7.40 per item (per month) and only about 15% of people need to pay because of all the exemptions. Also, because of the pay structure of prescriptions there's a split between doctors (who write prescriptions) and pharmacists (who earn money for dispensing).
Simply because you are forced to pay fines doesn't mean you are "corrupt".
The abstract indicates most of the fines come from "illegal off-label drug promotion" and "overcharging state governments". It could be argued that the first shouldn't even be an issue, and the second, depending on how "overcharging" is defined could be outright fraud on the part of big pharma, fraud on the part of state governments, or something in between.
I'll play devil's advocate: Marijuana users pay fines too, are they also corrupt and immoral? How about drivers who drive at 80km/h on a highway that is 95% 80km/h and 5% 50km/h which was obviously set up to trap people into paying fees? How do you know the fees that big pharma pays are not because of similar over-oppressive laws designed to make the government money?
Edit: Well, I'm a moron for talking before reading. Scratch that.
But most of those R&D costs are for getting "FDA" approval. I don't see why India (or anyone, really) should pay for lining the pockets of the USA's inefficient and corrupt bureaucratic machinery.
Or I could be wrong and those $12B really goes into equipment and lab workers wages, but you won't blame me for finding it real hard to believe until I see at least a rough breakdown of how those costs are summed up.
From the article: "Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details".
That either means they don't know themselves, or it means that the larger part of the budget got "lost" in requesting approval forms paper pushing greasing cogs and lobbying politicians.
The majority of the money goes into Phase III clinical trials. Don't bash the FDA - they're the most evidence based, scientifically minded regulatory body in our government.
Preclinical and Phase I - II trials aren't too expensive, in the order of millions of dollars.
But also remember, for every ~10,000 candidates that enter preclinical trials, about 1-2 will actually pass FDA approval.
The billion number isn't just for one drug, it's also for the 10,000 failures that you had to weed through to find that one drug.
Phase I is safety trials in healthy humans (young males generally). Phase II starts using it in the target population (the sick) and begins looking at dosing requirements and preliminary efficacy data.
But the big one, Phase III, that's the big group, expensive, efficacy trial. This is the trial that has to prove, beyond a shadow of a doubt scientifically, that the drug does what they say it does. A good Phase III trial can cost in the hundreds of millions of dollars easy. I've heard of $250,000,000 Phase III trials before.
If "the most rigorous evidence requirement in the world" is your example of "inefficient and corrupt", than I guess we'll just disagree.
But the FDA is the most strict drug regulatory body in the world, and the amount of evidence for efficacy that they require from the industry is truly impressive and truly does warrant the billions price tag.
>But the FDA is the most strict drug regulatory body in the world, and the amount of evidence for efficacy that they require from the industry is truly impressive and truly does warrant the billions price tag.
Funny how there are so many SSRI's on the market. Funny how this model results in the conclusion that it's a good idea to give kids amphetamines when they are known neurotoxins. Funny how medical marijuana is taking such a long time to break through into the mainstream. Politics play a huge role in business and tend to turn it into a theater of the absurd.
The FDA is not an ethics organization that evaluates drugs based on the total effect of public health. That simply isn't contained in the bevy of Bills that together form the Code that FDA mandate is derived from. I understand how frustrating watching these public health issues is, but the FDA isn't tasked with that, and only Congress can change that.
The FDA does something else: Drug company says they have a drug that does X. Does the drug do X?
That's it (okay, the FDA regulates a lot, but in the context of pharmaceuticals, this is their mandate -- "efficacy"). They require inordinate amounts of proof of efficacy.
Not the morality or ethics behind the application of the drug, but rather: does this molecule, in this concentration, in this delivery route, in this population, have the exact pharmacological effect that they claim it does.
From there, it is up to each person and their doctor to decide what treatments are needed!
Blame the doctors, then, or blame Congress, but the FDA follows it's mandate quite wonderfully.
> Funny how there are so many SSRI's on the market.
Why? What's wrong with SSRIs?
> Funny how this model results in the conclusion that it's a good idea to give kids amphetamines when they are known neurotoxins.
Giving amphetamines to children is certainly debatable but amphetamines are not neurotoxic. Methamphetamines are neurotoxic, especially in recreational doses, but non-methylated amphetamines are not.
> Funny how medical marijuana is taking such a long time to break through into the mainstream.
Funny thing about meth is that it's not that dangerous -- it's almost identical to adderral. The methyl group (meth-amphetamine vs amphetamine) really only improves the ability of the drug to cross the blood-brain barrier. It's basically a form of adderal with a slightly stronger bioavailability curve.
The reason why meth is a public health issue while addy arguably is not is mainly because requiring a Doctor rx, using an exact dosage with no refills, combined with the purity and safety of GMP-produced drugs, eliminates most of the issues behind meth.
I was shocked when I found how just how similar meth and adderall truly are.
As an Adderall user, I can back this up. The symptoms of use are very similar to meth. Ever seen that "meth jingle" ad? The whole "pulling hairs out of your face, cleaning everything, etc" pitch is spot on to Adderall side effects. The difference is that Adderall side effects are dramatically more mild due to (as betterth said) a properly calibrated and reliable dose.
Also, with Adderall, you can't afford to just take more to offset withdrawal symptoms, because you only have so much. The temptation to take another as it wears off is pretty substantial, especially for long-time users.
Uh, having taken adderall nearly every day for 20 years, I can say that I have absolutely no temptation to take another when the first wears off. In fact, I tend to forget without an alarm and then wonder why I can't focus.
Nor have I ever had any compulsion to clean everything in sight or pluck every hair from my face. It certainly makes cleaning easier, but I certainly don't feel the need to do it anymore on or off of it.
So you forget to take it for a couple of days? The biological half-life of dextroamphetamine is 10 hours and levoamphetamine 13 hours. That's 10 to 13 hours (since Adderall is a mix of both isomers) until just half of the dose you took is eliminated from your bloodstream. If you take something with a long half-life like that every day, it's constantly in your system. It takes roughly three days to completely eliminate a dose.
Yes indeed I often forget to take it during the weekends. I have no compulsion to take it when my prescription runs out (I often delay going to the doctor to get a refill and go a week without, especially if focus is not absolutely necessary).
Fair enough, that doesn't sound like an addiction at all. If you're just taking it to improve concentration, you might have luck with a combination of a Vitamin B complex, Piracetam and L-Tyrosine. All are cheap and have no side effects.
Adding a methyl group does more than improve bioavailability (and it's much more bioavailable, not "slightly stronger"). While both have nearly the same effects the long term side effects are much more significant for meth. Meth is neurotoxic, even when not abused as a recreational drug.
>Giving amphetamines to children is certainly debatable but amphetamines are not neurotoxic. Methamphetamines are neurotoxic, especially in recreational doses, but non-methylated amphetamines are not.
> If "the most rigorous evidence requirement in the world" is your example of "inefficient and corrupt", than I guess we'll just disagree.
That is exactly where so much of the inefficiency comes from! How rigorous does an evidentiary requirement have to be before it costs more than it's worth? If getting FDA approval for a new drug cost, say, $100 billion, would the added safety be worth holding back all the drugs that wouldn't be profitable enough to offset that huge up-front cost? A truly efficient FDA would take into account not just the harm of being too lax, but also the harm of being too strict.
(There's an even starker example of this in the Nuclear Regulatory Commission. Their regulations are so strict and red-tapey that the economics of nuclear energy in the US are inferior to those of coal, which is much more dirty and dangerous. Caution has costs.)
The FDA has a number of ways of getting around this for drugs that have limited effect. This is for drugs to be used in the general population, drugs for major illnesses.
But they already do this. When they design clinical trials, they take type 1 and type 2 errors into account. Even if you wanted to accept a ton more error, which would mean a lot more bad drugs on the market and a lot more good drugs off the market, it's still not going to be cutting costs by orders of magnitude or something.
Don't you think that the drug companies would have found cheaper ways to develop drugs since they've realized that people will still pay them? That would lead to even higher profits.
It's insanely difficult to bring a new drug to market. Imagine all of the crazy combinations of people that take them and if you miss one small group that has an adverse reaction you could be talking 1000s of people that are lining up to sue you out of existence or if you're in another company the regulatory body doing it for them. People around the world benefit immensely from our "inefficient and corrupt bureaucratic machinery" because they get safe drugs.
Also, from the article, "Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details". This is just plain rhetoric plain and simple. You see politicians do this everyday because there is no real way to refute it.
I am not terribly familiar with the process, but I assure you it includes: early computational simulations of the prospective molecules; testing on lab animals; testing on healthy people; testing on small (a few hundred) number of patients; large scale (a few thousand) multi-centre trials across the whole world (if you want to sell it to the whole world, that is). This process takes quite a number of years.
Now imagine how many labs, hospitals, scientists, doctors, statisticians, patients (oh they do get compensation), and auxiliary clerical workers need to be paid for the whole process.
Most private research dollars go into patent work-around drugs--drugs that have the same basic function as another, but successfully work around its patent (and get their own patent in the process). E.g. duplicated effort with occasional serendipity leading to something new.
Most research dollars go into new therapies with completely new mechanisms of action.
Companies are often working in similar areas, that's true. The best example of this is the statins. Lipitor was the 5th statin to hit the market. Was it a me-too drug? I guess, but it was also superior to the other 4 that came out first (less incidence of muscle damage, more efficacious). Did Pfizer say "Gee, let's copy that other statin?" Obviously not since getting a new drug to market takes 10 years and they came out only a few years later.
It's a combination of the scientific challenges in finding a new drug and the safety hurdles that the FDA puts up. Most of that 10 years is taken up by the clinical trials that the FDA requires.
I guess you could say it's the price of having access to thoroughly tested drugs that are both safe and efficacious.
At this point, isn't the pharmaceutical industry playing games with supply by limiting the production of many medicines?
Even a common OTC drug like guaifenesin that has been around since the 50's is difficult to find by itself, except in the newly patented time-release formulation (ie. Mucinex). (Although it is an ingredient in many cold medicines.)
The margins on generic drugs are razor thin. Most of the recent drug shortages are due to a lack of starting materials or manufacturing problems. Both of these can be traced back to the fact that there is very little money to be made in generic drugs. They are basically commodities.
Other sources of shortages are due to the fact that the government issues drug companies production quotas for some drugs, which the drug companies aren't allowed to go over even if their competition has problems. My understanding of how this works is that the DEA tells companies A, B, and C that they can each make 20 units of Drug X. Then the FDA tells company C that their Drug X isn't up to snuff and they can't make any more this year. The 40 units that companies A and B make isn't enough to cover demand, but they can't increase their production to 30 units because the DEA has already filed their paperwork.
Somewhere out there, a business model is waiting to be found.
I hope so, because the current one isn't working for consumers. Even with the billions spent on R&D, it turns out that many of the drugs Big Pharma turns out are no better than placebos. It's not hard to see why: a big company spends X amount on each failure and needs a 10X hit to offset the costs. If one doesn't materialize, it's not hard to rig the statistics to show some marginal benefit for a chosen winner, and a big marketing budget and the placebo effect takes care of the rest. Thanks to this model, we've finally conquered the scourges of restless leg syndrome, overactive bladder, and general anxiety disorder.
Actually it's almost impossible to rig the statistics. And every drug on the market has shown efficacy compared to placebo in large tests calle phase 3 clinical trials.
Actually it's almost impossible to rig the statistics.
I would argue that it's actually impossible to economically conduct sufficient studies to reliably predict the efficacy and long term safety of drugs in the general population. And you're right, every drug on the market has passed Phase 3 trials because they're cherrypicked. A big drug company knows how many drugs it needs in production to ensure that some percentage of them are statistically likely to get through Phase 3 trials. To believe otherwise is to believe a drug company would bet a multi-billion-dollar enterprise purely on a research gamble. Is it possible for them to lose? Sure, 'statistically likely' isn't a guarantee. But it's much better odds than depending on stumbling into an actual cure.
Do you have any evidence for that? I don't have any background in pharma, but my background in stats tells me that the odds of passing a controlled study with a placebo would be so low as to be economically infeasible.
If I run a big clinical trial pitting a placebo against a useless drug, the odds of getting the same results from both are low: one is going to appear more effective than another. If I run a hundred of these kinds of trials, I'm virtually guaranteed to see a few cases where one appears much more effective than another. And if I test my worthless drug against an existing treatment that was approved through the same process, I may as well be testing against another placebo.
I'm not suggesting all drugs are worthless; only that drug companies do not need to produce effective drugs to stay in business.
That's not true. Drug companies can't just cherry pick trials to report to the FDA. The FDA is involved from very early on in the process. Furthermore, if the drug company is doing suspicious things like shutting down trials, the FDA will be even more strict in their requirements for approval.
The drug companies don't need to shut down trials, they just need to spread their bets sufficiently to ensure there are some winners. Sort of a VC model, except they have a clearer victory condition in FDA approval. Once a drug is approved, the pharmaceutical equivalent of retail shelf space is assured and the marketing machine can kick in to guarantee profitability. And the FDA has little incentive to prevent marginally effective drugs from reaching the market as long as no better alternative treatment exists. Which it won't, if big drug companies can keep churning out pharmaceutical 'hits' without much regard for efficacy. The system is a self-sustaining money machine for them.
If what you claim is true, and drug companies only get things approved by brute force, then we'd expect just 5% (for p-value of 0.05, as is commonly used) of trials to succeed at every level. But that's not the case.
They're a problem for a lot of people. So many in fact that they fall into the range of normal human physiology and behavior. My point is that for most people, the cures that are being vigorously marketed by drug companies are no better than placebos for many of these 'disorders'. These drugs are an artifact of the pharmaceutical industry business model, which the parent comment acknowledges is broken albeit for a different reason.
There are a finite number of useful small molecules you can use as drugs. If it's costing 3-12 billion to find new ones and even then we are failing we may be at a point where it's time to 'give up' on our existing approach. As an upside we can remove a significant slice of our spiraling healthcare costs. We can also remove a lot of drug related advertizing that has dubious healthcare benefits. Unfortunately, that also means antibiotics are going to become infective in the not to distance future.
On the net I don't think this is a good thing, but it should free up a lot of vary intelligent people to work on other lines of research. Hopefully, we may eventual start to develop the tools to build direct DNA specific medicines on the fly by using the fruits of those other lines of research.
Why the down votes? Diminishing returns is a real issue and randomly testing chemicals until one happens to work for something is hardly the most effective approach possible.
The reason why the cost of R&D is inflating so much is due to relentless addition of new regulations, new requirements, new safety-related trials demanded by the authorities. Add to that that almost every other country has specific requirements that do not fit with what was developed and proven before, and that's just another 2-3 years clinical trial you need to put up with. This is really getting insane and there is science to back all those regulatory differences, some driven by pure ideology.
As you mentioned the patent cliff is looming for a number of big pharma actors, and what this is going to result in is less innovation and more strategic moves to other "easier" markets such as generics or OTC drugs. This is just plain bad for everyone in the end.
Yeah, there are a lot of safety-related things because we keep getting a vioxx every so often that's killing people.
I'm not willing to increase my chance of getting killed by medicine on behalf of someone else's profit margin. They have a big, powerful lobby, they should suggest process improvements. And make some on their end, as well, nobody's charging them billions in fees, they spend that money on the typical big-company waste in the process of complying with those regs.
Note that we still got a Vioxx on the market even though we had those tons of regulations in place. There was a similar scandal in France recently with another drug called Mediator. Truth is, regulations do not replace ethics - Corporations knowlingly allowing patients to be hurt should be punished accordingly - there is no need to inflate regulations further and further, this has never solved the problem, just like regulations in the financial industry will not make crooks disappear.
I never mentioned about removing all regulations in place. But things can be done to restrict their scope to where they were before, to manage the development of drugs at a more reasonable cost.
Got any examples? The trial process for new medications isn't perfect, but without citing specific failures in the process it becomes to easy to discount the parts of the process that do work.
Weight loss drugs. Three new products were rejected by the FDA last year. Sure these drugs had risks, but what's the cost of obesity in terms of medical costs?
At this point in time the FDA has incredibly high standards of safety for weight loss drugs and not without reason. But what are the costs of the 40% of obese Americans who will get diabetes, cardiovascular disease, etc, etc?
Wait - so you want to take the at risk group and give them a drug that failed human safety tests?
EDIT: I am trying to say that while obesity is 'bad', giving them a drug that adds to their risk levels is not a solution.
If you are still pro your position, bear in mind that you are now throwing dice and hoping that: (people who improve) >= (people who suffer + nothing happens).
Are you qualified to play dice with peoples lives?
One of the reasons why the FDA rejected Qnexa was that one of the components in the drug was thought to cause cleft palates in babies born to mothers who take the drug.
Mind you, this drug is already approved for use in humans. The FDA made the call that preventing cleft palates in babies (mind you the company offered to restrict the label to "non-child bearing women") was more important that reducing levels of obesity.
The FDA "suggested" the company run a 10,000 person clinical trial (estimated at $100M) to prove it didn't.
Did a quick search, 3 drugs were removed and of them 1 had abused rumors in rat trials, the other increased risk for heart attacks and the final was qnexa.
Tht was in 2010.
From what it looks like the FDA is going to renew qnexa by April 2012.
He's not advocating giving drugs to anyone, what he advocates is letting the at risk group decide whether or not they want to roll the dice with their own lives. You advocate forbidding this to happen. In other words you're hoping that: (people who suffer + nothing happens) > (people who improve). If you're wrong, then preventing the release of the drug is literally killing people.
Uh. You are taking the opposite position on a random event. It's still a bet.
And we have already gone past "letting the at risk group decide for themselves." it's hard to be succinct and explain the many reasons why we dont use that particular system when it comes to medication.
The discussion should not be about "efficacy and no risks", but the comparison of risks versus the benefits the drug can provide. That should be the only rationale when you go on treatment: understanding the risks on each side. Just like cancer drugs are usually not harmless (side effects can be pretty nasty), they can make you live longer than if you go untreated.
The communication to the patient should be fully transparent, and it should be up to the patient to choose what they want to do, not just regulators.
May be the real solution is a combination of tiered pricing and cut of all sales revenues by generics. The cost of this decision for Bayer is yet to be seen. Considering the number of users is only a few hundred at the current price point, Bayer should be ok.
But, it will be interesting to see a breakdown of r&d costs of bayer in total. Considering India is one of the most popular destinations for clinical trials by drug firms, I cant shrug off a karma play here.
http://www.scidev.net/en/health/clinical-ethics/news/fines-e...
Where does all the R&D money go? Somehow I get the impression that developing a new drug involves way too many people and processes and that disintermediation and automation along the R&D chain could greatly simplify and cheapen the process.
First of all, you need the brains to develop the drug. I can't imagine that this involves a team much larger than a pre-series A startup.
Does the development process for creating a new drug promote failing fast?
Does keeping the entire R&D process in house help or hinder?
How far can a team get before it needs to try a drug on humans and how much does it cost to get that far?
Are there any startups that just manage a portfolio of patients with symptoms/diseases/disorders and automatically pair those patients with drugs that might benefit them?
Should the process allow the patient to "price" his or her own life/health, whereby patients can opt in to Phase 1 trials for a lot more money than Phase 2 for example and name their own price in the process?
How much of the money spent is actually (time*wages) for a lot of people for an unnecessarily long process? Is burn rate a consideration when creating a new drug? How long does it take to get a drug to market? Can price be reduced by half by reducing the time it takes by half? Do a lot of people in the process spend their time waiting?
Is drug development in the US far more expensive than elsewhere because the entire healthcare system here is more expensive (vicious cost cycle / positive feedback loop)
Anyways, just tossing some ideas out there because I get the suspicion that pharma R&D is ridiculously archaic.
I don't have exact numbers on this, but it seems like a lot of the early stage research happens in very small teams at universities and biotech companies.
Then large companies like Bayer acquire the research and spend millions on getting it through FDA process.
I know advancements are being made in automation for various research activities and I'm sure there will continue being a lot of advancements there. (The need for automation is fully recognized at the industry level)
It does not go down. The more drugs we know, the harder it is to prove that the new drug you propose is better than current therapy. A proposed molecule that does not have significant advantage compared to the current gold standard will never sell. To put it in another way: all the low-hanging fruits are already taken.
Add to the fact that science progresses; we now know more about the human body and generally everything compared to 20 years ago, so more stringent rules and testing are required.
Classic example: before thalidomide, nobody cares about how drugs work in pregnant women. Now all drugs have pregnancy category (how safe it is to be used by pregnant women) approved by FDA, and figuring out this pregnancy category comes with a cost.
Yes it is. It is not about the cost of comparing 2 products, it is about market saturation. When 2010 came, drug A would be off-patent and evidence for using A would be piling up. As a doctor that cares about his patient, one would very reasonably choose drug A over the still-on-patent drug D which is only slightly more effective but since it's new the evidence is weaker (as in -- will this work for the relevant genetic makeup, disease state profile, microbial resistance pattern for antibiotics, is this better efficacy real and not just some shady number crunching by big pharma etc.), nobody exactly knows the long-term side effects, and it's much more expensive. Do you think that the pharma would spend millions to face this bleak market?
(EDIT: this assumes that drug A works "satisfactorily". Drug D still have a chance if it has markedly differentiating features, say if drug A is injected while drug D is taken orally.)
(as a side note, cancer drugs are hot because of precisely opposite of these -- most are fairly new, those that are old are not exactly pleasant to take, there is no "silver bullet" found yet so there are lots of room for improvement.)
Another take on the market saturation is that when the current therapy is simply already good enough, ie. the "silver bullet" has been discovered. That's the reason why there has been no new drugs developed for headache in recent few years (or pain management drugs in general). It's a totally different story when, say, aspirin was first introduced: there is a lot more room to improve on / differentiate from its side effect profile, pharmacological properties, etc.
I'm honestly gobsmacked that our model of health and physiology is so primitive that it doesn't use the most widely available treatment as a first line approach, which, as you point out, is the placebo effect. Why are so many resources being wasted on developing new chemicals when the brain can seemingly perform the same functions with nothing? I get that for a lot of things you need a physical intervention, but should this not be the last resort as it tends to have the most side effects?
Every time I read a post like yours, I think "Do you really want to treat HIV with a placebo?" But I know that's an uncharitable reading of your position. Which diseases do you propose be treated with placebo primarily?
All I said was try a placebo and see if it works as part of the standard routine. Obviously with a potentially fatal illness you want to use everything in your disposal to stop it. Why would you not use your last resort for something that serious? But then that includes using both physical and psychological treatments. If someone has HIV then the boost that positive thinking delivers to the immune system (http://legacy.lclark.edu/dept/chron/positives03.html) combined with anti-virals could save a life. If it's something like, say, depression or migraines or the flu, then a placebo may well cure it and there's no need to prescribe drugs which have nasty side effects or are addictive. If you can get something for free, why would you not do it?
The placebo effect only really changes self-reported symptoms. It makes people feel much better and that shouldn't be discounted, but it doesn't change things you can make objective measurements of - like whether the patient is alive or dead.
That isn't actually true. Ask any doctor about patients who just lost the will to live. Also read about the research about morphine and placebos, how a morphine blocking drug actually blocked the placebo effect - without the person knowing they got the blocker drug!
That's not correct. Placebos work even when the person knows it's a placebo. All that is required is belief that it will work, even if you have knowledge that it doesn't.
i.e. if they see they got better on the placebo they won't care when they find out - they have clear evidence that it does work.
Take a closer look at the post, and you'll see that what JunkDNA just said is that is going to happen, and hard. Right now they run about a 17% profit margin [1]. If they lose their cash cows en masse, that's going to go negative, fast. That's not that great a profit margin from that point of view.
What are they going to do then? The only thing they really can, slash costs. It seems unlikely the all the slashing is going to come out of everything except R&D.
We're ultimately going to have to deal with the fact that as a society we've chosen to make it extremely expensive to bring new drugs to market. Basically, our extremely high standards are/were sustainable only because we also gave them patent protection. It is going to be economically infeasible to have both extremely high standards for new drugs, then refuse to protect them for long enough to recoup their costs. There is no law of economics that says a thing must be produced; raise the cost above what can be recovered and what happens is that it won't be produced.
That's generally not a model that results in decreased costs, not to mention that we're in a situation now and for the forseeable future where people really need to stop thinking of the government as a free money fountain. We already can't fund our current commitments, adding yet more billions onto the already huge pile is not necessarily a good idea.
(And don't even think of trying to sell me on it being a net money saver. It won't be after the special interest groups are done with it.)
The money needs to come from somewhere. I'd rather not have the costs concentrated on the sick. We do have plenty of money to fund everything we need if we pull our military out of most foreign countries. I believe that Nasa's annual budget, for example, is roughly the same cost as 1 day in Iraq [citation needed].
In 2011, we spent 700 billion on the defense department, and we spent 1,205 billion dollars more than we took in. It's time to stop thinking of the government as a free money fountain.
I'd suggest it's much cheaper to look into how we could reduce the regulations making it so expensive, rather than throw government money at a problem of the government's creation. At the point where we are seriously talking about the entire edifice collapsing one must take seriously the question whether the costs of our regulatory regime have managed to exceed the benefits. Right now we have a terribly irrational balance between those who are hurt taking insufficiently vetted drugs vs. those who are hurt by not having drugs available for years that turn out safe. The former are visible and the latter invisible, but they are still real. A classic recipe for irrationality.
The reason the EPS hasn't taken a hit is because these companies aren't stupid. If they can't bring in more money by selling new products, they cut costs instead. Pharmas have been laying off huge numbers of research scientists and slashing their sales forces in record numbers. If you follow the industry, it seems like a major Pharma site is closing completely every few months. In the short-term, this props up the numbers, but the day of reckoning is still going to come.
Should doctors really be finding out about drugs from salespeople?
It seems to me that this is a large part of the problem and perverts the incentives in the industry not to produce what people need but what they can sell.
There has got to be a more efficient way for doctors to discover what drugs are useful to the patients they treat.
Heck, look at the tech startup industry. Very few if any of us learn about new startups from traveling salespeople. We learn about them from websites like Hacker News, TechCrunch, TechMeme, etc.
Do we have doctor bloggers that make an effort to learn about new drugs and discover what is and isn't worthwhile?
I would imagine that the very reliance on salespeople actually makes it harder to bring good, useful drugs to market because the industry generates its own noise for doctors that they themselves need to cut through.
Every pharma salesperson I've ever known has been for all intents and purposes indistinguishable from viagra spam emails in my inbox, except for they have a pulse and "pay" for readership through expensive dinners and other niceties.
The entire drug information dissemination machine is broken.
I didnt't downvote, but you might be drawing a too rosy picture of the software industry. There are a fleet of travelling salesman paying for dinners and giving away luxury goods . You'll see microsoft throwing big monney around to have it's products adopted. You'll see big industry contractors playing all the dirty games to get to sit at the same table as a big potential client.
It's plenty corrupt when you look at the big fishes, just not as much as the pharmatical industry (yet).
Most profitable? Citation needed. Profit margins are higher in the tech industry--companies like Microsoft, Apple, and Google all have higher margins than pharma. In terms of nominal profits, pharma does not come close to the oil and gas industry.
I don't think there's an unbreakable bond between profitability and sustainability. To use a tech industry analogy, despite making insane profits off of Windows as it is (and has been for 20 years), Microsoft has realized that we've entered a post-PC world, and modified Windows to run on new form factors, such as the tablet.
I really don't see your point. Microsoft's basic business model hasn't changed, their products are just evolving. Drug companies make new drugs and refine old ones all the time. Other than whining by obviously-biased spokespeople for the drug industry, I have no reason to believe their business model can't be sustained indefinitely under the current regulatory regimes.
The majority of blockbuster drugs are about to go off of patent protection. This is where the majority (if not all) of the profit in the industry comes from, as well as a huge chunk of the rests of their costs.
It's an interesting time in the industry but the patent cliff is real and the industry is going to change quite a bit more in the next few years.
The model is absolutely unsustainable - there isn't enough blockbusters in the pipeline to replace the current, not by a very long shot. And we know what is in in the pipeline because remember it takes 7-11 years to bring a candidate from preclinical through FDA approval, so we have a very good idea of what's coming out (and what's not).
Why would we want to sustain the current model again? What's to say that whatever new model crops up in its place won't be better?
I can't really think of any industry that had their business model collapse that didn't come out of it better than they had been.
Individual players, technologies and processes may disappear, but it's not like demand will, and so long as there is demand, there is a potential market.
I agree, but the risk is this: the current model produces the majority of the world's NME's (new molecular entities, or truly new drugs that aren't just old drug + ibuprofen and a new name). We can sit here and talk about what's wrong with the system, but it ignores that this is the most successful system in the history of medicine for producing truly effective pharmaceuticals.
But ultimately I agree, we may be in for a rough transitory period as far as drug research goes, but what arises from the ashes will likely be a far leaner and more effective beast. It's not like scientists care who is paying the bills.
Does the current model produce the majority of the world's NMEs or does the current model simply bring them to market. From another comment on this topic, it sounds as though most novel research happens not in the labs of companies like Glaxo-Welcome or Pfizer, but in university research labs for a couple of million dollars.
If this is the case, I imagine that any disruptions will occur at the C-suite level mostly, paving the way for entirely new ways of looking at the problem of bringing a new drug to market.
This is a common misconception. While the basic research that underpins the biological theory might happen in academic labs, turning basic research into an actual medicine that will a) work and b) not blow up your liver in the process is exclusively the province of drug companies currently. In fact, medicinal chemists (the people that actally figure out how to make the compound and scale up the manufacturing) are almost exclusively found in industrial drug development companies. They don't exist in any appreciable numbers In academia. They are analogous to the rocket scientists at NASA who worked on the moon missions that everyone worries can't be replaced because they have such specialized experiential knowledge.
Every once in a while an academic research lab will spin off a biotech to develop a new compound, but in general this is not how things have been done in the past. There is a current trend to in-license things from academia to lower the companies' exposure to early R&D risk. This ignores the fact that early research costs pale in comparison to the later clinical trials where most potential drugs go to die. Cancer is particularly bad with something like a 98% failure rate. In-licensing from academia isn't going to buy you much comfort when the thing doesn't work in a phase III clinical trial.
Like the GP post says, things are changing for big pharma, just as they are for MS. There's no way to keep up these prices, and the corresponding R&D costs, when (and not if, because it will happen) healthcare gets nationalized and you have one government representative with the monopsonistic power to really drive prices down.
You don't need to be an industry expert to grok that those numbers are wildly unsustainable. It is not possible to keep spending the amount companies spend to make new drugs. In the past, companies would inflate the price in the USA to make up for reduced prices elsewhere. But with all the recent healthcare reform in the USA, that strategy is ending.
To add insult to injury, the vast majority of the most commonly used drugs will lose patent protection in the next couple of years. In the industry they call this the patent cliff. There will not be enough new drugs to offset all the ones that go generic.
This move by India is a symptom of the wider drug industry problems. There will be more of these kinds of moves in the future. The industry has been searching for ways to more effectively make drugs and have it not be so expensive. But so far they have been striking out for 10 years running. The current strategy is to lay off most of their r&d workforce and offshore and outsource this part of the business.
Somewhere out there, a business model is waiting to be found. Whoever cracks that nut and becomes the Southwest of the drug industry is going to make a fortune.