A lot of people don't seem to know how the pharmaceutical industry works, and just how high risk it is. It takes around 12 years and $1 billion to bring a drug to market. When you pay for a drug, you aren't paying for the material, you are paying for all the failed drugs that they tested along the way. Pharmaceutical companies invest massive amount of money into incredibly long term plans by business standards. This high risk environment is why you pay so much for drugs. Only a few new drugs come out worldwide each year. Do you see yet why drugs can be expensive?
On average when a drug target is identified they must screen up to 1 million different chemical compounds to get "hits" that give drug activity. From there they mave have up to 1000 "lead" molecules. Then they optimize that lead and may end up with 10-200 compounds. Here up to 90% of these compounds fail. From there they submit maybe 5 to preclinical trials. Then a few of those might make it to the enormously expensive clinical trials. Even now 1 out of 3 drugs fails in phase 1 clinical trials. If the drug fails at this point then the company could take a hit of hundreds of millions of dollars lost. The reality is that over 95% of pharmaceutical projects fail.
So lets say a pharmaceutical company has brought a drug to market after over a decade and almost a billion dollars. They want to see maximum return on their risky investment, and that means they have a few options.
1) Repackage it with another drug to give some sort of synergistic effect.
2) Change the enantiomeric composition of the drug. Drugs are often "chiral" meaning their mirror images are different and will give different biological effects.
3) Change the method of administration (inhaler, injection, etc).
Thats why you see so many "rebrandings" of drugs these days. It is a way to increase profit on their risky investment. The catch? In order to patent ANY of these changes the drug company must once again go through the rigorous process of drug validation by government regulators. Contrary to the popular belief that these companies can just slap on a new label and make more money, they must demonstrate that this "new" drug gives some sort of enhanced therapeutic effect.
And of course they would pursue this. They have just invested a billion dollars in this drug when they had no idea if it would actually work out. You want to complain about drug companies? Fine. But at least understand WHY they do what they do. It is mostly related to the enormous amounts of money they must spend to bring a drug to market, meaning once they get a blockbuster drug they (rightfully) milk it for all its worth. If you take away their ability to make money on their high risk investment then they may not be able to make any new drugs in the first place.
Should the government maybe have a larger hand in pharmaceuticals to ensure adequate supply of unprofitable drugs? Sure, I would be thrilled with that. But I don't think we should meddle with the pharmaceutical industry. They are a business like any other, and just because they make drugs doesn't mean they are uniquely required to be charitable with their products. If the alternative is that no drugs get made at all, I'd rather have the current system.
I just don't understand why so many people rage against big pharma when they make a profit off of a drug that wouldn't exist without that company.
I don't see why people's lives should be in the hands of "businesses like any other." We don't contract our police force, firefighters, public schools, etc. out to capitalistic businesses because we understand that those things are necessary for a safe and healthy society. If policeman were paid per-arrest or firefighters were paid per-fire then we'd have a huge conflict of interest and everyone would be justifiably upset about it. So why is it OK when drug companies are paid for each use of their drug, when the fact that the drug is used REQUIRES people to continue to get sick and not have adequate preventative care?
Oh, I thought he was talking about playing a spell that is countering a spell with counters on it as it comes into play, but I see you guys were just discussing whether he was flashing a creature with flash in order to flash a flashback or just flashing a creature with flash but not needing flash in order to flashback a spell without flash.
Their business model need you to be sick, that's what's wrong with it.
People are going to be sick regardless. Unless you are somehow a conspiracy theorist who thinks pharma companies deliberately make people sick in which case I have no desire to talk to you.
I don't see why people's lives should be in the hands of "businesses like any other." We don't contract our police force, firefighters, public schools, etc. out to capitalistic businesses because we understand that those things are necessary for a safe and healthy society.
Fine then push for more government investment in medicine. What does this have to do with private companies? What would be accomplished by destroying private pharmaceuticals? Why can't you build up a government system beside the private one instead of tearing down the private one?
Drugs are not a zero sum game. It's not like a certain drug will eventually be discovered by someone, and therefore private companies should not be involved because we don't want that someone to be motivated by profit. It is very likely that if those companies weren't involved that drug would never exist. So if you want better drugs, push for more government investment in drug research and leave pharmaceuticals alone.
So why is it OK when drug companies are paid for each use of their drug,
Because it is a product they invented and which would not exist without them. Take away the possibility of high reward and you take away the incentive of high risk investment. What is the alternative? That the drug never be discovered in the first place?
when the fact that the drug is used REQUIRES people to continue to get sick and not have adequate preventative care?
This has nothing to do with pharmaceutical companies.
LogicX - The biggest problem I have with the pharma's is typified by something my father pointed out to me a long time ago (and note, he's a [now retired] Pharmaceutical Chemist who worked for basically every pharma [ICI, Ralston Purina, Squibb for the three I remember off the top of my head from my living years - but he had more before I was alive] and the FDA across his working years).
And that's the fact that the US pharmas in many cases explicitly mark up human drugs to the Nth degree.
His example he always gave was nitroglycerin pills - the same exact drug packaged and only legal to sell for horses, 5c a pill yet the human dosage was $50 a pill.
And the only difference being that the cheap horse pill had extra filler - dosage was identical of active ingredients and fillers were identical, just more for the horse pill to make it larger.
I feel the "keeping people sick" nonsense is just that, there's always going to be some that push forward to cure things - but the pricing model - especially when so much goes towards advertising which statistically leads to quite a bit of misprescribing - you've got problems.
And that's the fact that the US pharmas in many cases explicitly mark up human drugs to the Nth degree.
His example he always gave was nitroglycerin pills - the same exact drug packaged and only legal to sell for horses, 5c a pill yet the human dosage was $50 a pill.
And the only difference being that the cheap horse pill had extra filler - dosage was identical of active ingredients and fillers were identical, just more for the horse pill to make it larger.
But there is a reason for that; the massive cost of bringing a human drug to market. Again, you aren't paying for the cost of the raw material. Most of the cost is not the manufacturing process, it is the massive investment and all the failed drugs that it took to get to that point. I'm not an expert on nitroglycerin but I'm sure that the clinical trials for human use of that drug is a lot higher cost than for horses. These drugs don't magically pop into existence, it takes like I said, 12 years and $1 billion on average these days.
I feel the "keeping people sick" nonsense is just that, there's always going to be some that push forward to cure things - but the pricing model - especially when so much goes towards advertising which statistically leads to quite a bit of misprescribing - you've got problems.
Again the pricing model is what the market sets because of the high risk inherent in the industry. You can ask why a company must make a specific drug cost so much, and the reason is that they are making up for the 95% of other projects that will fail. With such a potential for financial loss (a single promising drug failing clinical trials can tank a companies stock) there needs to be similarly high potential for profit.
Well, I don't really hate them or care about them to any extent, but I think its for two main reasons.
1. Their lobbyists are extremely strong.
2. The focus on their industry is to produce new products, not reduce cost of current products.
- I would do the same thing. Lowering profits is a terrible strategy. Buuuuut... I think this is a huge issue against them.
People are going to be sick regardless. Unless you are somehow a conspiracy theorist who thinks pharma companies deliberately make people sick in which case I have no desire to talk to you.
Think of it this way. If you pay for someone to keep you healthy and you stop paying when you're sick, it makes that someone want to keep you healthy. If you don't pay until you're sick, that person has no interest in keeping you healthy.
That doesn't imply that he'll want to infect you with a disease, to offer you a cure afterwards.
LogicX - The biggest problem I have with the pharma's is typified by something my father pointed out to me a long time ago (and note, he's a [now retired] Pharmaceutical Chemist who worked for basically every pharma [ICI, Ralston Purina, Squibb for the three I remember off the top of my head from my living years - but he had more before I was alive] and the FDA across his working years).
And that's the fact that the US pharmas in many cases explicitly mark up human drugs to the Nth degree.
His example he always gave was nitroglycerin pills - the same exact drug packaged and only legal to sell for horses, 5c a pill yet the human dosage was $50 a pill.
And the only difference being that the cheap horse pill had extra filler - dosage was identical of active ingredients and fillers were identical, just more for the horse pill to make it larger.
I feel the "keeping people sick" nonsense is just that, there's always going to be some that push forward to cure things - but the pricing model - especially when so much goes towards advertising which statistically leads to quite a bit of misprescribing - you've got problems.
Did you even read the OPs post as to why the markup is so high?
My father was a biochemist for a large pharma company for 30 years before retiring and I agree with just about everything the OP said. Big pharma functions in an EXTREMELY high risk/high reward business environment.
One thing I'd like to add to the OP's original post is that a drug patent lasts 20 years, but that includes R & D, which is between 7-10 years. Therefore, pharma companies only have about 8-12 years to actually profit off of the drug before generics enter the market.
Shady business practices aside, in the end, these companies ARE providing products which serve to improve QOL. I don't know if the same could be said of other companies, such as large financial firms.
Well, I don't really hate them or care about them to any extent, but I think its for two main reasons.
1. Their lobbyists are extremely strong.
2. The focus on their industry is to produce new products, not reduce cost of current products.
- I would do the same thing. Lowering profits is a terrible strategy. Buuuuut... I think this is a huge issue against them.
I disagree. I don't think it is an issue against them, I think it is a huge issue in support of concurrent government investment.
LogicX, I agree with everything you've said (what's your background, by the way? I'm curious), and just popped in to say your first line in the OP basically sums everything up. I have a PhD in Pharmacology, so everyone automatically assumes I am an expert in the Pharmaceutical Industry (or assumes I work at a CVS :-/) -- but from what I gather talking to people outside of the sciences, folks mostly don't understand why it takes so long/costs so much for drugs to be made, then don't understand why we can't just make drugs safer. You've answered most of that already, but we can't have it both ways -- either we take the time and money to make drugs safer/efficacious with preclinical studies and multiple Phase I/II trials, or we rush drugs out and deal with pulling them from the market later due to large scale cases of drug-induced toxicity on a more frequent basis.
Also, drug patents last 20 years, so companies often only have ~5 years to actually make money from the drug (most of which offsets costs of other investigated compounds) before generics come out which also explains much of the cost (EDIT: Damn you, CHEESY).
LogicX, I agree with everything you've said (what's your background, by the way? I'm curious)
Chem major but I'm double majoring in medicinal chemistry so I've learned a lot about the drug development process.
and just popped in to say your first line in the OP basically sums everything up. I have a PhD in Pharmacology, so everyone automatically assumes I am an expert in the Pharmaceutical Industry (or assumes I work at a CVS :-/) -- but from what I gather talking to people outside of the sciences, folks mostly don't understand why it takes so long/costs so much for drugs to be made, then don't understand why we can't just make drugs safer. You've answered most of that already, but we can't have it both ways -- either we take the time and money to make drugs safer/efficacious with preclinical studies and multiple Phase I/II trials, or we rush drugs out and deal with pulling them from the market later due to large scale cases of drug-induced toxicity on a more frequent basis.
Also, drug patents last 20 years, so companies often only have ~5 years to actually make money from the drug (most of which offsets costs of other investigated compounds) before generics come out which also explains much of the cost (EDIT: Damn you, CHEESY).
It's a sad but true fact that most chemists involved in drug research will never work on a successful drug. And I would add to this that the costs are only going up in the recent decades as regulations get stricter. I'm not saying that is a bad thing, but it does matter in terms of public perception. The public is generally not very scientifically literate when it comes to drugs. This means that when there is a bad side effect they wonder why a company would make a drug with that side effect. In fact, that company should just make their mysterious pills cure everything already! The reality though is that most of this stuff is not absolutely understood.
Again the pricing model is what the market sets because of the high risk inherent in the industry. You can ask why a company must make a specific drug cost so much, and the reason is that they are making up for the 95% of other projects that will fail. With such a potential for financial loss (a single promising drug failing clinical trials can tank a companies stock) there needs to be similarly high potential for profit.
R&D - which includes those costs - for most of the pharmas is 30-40% less than they spend on advertising FYI.
Additionally, most of the costs of final trials (the biggest, most expensive ones) are actually footed by the FDA - and only charged to the company on an APPROVED product.
Trials do have costs involved - but they're a small part of the equation that makes pharmas bad.
[And note, on animal drugs - the testing standards are basically identical just require less stages of trial]
Additionally note that drug patents of 20 years often aren't enacted until stage 2 trials start on the drug - unless it's expected to be something revolutionary (rare), rather than a revision of an existing pharmaceutical product.
If my father hadn't thrown all his old home files into the landfill when he went into the retirement home, I'd start throwing up some scans of actual costs (since even if it's stuff that's not supposed to be public, there's nothing they could do to him now if it ever traced back). But I've seen things of failed trials - that were a $1m loss for a company when they were having products come out that were netting $1b+ per year - a substantial loss, but a statistical blip in comparison.
Additionally these companies actually break down their numbers by portion anyhow - the cardio-renal drug wing will report their numbers and gains/losses separate from the psychiatric for example - meaning that those failed trials for Lipitor don't increase the costs of Prozac - or whatever other example.
It is far easier to complain and criticize than it is to actually accomplish something. Bashing big pharmaceutical corporations is popular because they're immensely profitable (despite the barriers stated in the OP) and it's humorous to point out the work that's gone into erectile dysfunction pills instead of research for resistant strains of tuberculosis.
Why "Big Pharma" is bashed over local pharma is clearly explained in sociological terms. Going to a local pharmacist to get your prescriptions is friendlier knowing they run it themselves and the guy greeting you has more say in their own prices and policies. It's like being part of an exclusive club. They feel better than getting drugs from a giant corporate giant. In sociology you see there is an inverse correlation between group size and intimacy. There are less degrees of separation between you and whoever runs the show.
R&D - which includes those costs - for most of the pharmas is 30-40% less than they spend on advertising FYI.
For a single drug or overall? Source?
Additionally, most of the costs of final trials (the biggest, most expensive ones) are actually footed by the FDA - and only charged to the company on an APPROVED product.
Trials do have costs involved - but they're a small part of the equation that makes pharmas bad.
Clinical trials are the single most expensive part of R&D, and constitute 35% of the R&D budget for a drug.
Also, you may be interested to hear that only 3 in 10 drugs make enough money to cover their cost to bring to market. Still wondering why they must be so expensive?
[And note, on animal drugs - the testing standards are basically identical just require less stages of trial]
It is far easier to complain and criticize than it is to actually accomplish something. Bashing big pharmaceutical corporations is popular because they're immensely profitable (despite the barriers stated in the OP) and it's humorous to point out the work that's gone into erectile dysfunction pills instead of research for resistant strains of tuberculosis.
Just to touch on this -- there's always going to be more demand for "quality of life" drugs than treatments for rare conditions...it's simply not profitable for large pharmaceutical companies to pursue these. Trust me, as someone who researches a rare disease without a cure, it's a little frustrating knowing that all of our clinical trials and lab studies are based on compounds either administered off-label or found from low-throughput screens at Universities or small biotech companies, but there's really no alternative. It's simply not possible to raise the money to cover the amount of testing needed to come up with a suitable treatment for everything. In order for pharmaceutical companies to stay afloat and sponsor other studies, they need to focus on some of the low-hanging fruit guaranteed to bring in some big bucks.
EDIT: Also, to reiterate LogicX's point below -- it was indeed a very "happy accident" that led to ED treatments. Companies continue to market these and other QOL drugs because it makes them the money needed to grow as a company and to cover costs associated with other failed compounds.
I can look around for stuff that reinforces it - but all my fathers stuff is in the landfill since he went into the retirement home. And his textbook (yes, he wrote a textbook some of you may use if you have a photostability text) isn't relevant to the topic.
Yes, drug research is expensive, but it's all tax exempt.
Yes, drugs take a long time to make, but drug companies aren't exactly falling over themselves to expand their R&D.
The reason people are irritated by this is because drugs that have a significant impact on their quality of life have a 1000%+ gross marginal profit for the drug manufacturers and the costs get footed downstream. The big products pay for themselves in about 1 year or so on patent. Niche products for people who are basket cases medically (MLS, ALG, Alzheimers, falling apart old, etc.) are hugely expensive because they usually have smaller production runs.
The price of drugs plummets hugely - over 75%! - when they go off patent and the generic manufacturers get in there - and people are still making plenty of money. Just ask Teva and Mylan.
People aren't raging because pharma companies are making a profit. They're raging because 3 prescriptions for 1 guy over a month cost $1500. It's a difference of degree, these guys are entitled to a profit for their work because it's good and people want to buy it. Just not that much profit.
Just to touch on this -- there's always going to be more demand for "quality of life" drugs than treatments for rare conditions...it's simply not profitable for large pharmaceutical companies to pursue these. Trust me, as someone who researches a rare disease without a cure, it's a little frustrating knowing that all of our clinical trials and lab studies are based on compounds either administered off-label or found from low-throughput screens at Universities or small biotech companies, but there's really no alternative. It's simply not possible to raise the money to cover the amount of testing needed to come up with a suitable treatment for everything. In order for pharmaceutical companies to stay afloat and sponsor other studies, they need to focus on some of the low-hanging fruit guaranteed to bring in some big bucks.
Although I think we all know the story that Viagra was being developed to treat hypertension, but it just happened to cause increased blood flow to the *****.
<Long comment that got accidentally deleted by the browser back button on my mouse>
To summarize what I was writing: I personally know quite a few people involved in the pharmaceutical industry; my fiancee is in school specifically to get into the industry (graduating this spring!), the guy who runs her program spent decades in the industry, all of her classmates (its a specialized program) are trying to get in, she worked for a biotech (though not pharmaceutical) company over the summer, etc. I have a lot of personal contacts, but I am not actually in the industry.
Every single person I've spoken to without exception who is involved in that industry cares very deeply about the fact that their work helps people.
Like every industry, it can be cutthroat, and as a health industry it needs to be watched even more closely than most. The rare example of abuse or even corporate greed that comes up is particularly horrifying because it has to do with medicine. And it's very easy for the uninformed do-gooder to note that companies have a huge profit margin on the drugs they're manufacturing, with the suggestion that they shouldn't be permitted to make that margin, and without realizing that they HAVE to make that margin on the drugs they do successfully get to margin because of the failure rate and expenses required to get to that step or they simply couldn't support themselves.
It's a little jarring to realize that our approach to medication right now is:
For a number of years, every new medicine will be greatly overpriced, allowing the rich to get access to it while the poor with poor health insurance may have to do without, so that people can make a profit off of the drug. After a number of years, their patent expires and costs for the drug plummet.
But unless the government is willing to invest tens of billions of dollars into pharmaceutical research, it has to work that way.
I work in health care right now. I hope to get out of it very much so. Doctors whine too much. Insurance companies all need to be shot, broken, burned and then buried and then pour cement over them. They are the only ones more corrupt than the drug companies.
Mad Mat said it all. Pharmaceutical companies are not in the business of curing people, they are in the business of helping people manage whatever illness they have. If the pills have side effects, they will just give you another pill. If they actually cured people(and let's be honest, medical technology could most likely cure most ails at this juncture), their profits would dry up. Because they have shareholders that they are 'legally beholden' to, they don't even have to have a guilty conscience about impeding the progress of society just to make some money.
It's despicable, but it's a multi-faceted problem. And it is indeed a problem that exists in many industries, it's just easier to notice in this industry because we are literally NEED medicine at some point.
But honestly, the same problem(s) exist somewhat in the food industry. Servings of food have gotten smaller than they used to be, but for the same amount of(or in some cases more) money. And they use much more in the way of preservatives now, because the companies that make them..want you to eat again soon. Even though over-eating is bad, their only financial interest is in having you eat.
There is really no altruism in the world anymore, companies by and large(meaning probably 99% of them) just care about getting as much money as quickly as possible.
Surprised to see this from logic to begin with. In any event i agree with him.
Yes drug companies are getting into the QOL drugs which well if they convience you to take it then that is on you.
still they do make drugs that save peoples lives.
Now sure their in the business of making money and who can blame them, however NONE of the companies took it on so it sat on the shelf not helping the world because it couldn't be made lucrative.
Right because if you can't get a patent on something then someone else can make it after you do all the trials, and tests and sell it for half the cost.
why would you do that? let someone else develop and put out the money. it is just smart sense.
Private Mod Note
():
Rollback Post to RevisionRollBack
Thanks to Epic Graphics the best around. Thanks to Nex3 for the avatar visit ye old sig and avatar forum
I think it's because people inherently have less respect for intellectual property in the first place. Add to that the fact that the protection of this intellectual property is either bankrupting you or killing you, plus the fact that medicine is just about the least price elastic thing on the planet, and it's no surprise people have disdain for the profit motives, even if they make sense mathematically.
I get this attitude, but I don't buy the "they are in the business of keeping you sick" thing. That just seems conspiratorial and ignorant of how medical science works.
Private Mod Note
():
Rollback Post to RevisionRollBack
To post a comment, please login or register a new account.
On average when a drug target is identified they must screen up to 1 million different chemical compounds to get "hits" that give drug activity. From there they mave have up to 1000 "lead" molecules. Then they optimize that lead and may end up with 10-200 compounds. Here up to 90% of these compounds fail. From there they submit maybe 5 to preclinical trials. Then a few of those might make it to the enormously expensive clinical trials. Even now 1 out of 3 drugs fails in phase 1 clinical trials. If the drug fails at this point then the company could take a hit of hundreds of millions of dollars lost. The reality is that over 95% of pharmaceutical projects fail.
So lets say a pharmaceutical company has brought a drug to market after over a decade and almost a billion dollars. They want to see maximum return on their risky investment, and that means they have a few options.
1) Repackage it with another drug to give some sort of synergistic effect.
2) Change the enantiomeric composition of the drug. Drugs are often "chiral" meaning their mirror images are different and will give different biological effects.
3) Change the method of administration (inhaler, injection, etc).
Thats why you see so many "rebrandings" of drugs these days. It is a way to increase profit on their risky investment. The catch? In order to patent ANY of these changes the drug company must once again go through the rigorous process of drug validation by government regulators. Contrary to the popular belief that these companies can just slap on a new label and make more money, they must demonstrate that this "new" drug gives some sort of enhanced therapeutic effect.
And of course they would pursue this. They have just invested a billion dollars in this drug when they had no idea if it would actually work out. You want to complain about drug companies? Fine. But at least understand WHY they do what they do. It is mostly related to the enormous amounts of money they must spend to bring a drug to market, meaning once they get a blockbuster drug they (rightfully) milk it for all its worth. If you take away their ability to make money on their high risk investment then they may not be able to make any new drugs in the first place.
Should the government maybe have a larger hand in pharmaceuticals to ensure adequate supply of unprofitable drugs? Sure, I would be thrilled with that. But I don't think we should meddle with the pharmaceutical industry. They are a business like any other, and just because they make drugs doesn't mean they are uniquely required to be charitable with their products. If the alternative is that no drugs get made at all, I'd rather have the current system.
I just don't understand why so many people rage against big pharma when they make a profit off of a drug that wouldn't exist without that company.
-regarding Snapcaster Mage.
People are going to be sick regardless. Unless you are somehow a conspiracy theorist who thinks pharma companies deliberately make people sick in which case I have no desire to talk to you.
Fine then push for more government investment in medicine. What does this have to do with private companies? What would be accomplished by destroying private pharmaceuticals? Why can't you build up a government system beside the private one instead of tearing down the private one?
Drugs are not a zero sum game. It's not like a certain drug will eventually be discovered by someone, and therefore private companies should not be involved because we don't want that someone to be motivated by profit. It is very likely that if those companies weren't involved that drug would never exist. So if you want better drugs, push for more government investment in drug research and leave pharmaceuticals alone.
Because it is a product they invented and which would not exist without them. Take away the possibility of high reward and you take away the incentive of high risk investment. What is the alternative? That the drug never be discovered in the first place?
This has nothing to do with pharmaceutical companies.
And that's the fact that the US pharmas in many cases explicitly mark up human drugs to the Nth degree.
His example he always gave was nitroglycerin pills - the same exact drug packaged and only legal to sell for horses, 5c a pill yet the human dosage was $50 a pill.
And the only difference being that the cheap horse pill had extra filler - dosage was identical of active ingredients and fillers were identical, just more for the horse pill to make it larger.
I feel the "keeping people sick" nonsense is just that, there's always going to be some that push forward to cure things - but the pricing model - especially when so much goes towards advertising which statistically leads to quite a bit of misprescribing - you've got problems.
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
But there is a reason for that; the massive cost of bringing a human drug to market. Again, you aren't paying for the cost of the raw material. Most of the cost is not the manufacturing process, it is the massive investment and all the failed drugs that it took to get to that point. I'm not an expert on nitroglycerin but I'm sure that the clinical trials for human use of that drug is a lot higher cost than for horses. These drugs don't magically pop into existence, it takes like I said, 12 years and $1 billion on average these days.
Again the pricing model is what the market sets because of the high risk inherent in the industry. You can ask why a company must make a specific drug cost so much, and the reason is that they are making up for the 95% of other projects that will fail. With such a potential for financial loss (a single promising drug failing clinical trials can tank a companies stock) there needs to be similarly high potential for profit.
1. Their lobbyists are extremely strong.
2. The focus on their industry is to produce new products, not reduce cost of current products.
- I would do the same thing. Lowering profits is a terrible strategy. Buuuuut... I think this is a huge issue against them.
Think of it this way. If you pay for someone to keep you healthy and you stop paying when you're sick, it makes that someone want to keep you healthy. If you don't pay until you're sick, that person has no interest in keeping you healthy.
That doesn't imply that he'll want to infect you with a disease, to offer you a cure afterwards.
Did you even read the OPs post as to why the markup is so high?
My father was a biochemist for a large pharma company for 30 years before retiring and I agree with just about everything the OP said. Big pharma functions in an EXTREMELY high risk/high reward business environment.
One thing I'd like to add to the OP's original post is that a drug patent lasts 20 years, but that includes R & D, which is between 7-10 years. Therefore, pharma companies only have about 8-12 years to actually profit off of the drug before generics enter the market.
Shady business practices aside, in the end, these companies ARE providing products which serve to improve QOL. I don't know if the same could be said of other companies, such as large financial firms.
I disagree. I don't think it is an issue against them, I think it is a huge issue in support of concurrent government investment.
Also, drug patents last 20 years, so companies often only have ~5 years to actually make money from the drug (most of which offsets costs of other investigated compounds) before generics come out which also explains much of the cost (EDIT: Damn you, CHEESY).
Chem major but I'm double majoring in medicinal chemistry so I've learned a lot about the drug development process.
It's a sad but true fact that most chemists involved in drug research will never work on a successful drug. And I would add to this that the costs are only going up in the recent decades as regulations get stricter. I'm not saying that is a bad thing, but it does matter in terms of public perception. The public is generally not very scientifically literate when it comes to drugs. This means that when there is a bad side effect they wonder why a company would make a drug with that side effect. In fact, that company should just make their mysterious pills cure everything already! The reality though is that most of this stuff is not absolutely understood.
R&D - which includes those costs - for most of the pharmas is 30-40% less than they spend on advertising FYI.
Additionally, most of the costs of final trials (the biggest, most expensive ones) are actually footed by the FDA - and only charged to the company on an APPROVED product.
Trials do have costs involved - but they're a small part of the equation that makes pharmas bad.
[And note, on animal drugs - the testing standards are basically identical just require less stages of trial]
Additionally note that drug patents of 20 years often aren't enacted until stage 2 trials start on the drug - unless it's expected to be something revolutionary (rare), rather than a revision of an existing pharmaceutical product.
If my father hadn't thrown all his old home files into the landfill when he went into the retirement home, I'd start throwing up some scans of actual costs (since even if it's stuff that's not supposed to be public, there's nothing they could do to him now if it ever traced back). But I've seen things of failed trials - that were a $1m loss for a company when they were having products come out that were netting $1b+ per year - a substantial loss, but a statistical blip in comparison.
Additionally these companies actually break down their numbers by portion anyhow - the cardio-renal drug wing will report their numbers and gains/losses separate from the psychiatric for example - meaning that those failed trials for Lipitor don't increase the costs of Prozac - or whatever other example.
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
It is far easier to complain and criticize than it is to actually accomplish something. Bashing big pharmaceutical corporations is popular because they're immensely profitable (despite the barriers stated in the OP) and it's humorous to point out the work that's gone into erectile dysfunction pills instead of research for resistant strains of tuberculosis.
Why "Big Pharma" is bashed over local pharma is clearly explained in sociological terms. Going to a local pharmacist to get your prescriptions is friendlier knowing they run it themselves and the guy greeting you has more say in their own prices and policies. It's like being part of an exclusive club. They feel better than getting drugs from a giant corporate giant. In sociology you see there is an inverse correlation between group size and intimacy. There are less degrees of separation between you and whoever runs the show.
<--- Bashing is easy
For a single drug or overall? Source?
Clinical trials are the single most expensive part of R&D, and constitute 35% of the R&D budget for a drug.
Also, you may be interested to hear that only 3 in 10 drugs make enough money to cover their cost to bring to market. Still wondering why they must be so expensive?
I'll have to take your word for it.
Just to touch on this -- there's always going to be more demand for "quality of life" drugs than treatments for rare conditions...it's simply not profitable for large pharmaceutical companies to pursue these. Trust me, as someone who researches a rare disease without a cure, it's a little frustrating knowing that all of our clinical trials and lab studies are based on compounds either administered off-label or found from low-throughput screens at Universities or small biotech companies, but there's really no alternative. It's simply not possible to raise the money to cover the amount of testing needed to come up with a suitable treatment for everything. In order for pharmaceutical companies to stay afloat and sponsor other studies, they need to focus on some of the low-hanging fruit guaranteed to bring in some big bucks.
EDIT: Also, to reiterate LogicX's point below -- it was indeed a very "happy accident" that led to ED treatments. Companies continue to market these and other QOL drugs because it makes them the money needed to grow as a company and to cover costs associated with other failed compounds.
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
Yes, drugs take a long time to make, but drug companies aren't exactly falling over themselves to expand their R&D.
The reason people are irritated by this is because drugs that have a significant impact on their quality of life have a 1000%+ gross marginal profit for the drug manufacturers and the costs get footed downstream. The big products pay for themselves in about 1 year or so on patent. Niche products for people who are basket cases medically (MLS, ALG, Alzheimers, falling apart old, etc.) are hugely expensive because they usually have smaller production runs.
The price of drugs plummets hugely - over 75%! - when they go off patent and the generic manufacturers get in there - and people are still making plenty of money. Just ask Teva and Mylan.
People aren't raging because pharma companies are making a profit. They're raging because 3 prescriptions for 1 guy over a month cost $1500. It's a difference of degree, these guys are entitled to a profit for their work because it's good and people want to buy it. Just not that much profit.
Although I think we all know the story that Viagra was being developed to treat hypertension, but it just happened to cause increased blood flow to the *****.
To summarize what I was writing: I personally know quite a few people involved in the pharmaceutical industry; my fiancee is in school specifically to get into the industry (graduating this spring!), the guy who runs her program spent decades in the industry, all of her classmates (its a specialized program) are trying to get in, she worked for a biotech (though not pharmaceutical) company over the summer, etc. I have a lot of personal contacts, but I am not actually in the industry.
Every single person I've spoken to without exception who is involved in that industry cares very deeply about the fact that their work helps people.
Like every industry, it can be cutthroat, and as a health industry it needs to be watched even more closely than most. The rare example of abuse or even corporate greed that comes up is particularly horrifying because it has to do with medicine. And it's very easy for the uninformed do-gooder to note that companies have a huge profit margin on the drugs they're manufacturing, with the suggestion that they shouldn't be permitted to make that margin, and without realizing that they HAVE to make that margin on the drugs they do successfully get to margin because of the failure rate and expenses required to get to that step or they simply couldn't support themselves.
It's a little jarring to realize that our approach to medication right now is:
For a number of years, every new medicine will be greatly overpriced, allowing the rich to get access to it while the poor with poor health insurance may have to do without, so that people can make a profit off of the drug. After a number of years, their patent expires and costs for the drug plummet.
But unless the government is willing to invest tens of billions of dollars into pharmaceutical research, it has to work that way.
Spam infraction issued ~r_0
It's despicable, but it's a multi-faceted problem. And it is indeed a problem that exists in many industries, it's just easier to notice in this industry because we are literally NEED medicine at some point.
But honestly, the same problem(s) exist somewhat in the food industry. Servings of food have gotten smaller than they used to be, but for the same amount of(or in some cases more) money. And they use much more in the way of preservatives now, because the companies that make them..want you to eat again soon. Even though over-eating is bad, their only financial interest is in having you eat.
There is really no altruism in the world anymore, companies by and large(meaning probably 99% of them) just care about getting as much money as quickly as possible.
Yes drug companies are getting into the QOL drugs which well if they convience you to take it then that is on you.
still they do make drugs that save peoples lives.
Right because if you can't get a patent on something then someone else can make it after you do all the trials, and tests and sell it for half the cost.
why would you do that? let someone else develop and put out the money. it is just smart sense.
Thanks to Epic Graphics the best around.
Thanks to Nex3 for the avatar visit ye old sig and avatar forum
I get this attitude, but I don't buy the "they are in the business of keeping you sick" thing. That just seems conspiratorial and ignorant of how medical science works.