Big Pharma Charging $1000/pill for Hep-C Breakthrough Drug

shinji

macrumors 65816
Original poster
Mar 18, 2007
1,306
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http://www.cnn.com/2014/07/07/opinion/ignagni-hepatitis-c-drug/index.html?hpt=hp_t3

At $1,000 per pill, Sovaldi costs $84,000 for a single course of treatment, and well over $100,000 when combined with other medications, as is generally the case. If every person with hepatitis C were treated with Sovaldi alone at this price, the cost would be more than $268 billion. For some perspective, consider that in 2012, the United States spent $263 billion for all prescription drugs.

This pricing, which Gilead attempts to justify as the cost of medical advancement, will have a tsunami effect across our entire health care system. Because the cost of health insurance is fundamentally a reflection of the price of health care services, the excessive price of Sovaldi unavoidably puts upward pressure on premiums for everyone with private coverage. It will also strain state Medicaid and Department of Veterans Affairs programs.
Sovaldi combination therapy effectively cures Hepatitis-C in 90% of patients. http://en.wikipedia.org/wiki/Sovaldi
 

zin

macrumors 6502
May 5, 2010
488
6,472
United Kingdom
Whilst I am all for pitchforks and torches against big pharmaceutical corporations, it is important to note that these corporations spend billions of $$$ on R&D on new drugs, the vast majority of which will never make it to market.

Researching drugs is expensive, very expensive, costing $3 - $12 billion and up to a decade for each approved drug from a major pharmaceutical provider. That doesn't include the R&D spent on failed drugs that never made it to market.

These companies need to make a profit in order to continue researching more and more drugs. That being said, I would much rather all of the profits go towards more research and not a big chunk going to the shareholders of the big public pharmas.
 

VulchR

macrumors 68020
Jun 8, 2009
2,329
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Scotland
Honestly the company is probably not charging for the costs of this drug per se, but enough to cover the costs of this drug and all the other dead-end prospects they pursued and will pursue. Yes, drug companies make a profit, but it is worth considering the alternative: they they all go bust or simply back out of research and only market known drugs. Recent years have devastated the research base in drug companies (IMO because they gamble don a lot of molecular BS that does not scale up to whole organisms). In almost all the big pharma acquisitions you might have heard of over the past few years, most of them entail winding down research units.
 

Southern Dad

macrumors 68000
May 23, 2010
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The cost of developing, testing and marketing drugs are expensive. When they come up with a drug for cancer, that cost will be huge. Billions are spent in research to develop these drugs.

I wonder if it is covered under Obamacare... ;)
 

rdowns

macrumors Penryn
Jul 11, 2003
27,345
12,409
When the linked Wikipedia article says the same 12 week treatment will cost about $59,000 in England, my Spidey-sense starts tingling. Why does it cost $25,000 more here? Drug manufacturers certainly have the right to profit from their work but when you see prices in the US so much higher than the rest of the developed world, something is very wrong.
 

SLC Flyfishing

Suspended
Nov 19, 2007
1,486
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Portland, OR
As was said, R+D is extremely expensive, and those costs need to be recovered before the drug is allowed to go generic.

Drugs are expensive in large part due to the FDA, but the alternative (no FDA) is a scary prospect. Look up what happened with the drug thalidomide to see an excellent exams of why all that expensive R+D is a good thing.
 

ZombiePete

macrumors 68020
Aug 6, 2008
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San Antonio, TX
These companies need to make a profit in order to continue researching more and more drugs. That being said, I would much rather all of the profits go towards more research and not a big chunk going to the shareholders of the big public pharmas.
Then what would be the incentive for these companies to get into this market in the first place? Altruism isn't as big a motivator as cold hard cash, unfortunately.
 

SLC Flyfishing

Suspended
Nov 19, 2007
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Portland, OR
Then what would be the incentive for these companies to get into this market in the first place? Altruism isn't as big a motivator as cold hard cash, unfortunately.
There is a profit to be made (potentially).

But a lot of drugs lose money, or don't make much money at all.

Something like Celebrex, can make a lot of money very quickly. But something for say, a type of metabolic disorder that only 100,000 people worldwide suffer from, might be a complete dud.
 

lannister80

macrumors 6502
Apr 7, 2009
476
17
Chicagoland
it is important to note that these corporations spend billions of $$$ on R&D on new drugs, the vast majority of which will never make it to market.

Researching drugs is expensive, very expensive, costing $3 - $12 billion and up to a decade for each approved drug from a major pharmaceutical provider. That doesn't include the R&D spent on failed drugs that never made it to market.
Sounds like a prime candidate for a nationalized industry.
 

Sun Baked

macrumors G5
May 19, 2002
14,874
57
Likely the drug isn't priced on anything resembling the cost of the drug and/or R&D.

The pricing is likely based on the cost of a liver transplant and viewed as an alternative to that, and eliminates the lifetime of anti rejection drugs.

---

Likely the stumbled on this model when the CEO locked his keys in his car and they charged him based on the cost of replacing the window in his car, instead of a flat rate fee based on the actual cost of the service.
 

Southern Dad

macrumors 68000
May 23, 2010
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I'm willing to bet that the R&D, FDA approval, testing and trails, actually make this drug even more expensive than what they are charging. They are hoping to recover those costs during the time before generics are allowed to be manufactured.

Nationalizing the pharmaceutical industry isn't the answer. Right now there is competition to come up with solutions and better methods. You nationalize it, that is gone.
 

Huntn

macrumors demi-god
May 5, 2008
17,067
16,584
The Misty Mountains
I'm willing to bet that the R&D, FDA approval, testing and trails, actually make this drug even more expensive than what they are charging. They are hoping to recover those costs during the time before generics are allowed to be manufactured.

Nationalizing the pharmaceutical industry isn't the answer. Right now there is competition to come up with solutions and better methods. You nationalize it, that is gone.
It can be questioned if medical and medicines should be for profit.
 

lannister80

macrumors 6502
Apr 7, 2009
476
17
Chicagoland
so the U.S GOVT should take over? ???
No, but research should be made with public funds.

Pharm research is rather similar to "basic scientific research", where there is a TON of research that goes nowhere and costs tons of $, but eventually there's a breakthrough of some kind that makes it all worth it. And a lot of times those breakthroughs don't even have an obvious application (at the moment), but pay huge dividends down the road.

Basically the opposite of the "all we worry about is next quarters stock performance" mindset.

Just look at all the amazing stuff that's come out of NSF and NIH-funded research.

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You eliminate all the profit and see how many still want to go into the field.
You still get paid a good salary, you realize....right?
 

jkcerda

macrumors 6502a
Jun 10, 2013
682
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Criminal Mexi Midget
1.No, but research should be made with public funds.

Pharm research is rather similar to "basic scientific research", where there is a TON of research that goes nowhere and costs tons of $, but eventually there's a breakthrough of some kind that makes it all worth it. And a lot of times those breakthroughs don't even have an obvious application (at the moment), but pay huge dividends down the road.

Basically the opposite of the "all we worry about is next quarters stock performance" mindset.

Just look at all the amazing stuff that's come out of NSF and NIH-funded research.

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2You still get paid a good salary, you realize....right?
1.sorry but no. things are working out as is. what ever CO invest & does the research makes the profit or eats the losses.

2 sounds like a union, no motivation to succeed :D
 

lannister80

macrumors 6502
Apr 7, 2009
476
17
Chicagoland
sorry but no. things are working out as is. what ever CO invest & does the research makes the profit or eats the losses.
That's my point; they NEVER eat the losses. They pass them on to the poor shmuck that has to pay $1000 every day for a pill.

I'd rather those losses be spread out among every American.
 

lannister80

macrumors 6502
Apr 7, 2009
476
17
Chicagoland
ok, why? why should YOU be FORCED to pay for it? HOW do you know pharma CO's have no losses?
Why? Because I want to live in a decent, caring society that doesn't bankrupt people and literally put them out on the street (which causes all kinds of negative economic ripple effects) because they had the misfortune to catch a disease.

That's why.
 

jkcerda

macrumors 6502a
Jun 10, 2013
682
39,011
Criminal Mexi Midget
We're all forced to pay for things we don't like to pay for.
Why? Because I want to live in a decent, caring society that doesn't bankrupt people and literally put them out on the street (which causes all kinds of negative economic ripple effects) because they had the misfortune to catch a disease.

That's why.
is the ACA not going to take care of these people?

your hearts are in the right place, but I think its naive to believe that it is economically feasible for the GOVT to take over.

right now there is competition & COs are working to get things out first.
 

samiwas

macrumors 68000
Aug 26, 2006
1,575
3,518
Atlanta, GA
When the linked Wikipedia article says the same 12 week treatment will cost about $59,000 in England, my Spidey-sense starts tingling. Why does it cost $25,000 more here? Drug manufacturers certainly have the right to profit from their work but when you see prices in the US so much higher than the rest of the developed world, something is very wrong.
I had this discussion with a very conservative friend of mine. Her position was basically that other countries steal all of the US research and medication. She said that we NEED to pay really high costs to "keep up the good work", and that every other country is just piggybacking off of us.

Then what would be the incentive for these companies to get into this market in the first place? Altruism isn't as big a motivator as cold hard cash, unfortunately.
What does this have to do with siphoning money off to shareholders instead of investing it in more research? It's just as bad as publicly-traded insurance companies, which are the pure evil of the obviously-American system.

ok, why? why should YOU be FORCED to pay for it? HOW do you know pharma CO's have no losses?
Ooooohhh...someone's got him worked up again! He's using caps!!! And using words like "force"!

Why? Because I want to live in a decent, caring society that doesn't bankrupt people and literally put them out on the street (which causes all kinds of negative economic ripple effects) because they had the misfortune to catch a disease.

That's why.
What an entirely unAmerican view. In America, we aren't here to help people or to provide a safe, happy life. We are here to squeeze as much money out of them as we can and pass it off to shareholders. That's the mark of a successful country.
 

jkcerda

macrumors 6502a
Jun 10, 2013
682
39,011
Criminal Mexi Midget
I had this discussion with a very conservative friend of mine. Her position was basically that other countries steal all of the US research and medication. She said that we NEED to pay really high costs to "keep up the good work", and that every other country is just piggybacking off of us.



What does this have to do with siphoning money off to shareholders instead of investing it in more research? It's just as bad as publicly-traded insurance companies, which are the pure evil of the obviously-American system.



Ooooohhh...someone's got him worked up again! He's using caps!!! And using words like "force"!
simply my way of "enhancing" things, not worked up at all Sammi.
wait, you used caps lock up above, are you "worked up"? :D
 

samiwas

macrumors 68000
Aug 26, 2006
1,575
3,518
Atlanta, GA
is the ACA not going to take care of these people?
How does the ACA "take care of people"? It simply means you have to have insurance. I don't know about you, but having insurance doesn't mean I don't still spend an assload on healthcare.

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simply my way of "enhancing" things, not worked up at all Sammi.
wait, you used caps lock up above, are you "worked up"? :D
Yes, yes I am. :eek: (good catch by the way)