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Comment by jostmey | Hacker News Reader

I see two issues being conflated here. The first issue is the outrageous prices for generic drugs. The second issue is the true cost of research.

Drug prices have been rising out of control even for generic drugs (think epipens). It seems that competition is not driving down prices of generics. Perhaps it is time for government to break up "big parhma". Perhaps the FDA sets quality requirements so high that competitors cannot meet it, allowing that single manufacture to control prices.

The other issue is the true cost of research. The production cost is a fraction of the true cost. Research is expensive. There would be no Remdesivir if we only paid production costs. As a biomedical researcher, I am always on the fence about jumping jobs for something that will pay better. Many investors and techies vastly underestimate the cost of scientific research BY ORDERS OF MAGNITUDE.

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Except:

1) Taxpayers paid $70.5 million 2) Remdesivir was discovered through a collaboration between Gilead and US Army. 3) Remdesivir received funding from DOD and CDC (for Ebola treatment)

Note that the government giving companies money doesn't mean the government magically owns any rights to the medication.

Perhaps that's something the taxpayers should demand?

"The taxpayers"? I'm a tax payer, and I want no such thing. Speak only for yourself please.

I'm another taxpayer. I support the the commenter above you.

Why not ?

Well, some countries before tried to have a collective ownership of productive assets and it hasn't really worked out: it misaligns incentives all the way down.

This is an extremely vague retort.

Are you proposing the government should have no attached requirements to qualify for subsidies?

Are you flatly against all regulation when a particular company is given tax money?

For what it's worth, the government can regulate any industry regardless of whether it is subsidized.

But it does reduce the cost of research and development coming out of the company's pocket. That said, in a capitalist society, the production price helps to set where companies will stop making it.

The price is actually set to where profit is highest, meaning it's a function of: how many people will buy at various prices and how much does it cost to produce at various quantities.

One of the strong arguments for single payer healthcare, IMHO.

Single payer healthcare is a separate issue from pharmaceutical companies. In a single payer system, there will just be a single buyer- and a single buyer, AKA a monopsony, is illegal under monopoly laws in the US.

I tend to agree that gov needs to step in, however the libtertarian in me also wants to know: why doesn't someone start a business selling this drug for, say, $200 instead of $540? If the answer to that is that the regulatory burden is basically insurmountable thanks to decades of regulatory capture, then yeah, government needs to act. Presumably such a company doesn't need to do any research, or get new approvals! They just need to make the thing and distribute it.

Here is an idea: anyone can make a generic drug if an independent FDA lab cannot tell the difference between unlabeled samples from the new manufacturer and unlabeled identically packaged samples from a currently approved manufacturer.

You would need to do this testing continuously at random, so the FDA could just charge a fee for this. It would be way cheaper than full regulatory compliance.

I like this idea, that seems like an elegant solution I haven't heard before.

“Anyone” ends up with cases where packaging operations are run right next to shipping, meaning all kinds of contamination can happen.

Avoiding this situation means costly facilities with costly, inefficient but necessary regulation.

Sounds good to me, but I don't think it would fly. It's too reactive. The FDA needs to be able to take proactive steps to avoid mistakes. So, I take your idea and raise you:

Put cameras everywhere in your lab/factory, and give the FDA inspectors 24x7 access to every feed. This is in addition to allowing onsite random inspections, of course.

I mean, as a consumer, this would make me feel warm and fuzzy about buying drugs from that company. I mean, you could even allow the public access to those feeds, as a marketing tool!

You might even pay someone like the Vertitasium guy to do a walk through of how everything works, and then give the public access to your feeds.

> anyone can make a generic drug if an independent FDA lab cannot tell the difference

I see a few problems with this plan

1) Makers would lose interest in research of simple drugs easy to clone or, more probably,...

They would fight back introducing additives in the mix, useless except for the sake of making the recipe much more difficult to copy, or to aim for a product recognizable for the public (i.e viagra must be "blue pills" not green pills, etc, but the blue colorant is in fact useless except for marketing purposes).

2) Because an increase in additives the number of crossed interactions with other medicines would raise exponentially and would be much more complicated to predict in multiple treatments

3) Potential collateral effects and allergies could increase also.

And it creates a system prone to corruption, of course (The makers can be blackmailed by the independent lab).

Research also isn’t priced at just its face value - there’s the opportunity cost of very smart and hard working people making it happen at overwhelming risk of failing.

I think the main bloat is likely regulatory capture - we could start with the question “why can’t I make this drug in my garage” and work through each barrier. Equipment is part of it but the time and expense of navigating extensive regulations, building relationships with bureaucratic agencies, needing legal support, and so on prevents competition. Even if it isn’t as hard as it may seem to deal with all that, the reputation of it being an insurmountable barrier is enough to discourage would-be innovators.

Thing is I don’t want life saving medicine from some guy who just started producing it in his garage last month. Fortunately I can afford the “regulated” dose myself if I had to. Most people can’t though and this is a role of govt, making sure everybody has access to a lifesaving drug _that the govt funded_. The solution isn’t “let poor people use bootleg garage drugs”, it’s the ensure lifesaving medication is priced affordably. This is one of those situations where capitalism by itself isn’t well configured to deal with. This and, say, emergency room visits...

Since we can't figure out how to treat diseases in poor patients as they start we all pay a whole Hell of a lot more when they land in the er.

I think that in the case of epipen, the patent is on the drug delivery mechanism - the pen, rather than the epi. There are other competitive products out there but they cannot deliver the drug as efficiently or accurately as the epipen.

Add to that the legal and regulatory costs. Getting a drug approved is very expensive and time consuming.

The legal costs to defend the drug and its use in court after release can also be staggering. Most developed countries have the English Rule, which requires plaintiffs to pay the legal costs of defendants if they bring a suit and lose. The US does not.

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