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  • Great article about Big Pharma

    Chronic

    For big pharma, the perfect patient is wealthy, permanently ill and a daily pill-popper. Will medicine ever recover?

    Just a few years ago, infection with the hepatitis C virus guaranteed a slow and certain death for many. Available treatments were effective in about half of all patients, and the side effects could be awful. Things changed in 2014, when a new medication called Harvoni was approved to treat the infection. With cure rates approaching 99 per cent and far fewer side effects, the medication became an instant blockbuster. Sales topped $13.8 billion in 2015.

    But then an odd thing happened – sales began to drop precipitously. Harvoni, in conjunction with four other hepatitis C drugs, is projected to generate only $4 billion this year, a three-fold decline in as many years. Part of this decline is due to new competitors entering the market. But according to analysts at Goldman Sachs, another reason could be that the drug’s cure-rate erodes its own market.

    In a private report leaked to news outlets in April 2018, the Goldman Sachs analysts caution against investments in pharmaceutical or biotechnology companies aiming to develop outright cures, and cite Harvoni as a case study. It’s a simple point to make – if profit is your goal, then a product that eradicates its own demand might not be a wise investment.
    Food for thought for your sunday enjoyment.

    Disclaimer- the article isn't partisan.

  • #2
    Interesting points.

    In the case of a treatment effectively destroying its own market, it would seem that this is a positive outcome, right? We should find a way to encourage this and help the investor(s) get a high enough return to make them want to push for this type of development, while discouraging hyper-expensive "maintenance" treatments like statins.

    One idea that is not mentioned here would be to have a variable patent duration, based on the type of drug. This would allow the pricing to recoup the development expense within the patent window, while taking into accounn the market impact and devleopment timeline of the product itself. Today's patent protection has a fixed window that does not adjust to compensate for approval timelines or market consequences, so it creates the sort of potential disincentive for complete cures seen with Harvoni and others.

    Just tossing this out for debate.
    Last edited by SteinbergerHack; 08-12-2018, 08:21 PM.
    "The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency." ------------------ Pope John Paul II

    Comment


    • #3
      Originally posted by SteinbergerHack View Post
      Interesting points.

      In the case of a treatment effectively destroying its own market, it would seem that this is a positive outcome, right? We should find a way to encourage this and help the investor(s) get a high enough return to make them want to push for this type of development, while discouraging hyper-expensive "maintenance" treatments like statins.

      One idea that is not mentioned here would be to have a variable patent duration, based on the type of drug. This would allow the pricing to recoup the development expense within the patent window, while taking into accounn the market impact and devleopment timeline of the product itself. Today's patent protection has a fixed window that does not adjust to compensate for approval timelines or market consequences, so it creates the sort of potential disincentive for complete cures seen with Harvoni and others.

      Just tossing this out for debate.
      (Bolded)

      We should, we won't. One time profit, unless it generates an earth shattering expensive and creates massive profits,, will never be preferred (by big pharma) over long term revenue stream. There is little long term profit in cures, lifetime of treatment on the other hand...

      Am I cynical? Fook yes! There is only one team and the consumer isn't on it. Just sit back and enjoy the ride to the bottom.

      Comment


      • onelife
        onelife commented
        Editing a comment
        Take money out of the equation, make it about people's well being and there will be more cures for chronic illness.

    • #4
      Originally posted by oldsoapbars View Post

      (Bolded)

      We should, we won't. One time profit, unless it generates an earth shattering expensive and creates massive profits,, will never be preferred (by big pharma) over long term revenue stream. There is little long term profit in cures, lifetime of treatment on the other hand...

      Am I cynical? Fook yes! There is only one team and the consumer isn't on it. Just sit back and enjoy the ride to the bottom.
      I'm not that cynical. Our IP laws were developed to accomplish the sort of goals I am targeting, and have been tweaked over the years to deal with various industry dynamics.

      The reason for legal patent protection is twofold:

      1) It encourages R&D investment by protecting the inventor from copycat competitors who would like to steal the design and reap profits from the inventor's investment and ideas.

      2) It protects consumers by forcing the inventor to publish the details of their invention, and by placing a limit on the time period that the inventor enjoys a legal monopoly on their product.

      All I am suggesting is a few tweaks to fine-tune this system to improve the benefit for the consumer by altering the benefit to the inventor/investor.
      Last edited by SteinbergerHack; 08-13-2018, 06:17 AM.
      "The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency." ------------------ Pope John Paul II

      Comment


      • #5
        Originally posted by SteinbergerHack View Post

        I'm not that cynical. Our IP laws were developed to accomplish the sort of goals I am targeting, and have been tweaked over the years to deal with various industry dynamics.

        The reason for legal patent protection is twofold:

        1) It encourages R&D investment by protecting the inventor from copycat competitors who would like to steal the design and reap profits from the inventor's investment and ideas.

        2) It protects consumers by forcing the inventor to publish the details of their invention, and by placing a limit on the time period that the inventor enjoys a legal monopoly on their product.

        All I am suggesting is a few tweaks to fine-tune this system to improve the benefit for the consumer by altering the benefit to the inventor/investor.
        All well and good but, other than being a profit center, the consumer doesn't matter. Also, much like the epipen your plan give space for astronomical profits for the producer and negates any monetary benefit to the consumer. It also doesn't address the pharma need to create cures and not treatments.

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        • #6
          Originally posted by oldsoapbars View Post
          All well and good but, other than being a profit center, the consumer doesn't matter.
          Aside from having a need and the willingness to pay for a treatment, the consumer is not involved in the process - and shouldn't be. The same is true in every other industry, as well.

          Also, much like the epipen your plan give space for astronomical profits for the producer
          Yes, as it should. The inventor/investor who develops a cure for pancreatic cancer or Alzheimer's should absolutely become wealthy. In fact, I would much prefer to see him/her become wealthy than someone like Kanye West or Jamie Dimon.

          and negates any monetary benefit to the consumer.
          No, it absolutely creates a monetary benefit for the consumer, by reducing the development focus on treatments that result in on-going expensive prescription bills.


          It also doesn't address the pharma need to create cures and not treatments.
          Sure it does. If we shorten the patent term to 5 years after FDA approval, then allow no follow-ons that lock out generics and competitors, it would absolutely drive the industry towards cures rather than maintenanve treatments.
          "The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency." ------------------ Pope John Paul II

          Comment


          • #7
            This video may help some understand the basic concept at play here. Of course, if we get the government out of the whole thing, it might work more as it should.

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            • #8
              I have never thought of my self as a capitalist. what does that even mean?

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              • #9
                Originally posted by moogerfooger View Post
                I have never thought of my self as a capitalist. what does that even mean?
                Well, I know of lot of people who call themselves "socialists".
                "The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency." ------------------ Pope John Paul II

                Comment


                • #10
                  Originally posted by SteinbergerHack View Post
                  Aside from having a need and the willingness to pay for a treatment, the consumer is not involved in the process - and shouldn't be. The same is true in every other industry, as well.



                  Yes, as it should. The inventor/investor who develops a cure for pancreatic cancer or Alzheimer's should absolutely become wealthy. In fact, I would much prefer to see him/her become wealthy than someone like Kanye West or Jamie Dimon.



                  No, it absolutely creates a monetary benefit for the consumer, by reducing the development focus on treatments that result in on-going expensive prescription bills.




                  Sure it does. If we shorten the patent term to 5 years after FDA approval, then allow no follow-ons that lock out generics and competitors, it would absolutely drive the industry towards cures rather than maintenanve treatments.
                  I wanna see that horse. Any animal that can leave a pile that size must be a sight to behold.

                  A cure is A one time payoff, treatment can go on for decades. What you're suggesting is that pharma having to adjust their year over year margins will fall. When margins fall. When margins fall stock prices will follow. Lower stock prices will keep any cures off the market in lieu of long term profits which will drive up stock prices. Stock prices are the singular concern for the pharma company.

                  There is nothing in your proposal that will push for cures. Profit is the only thing of any importance here.

                  The outcomes from the medicine is of no concern to the drug companies outside the light of profits. The only time when any drug company care about patients is when there's a lawsuit. Why? Because lawsuits dig into profits.

                  Comment


                  • oldsoapbars
                    oldsoapbars commented
                    Editing a comment
                    I just realized that my response May have confused.

                    It goes like this (a simplified version):
                    A company calculates how much total cost to market. After they know that they figure out how much money they want to make on the product. That's called the profit margin. Based on those margins the investors will either buy or sell stock. If everyone is trying sell their stock the price of the stock prices fall. Now there is a group of people who decide how to operate that business, They're called the Board of Directors. They have one task. That task is making money. The stock prices is what drives people to buy stocks. They aren't going to invest in a money loser because they want to make money.

                    So, in your proposal what will happen when the company ends it's patent then everyone in the industry will jump in. That means that there is no more unfettered profit. The result will be higher prices to the consumer because the drug company needs to make margin

                • #11
                  Originally posted by oldsoapbars View Post

                  I wanna see that horse. Any animal that can leave a pile that size must be a sight to behold.

                  A cure is A one time payoff, treatment can go on for decades. What you're suggesting is that pharma having to adjust their year over year margins will fall. When margins fall. When margins fall stock prices will follow. Lower stock prices will keep any cures off the market in lieu of long term profits which will drive up stock prices. Stock prices are the singular concern for the pharma company.

                  There is nothing in your proposal that will push for cures. Profit is the only thing of any importance here.

                  The outcomes from the medicine is of no concern to the drug companies outside the light of profits. The only time when any drug company care about patients is when there's a lawsuit. Why? Because lawsuits dig into profits.
                  SH has a point. If your profit margin is guaranteed to drop considerably after 5 years, something that is only profitable for 5 years is much more attractive.
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                  • #12
                    Originally posted by gismo recording View Post

                    SH has a point. If your profit margin is guaranteed to drop considerably after 5 years, something that is only profitable for 5 years is much more attractive.
                    Precisely.
                    "The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency." ------------------ Pope John Paul II

                    Comment


                    • #13
                      Originally posted by gismo recording View Post

                      SH has a point. If your profit margin is guaranteed to drop considerably after 5 years, something that is only profitable for 5 years is much more attractive.
                      A short ROI schedule will drive up the price during that window. It WILL NOT generate cures. If they can't reach ROI it will never get to market. Good for the consumer isn't a concern

                      If the ROI is say, $100.000.000, the drug companies will make that only raise prices to make ROI.

                      notice nothing here will drive cures. It will drive people out of the market
                      Last edited by oldsoapbars; 08-13-2018, 03:50 PM.

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                      • #14
                        Originally posted by oldsoapbars View Post

                        A short ROI schedule will drive up the price during that window. It WILL NOT generate cures. If they can't reach ROI it will never get to market. Good for the consumer isn't a concern

                        If the ROI is say, $100.000.000, the drug companies will make that only raise prices to make ROI.

                        notice nothing here will drive cures. It will drive people out of the market
                        I disagree. A cure will instantaneously sell to every person with the disease, while a maintenance drug that offers limited benefit has a much slower adoption curve.

                        Did you read the article at your own link about the differing ROI resulting from government intrusion ito the market?
                        "The historical experience of socialist countries has sadly demonstrated that collectivism does not do away with alienation but rather increases it, adding to it a lack of basic necessities and economic inefficiency." ------------------ Pope John Paul II

                        Comment


                        • #15
                          Originally posted by SteinbergerHack View Post

                          I disagree. A cure will instantaneously sell to every person with the disease, while a maintenance drug that offers limited benefit has a much slower adoption curve.

                          Did you read the article at your own link about the differing ROI resulting from government intrusion ito the market?
                          This works only if you completely ignore how business operates. A one time cure will only work if the market can bear the price. Because of shortening the ROI cycle drives up the price. The company has to make margins or they fail. Like I've said before. If the market can't support the price it will NEVER COME TO MARKET. How do you expect to sell it to everyone ill, if they can't afford it? You're also not considering the fact that a lot of new medicine isn't covered by insurance because they deemed it experimental. This leaves the entire cost up to the consumer. If the cure is, say, $1000 a week, the number of potential sales drop like a Buick over a cliff.

                          The objective for the consumer is for effective, safe and AFFORDABLE medication. Driving up costs and keeping drugs out of the market solves none of that. As a consumer, we shouldn't even consider what happens to the drug companies or their investors.

                          BTW, I offered no link.

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