Author Topic: Another win for unabated capitalism  (Read 2715 times)

Read the Footnotes

  • Full Member
  • ***
  • Posts: 112
Re: Another win for unabated capitalism
« Reply #20 on: February 10, 2019, 09:00:49 AM »


A lot of drug cost in the us can be contributed directly to R&D. America is unequivocally a testing ground for new drugs. This premium is passed on to citizens here. It's not passed on to citizens in say the UK because their government has put caps on prices (in general terms).

I don't think the best action forward would be for the US to adopt said caps. They are not a permanent solution to the issue. Eventually the UK will be forced to renegotiate their terms and ultimately prices will rise.

Part of the shift in the composition of these histograms over time has to do with the fact that the model for successful drug R&D today has little in common with the methods used 40 years ago. Not that Costanza intended to make a point about changes over time, but you can actually see in the graphs that the US share has actually increased over time. The reasons are probably at least four fold.
1. The type of research that is likely to yield results is much more costly, requires more specific knowledge regarding disease states and takes longer. The most technologically sophisticated environments will do better under these conditions. The value of a network effect of sorts will increase as the challenges become higher.
2. The most generous compensation will attract the majority of the development. This gets us in to a bit of a chicken or the egg situation in our analysis.
3. Access to capital
4. Ability to manipulate the regulatory process, and incentivize adoption after approval
All of these contribute to the success of US drug development. The industry and their friends like to point to excellent educational system, or excellent companies, but the truth is more complicated.


Read the Footnotes

  • Full Member
  • ***
  • Posts: 112
Re: Another win for unabated capitalism
« Reply #21 on: February 10, 2019, 09:07:02 AM »
It's a very interesting story. Under certain strict criteria, medication can be dispensed without FDA approval for severe diseases for which there is no alternative treatment. I'm not aware of the specific rules. A drug company give away this compound for free for 20 years and had no funding or motivation to conduct clinical trials leading to FDA approval. Another company managed to snatch to prize of FDA approval. There were other nuances between the two nearly (but not completely) identical forms of the drug. A lot of nuances and possibly unintended consequences of the Orphan Drug Act. So in summary, not a new drug by any means, but a new FDA approval.

There are many other ways that you can manipulate the FDA's system to restart the clock and gain an additional 20+ years of patent protection for a compound that a lay person would never think of as a novel compound.

I won't list here the sorts of games that even pharma companies with stellar reputations regularly play. Besides, there are already too many people who know these tricks and take advantage.