If you told me that I could put in a lot of work and spend a lot of money for a shot at developing something, and if it works out, the largest countries in the world are going to just take my work without compensation, that would be pretty demoralizing to me, even if I knew I was also likely to make a fortune in America.
See, if I we're to become super rich off selling a drug in America I wouldn't really give two shits that it was also saving lives in other countries that couldn't have afforded to buy it anyway.
Scenario 1: I make a drug, it makes me jillions, poor countries don't make generic versions of it and millions of people suffer and/or die which gets me nothing.
Scenario 2: I make a drug, it makes me jillions, poor countries do make a Generic version and millions of people don't suffer and/or die which gets me nothing.
Neither scenario gets me anything extra. One of them reduces suffering in the world.
Right. And as I said above, there's a third option.
Scenario 3: They strike a licensing deal with Indian generics manufacturers to collect a small license fee for each HIV drug produced. They make jillions on the first world market plus a billion or two on the Indian market.
Why would someone pay for what they can get for free?
Well there is costs and plant involved in producing the generic. The pharma company could conceivably sell their drug at a price point that's the same as the generic and get the market that way. It's just that said price point will be very low and the companies don't like that because its really hard to get huge profits that way.
If you have your own plants you aren't dependant on the good will of the US government/US corps, to provide you with access to a drug you need.
You also don't have to worry that the price will go steadily up once they have you hooked because they know they have you by the short and curleys.
Most of the time, for most drugs, conditions, and patients, this literally does not matter. A generic will do just as well for you as the name brand will, for a fraction of the price.
Sometimes, though, the difference can be dramatic.
Well, now I'm good and terrified.
If I remember that article correctly, it was as much about not researching the effects of different dosages as it was about how the FDA handled it. In which case, it's not necessarily a problem that is inherent only to generic drugs.
A brand-name drug can only come to market after the manufacturer submits clinical trials on its safety and efficacy. Safety and efficacy tests must be done on all formulations and doses of the drug that they wish to bring to market. If the drug is intended to be used across multiple populations, they have to use broad samples.
In other words, they have to show that it works, and that it works in the populations they intend it to work, in all the forms they intend it to work.
Although they cheat like fuck to try and get through this stage. The amount of hidden trial data is staggering.
spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
You are likely to have better quality control from the actual manufacturer, not to mention the benefit of their continued study of the drug's effect on people. Also, there is merit in not being a thief every time you have the opportunity to be one, no?
You are likely to have better quality control from the actual manufacturer, not to mention the benefit of their continued study of the drug's effect on people. Also, there is merit in not being a thief every time you have the opportunity to be one, no?
I wouldn't place the value of not being a thief above my own life or those of others, no.
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spacekungfumanPoor and minority-filledRegistered User, __BANNED USERSregular
You are likely to have better quality control from the actual manufacturer, not to mention the benefit of their continued study of the drug's effect on people. Also, there is merit in not being a thief every time you have the opportunity to be one, no?
I wouldn't place the value of not being a thief above my own life or those of others, no.
That wasn't the question though. The question was "why would anyone in a poor country pay a discounted price for drugs when they can get the pirated generic for free." That is pretty different, no? I don't think anyone but Kant would suggest that someone ought to die before they would steal.
You are likely to have better quality control from the actual manufacturer, not to mention the benefit of their continued study of the drug's effect on people. Also, there is merit in not being a thief every time you have the opportunity to be one, no?
I wouldn't place the value of not being a thief above my own life or those of others, no.
That wasn't the question though. The question was "why would anyone in a poor country pay a discounted price for drugs when they can get the pirated generic for free." That is pretty different, no? I don't think anyone but Kant would suggest that someone ought to die before they would steal.
If you told me that I could put in a lot of work and spend a lot of money for a shot at developing something, and if it works out, the largest countries in the world are going to just take my work without compensation, that would be pretty demoralizing to me, even if I knew I was also likely to make a fortune in America.
See, if I we're to become super rich off selling a drug in America I wouldn't really give two shits that it was also saving lives in other countries that couldn't have afforded to buy it anyway.
Scenario 1: I make a drug, it makes me jillions, poor countries don't make generic versions of it and millions of people suffer and/or die which gets me nothing.
Scenario 2: I make a drug, it makes me jillions, poor countries do make a Generic version and millions of people don't suffer and/or die which gets me nothing.
Neither scenario gets me anything extra. One of them reduces suffering in the world.
Right. And as I said above, there's a third option.
Scenario 3: They strike a licensing deal with Indian generics manufacturers to collect a small license fee for each HIV drug produced. They make jillions on the first world market plus a billion or two on the Indian market.
Why would someone pay for what they can get for free?
Well there is costs and plant involved in producing the generic. The pharma company could conceivably sell their drug at a price point that's the same as the generic and get the market that way. It's just that said price point will be very low and the companies don't like that because its really hard to get huge profits that way.
If you have your own plants you aren't dependant on the good will of the US government/US corps, to provide you with access to a drug you need.
You also don't have to worry that the price will go steadily up once they have you hooked because they know they have you by the short and curleys.
Why would someone pay for what they can get for free?
Short answer: international treaties.
India has agreed to uphold international IP law. In the long run, this benefits India. If they're perceived as a rogue nation with regards to IP, then other richer countries are less likely to do business with them.
And we're not talking about somebody making knock-offs in a garage somewhere. We're talking about a national, legitimate pharmaceutical industry. It's in India's best interest to keep that industry on the right side of the law.
every person who doesn't like an acquired taste always seems to think everyone who likes it is faking it. it should be an official fallacy.
Most of the time, for most drugs, conditions, and patients, this literally does not matter. A generic will do just as well for you as the name brand will, for a fraction of the price.
Sometimes, though, the difference can be dramatic.
Well, now I'm good and terrified.
If I remember that article correctly, it was as much about not researching the effects of different dosages as it was about how the FDA handled it. In which case, it's not necessarily a problem that is inherent only to generic drugs.
A brand-name drug can only come to market after the manufacturer submits clinical trials on its safety and efficacy. Safety and efficacy tests must be done on all formulations and doses of the drug that they wish to bring to market. If the drug is intended to be used across multiple populations, they have to use broad samples.
In other words, they have to show that it works, and that it works in the populations they intend it to work, in all the forms they intend it to work.
Although they cheat like fuck to try and get through this stage. The amount of hidden trial data is staggering.
Yeah, they do.
every person who doesn't like an acquired taste always seems to think everyone who likes it is faking it. it should be an official fallacy.
If you told me that I could put in a lot of work and spend a lot of money for a shot at developing something, and if it works out, the largest countries in the world are going to just take my work without compensation, that would be pretty demoralizing to me, even if I knew I was also likely to make a fortune in America.
See, if I we're to become super rich off selling a drug in America I wouldn't really give two shits that it was also saving lives in other countries that couldn't have afforded to buy it anyway.
Scenario 1: I make a drug, it makes me jillions, poor countries don't make generic versions of it and millions of people suffer and/or die which gets me nothing.
Scenario 2: I make a drug, it makes me jillions, poor countries do make a Generic version and millions of people don't suffer and/or die which gets me nothing.
Neither scenario gets me anything extra. One of them reduces suffering in the world.
Right. And as I said above, there's a third option.
Scenario 3: They strike a licensing deal with Indian generics manufacturers to collect a small license fee for each HIV drug produced. They make jillions on the first world market plus a billion or two on the Indian market.
Why would someone pay for what they can get for free?
Well there is costs and plant involved in producing the generic. The pharma company could conceivably sell their drug at a price point that's the same as the generic and get the market that way. It's just that said price point will be very low and the companies don't like that because its really hard to get huge profits that way.
Well, developing a drug and getting it approved by FDA (or EU or Japan) is very expensive. The company who bears that responsibility should get some profit out of it, or else there's no incentive to develop new drugs. That's why the pharma patent system exists in the first place.
every person who doesn't like an acquired taste always seems to think everyone who likes it is faking it. it should be an official fallacy.
Before the inevitable objection to the above comes out, I'd be interested in seeing a cite for the "marketing costs >>> R&D costs" stat. Because the R&D costs are quite quite large.
The researchers’ estimate is based on the systematic collection of data directly from the industry and doctors during 2004, which shows the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion.
Blogpost graph, so possibly wrong, but claims to look at Marketing and Administration vs R&D in the major companies tax forms for 2010:
Annoyingly it doesn't separate it further into specific marketing costs. In nearly every company however the M/A/A spends more than double that of the R&D, and all but two have profit margins also in excess of their R&D spending.
At which point I think we can pretty easily consign to landfill these "a bloo bloo hoo those horrible greedy africans living on $1200 a year are driving us into the poorhouse by not paying US prices" claims from the pharma industry.
Drug companies already have discount programs in the US, especially for drugs that they can get people to take for their lifetime. Seems like they should be able to do something similar and at least capture some revenue in poorer countries.
It's worth noting that "marketing costs" include literally the company's entire sales department, not just television ads.
So the middle-class pharma rep making 40-60k a year is included in that 30-odd percent.
Yes marketing costs include paying for marketing people's salaries. But the point is that in a scenario where the company negotiates with UHC wholesalers, a lot of those jobs marketing directly to consumers and doctors don't have to exist, and the savings can be passed onto the reduced costs for the product the UHC organisation demands.
It's worth noting that "marketing costs" include literally the company's entire sales department, not just television ads.
So the middle-class pharma rep making 40-60k a year is included in that 30-odd percent.
It is also worth noting that "marketing costs" are for every drug they sell, including the ones they got approved 5 years ago, where as R&D are just for the ones they are researching now.
It's also worth pointing out that the R&D is very dependent on public universities and frankly I'd be perfectly fine with scrapping pharma as a private enterprise entirely for life saving medicine since their focus is on long term symptom treatment and not curing things
edit: this isn't one of those conspiracy theory posts, if they accidentally find a cure for autism you can bet your ass they'd sell it just because they'd want to be first to market with it, however it's optimal to come up with a pill that treats autism that someone needs to take forever so things like that get more research dollars
It's also worth pointing out that the R&D is very dependent on public universities and frankly I'd be perfectly fine with scrapping pharma as a private enterprise entirely for life saving medicine since their focus is on long term symptom treatment and not curing things
And it is worth pointing out a second time that this is a myth.
It's also worth pointing out that the R&D is very dependent on public universities and frankly I'd be perfectly fine with scrapping pharma as a private enterprise entirely for life saving medicine since their focus is on long term symptom treatment and not curing things
And it is worth pointing out a second time that this is a myth.
Which pharma company fills their R&D staff strictly with graduates from private universities?
because I was under the impression most of them were from public universities, and this isn't even going into how basically the entire US healthcare system is supported on the back of Medicare, who can't negotiate for drug prices
It's also worth pointing out that the R&D is very dependent on public universities and frankly I'd be perfectly fine with scrapping pharma as a private enterprise entirely for life saving medicine since their focus is on long term symptom treatment and not curing things
And it is worth pointing out a second time that this is a myth.
Which pharma company fills their R&D staff strictly with graduates from private universities?
because I was under the impression most of them were from public universities, and this isn't even going into how basically the entire US healthcare system is supported on the back of Medicare, who can't negotiate for drug prices
I think he meant the "their focus is on long term symptom treatment and not curing things" is a myth, not the support from publicly funded universities?
Blogpost graph, so possibly wrong, but claims to look at Marketing and Administration vs R&D in the major companies tax forms for 2010:
Annoyingly it doesn't separate it further into specific marketing costs. In nearly every company however the M/A/A spends more than double that of the R&D, and all but two have profit margins also in excess of their R&D spending.
Just some armchair data analysis here, but there's a reasonably strong correlation between the ratio of R&D to Marketing, and the net profit of those companies. Basically, the more they spend on R&D relative to marketing, the higher their profit.
Just throwing that out there.
edit: Correlation coefficient between those is about 0.52, which I figured out because I was kind of bored. So not super-strong, just moderate.
ElJeffe on
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
Drug companies already have discount programs in the US, especially for drugs that they can get people to take for their lifetime. Seems like they should be able to do something similar and at least capture some revenue in poorer countries.
Yeah about those....They are sort of a scam.
Basically at some point insurance companies figured out they need to encourage people to get the generics to save themselves $. So they tiered the copay system. Generics $20, non-Generics $50. Since it can be literally hundreds of dollars per prescription difference.
So the pharma companies went "have trouble paying for your meds? Here have this $40 off coupon" So now I the insurance customer can go to the pharmacy and get the generic costing me $20 and my Insurance carrier $50, or I can go get the Name Brand and cost me $10 and my Insurance $200.
Well, developing a drug and getting it approved by FDA (or EU or Japan) is very expensive. The company who bears that responsibility should get some profit out of it, or else there's no incentive to develop new drugs.
Yeah, nobody would ever develop new medicine without the profit motive. Louis Pasteur & Jonas Salk were all about the cash money dollars.
Well, developing a drug and getting it approved by FDA (or EU or Japan) is very expensive. The company who bears that responsibility should get some profit out of it, or else there's no incentive to develop new drugs.
Yeah, nobody would ever develop new medicine without the profit motive. Louis Pasteur & Jonas Salk were all about the cash money dollars.
Research for research's sake is so old school! All about the dolla dolla bills yo
Well, developing a drug and getting it approved by FDA (or EU or Japan) is very expensive. The company who bears that responsibility should get some profit out of it, or else there's no incentive to develop new drugs.
Yeah, nobody would ever develop new medicine without the profit motive. Louis Pasteur & Jonas Salk were all about the cash money dollars.
You think we would have anywhere near the range of modern medical wonders that we do by depending on the kindness of strangers?
Well, developing a drug and getting it approved by FDA (or EU or Japan) is very expensive. The company who bears that responsibility should get some profit out of it, or else there's no incentive to develop new drugs.
Yeah, nobody would ever develop new medicine without the profit motive. Louis Pasteur & Jonas Salk were all about the cash money dollars.
You think we would have anywhere near the range of modern medical wonders that we do by depending on the kindness of strangers?
I think we could probably manage it with a strongly state subsidized research sector
Although I think wanting to do away with private pharma is ludicrous because we develop way more stuff than a state model probably would (state funded research should still probably be at parity in terms of dollars, though), they just need to be far more tightly regulated than they are given what's at stake. The problem is trying to regulate them leads to people whining they won't develop medicine if we curtail their profits, but even with very tight regulation and even price controls on some drugs there are absolutely astounding amounts of money to be made
You think we would have anywhere near the range of modern medical wonders that we do by depending on the kindness of strangers?
Yes, I think we would have just as robust, if not a much more robust, range of 'medical wonders' if we recognized that many of the best minds are more interested in fundamental research (Pasteur) or defeating an adversary (Salk) than just making money. Do you even have a counterpoint or counterexample that compares to the genesis of germ theory or the development of the Polio vaccine that was accomplished via the much-vaunted Profit Motive (TM) ?
You think we would have anywhere near the range of modern medical wonders that we do by depending on the kindness of strangers?
Yes, I think we would have just as robust, if not a much more robust, range of 'medical wonders' if we recognized that many of the best minds are more interested in fundamental research (Pasteur) or defeating an adversary (Salk) than just making money. Do you even have a counterpoint or counterexample that compares to the genesis of germ theory or the development of the Polio vaccine that was accomplished via the much-vaunted Profit Motive (TM) ?
Why would someone pay for what they can get for free?
Short answer: international treaties.
India has agreed to uphold international IP law. In the long run, this benefits India. If they're perceived as a rogue nation with regards to IP, then other richer countries are less likely to do business with them.
Sorry. That's horseshit. How many countries buy from China despite their long and current history of ignoring IP laws and treaties?
That's right. All of them.
The only people benefited by IP treaties are the US. Even your allies like Australia get massively shafted by any "free trade" agreement you get us to sign. In every case it's a case of us agreeing to honour your IP and you telling us fuck off when we ask you to respect ours.
Posts
If you have your own plants you aren't dependant on the good will of the US government/US corps, to provide you with access to a drug you need.
You also don't have to worry that the price will go steadily up once they have you hooked because they know they have you by the short and curleys.
Although they cheat like fuck to try and get through this stage. The amount of hidden trial data is staggering.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
I wouldn't place the value of not being a thief above my own life or those of others, no.
That wasn't the question though. The question was "why would anyone in a poor country pay a discounted price for drugs when they can get the pirated generic for free." That is pretty different, no? I don't think anyone but Kant would suggest that someone ought to die before they would steal.
Short answer: international treaties.
India has agreed to uphold international IP law. In the long run, this benefits India. If they're perceived as a rogue nation with regards to IP, then other richer countries are less likely to do business with them.
And we're not talking about somebody making knock-offs in a garage somewhere. We're talking about a national, legitimate pharmaceutical industry. It's in India's best interest to keep that industry on the right side of the law.
the "no true scotch man" fallacy.
Yeah, they do.
the "no true scotch man" fallacy.
Well, developing a drug and getting it approved by FDA (or EU or Japan) is very expensive. The company who bears that responsibility should get some profit out of it, or else there's no incentive to develop new drugs. That's why the pharma patent system exists in the first place.
the "no true scotch man" fallacy.
From 2009, with nice graph: http://pipeline.corante.com/archives/2009/07/08/how_much_does_the_drug_industry_spend_on_marketing.php
(SG&A = sales, general, & administrative. COGS = cost of goods sold.)
Same authors as the 2008 paper, but back at it again in 2012. sadly, paywalled unless you have access to BMJ: http://www.bmj.com/content/345/bmj.e4348
the "no true scotch man" fallacy.
Annoyingly it doesn't separate it further into specific marketing costs. In nearly every company however the M/A/A spends more than double that of the R&D, and all but two have profit margins also in excess of their R&D spending.
So the middle-class pharma rep making 40-60k a year is included in that 30-odd percent.
any idea how much the average lab tech in the R&D department would be making for comparison?
Yes marketing costs include paying for marketing people's salaries. But the point is that in a scenario where the company negotiates with UHC wholesalers, a lot of those jobs marketing directly to consumers and doctors don't have to exist, and the savings can be passed onto the reduced costs for the product the UHC organisation demands.
It is also worth noting that "marketing costs" are for every drug they sell, including the ones they got approved 5 years ago, where as R&D are just for the ones they are researching now.
edit: this isn't one of those conspiracy theory posts, if they accidentally find a cure for autism you can bet your ass they'd sell it just because they'd want to be first to market with it, however it's optimal to come up with a pill that treats autism that someone needs to take forever so things like that get more research dollars
And it is worth pointing out a second time that this is a myth.
Which pharma company fills their R&D staff strictly with graduates from private universities?
because I was under the impression most of them were from public universities, and this isn't even going into how basically the entire US healthcare system is supported on the back of Medicare, who can't negotiate for drug prices
Speaking of generics
http://features.blogs.fortune.cnn.com/2013/05/15/ranbaxy-fraud-lipitor/
This article is fucking maddening.
I think he meant the "their focus is on long term symptom treatment and not curing things" is a myth, not the support from publicly funded universities?
So, you've never seen any evidence of it, but you're pretty sure it is totally happening.
for-profit corporations don't exist to help people
Just some armchair data analysis here, but there's a reasonably strong correlation between the ratio of R&D to Marketing, and the net profit of those companies. Basically, the more they spend on R&D relative to marketing, the higher their profit.
Just throwing that out there.
edit: Correlation coefficient between those is about 0.52, which I figured out because I was kind of bored. So not super-strong, just moderate.
Yeah about those....They are sort of a scam.
Basically at some point insurance companies figured out they need to encourage people to get the generics to save themselves $. So they tiered the copay system. Generics $20, non-Generics $50. Since it can be literally hundreds of dollars per prescription difference.
So the pharma companies went "have trouble paying for your meds? Here have this $40 off coupon" So now I the insurance customer can go to the pharmacy and get the generic costing me $20 and my Insurance carrier $50, or I can go get the Name Brand and cost me $10 and my Insurance $200.
Yeah, nobody would ever develop new medicine without the profit motive. Louis Pasteur & Jonas Salk were all about the cash money dollars.
Research for research's sake is so old school! All about the dolla dolla bills yo
You think we would have anywhere near the range of modern medical wonders that we do by depending on the kindness of strangers?
I think we could probably manage it with a strongly state subsidized research sector
Although I think wanting to do away with private pharma is ludicrous because we develop way more stuff than a state model probably would (state funded research should still probably be at parity in terms of dollars, though), they just need to be far more tightly regulated than they are given what's at stake. The problem is trying to regulate them leads to people whining they won't develop medicine if we curtail their profits, but even with very tight regulation and even price controls on some drugs there are absolutely astounding amounts of money to be made
Yes, I think we would have just as robust, if not a much more robust, range of 'medical wonders' if we recognized that many of the best minds are more interested in fundamental research (Pasteur) or defeating an adversary (Salk) than just making money. Do you even have a counterpoint or counterexample that compares to the genesis of germ theory or the development of the Polio vaccine that was accomplished via the much-vaunted Profit Motive (TM) ?
Statins.
That's right. All of them.
The only people benefited by IP treaties are the US. Even your allies like Australia get massively shafted by any "free trade" agreement you get us to sign. In every case it's a case of us agreeing to honour your IP and you telling us fuck off when we ask you to respect ours.