Sure, but that's a bit of a red herring. The largest expense in bringing a new prescription drug to market is the phase 3 clinical trial, which now costs on the order of $1B each. Those often fail, so it's a huge gamble. There is very little public funding for type of research.
And a drug like Revlimid makes its manufacturer tens to hundreds of billions; the "legacy" portfolio in which BMS classes it pulled in a cool $5.6b just in Q1 '25, of which Revlimid itself was about a sixth, or just under a billion - down by almost half year on year. See https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/do..., pp. 8-9.
It is as if VCs in the tech industry demanded the taxpayer guarantee them a healthy rate of profit, to a standard of health the VCs themselves are privileged to define. Indeed, as with Allred and the regional airlines, perhaps now we see whence Altman has cribbed his "innovation."
I don't understand your point. Some drugs are enormously profitable. Others lose money. There are no taxpayer guarantees. Pharmaceutical companies on average don't generate higher shareholder returns than other industrial sectors. A few like K-V and Dendreon have even gone bankrupt.
One could make an argument that taxpayer subsidized health plans which include prescription drug coverage such as Medicare Part D or Medicaid should limit the prices they are willing to reimburse on a QALY basis. And Medicare has started a limited drug price negotiation program. But generally, voters have been unwilling to accept the trade-offs inherent in drug price controls.
"How can we lower the cost of phase 3 clinical trials without allowing non-functional medication (scams) to proliferate" is very important. The point of a phase 3 trial is to prove that a medication treats what it claims to treat.
The NIH already creates grants for Phase 1 and Phase 2 trials. It's a bit insane that we don't also do phase 3 trials. Heck, even drug manufacturing is already done both by the DoD and the VA. It's crazy that we have a vision that private investment will somehow make things either cheaper, more affordable, or more available.
Big pharma is providing very little benefit and a lot of cost. We've seen their playbook with people like Martin Shkreli who'll buy up patents to existing drugs and jack up the price to make a quick buck. Do we really need that sort of "private investment"?
I don't think anyone is seriously making the argument that private investment in drug development is making things cheaper or more available. So that's a strawman argument.
The primary claim in support of the current system is that it encourages greater levels of innovation than would happen under a socialized central planning system where government bureaucrats allocate funding for all trials. We don't have any solid evidence about that one way or the other. But year after year, US pharma companies do consistently release more new drugs than any other countries on a per-capita basis. We don't want to wreck that just because of high prices on a few patent protected drugs. Let's take a longer view and consider possible second-order effects before making any drastic changes.
Sure, but that's a bit of a red herring. The largest expense in bringing a new prescription drug to market is the phase 3 clinical trial, which now costs on the order of $1B each. Those often fail, so it's a huge gamble. There is very little public funding for type of research.
And a drug like Revlimid makes its manufacturer tens to hundreds of billions; the "legacy" portfolio in which BMS classes it pulled in a cool $5.6b just in Q1 '25, of which Revlimid itself was about a sixth, or just under a billion - down by almost half year on year. See https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/do..., pp. 8-9.
It is as if VCs in the tech industry demanded the taxpayer guarantee them a healthy rate of profit, to a standard of health the VCs themselves are privileged to define. Indeed, as with Allred and the regional airlines, perhaps now we see whence Altman has cribbed his "innovation."
I don't understand your point. Some drugs are enormously profitable. Others lose money. There are no taxpayer guarantees. Pharmaceutical companies on average don't generate higher shareholder returns than other industrial sectors. A few like K-V and Dendreon have even gone bankrupt.
One could make an argument that taxpayer subsidized health plans which include prescription drug coverage such as Medicare Part D or Medicaid should limit the prices they are willing to reimburse on a QALY basis. And Medicare has started a limited drug price negotiation program. But generally, voters have been unwilling to accept the trade-offs inherent in drug price controls.
https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price...
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"How can we lower the cost of phase 3 clinical trials without allowing non-functional medication (scams) to proliferate" is very important. The point of a phase 3 trial is to prove that a medication treats what it claims to treat.
Phase 3 trials don’t cost $1B - they’re more on the order of $20M.
Sorry I should have been more specific. Average total cost to bring a new drug to market is on the order of $2B.
https://www.fiercebiotech.com/biotech/drug-development-cost-...
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The NIH already creates grants for Phase 1 and Phase 2 trials. It's a bit insane that we don't also do phase 3 trials. Heck, even drug manufacturing is already done both by the DoD and the VA. It's crazy that we have a vision that private investment will somehow make things either cheaper, more affordable, or more available.
Big pharma is providing very little benefit and a lot of cost. We've seen their playbook with people like Martin Shkreli who'll buy up patents to existing drugs and jack up the price to make a quick buck. Do we really need that sort of "private investment"?
I don't think anyone is seriously making the argument that private investment in drug development is making things cheaper or more available. So that's a strawman argument.
The primary claim in support of the current system is that it encourages greater levels of innovation than would happen under a socialized central planning system where government bureaucrats allocate funding for all trials. We don't have any solid evidence about that one way or the other. But year after year, US pharma companies do consistently release more new drugs than any other countries on a per-capita basis. We don't want to wreck that just because of high prices on a few patent protected drugs. Let's take a longer view and consider possible second-order effects before making any drastic changes.
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that number is not correct. you can get phase trials done in 100M ish. IIRC the 1B number is average cost, all three phases, including drug failures.