[dhimes]

I only regret that I have but one vote to give for bringing this comment out of the gray (apologies to Nathan Hale).

And, I would add: talent, on average, goes where the money is. We've seen it in sports, and it's true in academic pursuits.

Plus, it takes a helluva lot of money to get these drugs to market. Nobody gives that money to a company without a fair shot of getting it back. Hence, for the time being anyway, patents are a requirement in that field.

[ctoth]

I would like to discuss this claim that it takes a lot of money to bring a drug to market, and this is why drugs are currently so expensive.

This seems to be common wisdom in this thread, but I note an extreme lack of actually cited sources, so I decided to go dig some up.

I remember reading a book in 2004 discussing what percentage of medical industry profits went towards research and development, verses what percentage went towards marketing. While I cannot recall the title (I have read thousands of books since then), the idea did stick with me, and a bit of quick Googling produced some results:

First, and perhaps most shocking: http://www.bmj.com/content/345/bmj.e4348

Here is a copy of this research without the paywall: http://www.pharmamyths.net/files/BMJ-Innova_ARTICLE_8-11-12....

According to the pop-sci summary of this article in the HufPo, what these numbers translate to is that Pharma companies spend 19 times as much on self-promotion as they do basic research: http://www.huffingtonpost.com/2012/08/09/pharmaceutical-comp...

If you assert that drugs are so expensive because of the cost to develop them, and yet I have demonstrated that the R&D budget is a small percentage of the money which the drug companies are spending, do you withdraw your assertion? Given the aforementioned lack of sources in this thread I somehow doubt it.

Ah: I found a review/summary of the book which originally sparked this comment. It's The Truth About the Drug Companies, and is by Marcia Angell, the first female editor of the New England Journal of Medicine. The review is available at: http://www.nybooks.com/articles/archives/2004/jul/15/the-tru...

More: http://www.slate.com/articles/business/the_customer/2011/03/...

[refurb]

The author of the article you posted, Donald Light, has done a pretty poor job of supporting the numbers he has come up with.

If you want to see what drugs cost to develop, just ask the scientists who develop them: http://pipeline.corante.com/archives/2012/08/09/getting_drug...

His numbers don't even pass the sniff test. If you want to find out how much it costs to develop a new drug, there is nothing stopping you from calling a CRO and asking how much they charge for phase III trials (they are all in competition, so they'll freely give you a quote).

The average cost for a phase III trial is approximately $15,000/pt/yr. 1000 patients is a pretty average size trial, so now you are at $15M for one trial and the FDA requires at least two phase III trials.

And that's just the cost of phase III trials which doesn't include: phase I, phase II, manufacturing, regulatory costs, etc. Donald Light's claim that drugs cost $45M to develop is laughable and the could only come from someone with no understanding of drug development.

[pullo]

15000 USD/pt/yr seems to be a cost of phase 3 drug trial in a wealthy (western) nation. there has been a boom in conducting human trials across developing nations , through private contractors. A search for 'drug trials in developing nations' returns millions of links , including reputable sources like bbc and pbs. I will let you pick the best ones :) per capita income in india is 12000 usd/yr. there is no way, a drug firm will spend 15k usd in a place like that to perform human trials.Do remember that 12000 usd is the average income. the rural poor are some of the poorest in that world. you can safely assume that the cost of a drug trial in countries like india is much much lower. Indian poor have also been a test bed for human clinical trials. http://www.bbc.co.uk/news/magazine-20136654

Drug companies use poor as guinea pigs , marking up the price for wealthy nations and worst of all , prevent life saving care for billions of people. some on whom the drugs were tested on. So, there is more than one reason this victory is sweet for the developing nations.

p.s sorry about the multiple edits..

[ctoth]

I am somewhat confused by the term "article you posted" in your comment. I had believed that I had posted a variety of different articles from several different sources, one of which was written by Marcia Angell, former editor of the New England Journal of Medicine and presumably someone who knows how much a drug costs to develop.

[refurb]

The article I was referring to was the BJM article.

Oh yes, I know all about Marcia Angell. She has been rallying against the pharma industry for over a decade. The link I posted also goes into some of the outrageous things she has said that are completely unsupportable.

Here is another article talking about Marcia:

http://www.forbes.com/sites/johnlamattina/2012/12/14/marcia-...

Does pharma do bad things? Yes! But claiming there is a pharma conspiracy to drive down "target" cholesterol levels so they can sell more drugs is laughable. It ignores all the scientific evidence (most of it NOT from pharma companies), much of it published in her the journal she works for.

[twoodfin]

"Marketing" is not just ads. It's important things like talking to doctors and patients about the shortcomings of current drugs and their perception of the relative benefits of potential new drugs. It's analyzing your competitors' pipelines to avoid spending hundreds of millions developing a drug that will be obsolete before it is launched. It's understanding the regulatory environment in dozens of markets and adapting a product and sales strategy for each. And yes, it's communicating to doctors and patients the benefits of your new products.

If these companies could produce more drugs that would help patients and ensure that doctors, hospitals, patients and insurers knew enough about those drugs to spend more money to acquire them by spending less money on marketing, of course they would. So would Toyota, or IBM or any other company with something to sell.

[rayiner]

> I remember reading a book in 2004 discussing what percentage of medical industry profits went towards research and development, verses what percentage went towards marketing.

That doesn't even make sense. Neither R&D nor marketing come out of profits. Otherwise they wouldn't be profits...

Ironically, I can't get at that article because of a paywall, but my guess would be that HuffPo is defining "basic research" in a way that excludes most of the R&D spending (which undoubtedly goes to "applied research") and is defining "promotion" in a way that includes not just advertising, but things like the sales network.

The fact is that say Merck spends much more on R&D than on advertising: http://www.fiercebiotech.com/special-reports/7-merck-top-15-..., http://www.fiercepharma.com/special-reports/merck-top-13-adv...

[snowwrestler]

You are making a very common mistake, which is to equate the concept of drug development cost with the concept of basic R&D. They are not remotely the same thing; R&D is one of many expenses in the total development cost of a given drug.

[dhimes]

I would like to discuss this claim that it takes a lot of money to bring a drug to market, and this is why drugs are currently so expensive.

I never asserted your second clause. Pharma makes a shit-ton of profit, indeed.

I personally am grateful for your research in this comment(+1)- I regret that I don't have the time to have a proper discussion right now. Perhaps someone else could pick it up.

[ctoth]

Sorry -- I used your comment as a jumping-off point for this research rather than making my comment a complete reply to yours! I was more talking about the thread in general, where the point is made a few times. For instance, see https://news.ycombinator.com/item?id=5472735 Once again my apologies if I seemed to put any words in your mouth. I was looking for the right entrypoint to the thread and must not have selected the perfect one.

[dhimes]

No worries. Looks like your plan worked pretty well.