Healthcare going forward

[gsdx]

^ You didn't even read the article, did you? You stopped at the headline and the first paragraph.

If you had read a bit farther, you would have seen the REAL numbers:

From 1997 to 2011, AstraZeneca spent under $58 million on R&D for 5 new drugs. That's $12 million each drug.
From 1977 to 2011, Pfizer spend about $108 million on R&S for 14 new drugs. That's $8 million for each drug.

The list goes on.

From the article:

The drug industry has been tossing around the $1 billion number for years. It is based largely on a study (supported by drug companies) by Joseph DiMasi of Tufts University. It's a nice number for the pharmaceutical industry, because it seems to justify the idea that medicines should be pricey (and increasingly, they can be very pricey, costing tens of thousands of dollars per patient per year) without making it seem that inventing new medicines is so expensive an endeavor as to be ultimately futile.

Remember, this is YOUR evidence, not MINE, so don't you dare attack and insult my intelligence again.

 

[kallipolis]

From the article:

The drug industry has been tossing around the $1 billion number for years. It is based largely on a study (supported by drug companies) by Joseph DiMasi of Tufts University. It's a nice number for the pharmaceutical industry, because it seems to justify the idea that medicines should be pricey (and increasingly, they can be very pricey, costing tens of thousands of dollars per patient per year) without making it seem that inventing new medicines is so expensive an endeavor as to be ultimately futile.

Remember, this is YOUR evidence, not MINE

Some irony

 

[Benvolio]

^ You didn't even read the article, did you? You stopped at the headline and the first paragraph.

If you had read a bit farther, you would have seen the REAL numbers:

From 1997 to 2011, AstraZeneca spent under $58 million on R&D for 5 new drugs. That's $12 million each drug.
From 1977 to 2011, Pfizer spend about $108 million on R&S for 14 new drugs. That's $8 million for each drug.

The list goes on.

From the article:



Remember, this is YOUR evidence, not MINE, so don't you dare attack and insult my intelligence again.

No, no. Look again. You quote the part about tossing around 1 billion. But the next paragraph state that the 1 billion is out of date and far too low. The average is 4 billion, up to 11 billion.
An the chart from which you took the Astra and Pfizer figures says that it is state in million. And give a figure in excess of $58,000 but that does not mean 58 thousand or million, but 58 THOUSAND MILLION, OR 58 BILLION.

 

[Benvolio]

Some irony

Please read my response to gsdx and confirm that I am correct. Forbes site will not let me look again.

 

[ballcaphair]

Some irony

More irony:

"Are brand-name drugs manufactured in better facilities than generic drugs?

No. Both brand-name and generic drug facilities must meet the same standards; the FDA won’t permit drugs to be made in substandard facilities. The FDA conducts about 3,500 inspections a year to ensure standards are met. In fact, brand-name firms are linked to an estimated 50% of generic drug production. They frequently make generic copies of their own or other brand-name drugs, then sell them with a generic name."

From http://healthsmart.com/SmarterHealth/GenericVsBrandDrugs.aspx

 

[kallipolis]

More irony:

"Are brand-name drugs manufactured in better facilities than generic drugs?

No. Both brand-name and generic drug facilities must meet the same standards; the FDA won’t permit drugs to be made in substandard facilities. The FDA conducts about 3,500 inspections a year to ensure standards are met. [COLOR=#ff0000[SIZE=5]]In fact, brand-name firms are linked to an estimated 50% of generic drug production. [/COLOR]They frequently make generic copies of their own or other brand-name drugs, then sell them with a generic name."[/SIZE]

From http://healthsmart.com/SmarterHealth/GenericVsBrandDrugs.aspx

Highlighting assists the sight impaired person.

 

[Benvolio]

The Forbes articles continues: "AstraZeneca has spent $12 billion in research money for every new drug approved, as much as the top-selling medicine ever generated in annual sales; Amgen spent just $3.7 billion. At $12 billion per drug, inventing medicines is a pretty unsustainable business."

 

[gsdx]

They frequently make generic copies of their own or other brand-name drugs, then sell them with a generic name."

That does not surprise me in the least. When I was a kid growing up in a small town, we had a canning factory there. My father worked there. His job was applying the labels to the tins. If they were canning kernel corn, for instance, he would be given a list of how many tins of the product labels were needed. He would take the first brand, label the number of tins of corn needed, shut down the machine, go to the second brand on the list, swap the labels, and crank up the machine again. Same corn. Same tins. Different labels and different prices for each brand when they reached the grocery store.

 

[KaraBulut]

No, no. Look again. You quote the part about tossing around 1 billion. But the next paragraph state that the 1 billion is out of date and far too low. The average is 4 billion, up to 11 billion.

And this is where knowledge of the industry is important and looking at sources of information is important.

The total R&D budget for AstraZeneca was about $4-5 billion- this is not the development cost for any one drug. AZ has made two investments in the past couple of decades that account for their high R&D costs: they purchased Salick Healthcare which ran several cancer centers in the US and they have several development and production deals with Amgen which produces biologics. They also own MedImmune which is a biologics development center and they bought a biologics manufacturing center from Amgen. This is not typical of most pharmaceutical companies but it demonstrates how much cash they have to buy up other companies.

Cancer drugs and biologics costs thousands per dose- for example, those Humira commercials that run on television all day? Humira is $3,500 per dose.

In spite of their heavy investment in expensive cancer drugs and biologics, AZ's gross revenue for 2016 was $23.0 billion. They netted $4.1- a 17% profit.

 

[kallipolis]

In spite of their heavy investment in expensive cancer drugs and biologics, AZ's gross revenue for 2016 was $23.0 billion. They netted $4.1- a 17% profit.

Am I not surprised.........

 

[Benvolio]

And this is where knowledge of the industry is important and looking at sources of information is important.

The total R&D budget for AstraZeneca was about $4-5 billion- this is not the development cost for any one drug. AZ has made two investments in the past couple of decades that account for their high R&D costs: they purchased Salick Healthcare which ran several cancer centers in the US and they have several development and production deals with Amgen which produces biologics. They also own MedImmune which is a biologics development center and they bought a biologics manufacturing center from Amgen. This is not typical of most pharmaceutical companies but it demonstrates how much cash they have to buy up other companies.

Cancer drugs and biologics costs thousands per dose- for example, those Humira commercials that run on television all day? Humira is $3,500 per dose.

In spite of their heavy investment in expensive cancer drugs and biologics, AZ's gross revenue for 2016 was $23.0 billion. They netted $4.1- a 17% profit.

The $4.1 billion is needed to recoup expenditures and make future research possible.

 

[Benvolio]

More irony:

"Are brand-name drugs manufactured in better facilities than generic drugs?

No. Both brand-name and generic drug facilities must meet the same standards; the FDA won’t permit drugs to be made in substandard facilities. The FDA conducts about 3,500 inspections a year to ensure standards are met. In fact, brand-name firms are linked to an estimated 50% of generic drug production. They frequently make generic copies of their own or other brand-name drugs, then sell them with a generic name."

From http://healthsmart.com/SmarterHealth/GenericVsBrandDrugs.aspx

The important point is that the inventor must recover its investment during its patent monopoly period; once it expires, other companies can produce generics without the research expense.

 

[Kulindahr]

Who does not work for profit? A company spending hundreds of millions to research, develop, and test new drugs without making a substantial profit would soon go broke.

It appears that you don't know what profit is; you can make a tiny profit and not go broke.

- - - Updated - - -

Since you do not value or want to pay for research and development, the solution is simple. Stick with the older generic drugs, which can no longer charge for R&D.

Nice dodge.

 

[Kulindahr]

This is NOT ad hominem.

You do not read. We have proved over and over again that R&D is about half the money spent on advertising, and advertising costs double-digit millions while profits are closing in on the billion-dollar mark.

Please show us at least ONE instance in which a drug company spends hundreds of million of dollars on R&D for a new drug. Just one.

And please do not attack my intelligence again.

It does run into the hundreds of millions if all costs are included:

https://www.scientificamerican.com/article/cost-to-develop-new-pharmaceutical-drug-now-exceeds-2-5b/

 

[Kulindahr]

Drug companies get away with the highest prices and highest profits in the world because they convince people that they need their product, and the people will pay those exorbitant prices.

I was reading about advertising as customer persuasion yesterday, and guess what was given as an example of using advertising to convince people they need something that they really don't?







Yep, pharmaceutical companies.

 

[Kulindahr]

Which is something that you've claimed before that has also been proven false, yet you continue to try to present it as fact.

The numbers that most of the pharmaceutical companies cite came from a study by the Tufts Center for the Study of Drug Development which is a research group that is funded by the pharmaceutical industry. When the Tufts paper was released, it was universally panned by independent researchers. I particularly liked the statement from Médecins Sans Frontières who said that if you believe the numbers from the Tufts study, you probably also believe that the earth is flat.

That "study" is a superb example of getting the research results you pay for. What it gives as a low figure is in actuality a record high. In 2014 they did a new study and came up with $2.6bn to get a new drug to market, which is only a little higher than some more impartial studies.

The Federal Trade Commission looked at the numbers a while back and their study said that the cost of developing a new drug and bringing it to market is between $802 million and $868 million. That's a lot less than $4-11 billion dollars. It also doesn't account for the fact that many of the drugs that are brought to market are based upon publicly-funded research (often the NIH) or research underwritten by charitable foundations. Quite a few of the high-priced biologicals on the market were developed based upon university research.

Even with all of these "costs" the drug companies are still netting about 25% in profits overall and their stock prices continue to increase.

I found that reported this year, so it couldn't have been too far back. I don't have the time to do it, but I'd love to find out why one study is so much higher than the other -- what are the two counting as costs?

 

[Kulindahr]

^ You didn't even read the article, did you? You stopped at the headline and the first paragraph.

If you had read a bit farther, you would have seen the REAL numbers:

From 1997 to 2011, AstraZeneca spent under $58 million on R&D for 5 new drugs. That's $12 million each drug.
From 1977 to 2011, Pfizer spend about $108 million on R&S for 14 new drugs. That's $8 million for each drug.

The list goes on.

From the article:



Remember, this is YOUR evidence, not MINE, so don't you dare attack and insult my intelligence again.

The article points out there's a vast difference depending on how the calculation is done: if you just count the drugs that make it to market, the figure is low; if you count all development costs for all drugs, including failed ones, some companies really are spending on the order of ten billion per drug that actually gets to market (which suggests a high failure rate).

And the costs apparently really have skyrocketed since around 2010, by 300% - 400% depending on different studies.

 

[KaraBulut]

...And the costs apparently really have skyrocketed since around 2010, by 300% - 400% depending on different studies.

A lot of that increase is because these companies are really pushing biologics which have a high profit margin and are the dream drug because they don't cure the disease, they instead ameliorate symptoms and must be administered weekly or monthly for life (which creates a constant revenue stream).

Watch CNN for a few hours and count the ads for Keytruda, Harvoni, Humira, Neupogen, Enbrel, Remicade, Stelara and Simponi. Even Cyndi Lauper has gotten into the game, appearing in an ad for psoriasis drug Cosentyx.

In the case of AstraZeneca, they had a big writeoff because they had several drugs in development and in testing, they discovered that the drugs didn't improve outcome. Tralokinumab, a drug for asthma, failed in a late trial. Another drug which was a combination of durvalumab and tremelimumab, was discovered to not be superior to chemotherapy in cancer treatment.

When a drug trial fails, the R&D costs are usually written off. On the other hand, if a drug is approved, the company can write off the costs (depreciation) over the lifetime of the drug's patent.

 

[Benvolio]

The big question is whether the US with Obamacare or its replacement or amendment will impose price controls or "negotiation"? Without the vast US economy, without drug price controls, the amount of money spent here and abroad will be dramatically reduced.

 

[ballcaphair]

The big question is whether the US with Obamacare or its replacement or amendment will impose price controls or "negotiation"? Without the vast US economy, without drug price controls, the amount of money spent here and abroad will be dramatically reduced.

I think controls are not needed. Healthcare providers will leverage drug prices just as they do with coverage. Prices will be negotiated.