gilead the makers of Harvoni literally made a cure for a previously uncureable disease, You literally have no respect on a tech site of all places, for all the RnD that went into doing that.
No, they acquired Pharmasset, the company that made the cure, for $11.2B. That was a pretty low-risk move. It was already an obvious money maker.
"for all the RnD that went into doing that"
In the 18 months following Sovaldi’s approval, Medicare alone spent $8.2 billion on the drugs...that doesn't include private insurance payments. I imagine the acquisition was paid off quite quickly. Pricing after that was just how much profit they wanted to make.
See these for more detail:
https://www.finance.senate.gov/imo/media/doc/Wyden-Grassley%...
https://www.finance.senate.gov/ranking-members-news/wyden-gr...
While that's by definition true of any pricing decision, there's a lot more to the story: https://news.ycombinator.com/item?id=21883254#21884030
Is there something that’s supposed to be inherently evil in acquiring a company anyway?
Because pharmasset, the smaller company, had forecasted a price of 36000$ for Solvadi. With Gilead buying it out, it was able to reach a third of that price point and that’s a win to me.
Pharmasset discovered Sofosbuvir (Sovaldi), Gilead acquired them in 2011.
Gilead developed Ledipasvir some time after that.
I was contesting the phrase "literally made a cure for a previously uncureable disease". Which is why I called out the acquisition. They literally bought it, not made it.
See the fable the little red hen. It's work ethics.
Before I was a software developer I was in equity research, and one of the companies that we covered was Pharmasset. The whole point of these research companies is to find a winner and be acquired.
I get that it's low risk for the acquirer, but without that big payout the research and trials won't get done by the small companies, who won't be able to raise funding, etc.
I know that's revenue and not profit, but that doesn't even include private insurance, self pay, or sales outside the US.
Instead, the US both has the largest R&D subsides and the largest drug prices.
As usual the answer probably lies somewhere in the middle.
Is Google/Apple/MS/FB price gouging? Their net incomes are massive.
I'd be hard pressed to classify a situation were a company introduces a new product 80% cheaper than the alternative, and still be guilty of price gouging.
I'm not sure the margins support that allegation. Sovaldi is manufactured by Gilead (which also makes a Harvoni generic). They don't break out drug-specific margin, but http://truecostofhealthcare.org/wp-content/uploads/2014/12/G... and https://www.investors.com/news/technology/can-gilead-withsta... have some food for thought.
A couple things stand out:
1. Their profit margin varies year to year, but in the peak period from 2012-2019 it was 35-55%, averaging ~40-45%. While that's industry-leading for pharma, it's nowhere near high enough to say that their products could be, say, 75% (or even 50%) cheaper. A 20% reduction (very roughly cutting margins in half) wouldn't make it meaningfully more affordable and I don't think most people would describe that as gouging.
2. Apparently it actually cures the disease for many people, so this is a once-and-done treatment. Compared to nearly all other healthcare interventions, curing a life-threating chronic degenerative condition at this price is cheap. (Cost per death prevented of other interventions: https://journalofscientificinnovationinmedicine.org/articles..., https://twitter.com/troyd/status/1195811217056485377)
3. After they cured so many people, there was a much smaller market (success!). Revenue and margin both dropped a lot: https://www.macrotrends.net/stocks/charts/GILD/gilead-scienc...
4. "Gilead Sciences was also unique in that it was the only pharmaceutical company I examined that spent less money on marketing than they spent on research. Gilead’s marketing budget was only 15% of their total revenue."
This seems like a pretty clear example of why looking at revenue and margin like this is not a good way to manage this. Our goal here is clearly to eliminate the market for this product, and everyone ought to chip in to make that happen, not just the people who currently are at risk. The whole funding model is fundamentally broken.
That's a totally reasonable point (and perhaps worth starting a separate top-level reply about), but it's not at all what the GP comment was arguing.
(I'm not sure whether the evidence justifies that claim either, but the claim is a lot stronger than gouging)
That's bullshit.
It is perfectly acceptable to know something is wrong without wishing to extemporaneously perform for you.
I hear many people "know something" about health insurance premiums rising too much, blaming ACA for what they "know" are unnecessary increases in premiums to line the pockets of the fat cat insurance company executives.
Except they don't "know" that the ACA provided a mechanism for far more people to get healthcare for far more health issues. And since you don't get more of something for free, obviously the costs have to be paid somehow. And if they looked at the numbers, they would see that healthcare cost increases have slowed dramatically since ACA was effected.