[dodobirdlord]

> There's a saying that one should not throw good money after bad, in this case it would seem they are refusing good money because it won't cover the bad.

They are a drug development company, marketing their drugs to national government health services and private insurance companies. This is an iterative game, in game theory terms. Caving and selling at a loss just guarantees that counterparties will refuse to buy at the stated price next time too, and wait for them to cave and sell at a loss. Sitting on the drug until the parents expire and losing the entire investment rather than selling at a loss has the benefit of proving seriousness in future price negotiations.

And the article mentions that the ongoing care costs for someone with this disorder is hundreds of thousands of dollars per year. In the years since they refused the $1M price tag in an attempt to drive a hard bargain, the national governments and private insurance companies have no doubt spent more than $1M per patient they refused to buy a dose for.

Hardly seems like planet-destroying centaur levels of implausibility that they may eventually come around to the idea that $1M was actually a perfectly reasonable price, given the circumstances.

> Also tax writeoffs exist, so I'm not sure what that R&D actually cost them?

I think you have some major misunderstandings about what tax writeoffs are and how they work.

[bryanrasmussen]

>In the years since they refused the $1M price tag in an attempt to drive a hard bargain, the national governments and private insurance companies have no doubt spent more than $1M per patient they refused to buy a dose for.

I wouldn't make the assumption on that, given the disease is potentially deadly. I would more likely make the assumption that the private insurance companies especially did the math and figured they end up a couple hundred thousand ahead in the most likely scenarios. But I'm prone to cynicism.

>> Also tax writeoffs exist, so I'm not sure what that R&D actually cost them?

>I think you have some major misunderstandings about what tax writeoffs are and how they work.

perhaps, but I do experience that sometimes in my business it can make sense to spend money on things and make less profits in order to have less taxes to pay, on paper things might look worse off but I somehow feel that I'm doing better nonetheless.

[bryanrasmussen]

obviously comparing my business as a consultant to a pharmaceutical company is like comparing a single raisin to a field of watermelons, but I am of the opinion based on reading that the benefits of spending money to reduce profits and taxes seems to be greater the larger the business, and thus that the principle must hold.

[dodobirdlord]

Business losses offset profit, rather than taxes owed, and though losses can be carried forward for years to offset taxes, a company does at some point need to turn a profit for the tax benefits of its losses to matter at all. The article mentions that the company took investor money for this, and it seems to be a fairly small pharma R&D company, so I doubt they have some pile of other successful drugs that they are offsetting these losses against.

But moreover, losing money for tax purposes only makes sense in a narrow window dictated by tax rate. Leaving aside tricky confounders like government R&D grants, if your corporate tax rate is say, 10%, and you have an investment opportunity that won’t turn a cash profit but will grow the value of your business by 95% of what you invest, it can make sense to make an unprofitable investment and lose 5% on it over realizing the profits, paying taxes, and losing 10% on it. But for this to make sense you have to have an investment opportunity that already very close to breakeven, corporate tax rates aren’t that high. And just throwing money away to count the losses on your taxes never makes sense.

[bryanrasmussen]

>The article mentions that the company took investor money for this, and it seems to be a fairly small pharma R&D company, so I doubt they have some pile of other successful drugs that they are offsetting these losses against.

ok but it would seem to me that supposition sort of works against the supposition that they don't want to lower the price because then they would not be taken seriously in future negotiations, unless the company has some other sources of revenue to keep them going it would seem unlikely they would be available in that future.

in fact in the article it says

>In the 2 1/2 years it took to win EMA approval, AMT, which had no other products to sell and no revenue from Glybera, lost millions of dollars. The company was formally liquidated in 2012. Its assets were acquired by a new private company, uniQure.

I doubt they bought those assets for the millions that were lost - when I look at uniQure https://www.crunchbase.com/organization/uniqure it looks like they have reasonable money.

from the quotes in the article there are 100s of millions invested in uniQure but I'm not sure if that investment was made because people were like 'whoa, they got this million dollar drug!', if so seems weird that investors would invest for that reason because if I heard a company was selling a million dollar drug my next question would be 'how many billionaires need that drug?'

[buryat]

next question would be why governments themselves don't develop those drugs. I'm for the free market however bad it's in this case, unfortunately/fortunately it's the best instrument we got