The Gilead Hepatitis C case study mentioned elsewhere in this thread deserves consideration. They made a ton of money for a few years and that is now drying up, since competition came in and the prevalent patient population has shrunk as the drug is a cure. Down the road there will be large savings to the healthcare system, as the costs of a patient leading up to, through and after a liver transplant is insanely large, and the frequency of those will dramatically be reduced because of the HepC drugs. Sharing the cost savings to the overall healthcare system with the innovator drug company incentivizes drug companies to effectivley address expensive diseases. The timing of the economic benefits (reduced advanced liver disesase) and costs (HepC drug price) uncoupled to the casual viewer so Gilead looks to be just a money-grubbing corporation.
I’m also uneasy about federal officials appointing a panel that has final say on drug prices. It’s a hypothetical, and details would matter. Done wrong it could crash industry investment. To those that claim that there will always be investment- How much of your IRA/401K is in small/mid-cap biotech? -there are huge risks and expenses getting drugs to market, and looking at the profitable companies assumes huge survivorship bias on the companies that "made it".
Look at the state of antibiotics drug development (this terrifies me), or look at the availably of a standard, approved bladder cancer drug (Bacillus Calmette-Guerin or BCG) or a handful of other drugs (please internet search for BCG / chemotherapy shortage). These real-time problems illustrate the fragility of the economics of development and manufacture of drugs. Its not just a turn-the-crank widget. Should drug companies be spending on superbowls ads, no. Should Skrelli reprice proven drugs by 500x, Nope. Anything like Valeant or Purdue pharma, just nope. Should a pharma CEO be making $50MM /year, probably not. There are many problems to fix, but hitting the industry with a wrecking ball in order to set drug prices is short sighted will have consequences. Transparency on pricing is a good step. Get the PBMs, the Payors, and Pharma all to disclose where the money is flowing and what the true costs are. That will allow for some informed discussion. I’m not a pharma shill. They need to be held accountable, but accusations such as ditching cancer or Alzheimer disease cures isn’t valid or constructive. It doesn’t even make sense.
Thank you for the thought provoking comments. Hope my rant is coherent and useful to you.
I’m also uneasy about federal officials appointing a panel that has final say on drug prices. It’s a hypothetical, and details would matter. Done wrong it could crash industry investment. To those that claim that there will always be investment- How much of your IRA/401K is in small/mid-cap biotech? -there are huge risks and expenses getting drugs to market, and looking at the profitable companies assumes huge survivorship bias on the companies that "made it". Look at the state of antibiotics drug development (this terrifies me), or look at the availably of a standard, approved bladder cancer drug (Bacillus Calmette-Guerin or BCG) or a handful of other drugs (please internet search for BCG / chemotherapy shortage). These real-time problems illustrate the fragility of the economics of development and manufacture of drugs. Its not just a turn-the-crank widget. Should drug companies be spending on superbowls ads, no. Should Skrelli reprice proven drugs by 500x, Nope. Anything like Valeant or Purdue pharma, just nope. Should a pharma CEO be making $50MM /year, probably not. There are many problems to fix, but hitting the industry with a wrecking ball in order to set drug prices is short sighted will have consequences. Transparency on pricing is a good step. Get the PBMs, the Payors, and Pharma all to disclose where the money is flowing and what the true costs are. That will allow for some informed discussion. I’m not a pharma shill. They need to be held accountable, but accusations such as ditching cancer or Alzheimer disease cures isn’t valid or constructive. It doesn’t even make sense. Thank you for the thought provoking comments. Hope my rant is coherent and useful to you.