Indian drug company slashes crucial medicine prices by 76%

The very high cost comes from development of a drug candidate, not the initial discovery of a candidate. If you skip the part where they demonstrate that the chemical is effective, efficient, and safe for its intended purpose in large human populations then you are correct. At that point it is just a moderately low-cost chemical manufacturing problem.

However, I only see them copying drugs where someone else spent billions of dollars demonstrating safety and effectiveness. There are myriad drug candidates that no one has proven safe and effective that they are not copying because that would require real investment on their part.

However lifesaving the drugs maybe, this would cause the multinationals developing the drugs to increase costs so they dont lose their R&D investment while the Indian companies make a quick buck on someone else's research.

The goverment should have subsidised the drugs which would have been a balance between capitalism and compassion.

society is notoriously bad as innovating when there is no profit motive. the pace of the 'march of science' due to curiosity and dedication to the betterment of mankind is, unfortunately, glacial. thats not to say there isn't somewhere in between, but when we have this discussion, we have to appreciate the role that money plays in innovation--something people at HN might be able to appreciate.

Basically, you can't count on politicians to properly and effectively fund hundreds of different billion-dollar long-term programs, many of which will be expected to produce nothing. Because the life cycle of development spans several elections, every program is at the whims and mercy of whoever happens to be in charge of the program at any point in time. One of the reasons military R&D is expensive is because of the constant stopping and starting, changing priorities, and legislatures from one term to the next trying to redirect money into their districts. For government R&D, funding tends to follow fashion, not what would be the best allocation over the long term.

I've been there and done that. Government funding research can work out reasonably well. Government funding development is a disaster that takes twice as long and costs (at least) three times as much because it is subject to the whims of Congress. The constant stopping and starting of R&D projects, sometimes with unfunded year-long gaps in the middle, make it difficult to keep a team together (the beltway government R&D companies exist in part to mitigate this employment risk for people that work on government R&D).

First, suppose we have a drug candidate. Great. This would take many, many years of study of neurons/brain tissue cultures using in vitro techniques (petri dish, etc. out of the native environment). These are great and relatively cheap, but it's difficult to isolate good drug candidates. Eventually, after high throughput screening or whatever other research method is used, a candidate is found. This would (realistically) take many years and require many millions in funding.

Then, once you have this in vitro drug candidate, you have to start testing it in animal systems, starting with simple mice. Animal studies are expensive, because the organisms are essentially disposable. These sorts of studies for neural problems are even more expensive because the animals need to be observed carefully using various research techniques for very extended periods of time, on the order of months to years (since this is the timescale on which most neural disease work). This is obviously both expensive timewise and monetarily.

So our theoretical candidate works in simple animal and in vitro systems. Great! There a lot of drugs that get this far and then utterly fail on human subjects. Assuming that it passes FDA standards for human testing (which, at this point, seems fairly reasonable), human testing will start. The main purpose of Phase I trials is to determine toxicity of the drug in human systems, and to see if it has any significant effect. Let's say ~40 patients are being tested. These 40 (lucky? unlucky?) patients will take the drug, and then be investigated using a variety of techniques to judge the efficiency. One of the standard techniques in neural imaging is the MRI scan. The typical cost to the company carrying out the test is around $3000+ USD per scan carried out. Each patient will need to be scanned many times (let's say 10) over a period of time to determine whether or not the drug had any affect. Compared to other techniques where simpler blood tests or post-mortem tissue analyses can tell the story, this is very expensive. And this is just phase I. Phases II and III expand the number of patients into the several thousands. The cost of drug development for one potential compound for so long (the timeframe can be order of 15+ years) for a very, very small chance (due to the complexity of the field and the few successes so far) of a huge earning is simply unjustified for many companies. Earning back hundreds of millions of dollars of losses back must be done by passing the cost along to the customer.

Note that the patent lifetime on drugs is very short. Nominally, the compound is protected for 20 years. But this is applied for before any clinical trials start, so the effective lifetime is significantly shorter. For a neurodegenerative disease, the effective lifetime of the patent could very well be much sorter than the more "usual" effective lifetime of 7-12 years [1].

Also, as an extra. Organic synthesis is hard. I mean, really, really hard. You have to design a good synthetic pathway, then make sure it works, then scale it up from working in a fume hood, to working in large chemical reactors that can produce it on an industrial scale. I'd like to point people at the synthesis of Tamiflu, the antiviral used against various influenza strains [2]. These are long pathways and accordingly tend to have lower total yields. Drug synthesis is really hard, regardless of the cost of R&D of the drug.

TL;DR: Finding drug candidates is really difficult. FDA clinical trials is really difficult. Making the drugs themselves is really difficult.

[1]: http://en.wikipedia.org/wiki/Generic_drug [2]: http://en.wikipedia.org/wiki/Oseltamivir_total_synthesis

I find is odd that capitalist bias countries like to use tax money for huge military commitments, yet go insane at the idea of providing health care for its people.

Capitalism does not make any moral sense what so ever. Its is not supposed to. It is survival of the fittest. It is vicious and heartless. And it is supposed to be. So, socialist type stuff is required to serve other needs.

Of course socialist stuff need capitalist profits to support it, while capitalism needs socialist stuff, like law, to support it.

Broadly, that is how I see it anyway.