[lacker]

It's not that 20% isn't good. It's that, this drug costs $389,000 a year and they are only making 20% margins. So, even if they were a nonprofit they would still have to be charging $311,000 a year to break even. You can argue they shouldn't be profitable, and OK even if that is granted, that still wouldn't make these rare drugs cheap.

[mjevans]

When money shouldn't be an object in the equation it should be removed from the equation.

This is work that should be done for public benefit by public benefit organizations.

In other words, universities should be where this kind of treatment is developed and tested, AND the regulations that make normal drugs so expensive should apply differently (and relate heavily to a LOT MORE public disclosure and real peer review).

[replicatorblog]

That's a good hypothesis. How about someone suggests that Harvard, with its $36B endowment, tests it out? Pick a rare disease, ask Harvard, or any similar institution, to tackle it with their world class medical school and research capabilities. Offer them gov't matching funds. Or threaten their tax-exempt status if they don't do it. And let's see how they do.

Maybe a socialized or non-profit R&D program would do better than big biotech companies, but before we legislate this idea, how about we test it? My concern is that a non-profit/gov't drug development program will work as well as the ACA's $2B website.

I get hives whenever someone suggests pharma companies are "too" profitable. My daughter is alive today because these "greedy" pharma companies have developed chemotherapies that beat leukemia 90+% of the time. A 20% margin for these companies that regularly produce miracle drugs seems totally fair. Pharma is the closest thing we have to magic in the modern world.

I'm open to the idea there are better possible systems, but the burden of proof is on your side, not the side that regularly cranks out life-saving medicines like the goose that lays the golden eggs.

[malandrew]

I take an orphan drug myself to treat cataplexy/narcolepsy. I think the costs are around $60k to $80k per year and I'm of the exact same opinion as you. I have treatment today because we allow them to make a profit, and I'm only willing to try an alternative system when we prove through experimentation that this alternative system will actually produce as many treatments for orphan diseases at a cheaper price that makes the treatment available to more people.

Without the US healthcare system, my treatment simply would not exist. My treatment exists in no other country in the world.

Eventually, those that don't have insurance as good as mine will benefit from these drugs once the patent expires. It sucks that many people won't benefit until that happens, but under the alternative system SJWs are so keen to promote my treatment would never have been developed and I couldn't get this treatment at any price and no one in the future would get it either because their wouldn't be a treatment for a patent to expire on.

At the end of the day, the US is practicing "socialist" healthcare. It's socialist in the sense that it pays for a lot of the R&D that the rest of the world benefits from. 40% of the entire output of medical research globally comes from the US alone.

[brownbat]

> When money shouldn't be an object in the equation it should be removed from the equation.

We all believe it's important to save lives.

If it costs $300k to save one life, but in other disciplines or other areas of medicine you can save a life for $5k, then you have a problem that is not solved by simply ignoring money.

[rayiner]

> When money shouldn't be an object in the equation it should be removed from the equation.

Money is just a proxy for goods and services; in this case a proxy for having a bunch of highly skilled scientists and doctors work for years to treat a disease only a small group of people have. Having a public benefit corporation rather than a private company doesn't fundamentally change that dynamic.

As to regulations: at bottom, all they really require you to prove is safety and efficacy. If there was a cheap way to prove safety and efficacy, drug companies would just do that on the front end, and send only working drugs through the clinical process. But most drugs don't actually work; most actually fail clinical testing, many after they've made it pretty far along. If you get rid of that testing, and the safety and efficacy data that comes from it, what exactly do you disclose to the public?

[TeMPOraL]

Money is the common unit we use to deal with resource scarcity. As long as there's more demand for care than care to go around, money will continue to be a part of the equation.

[arcbyte]

It doesnt matter where you move the money, its always in the equation.

[frgtpsswrdlame]

Gah those numbers don't work like that!! Alexion is a monopoly because of patent law, they are maximizing profit but they maximize profit in $ terms, not % margin terms. Alexion currently spends tons and tons of money on sales. Those sales expenditures only have to yield the slightest profit for them to partake because they don't give a rats ass about relative margins, only absolute profit. These lower profit activities bring the % margin down but overall profit up so the company engages in them. You can look at basically any drug and see that margin on it as a standalone is going to be incredible, they're super cheap to manufacture and you can charge as much as you want while it's under patent. If we limited the cost to $311,000 expenditures would be cut very slightly, the operating margin might move a bit but it would stabilize and they'd continue to make fantastic profits.

[johnnyhillbilly]

Sounds like they spend a lot of money on questionable "marketing". Also, one never knows where the true profits are recorded in the days of ubiquitous tax avoidance.

[epmaybe]

I'm not certain that marketing plays that huge of a role. They make the only drug on the market to treat hemolytic uremic syndrome, every medical student has to learn about it. Must be some other costs, or hiding of true profit as you suggest.

[eganist]

Sunk costs on failed treatments, generally. I don't remember the stat well enough, but it's something like a double-digit quantity of candidates fail for each single one that receives FDA approval.

Here's hoping someone else can investigate and share the exact number. I'm at a stoplight.