anybody who believes pharma costs are justified by materials is... well, let's just call them uninformed. It's not justified by R&D costs or production issues. It's justified by the stock market, by the CEO having a race with other pharma CEOs for the biggest bonus, and by no other thing.
I work in med device, close to pharma, but a bit different. There is a lot of overhead. Beyond all the validations required for startup of each line, there is quite a lot of Sustaining work.
I'm not trying to defend this price, or the gouging that pharma does regularly. But I don't think the $5 price includes all the overhead of the QMS.
It's like taking the price of the ingredients for a pizza and saying it's what it should cost.
Well if the materials to make a pizza was 5 dollars and it was being sold at 1,000 dollars, saying "oh thats just necessary overhead" would lead me to wonder why the hell that level of inefficiency was tolerated.
Because each new type of pizza is made of brand-new ingredients, not just standard wheat flour, tomatoes, cheese, spices, etc. And they're baked anew and taste-tested to make sure they're not disgusting, or worse, have toxic effects.
why the hell that level of inefficiency was tolerated.
Patents, e.g. legal monopolies.
Maybe fines and penalties for undercutting someone who holds a patent should be scrapped for nonprofit manufacturers of generics.
Maybe profit should come second to the betterment of humanity.
I'm sure there are some costs associated with developing drugs, and I'm sure it's not cheap.
The problem still stands, though, and the solution is capping executive pay in public companies.
It's justified by asking "how much money can we suck out of the people it helps?"
Novo Nordisk's CEO was paid $9.8 million last year, inclusive of bonus and benefits.
The R&D is often publicly funded by research grants, with free labor by grad students. Our tax dollars are paying for extortion over our health in this completely broken system.
As you pointed out, this is literally just sociopathic CEOs doing what capitalism demands of them.
Normally you can think of these prices as the reward to taking a risk. The chance of developing a drug and bringing it to market is usually small, and the reward should accordingly be high. However, in the particular case of Ozempic, the company attempted to develop a diabetes drug, and accidentally found that the drug works against obesity. That means that the reward in this case outweighs the risk by an obscene amount.
Your starting premise relies on the idea that the costs associated with making drugs are justified. In essence, this implies that the insane rewards are justified because risks associated with not producing a drug are so high.
Most of our science is funded via taxes and controlled by the government, given to researchers through grants that are awarded based on merit as determined by their peers. We've developed an adjacent system where drug discovery is funded by capital and investments from non-scientists based on the idea that "striking gold" in the medical world could make them rich.
Why not just remove the cost-barrier to entry? Require all drug discovery to be funded through grants like other research? Pay people working on drugs whether they discovered a new drug or not, as long as they provided proof of their efforts? Researchers would not need to please those with money (banks, investors) to give them funds for a drug, and so would be free to work on drugs that have a low likelihood of being profitable (such as for forgotten illnesses, or using cheap and widely available medicines in novel ways). And when an amazing drug was discovered, our society would be free to use it efficiently and at-cost, since there wouldn't be stakeholders hungry for their massive payout.
The grant system is a mess, also. And in an ideal world those whose ideas and research led to amazing discoveries would be rewarded extensically somehow, both with appreciation and a reasonable amount of money (the staff of an entire research organization could be set financially for life for a tiny, tiny fraction of the amount of money we shovel over to pharmaceutical company stakeholders). And all of this is also tied up in the clinical medical industrial complex, with all its own neuroses.
So there are barriers to implementing something like this... But holy shit do I hear this idea a lot, that high risk justifies the insane rewards. I think it's bogus!
Most of the research on drugs is done by universities with grant money or government labs and then the production is sold to private companies. They aren’t taking nearly the amount of risk you are claiming.
obviously
anybody who believes pharma costs are justified by materials is... well, let's just call them uninformed. It's not justified by R&D costs or production issues. It's justified by the stock market, by the CEO having a race with other pharma CEOs for the biggest bonus, and by no other thing.
I work in med device, close to pharma, but a bit different. There is a lot of overhead. Beyond all the validations required for startup of each line, there is quite a lot of Sustaining work.
I'm not trying to defend this price, or the gouging that pharma does regularly. But I don't think the $5 price includes all the overhead of the QMS.
It's like taking the price of the ingredients for a pizza and saying it's what it should cost.
Well if the materials to make a pizza was 5 dollars and it was being sold at 1,000 dollars, saying "oh thats just necessary overhead" would lead me to wonder why the hell that level of inefficiency was tolerated.
Because each new type of pizza is made of brand-new ingredients, not just standard wheat flour, tomatoes, cheese, spices, etc. And they're baked anew and taste-tested to make sure they're not disgusting, or worse, have toxic effects.
Patents, e.g. legal monopolies.
Maybe fines and penalties for undercutting someone who holds a patent should be scrapped for nonprofit manufacturers of generics.
Maybe profit should come second to the betterment of humanity.
I'm sure there are some costs associated with developing drugs, and I'm sure it's not cheap.
The problem still stands, though, and the solution is capping executive pay in public companies.
It's justified by asking "how much money can we suck out of the people it helps?"
Novo Nordisk's CEO was paid $9.8 million last year, inclusive of bonus and benefits.
The R&D is often publicly funded by research grants, with free labor by grad students. Our tax dollars are paying for extortion over our health in this completely broken system.
As you pointed out, this is literally just sociopathic CEOs doing what capitalism demands of them.
Normally you can think of these prices as the reward to taking a risk. The chance of developing a drug and bringing it to market is usually small, and the reward should accordingly be high. However, in the particular case of Ozempic, the company attempted to develop a diabetes drug, and accidentally found that the drug works against obesity. That means that the reward in this case outweighs the risk by an obscene amount.
Your starting premise relies on the idea that the costs associated with making drugs are justified. In essence, this implies that the insane rewards are justified because risks associated with not producing a drug are so high.
Most of our science is funded via taxes and controlled by the government, given to researchers through grants that are awarded based on merit as determined by their peers. We've developed an adjacent system where drug discovery is funded by capital and investments from non-scientists based on the idea that "striking gold" in the medical world could make them rich.
Why not just remove the cost-barrier to entry? Require all drug discovery to be funded through grants like other research? Pay people working on drugs whether they discovered a new drug or not, as long as they provided proof of their efforts? Researchers would not need to please those with money (banks, investors) to give them funds for a drug, and so would be free to work on drugs that have a low likelihood of being profitable (such as for forgotten illnesses, or using cheap and widely available medicines in novel ways). And when an amazing drug was discovered, our society would be free to use it efficiently and at-cost, since there wouldn't be stakeholders hungry for their massive payout.
The grant system is a mess, also. And in an ideal world those whose ideas and research led to amazing discoveries would be rewarded extensically somehow, both with appreciation and a reasonable amount of money (the staff of an entire research organization could be set financially for life for a tiny, tiny fraction of the amount of money we shovel over to pharmaceutical company stakeholders). And all of this is also tied up in the clinical medical industrial complex, with all its own neuroses.
So there are barriers to implementing something like this... But holy shit do I hear this idea a lot, that high risk justifies the insane rewards. I think it's bogus!
Most of the research on drugs is done by universities with grant money or government labs and then the production is sold to private companies. They aren’t taking nearly the amount of risk you are claiming.