Raising drug prices because they can

[YourNameHere]

 

[Syttu]

A reason why we should not impose arbitration in how producers produce and distribute their products.

 

[po18guy]

“Big pharma” is a red herring. Rather than a malevolent monolith, they are private, investor financed individual corporations. They need to turn a profit, not only to satisfy investors, but also to generate funds for current and future research. Are they perfect? No! Far from it. Name a person or corporation or government that is.

However, patent laws come to our rescue since, when patents expire, generic manufacturers enter in, producing drugs at much lower cost, because the original patent-holder bore the costs of drug development and testing. American drug costs are high, at least in part, because the US essentially develops drugs for the rest of the world. Chalk that up to the cost of charity you will.

Speaking of which, not that many know this, but it costs between 2-5 BILLION dollars to develop a drug and shepherd it through the FDA process in America. Think of that. For each drug. And no, government can’t do this because 1) it is not government’s job, 2) government does not have the money and other resources and 3) government does not care because it does not have to care.

You want to slow things down? You govern them. That’s what government does. Now, they certainly contribute much via the NIH, NCI and other administrations. But, they are in no way capable of doing what profit-driven companies do. Government chugs along slowly. Patients die while waiting for FDA approval. This bothers the FDA not one bit.

Remember that profit, while good for us and bad for them, is what motivates advancement in medical science. I have participated in four clinical trials now, hoping in part to advance cancer treatment.

In exchange for the skin I have in the game, I have received millions of dollars in developmental drugs at no cost over the last 10 years. Was there risk? Of course! That’s how progress is made. At least one of the drugs is now approved and in use by cancer patients.

As it is with life, such things are never as simple as they first appear.

 

[DIERM]

As it is with life, such things are never as simple as they first appear.

Exactly…and especially here.

What I have learned after 23 years in the bio-pharma business:

The simplistic belief would be that the costs of materials, costs of labor, costs of marketing, cost of manufacturing and distribution make any single “pill” price from a few cents to a couple dollars, and there is outrage when the cost comes out exponentially higher.

But what nobody sees is the fact that maybe only about 1 out of a dozen drugs make it from discovery to clinical trials…and the R&D costs may takes a few years, and with astronomical costs.

Then maybe only 1 or 2 of those making it through trials move on to scale up and filing for a New Drug Application (another extremely expensive proposition, given all the equipment and facility validation, manufacturing equipment costs, and facilities costs.

Then maybe only 1 of those get approval for commercial manufacturing and sales.

That one drug could have easily cost billions (yes, starting with a B, and ending with an S), and to recoup investors’ money, the price per dose is markedly higher than the cost of the manufacturing of the final product after all the up-front costs are considered.

Its no different than going to a diner and ordering a piece of apple pie, and paying $3.00 bucks for it, and then thinking, “Hey, I could have bought the whole pie at the store for 2 bucks more”, or “I could have bought all the ingredients to bake 3 pies for the price of one slice!” Of course there is the waitress to pay, the bakery to produce it, the truck and fuel and driver’s cost, the rent on the diner, etc., etc., etc.

So, no, its not as simple as it seems.

 

[Socrates92]

So this begs the question: Is the FDA the problem?

 

[Hodos]

To add to what you were saying, I have worked in the pharmaceutical/medical device manufacturing industry for the last 10 years. Producing drugs and medical devices is not a cheap endeavor as these are highly regulated industry. For every operator who is performing value added production steps, there are anywhere between 4 and 10 people verifying that the product meets the quality attributes that the patient demands and deserves. In addition, these industries are rightfully subject to a lot of regulation by both domestic and international regulatory bodies [FDA (US); EMEA (EU); JP (Japan), etc.] as well as being subject to industry specific professional organizations that set the guidelines for good engineering and manufacturing practices in their relative fields (ISO, PDA, etc.). These regulations are never static, but always evolve and increase the demand for additional quality control systems. While there are certainly examples where companies have abused the need to increase price to keep pace with increasing cost of production, most companies try to be good actors when pricing their products. They don’t want to price their product such that the patient cannot afford them. One of the biggest issues is that there is no transparency in the medical field with regard to cost of services, effectively placing the medical field outside of the free market.

 

[Hodos]

So this begs the question: Is the FDA the problem?

I would not necessarily say the FDA is the problem. There is a lot of good in having the pharmaceutical and medical device industry subject to regulations that help guarantee the safety of the patient. However, the FDA does need to recognize that while it needs to maintain a semi-adversarial relationship with the companies they regulate for the sake of enforcing quality standards, they also need to understand they are a partner in the industry because they should have an interest in making safe drugs and medical devices available to the public.

 

[Socrates92]

Right. So do you think they do a good job of that?

 

[Hodos]

Sometimes yes, sometimes no. They are probably understaffed from what I have seen at times. Keep in mind I am familiar with the manufacturing side of things, not as familiar with R&D and drug approval.

 

[Socrates92]

Gotcha. I don’t have a srrong opinion myself, so I’m curious to hear what others who have more experience dealing with pharma have to say. People can die from lack of drugs the same as from a bad drug so it’d be interesting to know if the FDA is better at saving or killing people.

 

[Hodos]

Working with regulatory agencies is a complicated relationship. It is good that they require us to have robust quality systems. But with those systems you end up with greater lead time and cost for drugs. The other thing is the regulations tend to be worded to provide very broad guidance; however, when you face an inspection some inspectors may have very specific things they may or may not want to see, and there may be differences in opinion on what constitutes best practices. In other words, there can be some aspects of subjectivity.

 

[Socrates92]

Interesting. I had always assumed that regulations would be extremely detailed as well.

 

[DIERM]

People can die from lack of drugs the same as from a bad drug so it’d be interesting to know if the FDA is better at saving or killing people.

Often people who die from a lack of drugs is not the fault of the FDA…there are several considerations.

Sometimes, drugs are “fast tracked” for approval, so this might be viewed as a positive step…but RISK is what has to be considered…if the FDA quickly approved, without adherence to regulation and consideration of data, a few people might be saved, but many, many more killed or disabled because of the same action of hasty approval.

The FDA is like most governmental agencies, sometimes hard to deal with, but by and large they do a good job…“Bad Drugs” or drugs not going to market (even" good drugs" which are aborted because they will not make the money expected as return on the investment) is statistically more the fault of the manufacturer than the agency.

Without the FDA the incidence of shoddy “counterfeit” drugs would be far worse than it is, and more people subject to harm than to healing.

 

[Hodos]

No, they tend to be pretty broad just because each drug or device has its own quality attributes. So if you read one of the regulations about facilities that are used to produce drugs or devices, they might say something like, “Facility shall be of suitable space and design to safely produce product.” What does that mean exactly? It is dependent on what the company manufacturing the product considers to be critical quality attributes. So maybe you say, well, this is something that needs to be produced in a cleanroom environment. So you would then look to professional organizations such as ISO that makes their own standards of how a cleanroom is designed, classified, etc., and you would appeal to testing to those standards to demonstrate that your facility meets the regulatory requirement. That’s just one example.

 

[maryjk]

Remember that profit, while good for us and bad for them, is what motivates advancement in medical science. I have participated in four clinical trials now, hoping in part to advance cancer treatment.

In exchange for the skin I have in the game, I have received millions of dollars in developmental drugs at no cost over the last 10 years. Was there risk? Of course! That’s how progress is made. At least one of the drugs is now approved and in use by cancer patients.

As it is with life, such things are never as simple as they first appear.

I’ve participated in one study that was cancelled. It was in phase 3, for at least two different diseases. So all that time and money to get it that far. Then it was dropped. Why? Because it didn’t work well enough to bring to market.

Now, I am participating in a trial that is phase 2. Time will tell if this drug will make it out of the gate.
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I have lupus. So, my information is based on that.

 

[Pattylt]

One area that is vital for the government to be involved in is orphan drugs. These are drugs that are extremely expensive to develop and test yet only a few patients have the disease or illness it treats. Government will subsidize Pharma to work on these drugs as normally Pharma wouldn’t touch it due to no profit margin.

And the FDA is vital in my opinion. No Americans were exposed to Thalidimide due to the FDA.

 

[po18guy]

Yes and no. They slow down both bad and good drugs - the classic double-edged sword.

Point being that many of us here are alive solely because a drug company took an immense risk and either developed a product sufficiently to submit it for human trials, or actually succeeded and brought it to market.

We hate to hear of corporate profits, but take the profit (i.e. incentive) out and the new drug pipeline dries up.

 

[po18guy]

You may qualify for CAR-T or other immune modulating treatment. You could also have a marrow or peripheral blood stem cell transplant, but that is rather extreme.

 

[po18guy]

And the FDA is vital in my opinion. No Americans were exposed to Thalidimide due to the FDA.

Actually, many were in the 50s and 60s. There was no caution known for its use in pregnant women, and I attended school with a “Thalidomide baby”

Thalidomide is still available and in use against multiple myeloma. A cousin drug, Lenalidamide, is also commonly used against myeloma, MyeloDysplastic Syndrome/MDS (which I also had) and some lymphomas.

However, federal investigation and regulation essentially eliminated its use by pregnant women.

 

[HerCrazierHalf]

I think the happy middle ground here occurs once the patent runs out. If there’s focus on an open source or nonprofit model for the underserved generic drugs then that’s help too.

For instance, most types of insulin are old enough to be generic, but the manufacturing and supply challenges means only 3 or so companies make all the insulin. However there is a project attempting to crate a process for making small batches in more local settings.