Author Topic: Another win for unabated capitalism  (Read 2533 times)

LC

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Another win for unabated capitalism
« on: February 04, 2019, 07:12:11 AM »
https://www.reuters.com/article/us-usa-healthcare-catalyst/senator-sanders-to-ask-why-drug-once-free-now-costs-375k-idUSKCN1PT0ZJ?utm_source=applenews

https://www.statnews.com/pharmalot/2016/04/05/jacobus-pharmaceuticals-martin-shkreli/

There are around 400 people in the US that suffer from LEMS.

This is a drug that is not new, requires little to no R&D, no additional regulatory approval, and is not especially hazardous or difficult to produce.

Charging these 400 people $375,000 for the medication they require to maintain basic muscle control will generate this corporation $150,000,000 per year.

Gotta love fleecing the ill.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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BRK7

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Re: Another win for unabated capitalism
« Reply #1 on: February 04, 2019, 07:45:49 AM »
This calls to mind Charlie Munger's quote (I think he was referring to Greenspan at the time) about "overdosing on Ayn Rand." 

For all of the wonderful things that capitalism has done for us a society (and it certainly has), we must also acknowledge that it occasionally produces abhorrent results.

wachtwoord

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Re: Another win for unabated capitalism
« Reply #2 on: February 04, 2019, 08:55:10 AM »
The problem here is not capitalism, as any libertarian would tell you, but the rather absurd notion of patents. Discontinue patent protection (and copyright too please!) and the world will be a much better place.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

Cardboard

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Re: Another win for unabated capitalism
« Reply #3 on: February 04, 2019, 09:13:55 AM »
"The problem here is not capitalism, as any libertarian would tell you, but the rather absurd notion of patents. Discontinue patent protection (and copyright too please!) and the world will be a much better place."

Right... So who would invest $10's to $100's of millions upfront to find a cure and get approval with all associated risk of failure involved and get zero return over "x" predetermined years?

And even if there was no patent law, then the recipe never gets disclosed. The competitor has to redo the entire research process to find the cure with possibility of never finding it.

"For years, patients have been able to get the same drug for free from Jacobus Pharmaceuticals, a small New Jersey-based drug company, which offered it through a U.S. Food and Drug Administration (FDA) program called “compassionate use.

What is that program and what was the cost to the U.S. government and tax payers? It wasn't free I can guarantee you.

True problem here is developing drugs for a very small number of users. It has nothing to do with capitalism or patents. It is a societal question: are taxpayers going to pay to help a tiny minority or you have this minority paying their own?

Cardboard

Castanza

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Re: Another win for unabated capitalism
« Reply #4 on: February 04, 2019, 09:24:13 AM »


Guess which industries are heavily subsidized and which are not. Shrink government and solve problems.

The issue is not capitalism. It's government involvement in capitalism.

Congress is looking into a call made by a ref in an NFL game. Really? It's time people take a step back and see just how big and invasive government has come.

morningstar

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Re: Another win for unabated capitalism
« Reply #5 on: February 04, 2019, 10:37:37 AM »
This is a drug that is not new, requires little to no R&D, no additional regulatory approval, and is not especially hazardous or difficult to produce.

FDA 2 months ago: "The U.S. Food and Drug Administration today approved Firdapse (amifampridine) tablets for the treatment of Lambert-Eaton myasthenic syndrome (LEMS) in adults. LEMS is a rare autoimmune disorder that affects the connection between nerves and muscles and causes weakness and other symptoms in affected patients. This is the first FDA approval of a treatment for LEMS. “There has been a long-standing need for a treatment for this rare disorder,” said Billy Dunn, M.D., director of the Division of Neurology Products in the FDA’s Center for Drug Evaluation and Research."

According to the FDA, this is a newly approved treatment and the first available for the disease. It's not clear to me how this fits with your statement, but it feels like there is more to this story.

lschmidt

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Re: Another win for unabated capitalism
« Reply #6 on: February 04, 2019, 11:14:39 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.

Cigarbutt

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Re: Another win for unabated capitalism
« Reply #7 on: February 04, 2019, 01:17:38 PM »
Coming up with a framework to develop and market drugs for rare or "orphan" diseases is very challenging whichever ideology one adheres to.
The US has relevant legislation since 1983. Over time, it has worked reasonably well but there have been problems. It's possible to consider a worse scenario than access to expensive drugs: having no access to the drugs.

In Canada, where capitalism is "tamed" in the healthcare sector, there are various "access" programs but, despite repeated calls by those who need access to an orphan program, the government has not, to this day, put in place such a program. To a certain extent, Canada relies on the US for basic clinical work in this specific area and drug approval is delayed and often many drugs never get approval because it is not always clear that drugs bring "substantial" benefits over alternatives.
https://nationalpost.com/news/politics/health-canada-gives-kiss-of-death-to-planned-policy-for-rare-disease-drugs

I'm not saying LC is wrong. Just saying that this is a difficult topic and there are tradeoffs.

@Castanza
Look up Baumol's disease (it's not really a disease) because some people come to a diametrically opposed conclusion when analyzing the graph that you provide.

LC

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Re: Another win for unabated capitalism
« Reply #8 on: February 04, 2019, 03:31:09 PM »
That's fair and I don't know a solution or even a better alternative, but I know that this kind of stuff is simply wrong.

And while COBF is generally evidence of the benefits of owning businesses operating in a predominately capitalist society (and all the money we're all making as a result) - the downsides need to be discussed as well.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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Spekulatius

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Re: Another win for unabated capitalism
« Reply #9 on: February 05, 2019, 04:30:54 AM »
It seems like an unintended do sequence of the Orphan drug act, meant to foster research for rare diseases. I think Genzyme was the first company who benefited from it, as they developed Ceredase for the rare Gaucher’s disease. I was invested in the stock at various times, so I remember how surprised I was how much and how long they could generate revenue from this drug (and slightly improved versions of it).  I think at that point they were charging 30k/year, which was considered extremely high, now the bar is 10x higher.

I think think law has done some good, but is has developed into a license to rip off the healthcare system. It’s not capitalism that fails here, but poorly legislation/rules.  Somehow along the way, things went wrong. we can tell by the results.
To be a realist, one has to believe in miracles.