Maybe pharmaceutical companies should dial back their return expectations.
Do you know why there are so many “Big Pharma”? It has to be big, because most of the smaller ones simply can’t survive for long. Developing drug is a difficult process. Whopping 90% of compounds fail during the three phase clinical trial period, $40k per patient in the trial, hundreds of millions of dollars per trial.
Every failed trial is a signal for career change for people who develops drugs. You think people will invest in such risky business without expecting a big reward? Asking for low drug price without lowering the clinical trial cost is assuming drugmakers can print money. Unfortunately biology doesn’t work like that.
A lot of us who develop drug are doing it because we believe this is a meaningful thing we can do in the world. They are just hidden behind investors like Shkrelli, who isn’t even anywhere near the actual people who make the drug. But we do need the money to develop the drug. A lot of it. I hope you understand.
The real solution is to lower the cost of the trial. And I maintain that the drug company isn’t in control of this.
You need to take into account of the fact that patent clock starts ticking as soon as you file it, whether the drug gets approved by the FDA or not. The drug development process itself eats away that exclusivity at about 12 years on average, so that 40% needs to account for the time when you don’t get another drug approved (remember the 90% failure rate).
Drug business is EXTREMELY hard, and investors aren’t running a charity. There needs to be high profit margin to motivate people who fund the discovery and development process for new drugs to come out.
As I keep saying, once we bring down the cost of clinical trial (which is totally artificial, and not under the influence of pharma), you will bring down the risk and cost of drug.
Again, you are pointing the finger at the effect of high medical cost rather than the cause. Ask yourself: why are doctors in US paid 3x the amount compared to UK? Do they raise price because of the drugs? No.
If the expectations for returns on pharma become substantially lower, less money will be invested in pharma and they will have less money to invest in R&D.
I don't think Martin Shkreli is a challenge to that thesis.
Nothing to do with deploying more R&D in this case.
In terms of expectations on returns of your statement - I would be curious to see the case that increased expectations on returns correlates with positive outcomes. Sure more money in, but that does not equate to better meaningful and better results out.
> Sure more money in, but that does not equate to better meaningful and better results out.
I believe that spending more on R&D will cause more drugs to be developed. If you disagree, we can agree to disagree - I'm not sure it would be a productive conversation.
"I believe that spending more on R&D will cause more drugs to be developed."
More != better.
I'm not even sure who the 'somebody else' even is. Public capital markets are how we direct money towards promising things that people want.
I'm not sure who else would be funding pharma research if not people who are giving their money willingly.
Hmm... yeah. Shame, there's just... no other way.
Say, how often do you travel abroad?
No need to be snarky and sarcastic just because you are having trouble explaining your point.