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Comment by lobotryas | Hacker News Reader

The key to taking a drug through trial is having enough cash for the trial and for your company to survive the time it takes to complete the trial successfully. Remember that said success is not guaranteed and you might have to write off years of work and start from scratch.

This is why drugs are so expensive in the West.

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Drugs in the west are also expensive because successful drug companies pay their employees a lot of money (a cost that affects profit) but are still extremely profitable (by carefully figuring out what each regional market can afford to pay to maximize their revenues). These companies know that westerners will spend significant fractions of their income for medicine.

(I also agree that having large amounts of cash and runway is necessary for a successful trial).

And to add, a clinical trial can be thought of as just one step to establish evidence for efficacy and safety.

Because if you really want to prove that it works and is safe, you have to give it to a lot of people, all of whom have different health conditions. To establish that, you would ideally give it to everyone with the disease of interest. But you can't test a drug on the entire world, so.... you only find so much in a clinical trial.

It's known that about 90% of new drug candidates fail somewhere along the clinical trial process. While a successful drug by itself might cost a few 100 millions of dollars, the failures means that the amortized cost is about $1 billion.

This is why compounds change hands so many times before they are successfully commercialized. Running a phase three study costs much more than a phase two. Pharmaceutical companies partner to pool the risk and share the cost.

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