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Comment by rayiner | Hacker News Reader

None of those points apply here, where the new branded drug is a revolutionary advancement over the previous drugs. (This non-profits new drug is something newer still).

Saving a life creates some aggregate economic value (the person will not die and instead will continue contributing to the economy for X more years). Drugs are expensive because in the first world, that amount is a lot and the entity creating a cure can reasonably expect to capture a substantial portion of it, either because the person will pay it or because governments will.

Neither is intrinsically a problem. $84,000 to cure HepC is a bargain, because people die from that quite young and on the other side of the equation is potentially millions of dollars of saved economic productivity. That’s not an argument for not charging $84,000 for HepC drugs. It may well be an argument for having the government foot the bill.

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It’s important that we incent what we actually want. As it stands the science is often done in universities funded by federal grants. The monopoly owner—which is allowed to capture much of the value—is responsible for the drug testing process and marketing.

The drug testing process is no doubt important but is it so much more important than the initial drug discovery that the entity that funds it should be where all the profits go?

That’s a misleading characterization of the industry. There is a huge gap between university research and products people can sell, and its not just drug testing and marketing. (Think of the difference between the Google patent developed at Stanford and Google’s real search engine.)

The value of academic findings is only apparent in retrospect, after a drug has been shepherded through the development process by a biopharma company. The govt spends maybe $25-30B a year on drug research. The top 15 pharma companies alone spend like $70B a year on R&D

It costs over $200M to take a drug from academia to market just including out of pocket costs. Including the drugs that fail at various stages within industrial drug dev -- 90%+ of drugs -- and the cost to get a drug approved is $2.6B, not including academic costs

Compounds discovered in academia have like a 1 in 10,000 chance of getting approved. The group that analyzes which of those drugs have a shot at getting to market and funds the cost of that R&D are biopharma companies

Reducing life to exploitable profits is just wrong. If it's the only way to incentivize drug testing and marketing then the companies involved in those pursuits ought to struggle under the weight of sin taxes.

You can ignore economics, but economics won’t ignore you (especially when you do stupid things like tax industries that create a benefit because you deem that benefit too important.)

If taxing price gougers seems stupid you're going to hate the pitchfork-toting mobs.

In litigation, the cost of a decade of life can be valued at a million dollars or more. Saving the life of a 45 year old for $85,000 isn’t “price gouging” it’s a huge bargain. And taxing industries that create those outcomes, like we do with industries we want to discourage (such as alcohol or tobacco) is economically irrational.

Of course you expect the pitchfork-toting mobs to be irrational. But that’s not a basis for arguing in favor of something as a matter of sound policy.

Trying to set drug policy ignoring the economics of human life is like trying to design an airplane while ignoring gravity. You can’t will physics into submission through moral outrage. There is, as far as I can tell, no proven correlation between scientific talent and altruism. If you make it so you can’t get rich saving lives, many of the best and brightest will go work making better advertising technology instead.

You're making this very hand-wavy calculation. Hardly any 45 year olds were dying of hep C, even the older ones had lots of comorbidities & other risk factors, which is what one would expect for a disease acquired through intravenous drug use, and often transmitted in prisons or unsanitary tattoo parlors, and the drugs don't have a perfect cure rate.

In any case it's nearly irrelevant because this was a completely post-hoc rationale for pricing this drug. I am not opposed to large cash bounties for major advances but our current system is not remotely designed around that principle. Forgive me for thinking you are defending the wrong system.

In one study, 60% of the people who died of Hep-C were between 45 and 59: https://www.hepmag.com/article/death-risk-24659-138388084. More than half of cases aren't the result of intravenous drug use: https://aasldpubs.onlinelibrary.wiley.com/doi/pdf/10.1002/cl....

> In any case it's nearly irrelevant because this was completely post-hoc rationale for pricing this drug

Drug development, like tech startups, is high risk, but every now and then creates a lot of economic value. To make the system sustainable, there must be a way of capturing a significant chunk of that value from those "unicorns." So yes, it's post hoc in the sense that you don't know until after you roll the decide whether a particular drug is going to create a lot of value or not. That's the case with most high risk investments.

> Forgive me for thinking you are defending the wrong system.

Forgive me for thinking that people are completely nuts for thinking it's a good idea to lower the potential rewards to investment for industries that are "more important." It's completely ass-backward.

Those studies don't say what you're claiming.

I meant the pricing was post-hoc in the sense that they came up with a story like yours for why it was worth $84,000 when they were bringing it to market. There was no precedent for a pill that costly when the research was undertaken. Even in the case of HCV--the best case to be discussing if you're an advocate of for-profit medicine--it's not a good example of an incentive structure.

You need to do a bit more reading. The latest Hep C drugs have cure rates of over 99%. Even NICE, the UK's cost-effectiveness committee said that Sovaldi is cost-effective.

Look, if you would rather those companies not even exist in the first place, the cure not invented, and the people suffering from the disease die, then go ahead and say so.

This way, you'd have no one to blame for all the problems.

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