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Tuesday, February 19. 2008

Evil Big Pharma

Megan McArle explains simply why cutting the profits of drug companies will damage R&D. A quote:

I don't think of R&D as a budgeting problem; I think of it as an investment problem. After all, even if the pharmaceutical industry has no profits right now, they can borrow the money in the financial markets at fairly attractive rates.

The main obstacle to R&D, then, is not the current state of pharmaceutical industry profits; it is the potential return on the investment in R&D. After all, Merck doesn't have to make drugs; it could generate a nice, safe return of 5% a year in government bonds. Or it could get into some other business, such as making soap. If you drive down the profits on new drugs too far, it stops making sense to invest in new drugs, even if there is a small profit to be made on current production.

Exactly right. In fact, I feel that it was wrong to institute time limits on drug patents. (h/t, Big Pharma vs. Big Gov at NE Repub.)

Posted by The Barrister in Medical, Politics at 09:02 | Comments (8) | Trackbacks (0)

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In fact, I feel that it was wrong to institute time limits on drug patents. What other industry has to put up with that sort of theft of your investments and discoveries?

All of them. All patents are issued for a limited time. United States Code Title 35, Part II, Chapter 14, section 154. The cited law is clearly not the whole story, though, because I know I've seen knockoff products appear in much less than 20 years. In fact, the typical duration of a patent appears to be about five to seven years for all products, just as it is for drugs and medicines.
#1 wolfwalker on 2008-02-19 09:46 (Reply)
Right you are. I should not have added that comment to The B's post.
#2 BD on 2008-02-19 09:55 (Reply)
I don't have problems with the profits of pharma nor with the patent system... the legal overhead we have instituted on that system, however, I do have problems with.

For all the demonization of drugs that have ill effects, like that of thalidomide, the medication, itself, actually has other uses outside of the one that was pushed at consumers (morning sickness). Because of the harsh reactions to that medication, and the lengthy methodology to approve new drugs, we have the dual effect that new medications are safer, but that those that have been demonized or restricted from wide use cannot be made or sold for restricted use for diseases that they are useful against. If memory serves thalidomide proved to be one of the few drugs that was effective against Hanson's disease... leprosy.

Part of the cost is not just research, which most companies put at a
#3 ajacksonian (Link) on 2008-02-19 10:47 (Reply)
Thalidomide is an interesting story. When it was discovered in the 1950s, scientists did not understand chiral chemistry.

Think of chiral chemistry as molecules that are mirror images - like your right and left hand. One molecule is efficacious and the other can be harmful.

In the case of thalidomide, the lack of distinction led to horrible birth defects.

Today, thalidomide is the core of Celegene's success. Celegene has used the fact that thalidomide is a controlled substance as a barrier to entry even though the patent on thalidomide has long since expired.

Celegene is using thalidomide and its derivatives in cancer treatment.
#3.1 Barrett on 2008-02-20 00:00 (Reply)
deep in the bowels of the gestating Brave New World, central planning theorists are drooling over the power a welfare-state could amass if only it didn't go broke caring for the no-longer-productive. Big Pharma ain't helping them at all, what with extending the human life span and all. In fact, Big Pharma is an enemy of the Brave New World.
#4 buddy larsen on 2008-02-19 11:41 (Reply)
Buddy,

It is such a slippery slope when the sanctity of life is removed. It makes it easy to disenfranchise the unborn who have no voice for themselves. Why not add those unproductive old people to the list too?

I fear the liberal world of moral relativism and the supremacy of man.
#4.1 Barrett on 2008-02-20 00:06 (Reply)
Buddy,

U.S. News & World Report had a long article about our aging population and how they're living 'youthful' lives well into their 90's thanks to wonderful new drugs and better lifestyles. Before I got to the end of the article, I was thinking about what you said..... not the political side, but the simple economic side. And the thing is, it's such a no-no topic to discuss. You don't want to come off sounding as if old people should buy the farm and get out of the way! The facts as they portrayed them are that we are a decade 'younger' now than our parents.

That means Buddy, at 80, you're really 70. :) Ain'tcha glad, honey??
#5 Meta on 2008-02-19 17:35 (Reply)
oh jeez yes -- now i can run right out and waste another decade!
:-D
#5.1 buddy larsen on 2008-02-19 18:18 (Reply)

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