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Comment by onphonenow | Hacker News Reader

Correct.

The problem with existing research is that it simply isn't that open to new ideas, particularly once funding streams are in place (because shifts in funding mean job losses, institutional impacts etc).

As you are pointing out, VC's often see monpolies as something to disrupt. So you'll take the taxi industry for example. A govt sanctioned monpoly with horrible service and low insurance limits. They'll make a play with something like uber.

Hotels -> airbnb / VRBO

And the list goes on.

You point out how VC's don't focus on short term profits. While I would agree, some however would argue that VC's should focus MORE on short term profits. I personally think too many money losing businesses are subsidized for way too long with VC money. In biotech that may be a good or necessary thing, but personally think this longer view is a bit of a negative.

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My comment was extremely flippant. Let me provide an example to explain my point of view.

Cancer research can appear very stagnant. Pharma companies and researchers funnel money into existing solutions and combinations of existing solutions which increase life expectancy by a few months, and quality of life by a few degrees. Not much foundational research on cures, and why should there be when every new drug which leads to slightly better outcome will be purchased by patients who will do anything to live a bit longer?

Now, how in the hell would VC be expected to improve that landscape? The ideal solution is a cheap therapy which cures cancer. Maybe a cancer vaccine. Where's the money in a 50 (or even 1k) tailored vaccine to cure a cancer when a slightly new combination of cancer drugs can cost $50,000 a month for the rest of the life of a patient?

I'd argue VC don't think long term for the benefit of anyone except themselves. They'll invest in a moonshot if it disrupts an industry for their benefit (e.g puts all taxi drivers out of work) but not if it eliminates an industry (e.g cancer research). There's way more money in funding a slightly different cancer drug.

>Where's the money in a 50 (or even 1k) tailored vaccine to cure a cancer when a slightly new combination of cancer drugs can cost $50,000 a month for the rest of the life of a patient?

Profit isn't revenue, for one thing. Does that hypothetical $50k/month treatment cost $49,999/month to manufacture? That's the story for a lot of drugs.

Hypothetically, yes. Practically, that almost never happens. The reason the treatment costs $50k/month is because there is no alternative, and that's how much insurance will pay for it.

Whether or not the unit economics are $49,999/month or $49/month has no bearing on this. Treatments aren't commodities, they aren't apples at the grocer, where if the prices are too high, you just go to a competitor across the street.

Ok, so here's a thought: who makes money if people don't die of cancer? Let's assume they're all retirees. Agriculture, housing, the local taxation authority, and possibly their immediate kin (assuming, on average, people love their parents and want to spend time with them).

Maybe Monsanto, Toll Brothers, and local governments should be funding cancer research?

I work in pharma. Pricing in pharma for drugs like that is complicated. Usually these drugs do actually require rather expensive manufacturing processes, that have to run in extremely large facilities with extensive QA, but in fairly small batches.

More importantly, every major pharma has a compassionate use program that helps people who can't afford the drugs get them, through offsets and credits. I understand the desire to make pharma look like pure-evil profit mongers, but the reality is that this is not an easy business to be in.

Many drugs invented by US companies are available cheaper in countries that don't respect US IP law (with no differences in quality/QA process/etc). The reason for this is obvious: in the US the government gives the inventor a temporary monopoly.

It's pretty widely accepted the presence of this government-enforced monopoly significantly increases the price of many drugs.

The standard argument in favor of this is that it incentivizes R&D and we wouldn't have these drugs otherwise. I think it's debatable either way, but claiming these companies don't take advantage of this arrangement to increase prices is not true.

The price of drugs in US also reflects expensive R&D and sometimes even more expensive approval process. Plus the companies has to account for the possibility of third parties manufacturing without the license which in turn requires higher unit price.

This is nonsense. Most Western nations fully respect IPR and patents.

There is nothing wrong with patents "promoting the Arts and Sciences".

The problem in the US is that your largest buyers (Medicare, Medicaid, VA, Tricare) aren't allowed to properly use their buying power to push pharma companies on prices.

At the same time, there's very little restriction on pharma companies advertising directly to patients (banned in most nations) which puts pressure on GPs and specialists to over/off-label prescribe unnecessary pharma.

Prices in most countries are cheaper than the US because of that buying power that the government has, along with independent assessment of the value of new drugs and treatments in terms of QALY and cost/benefit to the people.

I am not aware of any large-scale alternative manufacturing facilities that explicitly avoid IP laws and market their product legally. Can you give an example?

I work for a US biotech that is wholly owned by a EU pharma, not the US.

It's the scandals on stuff like Albendazole that make y'all evil, not the cancer drugs. I mean the FDA forces us to live like we are in some Soviet style dystopia. Some ancient commodity antiparasite drugs that are cheap as salt -- so abundant that people literally use them as a drench on livestock -- can only be bought from one or two approved marketers (manufacturers), through only approved distribution channels, only at approved retailers, after unnecessary high-skilled laborers press some buttons, and only after you have the right script from the right gatekeepers.

As you pointed out in your original comment, VC's will def fund moonshots and big growth ideas with 1 in 10 or 1 in 100 chances for payoff. These don't make short term profits, but they have the potential to do something dominating.

SpaceX against a huge established industrial base. That's going to be VC type funding, not traditional funding streams. We had govt initially doing everything they could to shut spacex out, doing block buys, trying to crush them on paperwork etc.

My complaint is simple. We know the current billions spent under current approaches have not cured a wide variety of illnesses. So what harm is there in spending some, relatively small amounts of money, on other ideas.

What's interesting is the reaction from folks like you, NIH, academics and others. It's vehement rejection. But why not instead demonstrate your approach results in a cure. The rejection is because you know you are sitting on nothing.

We see this with spaceX. Established astronomers are crying bloody murder. But this is in part because they are afraid. Their huge thirty meter telescope gravy train (decades of funding into their labs) is at risk of being totally trumped by cheaper access to space, where telescopes work great.

Established businesses tend to be risk averse. So in short, a role to play here for new ideas.

Note: Be careful about snarky comments, those are best avoided on HN, and can be a bit embarrassing in hindsight if you try to be snarky but inadvertently are correct and then have to try and walk back a point that you didn't mean to make.

What would “more foundational research on cures” look like? I do cancer research and, frankly, the work feels pretty foundational. I’m curious what you would change.

Also please note that cancer vaccines have been tried but have failed for a few reasons. First, cancer cells are quite similar to normal cells, so cross reactivity is a problem. So, a typical approach is to to target “neoantigens” which are mutated cell surface proteins that are only on cancer cells. Not all cancers have neoantigens and they can mutate to stop expressing the neoantigen. Also tumors can express proteins that suppress or evade the immune system. PD-L1 blockers target one of the ways tumors do this.

All that to say, it’s not like people aren’t trying this stuff. It’s just really, really hard.

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