It says so in the first few paragraphs: Novartis licensed (bought) the right to sell the drug in Europe. The patents remain with the hospital.
The hospital that developed the drug is a public hospital associated with a public university. So the government paid for development, and (indirectly) to government is benefitting from the license fees paid by Novartis. That is co-profiting.
“Novartis bought the rights to Lutathera with a $3.9-billion-euro takeover of French company AAA last year.”
Where exactly does it say that the patents have remained with the hospital?
I don't think journalistic language necessarily so accurate.
I don't think we can say for sure what changed hands in the transaction, but it should not matter anyhow.
If they bought everything, then the total lifetime value of the asset would hopefully have been baked into the price.
> The producer (AAA, later bought by Novartis) gets exclusive rights to sell the drug, for ten years in the EU, and for seven in the US. The only exception is hospital pharmacies preparing the drug for their own patients.
[1] https://nos.nl/artikel/2266712-hoe-nederlands-kankeronderzoe...
While it may sound strange put that way, most universities spend a lot of time thinking about how spin off profitable companies from their research. It's a huge deal and public spending on research is often motivated like this. Universities and R&D companies have a codependent relationship and this is generally regarded as a good thing.
The morally dubious outcome of this is that a lot of research ends up locked away as intellectual property of some private entity, but it's not easy to question.
Is it? At best, I'd say it's seen as a "necessary evil," where "evil" is much more certain than "necessary."
Any sources on this, anyone?
Drugs don't emerge fully formed from academia, just waiting for pharma to patent them and jack up the price. Pharma spends more on r&d than academia
Currently they cost ~19 million each which is frankly not that big of a deal. A larger issue is only ~15% of drugs make it through the process. With ~20 new drugs a year this only adds up to 2.5 billion per year which a frankly a drop in the bucket compared to drug costs.
I think the answer is probably a little bit more grey FYI.
Saying funding would continue without any benifits seems to be the least likely outcome. Personally, I would be fine stopping all public drug research, but I suspect more people would want to continue...
In the end when you change one part of the process you need to assume other parts of a related system will change in some manor.
Honestly, this is simply not going to happen in the US so it’s hard to say what’s realistic.
Any yes, you can outsource running a trial, but you still need someone to design it, process the data, put together an NDA and submit for approval.
I can only imagine the complete clusterfuck that would be if it was all done by public employees.
Large drug companies are not bringing magic recipes to the mix here. Often it’s the same researchers who found the drug who end up starting drug a company to profit from their research.
As to advertising to doctors their is plenty of evidence this is harmful. It’s easy to for doctors to keep up with relevant drugs as so few are added each year and many are extremely specialized. Advertising results in over prescription which is known to be extremely harmful with opioids being an obvious example.
The flip critique of the drug industry is to suggest they're basically taking miracle cures developed in toto in publicly-funded labs and taking pure profits.
If that were the case, shouldn't one of the dozens of well-capitalized research institutions just go to market?
The reality is the drug companies take on a tremendous burden turning high-level research into a product that works, including:
+ Formulating a product that will work at scale,
+ In widely diverse populations,
+ While eliminating potential side effects, + Adapting for human UX limitations,
+ Exhaustively guarding against adverse reactions,
+ At the same time, building production capacity,
+ Creates marketing materials for patients, but also to educate doctors who don't have scads of time to study new treatments,
+ Physically distributing the product
+ Monitoring the product fastidiously once it's on the market for negative reactions,
+ Sending humans to almost every doctor's office to answer any questions about the product,
+ While staffing a 24/7 customer service number to sort out any problems
It's not as easy as it's made out to be!
This, so much. I'd add no gaming of orphan drug patents. It's through the patent system that pharmaceuticals get their pricing power.
http://sourceonhealthcare.org/orphan-drug-act-fostering-inno...
https://philanthropynewsdigest.org/news/cystic-fibrosis-foun...
They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion.
Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies which did not previously exist, saving and improving people’s lives.
You can debate the profit motive (as your link mentions) but the Foundation considers this a massive win for their ability to fight CF and make CF sufferers lives better.
[1] Some economic reductionism here: if you know the cash flow, you can project the value and the other way around. So if someone offers you 3 billion and you know the effect of the medicine and the number of patients, you can infer the price of the medicine. This to establish the (moral) link between the selling of the IP and the price.
This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment.
So the CF Foundation is “forcing donatations” from the healthy populace through increased insurance premiums to bankroll their continued investments in treatments and such.
I don’t know if that makes it any more or less ethical, but certainly if it were mostly individual CF patients on the hook for the $300k (in aggregate that is — I’m not saying that never happens) then it would make less sense for the CF Foundation as a strategy.
Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?
This is a _myth_
Big Pharma is an insanely inefficient structure for turning money into useful R&D results.
Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money via taxes and/or insurance programs.
R&D should be paid by government funds. Testing should be transparent and open. Production should be done by private companies. This would be a significantly more efficient use of our money. It would also align R&D expenditures much better with actual costs to society for medical issues.
Are you contending that the non-profit CF Foundation is going to take their $3B and not do something useful with it to serve the CF population?
> For well over a decade, CFF has employed a venture philanthropy model that provides upfront funding to pharmaceutical companies to help reduce the financial risk associated with the development of drugs to treat CF. As a result, the organization has a pipeline of drugs in various phases of development and reinvests the funds from any royalties it owns to advance drug discovery and efforts to find a cure.
> The proceeds of the sale will dramatically accelerate and expand the foundation’s research, care, and patient programs and significantly boost its funding of research targeting the genetic cause of CF. The organization also plans to use the funds to strengthen the specialized care and support that people with CF and their families receive at more than one hundred and twenty centers across the country and to expand its resources for people with CF and their families.
The typical argument for justifying high drug costs is that it costs lots of money to do R&D. This argument loses weight when the marketing costs are twice the R&D costs. Further to this point is the fact that the actual discovers aren’t the ones getting the big rewards of their discoveries. So it all appears inefficient in ways that don’t matter when applied to Google due to the fact that ultimately we are talking about peoples’ financial and physical health.
Marketing includes the cost of bringing the new compound to the attention of medical professionals who might benefit from knowing about it. This means hosting conferences, having representation at conferences/trade shows/exhibitions, seminars and other educational material, etc. Medical professionals are busy people who don't have time to independently research every new compound being brought to market, so someone has to make it very easy for them to learn about new compounds and easy for them to determine if it's something they need to care about. Hospitals and pharmacies have to be convinced that it's something that should be stocked, insurance companies have to be convinced that the treatment is cost effective enough to justify covering.
> These drugs tend to be necessary for people in ways that Google is not. There are cases where people live in penury due to high drug costs. From the perspective of beneficial to society it seems from my perspective that this is inefficient.
The resources that are expended to create new drugs could in the short term be spent far more efficiently on saving lives were it all donated to the Bill and Melinda Gates Foundation. The benefit to society of drug research is not the well being of those people that a drug can treat when it is created, but rather that the drug now exists and will be available for all time. On the balance of the moral calculus, what happens during the 10-15 year window in which the drug is available and still protected by patent is totally negligible.
That is also a myth, perpetuated by people who do not understand how to read an income statement. Please provide a source for that, and if the source is or is using the SG&A line from an income statement, it's wrong.
If a company could increase its bottom line by cancelling marketing spend, that's an easy equation to figure out.
Or... maybe (profit after marketing - marketing spend) > (profit without marketing).
And as (in a reasonable stable company) the research spend will be related to profit... marketing spend likely does result in more money being available for research.
The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits. They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people. There is also the fact that in a system like the U.S. where people have large out of pocket expenses at the point of contact with the health care system having companies maximize profits for a particular life saving drug causes some people to view said maximization with disgust.
Advertising direct to the public is banned in many countries, but not the US - I assume this is what you're referring to. However, pharma companies can and do spend billions on marketing to healthcare professionals within the EU.
> However, from a societal point of view it seems to me that it is much better for society for there to be no marketing of drugs.
Your point about the societal value of drug marketing is complex. In some cases, I totally agree with you that it's not money well spent - selling one beta blocker or statin against five others with broadly comparable data hardly helps the cause of humanity. However, in other cases the marketing/sales actually helps ensure that patients are given the drugs that they need - doctors aren't infallible, and not all doctors are created equally.
> The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits.
This is actually relatively rare.
> They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people.
Like it or not, the overall cost of discovering a drug, then testing it all the way through the many phases over many years, is roughly billions. Rare diseases can be ignored because it's simply not sensible business to develop drugs for them. Unless a company can find a way of charging a very high price, or find short cuts to development, or the current system of regulations is eased, this won't change.
Companies are prohibited from advertising to doctors? I thought it was just direct-to-consumer.
From [1] it appears that U.S. sales for pharmaceuticals are double the figure for the EU. This suggests that advertising, lack of regulatory controls on pricing, and R&D account for this. Since medical costs are exspensive in the U.S. at the point of contact and the U.S. spends twice per capita GDP on healthcare people are indignant at the system and things like direct to consumer advertising is an easy target for our ire.
I don’t know if English is your native language but “marketing spend” is correct and “marketing spending” is not.
[1] https://www.efpia.eu/media/361960/efpia-pharmafigures2018_v0...
Who funds this and what kind of shit lawyers and economists draw up the funding schemes that give away full intellectual property, only with a (historic) backstop for individual preparation?
We need risked based co-funding, co-profiting (irregardless of wether it's governments or, say, insurers investing), a backstop on prices via qualy-s, relatively short patents, no gaming of patents via arbitrarily small changes, governments creating generics, ... And now I wake up.