Should drug companies research expensive drugs?

[Roland of Gilead]

I have been reading up on a few of the new gene therapy drugs, which are a bit different from your pill in a bottle drug.  These drugs require a lot of training and manufacturing plus special facilities to make and administer.   Obviously they are priced quite high.

In today's environment though, the general public probably will not understand any of this and any politician worth his or her salt will capitalize on that.   Making a cancer gene therapy drug that you have to sell for half a million dollars or more and you still don't break even is still going to get you labeled as greedy in the public eye.

I am not sure of the solution here.   I know as an investor I have been shying away from these companies because of the high costs and the political climate.

[Civex]

I think so.

My reasoning is at some point we will hit on something that has a major (read broad) impact like infliximab did for monoclonal antibodies/autoimmune diseases or nivolumab/pembrolizumab did for immunotherapy in oncology, which initially may be difficult and expensive to produce, but due to demand someone will over time create a less expensive production method. Kind of like insulin's history-at first it was terribly expensive and difficult to create, being taken and purified from animals, and now bacteria grow it and it costs pennies to make.

Some therapies like CAR-T do require tons of input, but I think you might be overestimating at least the admin and facility required to work with other gene therapies-I've worked with RNA gene therapy in small towns, n=1.

From the investment side, I wouldn't touch individual biotech companies....VTSAX all day everyday.

[Metalcat]

What exactly is your question?

[ctuser1]

Drug companies *do* spend a lot of gene therapy etc because:
1. Thee are building strategic skillset and capabilities for the future. They don't want to be left behind other peers when gene therapy becomes cheaper, more available and much more beneficial.
2. Although expensive, these therapies tend to score well on cost vs. benefit measures. e.g. the QALY measure used by UK (https://www.ncbi.nlm.nih.gov/pubmed/18767894). Hence, the single payers tend to adopt them and pay for them.
3. You don't get to see majority of the grunt-work on gene-therapy-research on drug companies balance sheets. They happen on university research labs, manned by post-docs paid $45k/year, who hope to someday land a $55k/year (I have seen a $50k/yr job posting in Midwest) tenure track job before 40. This research is either free or very cheap for the drug companies. They can just call up a $55k tenure-track-guy and say "hey, here's $2mm in funding if you can study this specific thing". That money pays for a lot of $45k/year post-docs.

-----------------

I doubt "should" is a relevant question anywhere.

Drug companies do and will respond to $$ incentive and decide to research whatever they can make a profit with.

They sure do NOT drive their research by any consideration of "should" (and they are not expected to).

Lower respiratory infections (bronchitis etc) are the biggest "treatable" killers worldwide. Diarrhoeal infections are number 2? But very little money is spent on antibiotics.
(news article on this topic: https://www.pharmaceutical-journal.com/news-and-analysis/features/why-are-there-so-few-antibiotics-in-the-research-and-development-pipeline/11130209.article?firstPass=false).

Not sure of the exact slant/veracity of this source. It seems like a hospital industry broadside against pharma, but I doubt they are going to manufacture data. So here it is: https://www.csrxp.org/wp-content/uploads/2019/05/CSRxP_One_pager_III_FINAL-SITERELEASE.pdf
Per this, for every 22 cents spend on research drug companies spend 19 cents asking you to call your doctor about some <xyz> drug and 18 cents go towards profit.

If the industry focus of research was driven by "should" then the spending priorities would have likely been different: maybe it would have been prioritized by number of lives saved (if so - antibiotics would be top of the hierarchy). Marketing sure would not have been such a high focus area for spending!!

[Roland of Gilead]

Most of the drug companies I invest in do zero marketing because they don't have approved drugs yet.  So the argument that money could be saved there doesn't work.

Actually most of them go bankrupt and are taken out of the equation, which causes a survivorship bias.

But the question I was asking, is would it be better to leave this research totally in the hands of the universities and government instead of trying to "free market" it into some sort of profit producing therapy if at the end of the day you need to price it at millions just to break even on your costs.

[ctuser1]

..would it be better to leave this research totally in the hands of the universities and government instead of trying to "free market" it into some sort of profit producing therapy if at the end of the day you need to price it at millions just to break even on your costs.

I don't think any "totally one way or the other solution" is ever going to be a good one.

We currently have a situation where the government is starting to abdicate on it's responsibilities of funding basic science research (https://fas.org/sgp/crs/misc/R44307.pdf - look for Federal R&D funding graphs, which show trends of decline). This means the likelyhood of the next ARPANET or Human Genome project succeeding goes lower.

At the same time, killing profit motive will give us Soviet America, which will lack the initiatives like Craig Venter's Celera Genomics which relied on data produced at public funding, but figured out how to process them much faster and cheaper (https://fas.org/sgp/crs/misc/R44307.pdf).

US had a solution that worked really, really well! You know, the one that put a man on the moon, built highways, gave us the internet and microchips etc etc.

That model started showing signs of breaking in 80's.

Why look for anything else? Perhaps a rediscovery of the past is the only thing required!

[ctuser1]

Most of the drug companies I invest in do zero marketing because they don't have approved drugs yet.  So the argument that money could be saved there doesn't work.

Amortization of future expected expenses, my friend.

They may not spend now. However, in theory, their stock prices, or the prices they fetch when the drug portfolio is sold, or how the drugs are indeed priced when whatever-fraction-of-them-succeed do come to the market - all of them likely *do* take into account the profit or marketing expenses.

Any bean counter valuing any aspect of that business would be negligent to not include marketing expenses in it. Profit is also included in indirect ways. The system I am coding up right now does it via ROC (Return on Capital) calculations - which is a cost item standing in for the opportunity cost of deploying the capital vs putting it in - say - VTSAX.

[GuitarStv]

Drug companies are greedy by nature.  That's the name of the game, they're for profit entities.  Their goal is not the betterment of society . . . it's to generate cash.  If they waste their time attempting to help people, they'll fail and be overtaken by other drug companies that do not.  The beauty of their end product is that often their clientele will die without paying whatever price is set for treatment, so they've got a pretty good sales pitch.  It's why drug development costs have little to do with end costs to users - take insulin (a drug given to the world for free by it's discoverer who didn't want to profit on other people's misery) and look at how expensive it is in the US.  Profiteering is the best way to make money in this industry.

If drug research is not worth it to a pharmaceutical company, they'll stop doing it.  But the drug industry is incredibly profitable, so I doubt that we'll see this any time soon.  Should we rely more on the government and universities for research?  Probably.  By doing this, public funding could direct research towards the most beneficial areas for society rather than the most profitable for private companies.  But the 'taxes/big government' crowd will fight tooth and nail against this path, so it's unlikely to ever happen.  As has been mentioned, the trend in the past few decades has been to reduce self-reliance on government funded science and increase dependence upon for profit companies.

[OtherJen]

..would it be better to leave this research totally in the hands of the universities and government instead of trying to "free market" it into some sort of profit producing therapy if at the end of the day you need to price it at millions just to break even on your costs.

I don't think any "totally one way or the other solution" is ever going to be a good one.

We currently have a situation where the government is starting to abdicate on it's responsibilities of funding basic science research (https://fas.org/sgp/crs/misc/R44307.pdf - look for Federal R&D funding graphs, which show trends of decline). This means the likelyhood of the next ARPANET or Human Genome project succeeding goes lower.

At the same time, killing profit motive will give us Soviet America, which will lack the initiatives like Craig Venter's Celera Genomics which relied on data produced at public funding, but figured out how to process them much faster and cheaper (https://fas.org/sgp/crs/misc/R44307.pdf).

US had a solution that worked really, really well! You know, the one that put a man on the moon, and gave us the internet and microchips etc etc. That started breaking in 80's.

Why look for anything else? Perhaps a rediscovery of the past is the only thing required!

This. Public funding for biomedical research in this country has been on a downward slide since the first years of this millennium. Drug companies aren’t doing the basic research that has traditionally been done at universities and research institutes because the profits aren’t readily apparent, and young academic researchers are leaving the field in droves because positions and funding are increasingly less available. I can count on one hand the number of fellow students from my doctoral program who actually work in basic research, and that doesn’t include me or any of the other 5 students in my entering cohort.

[Roland of Gilead]

I hear what you are saying and agree mostly, but I was not talking about generics or insulin or things that can be taken advantage of by a market.

I am talking about drugs (like the CAR-T therapies mentioned) where the costs to produce/administer are real.

There is increasing outrage over the high price of drugs and the abuse of market for things like insulin, epi-pen, etc. but it spills over into all areas, even if not really justified.   If I were a CEO or an investor, I would be somewhat worried from a financial side if I am trying to get an approval on a drug which can't show a profit unless it is priced at a certain level, and can't show a decent return for the investment unless it is priced even higher.

[maizefolk]

Do you mean "should" in an ethical sense? Or should in a is it a good business decision sense?

Ethically, I think it's definitely the right call to keep doing research into drugs that can save people's lives (or even just control painful chronic conditions), even if the actual cost of manufacturing those treatments is likely to be very high. Over time we may get better at manufacturing biologics so the costs may come down.

Even if we don't and the treatments are only ever something the top 5% of the population can afford, it will still save some people's lives who would otherwise die, and the people who aren't saved at least are not harmed in any way. I don't think the alternative of everyone dying because we didn't develop a drug because we knew it wouldn't be accessible to everyone is morally preferable.

From a business standpoint, I don't know the answer. I tend to think businesses generally make intelligent decisions
make better decisions than I could when it comes to figuring out how to spend their money to make more money, but there are certainly plenty of exceptions, including several recent famous ones in the world of medicine like Elizabeth Holmes or Martin Shkreli.

3. You don't get to see majority of the grunt-work on gene-therapy-research on drug companies balance sheets. They happen on university research labs, manned by post-docs paid $45k/year, who hope to someday land a $55k/year (I have seen a $50k/yr job posting in Midwest) tenure track job before 40.

You're seeing $50k/year tenure track jobs in biomedical fields? Yikes. I've definitely seen humanities positions with salaries that low, but would have guessed anything biomedically relevant would be more in the $70-90k range to start in low cost of living cities.

Agreed that federally funded academic research does subsidize the drug companies, and having almost all academic workers be "trainees" who paid way below market rates subsidizes academic research in turn. It's actually fascinating to watch when faculty start companies because pretty consistently one of the first hurdles you hit is sticker shock over how much it costs to hire someone will the same skills as a postdoc (or senior graduate student) in a non-training position. "We need to pay how much?"

[ctuser1]

You're seeing $50k/year tenure track jobs in biomedical fields? Yikes. I've definitely seen humanities positions with salaries that low, but would have guessed anything biomedically relevant would be more in the $70-90k range to start in low cost of living cities.

My data may be out of date.

I saw a posting like that (not exactly sure which field, but it was not humanities) for a midwest university back in 2006.

I remember being shocked by that posting. As an entry level software dev at that time I was already earning almost double that.

Till that point I was very serious about doing a PhD in Computation/Applied-Mathematics (in topics that has little practical application right now). That posting was one of the key things that convinced me otherwise. I simply could not contemplate that sort of a pay cut till mid-30s or 40s.

[OtherJen]

You're seeing $50k/year tenure track jobs in biomedical fields? Yikes. I've definitely seen humanities positions with salaries that low, but would have guessed anything biomedically relevant would be more in the $70-90k range to start in low cost of living cities.

My data may be out of date.

I saw a posting like that (not exactly sure which field, but it was not humanities) for a midwest university back in 2006.

I remember being shocked by that posting. As an entry level software dev at that time I was already earning almost double that.

Till that point I was very serious about doing a PhD in Computation/Applied-Mathematics (in topics that has little practical application right now). That posting was one of the key things that convinced me otherwise. I simply could not contemplate that sort of a pay cut till mid-30s or 40s.

I’m not shocked by it and doubt things have changed much. According to Indeed.com, the average assistant professor salary in the US is just over $60k. Biomed faculty are always going to be on the low end for the STEM fields. Biomed generally does not pay high salaries. My first research assistant job out of undergrad, at a well-renowned cancer institute, paid $22k per year.

[Metalcat]

As someone who is on one of these expensive gene based biologics and whose mother is also on an expensive gene based biologic, we don't really flinch at the cost because that's, well, the legit cost of these drugs.

The concern here seems to be that the public will mistake the high cost of biologics for the price gouging of insulin?
Is that the concern? That drug companies might be criticized for producing very expensive drugs?

I really don't think that will be a problem. With all of those marketing dollars, it's not hard to generate PR indicating that these drugs are expensive for legitimate reasons.

Unless I'm still confused about what the question is??

[John Galt incarnate!]

I have been reading up on a few of the new gene therapy drugs, which are a bit different from your pill in a bottle drug.  These drugs require a lot of training and manufacturing plus special facilities to make and administer.   Obviously they are priced quite high.

In today's environment though, the general public probably will not understand any of this and any politician worth his or her salt will capitalize on that.   Making a cancer gene therapy drug that you have to sell for half a million dollars or more and you still don't break even is still going to get you labeled as greedy in the public eye.

I am not sure of the solution here.   I know as an investor I have been shying away from these companies because of the high costs and the political climate.

Let the pharmaceutical sector do what it wants (of course w/in FDA requirements).

R&D of very expensive drugs or not is simply a matter of choice of a firm's  board of directors.

[Roland of Gilead]

As someone who is on one of these expensive gene based biologics and whose mother is also on an expensive gene based biologic, we don't really flinch at the cost because that's, well, the legit cost of these drugs.

The concern here seems to be that the public will mistake the high cost of biologics for the price gouging of insulin?
Is that the concern? That drug companies might be criticized for producing very expensive drugs?

I really don't think that will be a problem. With all of those marketing dollars, it's not hard to generate PR indicating that these drugs are expensive for legitimate reasons.

Unless I'm still confused about what the question is??

I am very glad the drug is available for you and your mother!   You hit exactly on the concern.   I was reading a few articles on some of these very high priced, complicated biologics and went to the comment section and just saw acid dripping comments about how dare they charge so much for a drug and other comments about why should they even bother developing a drug that only rich people could afford.   It made me wonder why a company would want to expose itself to that type of risk instead of sticking with easier to produce and develop drugs which help people and yet can be sold at a profit for what people perceive as a reasonable price.   Again, I am looking at this mostly from an investment point of view, not strictly a moral point of view.   The right way to develop a drug which will not show a profit is to do it through a well funded charity or the government.

[Metalcat]

As someone who is on one of these expensive gene based biologics and whose mother is also on an expensive gene based biologic, we don't really flinch at the cost because that's, well, the legit cost of these drugs.

The concern here seems to be that the public will mistake the high cost of biologics for the price gouging of insulin?
Is that the concern? That drug companies might be criticized for producing very expensive drugs?

I really don't think that will be a problem. With all of those marketing dollars, it's not hard to generate PR indicating that these drugs are expensive for legitimate reasons.

Unless I'm still confused about what the question is??

I am very glad the drug is available for you and your mother!   You hit exactly on the concern.   I was reading a few articles on some of these very high priced, complicated biologics and went to the comment section and just saw acid dripping comments about how dare they charge so much for a drug and other comments about why should they even bother developing a drug that only rich people could afford.   It made me wonder why a company would want to expose itself to that type of risk instead of sticking with easier to produce and develop drugs which help people and yet can be sold at a profit for what people perceive as a reasonable price.   Again, I am looking at this mostly from an investment point of view, not strictly a moral point of view.   The right way to develop a drug which will not show a profit is to do it through a well funded charity or the government.

I don't think the comments section of anything is a great indicator of much at all other than vitriolic nonsense.

People love being outraged and the comments section is where they rage.

Creating novel drugs that successfully treat complex and often otherwise untreatable conditions is pretty good for PR I would think.

My drug is about $1000/mo and my mom's is ~$16000 per month, but we both have insurance that covers most/all of it. If I were low income, I would get mine for free from the drug company.

[scottish]

If companies don't develop new drugs, won't innovation just come to a halt in this area?    The government and academia are unable to do this on their own...

My question is does research focus on developing expensive new drugs to treat a disease rather than on developing a cure for the disease?

[Metalcat]

If companies don't develop new drugs, won't innovation just come to a halt in this area?    The government and academia are unable to do this on their own...

My question is does research focus on developing expensive new drugs to treat a disease rather than on developing a cure for the disease?

That's really not a simple question and the answer isn't simple either.

Bodies aren't in a state of perfect health or an acute state of disease, that's not really how it works.

There is absolutely more money in ongoing, long-term treatment, which is why that's where a lot of research dollars go, but that doesn't mean that you can really cleanly delineate between treatment and cure.

Just like health->pathology, it's a spectrum.

[GuitarStv]

If companies don't develop new drugs, won't innovation just come to a halt in this area?    The government and academia are unable to do this on their own...

<<citation needed>>


https://www.pnas.org/content/115/10/2329

This report shows that NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016. Collectively, this research involved >200,000 years of grant funding totaling more than $100 billion. The analysis shows that >90% of this funding represents basic research related to the biological targets for drug action rather than the drugs themselves. The role of NIH funding thus complements industry research and development, which focuses predominantly on applied research. This work underscores the breath and significance of public investment in the development of new therapeutics and the risk that reduced research funding would slow the pipeline for treating morbid disease.

https://www.latimes.com/health/la-xpm-2011-feb-10-la-heb-drug-development-taxpayers-20110210-story.html

...public-sector research institutions (or PSRIs, for short) became more active players in drug development following the biotech revolution of the mid-1970s. Government-funded researchers used recombinant DNA technology and monoclonal antibodies to discover and invent biologic and small-molecule drugs. Patents proliferated, but few of these candidate drugs were licensed to the private sector. Then, in 1980, the Bayh-Dole Act and other federal legislation changed the rules on technology licensing, making it more appealing for drug companies.

A group of researchers from Boston University, the NIH and the Norwegian Radium Hospital Research Foundation set out to quantify the contribution of PSRIs toward development of drugs and vaccines that have been approved for use by the U.S. Food and Drug Administration. The task required them to spend a great deal of time with the FDA’s Orange Book, which details the patent history of all new drug applications that were ultimately approved. They also scoured news reports and company announcements and surveyed academic technology licensing officers to catch any other drugs they might have missed.

Altogether, they gave 75 PSRIs credit for inventing 153 new drugs that won FDA approval from 1970 to 2009. The NIH was responsible for 22 of the drugs on that list, and the University of California system came in second with 11. Rounding out the top five PSRIs were Memorial Sloan-Kettering Cancer Center in New York with eight, Emory University in Atlanta with seven, and Yale University in New Haven, Conn., with six. Virtually half of the new drugs were developed for treating cancer or infectious disease.

And these weren’t just run-of-the-mill drugs – they were important ones. For instance, 46% of the drugs developed by PSRIs got priority reviews from the FDA (an indication that they offered a substantial improvement over existing treatments), compared with 20% of the drugs from the private sector.

In addition, the researchers wrote, “Virtually all the important, innovative vaccines that have been introduced during the past 25 years have been created by PSRIs.”

Public research institutions were also particularly good at identifying new uses for existing drugs. From 1990 to 2007, the FDA approved only 10 such requests; nine of them originated in PSRIs, according to the study.

Overall, the team concluded, “PSRIs tend to discover drugs that are expected to have a disproportionately important clinical effect.”

Public research is currently the driver of innovation when it comes to important treatment.  That's why de-funding of public research into disease and treatment is such a concern.

My question is does research focus on developing expensive new drugs to treat a disease rather than on developing a cure for the disease?

To the best of my knowledge there's no clear answer to this.  But I'm a fan of following money to determine human motivation.  A company obviously has more motivation to sell a treatment for a condition than to cure the condition quickly.  This of course doesn't apply to public research . . . which may be why public research is so much more effective.

[OtherJen]

If companies don't develop new drugs, won't innovation just come to a halt in this area?    The government and academia are unable to do this on their own...

<<citation needed>>


https://www.pnas.org/content/115/10/2329

This report shows that NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016. Collectively, this research involved >200,000 years of grant funding totaling more than $100 billion. The analysis shows that >90% of this funding represents basic research related to the biological targets for drug action rather than the drugs themselves. The role of NIH funding thus complements industry research and development, which focuses predominantly on applied research. This work underscores the breath and significance of public investment in the development of new therapeutics and the risk that reduced research funding would slow the pipeline for treating morbid disease.

https://www.latimes.com/health/la-xpm-2011-feb-10-la-heb-drug-development-taxpayers-20110210-story.html

...public-sector research institutions (or PSRIs, for short) became more active players in drug development following the biotech revolution of the mid-1970s. Government-funded researchers used recombinant DNA technology and monoclonal antibodies to discover and invent biologic and small-molecule drugs. Patents proliferated, but few of these candidate drugs were licensed to the private sector. Then, in 1980, the Bayh-Dole Act and other federal legislation changed the rules on technology licensing, making it more appealing for drug companies.

A group of researchers from Boston University, the NIH and the Norwegian Radium Hospital Research Foundation set out to quantify the contribution of PSRIs toward development of drugs and vaccines that have been approved for use by the U.S. Food and Drug Administration. The task required them to spend a great deal of time with the FDA’s Orange Book, which details the patent history of all new drug applications that were ultimately approved. They also scoured news reports and company announcements and surveyed academic technology licensing officers to catch any other drugs they might have missed.

Altogether, they gave 75 PSRIs credit for inventing 153 new drugs that won FDA approval from 1970 to 2009. The NIH was responsible for 22 of the drugs on that list, and the University of California system came in second with 11. Rounding out the top five PSRIs were Memorial Sloan-Kettering Cancer Center in New York with eight, Emory University in Atlanta with seven, and Yale University in New Haven, Conn., with six. Virtually half of the new drugs were developed for treating cancer or infectious disease.

And these weren’t just run-of-the-mill drugs – they were important ones. For instance, 46% of the drugs developed by PSRIs got priority reviews from the FDA (an indication that they offered a substantial improvement over existing treatments), compared with 20% of the drugs from the private sector.

In addition, the researchers wrote, “Virtually all the important, innovative vaccines that have been introduced during the past 25 years have been created by PSRIs.”

Public research institutions were also particularly good at identifying new uses for existing drugs. From 1990 to 2007, the FDA approved only 10 such requests; nine of them originated in PSRIs, according to the study.

Overall, the team concluded, “PSRIs tend to discover drugs that are expected to have a disproportionately important clinical effect.”

Public research is currently the driver of innovation when it comes to important treatment.  That's why de-funding of public research into disease and treatment is such a concern.

My question is does research focus on developing expensive new drugs to treat a disease rather than on developing a cure for the disease?

To the best of my knowledge there's no clear answer to this.  But I'm a fan of following money to determine human motivation.  A company obviously has more motivation to sell a treatment for a condition than to cure the condition quickly.  This of course doesn't apply to public research . . . which may be why public research is so much more effective.

Yep. Basic research, which is often funded by govt grants, is not immediately profitable, and it may be some time before it ever becomes profitable. It is the foundational body of knowledge from which profitable drugs, therapies, etc. are developed. Because of this lack of a direct route to profit, private companies are generally unwilling to conduct this type of research.

[scottish]

I'm not arguing that government and academia shouldn't work together on basic research.   I agree with you all that this is the most common way to get basic research going & most companies won't do it on their own.

What I am suggesting is that once a promising drug has been identified, the process of manufacturing the drug, trialing it, marketing it and distributing it won't be done by academia or the government without industry involvement.    This is where private industry is needed...

Seriously, can you imagine the government setting up a factory of Chinese hamsters to produce infliximab?   and then running infusion clinics across the country to treat patients?   

I can give you lots of examples where government attempts to productize research have been a failure.    Hell, it doesn't even have to be research, the government can barely do IT systems and real estate.

[nippycrisp]

Gene therapy development was kinda my job before FIRE, so I'll add a little color:

True gene therapy (inserting replacement genes) via AAV, for example, is being pioneered on rare genetic diseases where (a) the problem is 100% known (because there is too much R&D cost to chance being wrong) and (b) the government has granted orphan disease status. This means that the disease is fairly rare, and, in order to encourage cures to be developed, the government has made the regulatory and filing costs to develop a medicine are very cheap.

In practice, biotech start-ups focus on one or two of these rare diseases, develop the formulation (gene to be delivered, viral packaging, dose, etc). As they move toward clinical trials, they're generally sold to a large pharma company. The large pharma company will not make any money on what the startup is trying to cure. Instead, they're investing in the technology and know-how for the next thing. For example, PTC recently bought Agilis, which makes a therapy for AADC deficient children (these are kids that can't make dopamine. They resemble human pancakes). PTC isn't interested in AADC deficient people, which are maybe a hundred thousand worldwide. Rather, they're interested in making a gene therapy for Parkinson's disease, which will have a similar administration profile for AADC. It's an investment, in the classic sense. Right now, there are very few good start-up companies left that aren't already acquired or terrible.

A few other thoughts:

AAV-based gene therapy is a one-shot deal, in theory. That means that you get only one opportunity to charge patients for it, which is partly why it's so expensive. Everything has to be perfect, especially dosing and placement. Wrong spot = no effect. Too much dose, you can't remove it. Not enough dose? Sorry. It's also worth mentioning that many patients develop antibodies to the virus itself, so subsequent doses may provoke an immune reaction that won't be pretty. In addition to getting only one shot at the target, you also aren't a good candidate for other gene therapies in the future (barring tech advances). So it's a pick-your-cure situation.

To add on to the cost thing, it's worth noting that insurance is a major issue in this brave new world. There was one gene therapy treatment by GSK that actually had a money-back guarantee (https://www.technologyreview.com/s/602113/gene-therapy-cure-has-money-back-guarantee/), but I think it only enrolled a single patient, mainly due to the high cost. That's scary, and it's caused some to question the model of easing into gene therapy this way. One thing that's being floated now is a gradual reimbursement, where insurance pays a sum over time for treated patients who remain symptom-free. That seems fair to me, but it's a complicated question.

As a former insider, I'll also mention that I saw a good number of people who were borderline fraudsters working in the space, as it's so hot right now.

[GuitarStv]

I'm not arguing that government and academia shouldn't work together on basic research.   I agree with you all that this is the most common way to get basic research going & most companies won't do it on their own.

What I am suggesting is that once a promising drug has been identified, the process of manufacturing the drug, trialing it, marketing it and distributing it won't be done by academia or the government without industry involvement.    This is where private industry is needed...

OK, but you first voiced concern about innovation coming to a halt.  Important and innovative research isn't really what private industry does best.  Given their nature, marketing isn't necessary for most of these drugs . . . so it seems like a largely useless expense.  Either a person has the disease and needs the drug/treatment, or they don't.  Production, monetization, and distribution often done very well by private industry.  The problem is that one of those three is in direct opposition to helping people.

Seriously, can you imagine the government setting up a factory of Chinese hamsters to produce infliximab?   and then running infusion clinics across the country to treat patients?

Yes.  What, you don't think that the kind of folks in charge of the WHO or CDC are capable of coordinating large scale projects?  That's like . . . all they do.  We depend on our provincial governments to coordinate the health care we receive . . . and so far we've successfully avoided the privatized shit show that goes on south of the border.  Certainly a government agency is capable of doing what you're asking.  Are they they best option to do so?  Depends on what you're using to judge success.  If success is judged by profitability, then certainly not.  That's the forte of private industry.  If success is judged by disease treated/cured and societal benefit . . . I don't know, but I suspect it would be closer between industry and government than you think.

[Roland of Gilead]

For your country GuitarStv there is a current case in the news about a drug that is not approved in Canada (but is in the USA) from Swiss drug maker Novartis called Zolgensma.  It costs something like $2.1 million dollars.  It is maybe a full cure for spinal muscular atrophy.

If you read any article comments section though, all you can see is outrage over the idea of charging babies $2.1 million dollars.  I know someone above mentioned that comment sections don't mean much but I get the feeling that the general public has this same opinion.   If you must price a drug that high to make a profit, you are evil.

[Metalcat]

For your country GuitarStv there is a current case in the news about a drug that is not approved in Canada (but is in the USA) from Swiss drug maker Novartis called Zolgensma.  It costs something like $2.1 million dollars.  It is maybe a full cure for spinal muscular atrophy.

If you read any article comments section though, all you can see is outrage over the idea of charging babies $2.1 million dollars.  I know someone above mentioned that comment sections don't mean much but I get the feeling that the general public has this same opinion.   If you must price a drug that high to make a profit, you are evil.

I just really, really don't see that being a general public perception

[scottish]

I'm not arguing that government and academia shouldn't work together on basic research.   I agree with you all that this is the most common way to get basic research going & most companies won't do it on their own.

What I am suggesting is that once a promising drug has been identified, the process of manufacturing the drug, trialing it, marketing it and distributing it won't be done by academia or the government without industry involvement.    This is where private industry is needed...

OK, but you first voiced concern about innovation coming to a halt.  Important and innovative research isn't really what private industry does best.  Given their nature, marketing isn't necessary for most of these drugs . . . so it seems like a largely useless expense.  Either a person has the disease and needs the drug/treatment, or they don't.  Production, monetization, and distribution often done very well by private industry.  The problem is that one of those three is in direct opposition to helping people.

Seriously, can you imagine the government setting up a factory of Chinese hamsters to produce infliximab?   and then running infusion clinics across the country to treat patients?

Yes.  What, you don't think that the kind of folks in charge of the WHO or CDC are capable of coordinating large scale projects?  That's like . . . all they do.  We depend on our provincial governments to coordinate the health care we receive . . . and so far we've successfully avoided the privatized shit show that goes on south of the border.  Certainly a government agency is capable of doing what you're asking.  Are they they best option to do so?  Depends on what you're using to judge success.  If success is judged by profitability, then certainly not.  That's the forte of private industry.  If success is judged by disease treated/cured and societal benefit . . . I don't know, but I suspect it would be closer between industry and government than you think.

I dunno, I just look at the DND HQ relocation in Ottawa from downtown to the old Nortel campus.   They spent enough money to build the campus from scratch and took 10 years to start moving in.   And guess what?   They forgot to plan for parking spaces.

To put health care in context, you have to remember that we've been improving it for 70 years now.     Given enough time and motivation, even the government will eventually make things work.

IMO, the last thing we want is to put the government in charge of something that requires innovation and new ideas...

[ctuser1]

Given enough time and motivation, even the government will eventually make things work.

This is the key.

Being able to iterate over the solution, in a democratic manner, is what the government does best.

Certain topics are best suited for this type of iteration. (e.g. basic science research, with all the ethics considerations, like the "gene edited baby" stuff).
Certain topics are best left out of the governments hands because they require a much faster moving solution (e.g. advent of social media).
Certain topics are best done in combination. (e.g. ARPANET -> dot com boom, Human Genomics Project -> Celera Genomics).

I personally always prefer to have the government do the least amount possible where things need to move fast, because they are not very good at that.

[J Boogie]

Should we rely more on the government and universities for research?  Probably.  By doing this, public funding could direct research towards the most beneficial areas for society rather than the most profitable for private companies.  But the 'taxes/big government' crowd will fight tooth and nail against this path, so it's unlikely to ever happen.  As has been mentioned, the trend in the past few decades has been to reduce self-reliance on government funded science and increase dependence upon for profit companies.

There are plenty of wealthy countries where the anti taxes/big gov crowd don't have much political sway. Why do you suppose these countries with well funded governments are unable to compete with private drug companies and sell equivalent medicine to the public without the gouging?

[GuitarStv]

Should we rely more on the government and universities for research?  Probably.  By doing this, public funding could direct research towards the most beneficial areas for society rather than the most profitable for private companies.  But the 'taxes/big government' crowd will fight tooth and nail against this path, so it's unlikely to ever happen.  As has been mentioned, the trend in the past few decades has been to reduce self-reliance on government funded science and increase dependence upon for profit companies.

There are plenty of wealthy countries where the anti taxes/big gov crowd don't have much political sway. Why do you suppose these countries with well funded governments are unable to compete with private drug companies and sell equivalent medicine to the public without the gouging?

You're making an assumption here - that a well funded government is unable to compete with private drug companies and needs to do so to avoid gouging.

A government has a lot of purchasing power when medicine is socialized.  Typically this purchasing power is used to prevent the gouging by pharmaceutical companies that is so common in the US.  In that case, there's little incentive to go through the work to set up government manufacturing labs and provide a comparably priced alternative.  I'd argue that it's probably a waste of time/effort in that case.

[J Boogie]

Should we rely more on the government and universities for research?  Probably.  By doing this, public funding could direct research towards the most beneficial areas for society rather than the most profitable for private companies.  But the 'taxes/big government' crowd will fight tooth and nail against this path, so it's unlikely to ever happen.  As has been mentioned, the trend in the past few decades has been to reduce self-reliance on government funded science and increase dependence upon for profit companies.

There are plenty of wealthy countries where the anti taxes/big gov crowd don't have much political sway. Why do you suppose these countries with well funded governments are unable to compete with private drug companies and sell equivalent medicine to the public without the gouging?

You're making an assumption here - that a well funded government is unable to compete with private drug companies and needs to do so to avoid gouging.

A government has a lot of purchasing power when medicine is socialized.  Typically this purchasing power is used to prevent the gouging by pharmaceutical companies that is so common in the US.  In that case, there's little incentive to go through the work to set up government manufacturing labs and provide a comparably priced alternative.  I'd argue that it's probably a waste of time/effort in that case.

I'm having trouble tracking the thrust of your argument. Your first statement indicated you think the government should do more R&D, but is thwarted by libertarian sentiment. Your second statement seems to say that the purchasing power of governments is what makes it unwise for them to do more R&D.

To be clear, my view is that the US gov of the past few decades is unable to compete with private companies when it comes to R&D.  Until the govt gets its groove back, I think it's better to have expensive cures than no cures. It's better to have companies doing profitable research than scientists doing nothing. What could persuade them to leave the private sector and work for the govt? I'm not sure, but I don't think vilifying them for acting exactly as other companies do is going to help.

[ctuser1]

.... To be clear, my view is that the US gov of the past few decades is unable to compete with private companies when it comes to R&D. ....

Any data/study etc to support this view?

Private industry only scratches the surface of science research in applied fields where they can immediately monetize things. They have almost no interest in basic sciences research.

I'm willing to bet $10 that if you round up all the Nobel laureates in the last X years, majority of their research would have been funded by government money.

I am not in academics, so would stand corrected if countered with proper data.

[GuitarStv]

Should we rely more on the government and universities for research?  Probably.  By doing this, public funding could direct research towards the most beneficial areas for society rather than the most profitable for private companies.  But the 'taxes/big government' crowd will fight tooth and nail against this path, so it's unlikely to ever happen.  As has been mentioned, the trend in the past few decades has been to reduce self-reliance on government funded science and increase dependence upon for profit companies.

There are plenty of wealthy countries where the anti taxes/big gov crowd don't have much political sway. Why do you suppose these countries with well funded governments are unable to compete with private drug companies and sell equivalent medicine to the public without the gouging?

You're making an assumption here - that a well funded government is unable to compete with private drug companies and needs to do so to avoid gouging.

A government has a lot of purchasing power when medicine is socialized.  Typically this purchasing power is used to prevent the gouging by pharmaceutical companies that is so common in the US.  In that case, there's little incentive to go through the work to set up government manufacturing labs and provide a comparably priced alternative.  I'd argue that it's probably a waste of time/effort in that case.

I'm having trouble tracking the thrust of your argument. Your first statement indicated you think the government should do more R&D, but is thwarted by libertarian sentiment. Your second statement seems to say that the purchasing power of governments is what makes it unwise for them to do more R&D.

To be clear, my view is that the US gov of the past few decades is unable to compete with private companies when it comes to R&D.  Until the govt gets its groove back, I think it's better to have expensive cures than no cures. It's better to have companies doing profitable research than scientists doing nothing. What could persuade them to leave the private sector and work for the govt? I'm not sure, but I don't think vilifying them for acting exactly as other companies do is going to help.

We're talking about two related (but different) things here.

Companies can do manufacturing and processing very cheaply.  I don't like something as important as drugs necessary for health care to be left to people with monetary reason to extort the people who depend on them, but it makes sense that governments would turn to companies for that reason if they're able to leverage socialized large scale purchasing power to negate that risk.

As shown above in the links I already posted, industry R&D is not as effective or efficient as government sponsored research at researching cures for important health related problems.  If you're concerned about getting the best research for your buck, you should be banging on the doors of your local politician to increase government funding for science and medicine.

[OtherJen]

.... To be clear, my view is that the US gov of the past few decades is unable to compete with private companies when it comes to R&D. ....

Any data/study etc to support this view?

Private industry only scratches the surface of science research in applied fields where they can immediately monetize things. They have almost no interest in basic sciences research.

I'm willing to bet $10 that if you round up all the Nobel laureates in the last X years, majority of their research would have been funded by government money.

I am not in academics, so would stand corrected if countered with proper data.

I was in academic biomed research. Your assessment is accurate. Basic science is necessary but not immediately profitable. Hence public funding.

[J Boogie]

You're right, we are talking about 2 different things. For the sake of clarity, we should leave my skepticism of the current govt's ability out of this argument.

Yes, public funds are absolutely essential for the foundational research that lacks an immediate path to profitability. Agreed 100%.

I also contend that for-profit private research, while not absolutely essential, is just fine. The free market makes it so the diseased wealthy can essentially hire scientists to develop cures for their rare diseases. Devoting significant public funding to the myriad of rare diseases out there would not be in the public's best interest. So for many diseases there will either be an extremely expensive cure or no cure. It is better that there is a cure, and that research is done that can be built upon, and that generics can eventually be developed, even if it means that the poor will suffer while the rich get well. It is not fair, but it is worth the trade off.