Comment by shiven | Hacker News Reader

Comment by shiven | Hacker News Reader

Whenever something like this comes up, R&D is held up as the "cost center", whereas initial discovery (hit) or optimizing it into a "lead" molecule is a fraction of the cost of turning out a "drug", even manufacturing is a comparatively small expense. The majority of the cost lies in the clinical trials process. That is where a potential drug can fail and take everything down the drain. That is why the "fail-early, fail-fast" mantra has been ingrained into big pharmacy like gospel truth. However, there is no reliable predictor of "late stage" clinical trial failures for a candidate drug molecule. And trials can fail from a drug having statistically insignificant improvements in a group of target patients, all the way to, having a high (how high?) propensity for adverse effects in the patient group.

So, the solution? More fundamental research to explore indicators of late stage failure, coupled with "cheaper" clinical trials to justify a lower development cost that is enforced by legislation to bypass greedy execs/shareholders. Now, those "cheaper" trials, that is whole 'nother can-o-worms for a different thread, because it involves our willingness, as a society, to accept such risks as are part of the discovery process.

Also don't forget to take into account the price insensitivity of some buyers.

If I had a pill that could save 1 million people I wouldn't price it at $100, since I'd only make $100m. If I price it at $1m per pill, only 100 people could afford it, so that also only makes me $100m. But if I price it at say, $100k, I can get about 300k people to pay for it, which nets me $30b.

This is all aside from how much the drug cost me to make.

This is a real scenario... it's called sovaldi, and it basically cures hepatitis c. Except it costs $80k for the full course. There are around 100 million people (globally) who have the disease.

Few things:

- Usually drug prices are dropped / negotiated with foreign governments for developing countries - Drug price often starts high but drops as government / FDA criticizes and once they milk health insurance companies to pay for it

It's not an ideal system at all, but just wanted to correct the notion that the prices start high and stay that way / poor people don't get access to it!

At $1,000/pill, it's not something you can just handle on your own out of pocket. It also doesn't cover even half of the HepC genotypes. However, for the genotypes it does cover, it works very, very well compared to the previous course of treatments.

I went through the treatment last year because I had great insurance and they covered the drug. This was something I thought about every single time I had a conversation about that drug. I'm cleared of HepC because of Sovaldi/ribavirin, but I can only imagine all of the people who will deal with HepC for far longer than they need to because of the ridiculous cost. Upon reading the Wiki article on Sofosbuvir (generic name for Sovaldi), it sounds like things are already moving in the right direction, but there's still a ways to go before the cost comes down.

There are economic forces at play that actively discourage pharma from trying to identify who will benefit most from the drug. First of all, there is a huge priority on being first to market. They stand to make hundreds of millions if their drug is approved before their competitors, and they can be the sole option for even 6 momths. Doing prolonged preclinical research to delay registration trials and FDA approval makes no sense to them. Secondly, the fact is that they make more money if we just give the drug to everyone. It takes 3 doses or so before doctors can work out if a drug works or not. So if we give 100% of cancer patients at least 3 doses, they profit more than if we give it to just the 30 - 60% that could benefit the most.

So although you are right that encouraging or forcing companies to come up with companion biomarkers that predict efficacy is a good way to reduce cost, in reality it is not so simple.

The hype about these latest immunotherapy drugs is so massive (and much of it is justified) that pharma has everyone over the barrel, they will charge the earth and get away with it.

"Cheaper" trials are already par for the course in the developing world. And there are, as you mention, all kinds of down sides. But don't worry Big Pharma is not going to be sitting forever in the west. The rest of the world's governments, have had enough of their BS while trying to keep their populations alive. The consequences can be seen in IP law in the developing world and the rise of serious local competition. Bottom line - if you need access to medication\treatments that's costing a bomb, check out the options available in the developing world. You will be amazed.

Some of the trials from big western pharmaceutical companies are actually being outsourced to smaller labs in Asian countries with less restrictive laws, especially when testing with large mammals.

Isn't marketing/advertising a huge cost center as well?

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