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Comment by huhtenberg | Hacker News Reader

Witty sarcasm much?

Without this "privilege" a company has no incentive to develop anything new, leave alone anything that requires massive R&D investments. What India did is it effectively said that they don't want to participate in the development of new drugs, so their stance on this matter is frankly quite ludicrous.

Try this for a comparison - Germany declares that all software sold in their country should be priced at $1 or less. Would you still be talking about software companies being crybabies for objecting this? Doubt it.

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The scientists who develop such drugs generally do not do it to make billions of dollars. Their salaries usually are in the 6 figures and I see no evidence that fewer drugs would be developed if society paid for development through universities and nonprofit research centers.

There are other incentives in life other than money.

>There are other incentives in life other than money.

But there aren't other ways to fund drug research.

> But there aren't other ways to fund drug research.

Yes there are; public money and normal sized salaries for scientists doing the public research for the public good. Granting monopolies to private corporations is hardly the only way to achieve things. Scientist's aren't in science for the money, science generally pays shit anyway; they're in it for other reasons.

You can't feed a family on good-will and happy thoughts.

Edit: the parent was originally a snarky one-liner "Yes there are"

You don't need a private monopoly on medicine to feed a family, just a good wage from a publicly funded research institute.

Yes, because publicly funded research institutes have enough money to cover multiple drugs in development (a majority of which will fail), clinical trials, and manufacturing, etc...

There are legitimate problems with the current system, such as Pharma typically doesn't produce drugs for rare diseases - there just isn't enough money in the market to justify the lost opportunity costs. Publicly funded research is supposed to help those instances where the economic incentives aren't there.

This can lead to a perverse switch in motive. Instead of trying to help patients who legitimately need help to trying to get as many people to buy a drug as possible, regardless of need. But in case you haven't been paying attention - public funding for science isn't exactly growing. So if we want to see some of these next generation cancer drugs with small markets, you need to have the ability to charge large amounts.

But the public institutes just aren't equipped or financed well enough to handle it on their own.

> Yes, because publicly funded research institutes have enough money to cover multiple drugs in development (a majority of which will fail), clinical trials, and manufacturing, etc...

I didn't say they did; I'm saying they should. Medicine as a business is immoral IMHO, and a good half of this county agrees with me. We want public healthcare, not private healthcare because money is a perverse incentive when it comes to health.

> But the public institutes just aren't equipped or financed well enough to handle it on their own.

Agreed, but they should be, and if we want to see a better healthcare system that does more for the general public rather than just the rich, they'll need to be. The free market is not the correct solution for healthcare/medicine. Medicine is a communal good and should be funded by and available to the whole community.

I think you forgot to finish that sentence with "currently in any wider use".

The current system has become a few spots, take a look at the debate about cherry-picking clinical trials to get new drugs approved, requirements for pre-registration and the non-functional oversight of the same ...

Perhaps trying new ways to fund drug research can be a part of revitalizing the system?

How about this (It's on YC today!): http://www.fastcompany.com/3025372/if-the-immunity-project-c...

Academia has a spotty track record when it comes to drug development. They don't have the money to put into lots of potential drugs, so they aren't able to test the breadth of targets that a Bayer would be able to. For all of the problems that Pharma has, they have been able to bring a lot of new drugs to market pretty efficiently.

Drug development is not mutually exclusive. If nonprofits and universities could develop drugs so much cheaper why are they not already doing so?

Exactly, drug research is science and should be treated as such. Other scientific discoveries are not patentable and we don't have problems with lack of scientists willing to do their jobs for university salaries.

For me the notion that someone can claim a right to a chemical compound that has positive effect on our bodies is absurd. It's like Einstein patenting e=mc^2 and asking nuclear power plants to pay him.

The costs involved in bringing a new drug to market are more than just the salaries of researchers though.

That would be worth exploring, but the cost of developing a drug is astronomically high: "The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billion." http://www.forbes.com/sites/matthewherper/2012/02/10/the-tru.... The most expensive part is Phase III Clinical Trials, and it's growing: "We examined drug development in four major public health areas and discovered that for any given drug on the market, typically 90 percent or more of that drug’s development costs are incurred in Phase III trials." http://www.manhattan-institute.org/html/fda_05.htm

No university or nonprofit has that kind of budget, and even if they did, they are unlikely to take on the risk of a failed drug.

Pharmaceutical companies typically spend more money on advertising than drug development which leads me to think that the patent system isn't that necessary to the overall profitability.

That would be a strong argument if you would provide some sort of evidence.

probably referring to this from elsewhere in the thread: http://www.sciencedaily.com/releases/2008/01/080105140107.ht...

Ridiculous argument.

Marketing spend is based on the idea you spend $X and get $X + Y back. This doesn't always work, but it's the general premise.

This means without marketing dollars they'd be making less money.

Or they'd be making drugs that actually matter, instead of drugs they can market well to unassuming consumers.

The last time I got an Rx, the doctor actually made the decision along with my insurance company (at least how much they'd pay).

So you're saying that drug advertising is pulling the wool over the eyes of the entire industry so that they give patients nothing more than placebos?

Most drugs, even those that offer a benefit over current therapies, don't sell themselves. Physicians need to learn about new drugs, have an opportunity to try them before you ever see widespread use.

Well, they're picking the drugs that they can sell the most of -- i.e. the ones that will benefit the most people. That's not a bad thing.

However, the cost of human trials are still a problem. Because of the costs, drug research to treat rare diseases aren't going to get funded by anyone.

It really is not that simple in real life. That's a decent write-up of how advertising is supposed to work for your disruptive yet novel startup, but pharmaceuticals is a more complicated animal.

Drugs are things that people "need". If no drug companies advertised, people would still go to their doctors with problems, and doctors would still prescribe medication when necessary (you have some degree of advertising prompting doctor visits, but for the important stuff, and in a system where people are not afraid of the monetary cost of going to a doctor, they'll be going anyway).

However currently all drug manufacturers must advertise their products because their competitors advertise their competing products. Anyone who doesn't advertise will be left behind as patients request the drug that they saw on TV. No company wants to be the company that doesn't advertise.

Advertising makes advertising necessary. It's a sort of "Advertising Prisoners Dilemma": http://en.wikipedia.org/wiki/Prisoner's_dilemma#In_economics

One way to break this is to create laws that forbid advertising. Another is to allow the formation of cartels.

How much of that cost is the advertisement of the drug?

Consider that the cost may be astronomically high because it's possible to make marginally more. It's entirely possible that the same level of drug research can be done for much less money.

For instance, with patents there is an incentive to find a solution first. This probably raises the cost of research because (a) pharmas spend more time researching alternative medicines with different compounds with the same effect as existing drugs simply to get around pre-existing patents and (b) pharmas spend more money to rush research to patent it first.

Also, if clinical trials are the problem, India appears to be willing to help.

other incentives like what? The only thing I can think of as a reasonable incentive would be to create something that heals the sick but... ohhhhhhhhhhhh..

Seriously though I want to stab that guy. Maybe we should ask the scientists who put in the real work who they think should have access to the drugs.

I'm sure I'm being very pedantic here, but the "no incentive" argument has always bothered me. Saving a life is an incentive. Satisfying intellectual curiosity is an incentive. So the company does in fact have incentives to develop something new without this "privilege." The may have a strongly decreased financial incentive, but that is very different from no incentive.

You must be kidding. Developing a new drug can easily cost hundreds of millions of dollars. Also note that majority of drug development efforts (>90%) fail, thus each successful drug has to pay for its own development cost as well as the failed ones.

And no, you can't pay for the costs with "satisfying intellectual curiosity"

No, I'm not kidding, I was simply pointing out that there are other incentives besides financial. I never said intellectual curiosity would pay the bills just that I felt claiming 0 incentive wasn't completely correct. Something along the line of no financial incentive, or greatly reduced financial incentive is better.

Ok. You do realize that each stage of the drug development process is very expensive right? You'll need money for lab mice, clinical trials etc.

How do you suggest intellectual curiosity be fulfilled with no money?

Drug development is fundamentally different from software. There is just no way to do it (either by public or private institutions) without a lot of money.

> You'll need money for lab mice

C'mon, mice can't cost that much.

You have no idea how much it costs to keep a mouse colony fed, taken care of, given veterinary care, etc... and then there's the breeding and genotyping, and treatments. And if they die, you need a pathology report. Mice get expensive fast. These are usually very well engineered mice strains that cost a lot of money just to develop in and of themselves.

And that doesn't even cover their plans for world domination.

Here's a link to Ohio State's per diem fee for mice: http://ular.osu.edu/rates-and-fees/ (It's around $1/day per cage there)

I think you can house up to 5 mice in a cage, and it wouldn't be uncommon for a reasonably sized lab to have a colony of around 200-300 mice. So you'd have maybe 75-100 cages (males you house at a lower rate). So your daily rate at OSU is on the order of $75-100. At other institutions, it can cost as much as $1 per mouse. And this is just for housing them. You start getting to real money, real fast.

I wish humor came across better sometimes; you took my comment way too seriously.

> Developing a new drug can easily cost hundreds of millions of dollars.

When R&D budgets are no longer superseded by advertising budgets at pharmaceutical firms[1], I will start to find this line of argument compelling.

[1] http://www.sciencedaily.com/releases/2008/01/080105140107.ht...

Do you mind explaining what's wrong with having advertising budgets? Remember that investment into marketing is tested with the same yardstick as R&D investments - revenue generated per dollar invested. If marketing isn't effective then it won't be done.

Keep in mind that marketing drugs is a purely American thing; in most other countries with sane healthcare policies you can market awareness of a condition but not a drug to treat the condition. Doctors should be the one helping a patient decide which medication is best for their situation, not some ad exec.

That article is about promotional budgets, which is at least subtly different than advertising budgets. For instance, it includes $15.9 billion in samples (which are certainly promotional, but giving patients free drugs does not immediately jump to mind when you say advertising).

The number there is from the figure here:

http://www.plosmedicine.org/article/info:doi/10.1371/journal...

Err, what?! Companies don't exist to save lives or explore intellectual curiosity. They exist to make money. Therefore we do have a responsibility to try and make the profit motive line up with more humanistic motives.

A strongly decreased financial incentive is disincentive in a system where

1) Equipment and the necessities of life cost money, to say nothing of opportunity cost. Even the most ascetic lab rat can't eat good feelings and intellectual curiosity.

2) If you're looking to raise capital, E(ROI)>0 makes it 100x easier to raise 100x as much capital (perhaps this is exaggerating, but capital markets are MUCH larger than charity markets).

> Without this "privilege" a company has no incentive to develop anything new

How much are they developing vs how much are they marketing? A lot of pharmacological studies are preformed by public universities and an insignificant amount of money that many think goes to "research" instead goes to "do you have <made_up_disease>? talk to your doctor about <our_new_drug?>" type commercials and other marketing.

> Try this for a comparison - Germany declares that all software sold in their country should be priced at $1 or less.

If that software will end up saving lives, then it should be sold for $1 or less and the government should develop/buy it/fund it.

Or how about another comparison. Open source software is priced at $0. Are people writing it? Why? They shouldn't according to your logic. So maybe someone will bother developing and researching life saving drugs without being granted monopoly on its distribution.

Finding the chemical is a very small part of the cost. Try setting up animal tests, phase I clinical trial, phase II clinical trial, phase III clinical trial, years of follow up, hiring people to put together documents to get regulatory approval, post market monitoring of the drug, getting information about your drug to physicians...

Let me know how much all those things cost.

Open source software is priced at $0.

Drug discovery (i.e. actual drugs; NOT just hits or lead molecules) is not as simple as pounding code on the couch in your jammies.

But it is also not infinitely cheaper. It involves time commitment. Large projects are thousands and thousands of man months, and you can download and build it by paying $0. People seems to be willing to spend a significant amount of time for something that is distributed for $0.

By the logic above, that should never happen.

It is effectively infinitely easier. Hackers don't need multi-year studies, trials and FDA approvals before pushing code to Github. The fact that there are no "open source drugs" should give you a hint that the analogy you're trying to draw is fundamentally flawed.

I personally would love to see all software be given away for free. Put all the code on GitHub in the public domain. That's the world I work towards. There'd be just as much money to be made, only it would be spent on actually employing workers and getting stuff done and not on fighting over licenses and intellectual "property".

The patent laws of the US are responsible for Bayer's business model, and in a lot of ways it's a good tradeoff. But it's not the only possible way to figure this stuff out, nor is the money the only possible incentive.

Anyway, it's not like Bayer wasn't aware of India's patent laws. They are still going to make billions on this drug, regardless of what India does, and they can spend that money bribing its government officials to change their patent laws. Don't worry, it'll all work out in the end.

If that happened much software would just move to the (arguably worse) service model where programs won't work offline or run on your local machine, and if the server shuts down you lose everything.

That's not how the vast majority of the open-source software I use on a daily basis runs...

Not everything is open source, and if it was, then the programmers that currently work on open source projects would be unemployed.

> Without this "privilege" a company has no incentive to develop anything new

While that is true about companies it is not true about people. There are numerous people who do research into specific medical conditions for reasons other than money. While I'm not saying Crowley didn't make a fair shake of money with his companies

http://en.wikipedia.org/wiki/John_Crowley_(biotech_executive...

There was a clear motivation to save his own, and other children's lives.

Would companies stop entirely or would not for profits arise in their place?

I think it's disingenuous to imply that there is no other way that medical research could ever happen.

One also has to examine the moral dilemma faced in this situation. Respect international intellectual property laws and quite literally allow millions to die OR "steal" the drug?

Now run the dilemma again but it's your own child.

Is it right? Would you do it?

Free software movements point to the probability that software would likely still exist in a world where it was declared that all software should be priced at ${arbitrary}.

I feel like the truth is far more nuanced than you're allowing for here. There's far more than money on the line and if I were the one dying of a $65,000/year cancer I'd also struggle to respect the international laws that were willing to consign me to death if the profit on the materials was in the 99% range.

I never though I'd see someone on HN extol the virtues of a pharmaceutical company executive and Republican!

No doubt that there are more incentives than just money, but you do realize that John Crowley is filthy stinking rich from the sales of his company to Genzyme, right?

> I never though I'd see someone on HN extol the virtues of a pharmaceutical company executive and Republican!

Ha ha I appreciate your comment (and if it's sarcastic/funny it's actually hilarious)

But otherwise it's Ad hominem. I'm presenting him as a more nuanced human than just than just a guy who sold a company for $200M (http://newsok.com/novazyme-example-of-promise/article/275860...) and who's name gets floated as a possible (R) candidate (but who doesn't take on the role).

Perhaps he's one of the numerous Republicans who are dissatisfied with the entire radical wing. I don't know anything about that. Maybe the reason he repeatedly chose not to run or accept an appointment is he wasn't radical enough. After all, many do say that even Reagan wouldn't make it in today's Republican party.

Making a founder's share of $200M is probably fair payoff for saving all those children's lives (potentially ~10,000 cases in the USA)... especially when compared to a share of $1B for enabling the absoloute clusterfuck of idiocy that is TUMBLR.

Do Zuckerburg, Brin and Graham deserve the same derision for also being filthy stinking rich? Do all other motives get thrown out the window when they get a life changing payday?

Anyways, the sum of a person is more than their net worth and their political affiliations. I'm sure there are a handful of good people who are also Republicans.

Of course it's an Ad hominem!

I get where you're coming from, but I think what my point is is that you can have altruistic intentions and get filthy stinking rich in the process. In fact, you can be nothing but a greedy pig and still do good in the world.

I would go to India.

If someone develops software that can directly save a life, then yes, it should be affordable by literally everyone.

The same applies for medicine. If you are with-holding drugs that can literally cure cancer but require you to cough up, say, $50,000, then I sincerely hope a hell exists for you because that is straight-up unapologetic evil.

If R&D is that expensive and you need to recoup costs, then the government should fund the research of such drugs.

No matter what the circumstances however, you don't get to restrict access to a drug that cures cancer based on financial capability and somehow take the moral high ground.

I think something that hasn't been mentioned is how much they spent to develop the drug, and how much they expect to recoup.

If someone has to take a drug for 3 years and pays 195,000 dollars, and there are tens of thousands of patients, they can certainly price it lower than that.

If the price per year is 1950 (3%) and a million people are using the drug, that that 1.95 billion dollars. Per Year.

It's important to remember that you're not just paying for the successful drug. You're paying for all of the unsuccessful ones as well.

Plus, you're also paying for the rather large profits made by companies in this sector.

If you think profits are high, why don't you set up shop and develop your own drugs and undercut your competitors?

After all, profits attract competition.

That's what India is doing it's allowing other businesses to step in and compete in production of the drug. If the original drug company can't compete then that's not the governments fault.

Obviously that isn't what you mean though, your talking about the competing from start to finish of a drug, well lets say a company invests in producing an equivalent cancer drug that doesn't infringe on the original patent. Now we have these two drugs that are effectively the same and they both compete and the price lowers down to the point were they are both making enough profit to support their business without over the top profits on that drug. Congratulations you've got to the point that the Indian government wants and all it took was a huge investment in an otherwise redundant drug.

Since the Indian government can't force the company to sell the drugs at the appropriate price they have to rely on the threat of letting other companies sell the drug at an even lower price and hope the company plays ball. The whole point behind intellectual property is that both the creator and the public benefit, if the public isn't benefiting then they will not respect intellectual property.

That is a fair point, and I do think the drug industry should be rewarded for making a product that saves lives.

If we were making the comparison to the software industry again we wouldn't make that same comparison, we would just have the people close up shop and start another startup when their product fails and they fail to pivot.

I guess the analogy just starts falling apart there.

No, a more accurate comparison would be that Germany declares that a software algorithm cannot be patented.

I think we have a lot of support for that here. :)

I wonder how much of that money is spent on the actual R&D and how much goes to the fancy looking offices, management, administration, marketing? When you can dictate the prices of course you'll set them as high as possible and than pump up the expanses, but with a bit of real competition I'm convinced you could significantly cut the prices and still make some money.

I would. Financing development with monopoly on making copies is ridiculous unenforcible idea when anybody can make a copy for anybody at near zero cost with use of equipment posessed by almost anybody. It should be abandoned as fast as it can be with all its legislative luggage. Setting max price of software copy would be awesome step in the right direction.

The solution is to implement everything as SAAS and charge whatever you like.

Good solution. It's a wonderful solution if customers accept it. As long as your code doesn't leak outside.

I'm all for any solution that doesn't require giving a cop access to my computer to enforce it.

If they're going to price the drugs so high in India that no one can afford them, what is India getting out of the deal? All property rights (but especially intellectual property rights) are essentially a trade between the government, and indirectly the people. For real property, the Government gets tax and increased economic activity (leading to more tax) in exchange for agreeing to arrest anyone who uses your property without your permission. For intellectual property, the trade is that citizens get to use new and useful things, and there is more economic activity, in exchange for the government agreeing to arrest anyone who copies your product without permission. If the citizens can't get the new and useful thing, why should the government stop anyone who copies it?

Germany declares that all software sold in their country should be priced at $1 or less

It would be OK if this were known in advance; software developers could decide whether the absence of future German revenue meant they should (i) not develop a German version and/or (ii) not develop a product at all (as the non-German revenue would not be sufficient).

Changing the goalposts after development decisions are made is different.

> witty sarcasm much?

lol - recursion.

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