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Pharmaceutical giants demand government handouts


ReeferMadness

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In a startlingly frank admission of the failure of their capitalist business model, a collection of some of the world's largest pharmaceutical companies said they need incentives to develop antibiotics to fight 'superbugs'. Apparently the giveaways that are being promoted in the TPP like longer patent lifetimes and the ability to sue governments that do anything to interfere with their profits is no longer enough for multinational corporations. They need direct cash infusion now.

One line in this story is particularly interesting. Not only does it indicate where the drug companies focus their efforts.

It is far more lucrative to develop drugs for cancer or chronic diseases that can be used for months or even a lifetime and which typically have much higher prices.

It also indicates why there is no incentive (and in fact powerful financial disincentives) to cure any chronic condition or disease, ever.

This case illustrates a problem that plagues not only the drug industry but the whole medical industry, the crime industry, the military industry, the insurance industry and every other industry ever created to address problems. These huge industries become dependent on the problems they were created to address. If those problems ever disappear or even are significantly diminished, it will threaten the salaries of powerful people. And so the last thing these industries want is for those problems to go away.

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These huge industries become dependent on the problems they were created to address. If those problems ever disappear or even are significantly diminished, it will threaten the salaries of powerful people. And so the last thing these industries want is for those problems to go away.

The same problem exists for governments that depend on smoking, gambling or carbon taxes. It is actually worse for governments because once a bureaucracy is created to "solve" a problem they have almost endless funds as long as they can convince voters that the problem needs "solving" (which of course implies it is not in their best interest to actually solve the problem). The department of aboriginal affairs + band chiefs is a good example. Edited by TimG
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In a startlingly frank admission of the failure of their capitalist business model, a collection of some of the world's largest pharmaceutical companies said they need incentives to develop antibiotics to fight 'superbugs'. Apparently the giveaways that are being promoted in the TPP like longer patent lifetimes and the ability to sue governments that do anything to interfere with their profits is no longer enough for multinational corporations. They need direct cash infusion now

One of the biggest costs associated with getting a drug to market is complying with regulations that the government imposes. Furthermore, in most advanced countries (except maybe the US), the government is the biggest customer for most pharmaceuticals. So basically what the companies are saying is that if their biggest customer wants them to develop something, they should pay for the development. This is the same way in which most industries work... if you go to a company and ask for a new product that doesn't exist to be developed, you pay for that development effort. For example, aerospace companies don't just randomly build new fighter jets and then hope someone buys them, rather, they find customers that have specific needs and build to those needs, and the customer pays for the development.

In industries that market to individual consumers, companies will try to develop new products themselves to catch media hype and stay ahead of the competition. But this happens mostly just in direct-to-consumer industries. Healthcare doesn't fit that mold. The cost of developing new healthcare technologies will only grow ever larger over time, and it is the customers that will have to pay for these development efforts, and in most countries it is government that has taken on this role.

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One of the biggest costs associated with getting a drug to market is complying with regulations that the government imposes. Furthermore, in most advanced countries (except maybe the US), the government is the biggest customer for most pharmaceuticals.

Oh, those pesky regulations like ensuring the drugs don't kill people? Yeah, let's get rid of that kind of red tape. :rolleyes:

So basically what the companies are saying is that if their biggest customer wants them to develop something, they should pay for the development. This is the same way in which most industries work... if you go to a company and ask for a new product that doesn't exist to be developed, you pay for that development effort. For example, aerospace companies don't just randomly build new fighter jets and then hope someone buys them, rather, they find customers that have specific needs and build to those needs, and the customer pays for the development.

I've got a better idea. Instead of handing massive amounts of money to foreign drug companies to fund their ridiculous bonuses, let's properly fund universities so they can do research. It will be cheaper and provide opportunities to Canadian universities and students.

Once the research is done, we can license the product to drug companies and they can compete on a lowest cost basis to do the production.

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There are lots of reasons but one of the biggest is public water and sanitation. Another is publicly funded vaccination programs.

The government funds a lot of stuff. They get to steal people's money for the public good right?

The public funds lots of research and development. Why can't they fund the development of new antibiotics? It's a lot more useful then a lot of things governments do.

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The government funds a lot of stuff. They get to steal people's money for the public good right?

If you don't like the government stealing your money, go ahead and move to some deserted island and be "free".

The public funds lots of research and development. Why can't they fund the development of new antibiotics? It's a lot more useful then a lot of things governments do.

I just suggested that governments fund research - but through Universities, not by handing military-style, endless R&D programs to huge corporations.
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There are lots of reasons but one of the biggest is public water and sanitation. Another is publicly funded vaccination programs.

So, drugs and better water. I'd add better and more food too,. and vaccinations, sure.

Trudeau met with a whole bunch of lobbyists quietly right after being elected.

Any Big Pharma there with begging bowls?

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I just suggested that governments fund research - but through Universities, not by handing military-style, endless R&D programs to huge corporations.

Universities are filled with researchers looking to profit from the research. Many professors have arrangements with corporations and/or start their own to exploit any ideas that they happen to come up with.

The point you are missing is ownership. If the government pays it owns the IP whether they fund private corporations or universities. If either want to keep the IP they have to pay for that privilege.

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Oh, those pesky regulations like ensuring the drugs don't kill people? Yeah, let's get rid of that kind of red tape. :rolleyes:

You'll notice I didn't suggest that.

I've got a better idea. Instead of handing massive amounts of money to foreign drug companies to fund their ridiculous bonuses, let's properly fund universities so they can do research. It will be cheaper and provide opportunities to Canadian universities and students.

Once the research is done, we can license the product to drug companies and they can compete on a lowest cost basis to do the production.

In many areas, large companies are usually better suited to conducting research and development of things that are actually gonna go to market than university labs are. For one, most work in university labs is done by grad students, which are there for 4-6 years and then graduate and go elsewhere. Meanwhile, developing a new drug and taking it to market takes much longer, and is a process that benefits from having personnel on hand that have long years of experience with the whole process. The resources and expertise of a corporation valued at many billions of dollars are impossible to replicate in a university lab setting.

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You'll notice I didn't suggest that.

I noticed you didn't really suggest anything, specifically. You left me to interpret your meaning so I did.

In many areas, large companies are usually better suited to conducting research and development of things that are actually gonna go to market than university labs are. For one, most work in university labs is done by grad students, which are there for 4-6 years and then graduate and go elsewhere. Meanwhile, developing a new drug and taking it to market takes much longer, and is a process that benefits from having personnel on hand that have long years of experience with the whole process. The resources and expertise of a corporation valued at many billions of dollars are impossible to replicate in a university lab setting.

Oh, you mean expertise as in Martin Shkreli?

If it's going to be funded by public dollars, then it should be done by a public organization. I'm sick of subsidizing billionaires.

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I noticed you didn't really suggest anything, specifically. You left me to interpret your meaning so I did.

I was merely pointing out that much of the cost to get drugs to market is imposed by governments, even if some/most of those costs are reasonably justifiable from the perspective of public safety (reality is proving that a drug is safe before it goes to market is certainly critical and the regulations are indeed intended to do that, but the way they are implemented and the inefficiency of dealing with the bureaucracy costs companies billions of dollars more than it should). Governments are also generally the largest buyers of the end products. Therefore they are the ones that pay the cost. In the end, whether those costs are in terms of up-front R&D money, or if the company pays for the R&D itself and then recovers the cost by selling the drugs at a higher price, it'll be the government and other drug purchasers that pay for it.

Oh, you mean expertise as in Martin Shkreli?

No, I mean expertise as in all the thousands of highly trained employees with decades of experience that work at large pharmaceutical companies, as well as the institutional knowledge of how to do these things and billions of dollars worth of capital infrastructure.

If it's going to be funded by public dollars, then it should be done by a public organization.

Corporations are global, government agencies are replicated in each country. Medical solutions to address particular problems only need to be developed once, or maybe 2 or 3 times so there's some competition, they don't need to be replicated in each country. A few major global corporations that can recover their costs in a global marketplace are going to have more resources to throw at solving medical problems than if every country had its own public agency duplicating the efforts of every other country.

Furthermore, if a government agency was responsible for developing new drugs, you'd very quickly see its research become politically motivated. Would you want some crazy social conservative to come into power and decide that all medical research is bad since its against god's will and cancel all the funding? Not an impossibility in the US - where almost all new drug development happens currently. Meanwhile, companies are just out there to make a profit, meaning they'll be trying to address problems that the most people are affected by and are willing to pay to be solved, meaning the highest amount of research dollars goes to addressing the medical problems that affect the most people the most strongly, in general.

I'm sick of subsidizing billionaires.

Your emotional revulsion at having governments pay corporations to do things that it makes sense for corporations to do is noted.

Edited by Bonam
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I was merely pointing out that much of the cost to get drugs to market is imposed by governments, even if some/most of those costs are reasonably justifiable from the perspective of public safety (reality is proving that a drug is safe before it goes to market is certainly critical and the regulations are indeed intended to do that, but the way they are implemented and the inefficiency of dealing with the bureaucracy costs companies billions of dollars more than it should). Governments are also generally the largest buyers of the end products. Therefore they are the ones that pay the cost. In the end, whether those costs are in terms of up-front R&D money, or if the company pays for the R&D itself and then recovers the cost by selling the drugs at a higher price, it'll be the government and other drug purchasers that pay for it.

Tell me. Do those "bureaucratic costs" include bribing doctors to prescribe drugs which may or may not work? Or for "off-label" uses? Or is that a different category of cost?

No, I mean expertise as in all the thousands of highly trained employees with decades of experience that work at large pharmaceutical companies, as well as the institutional knowledge of how to do these things and billions of dollars worth of capital infrastructure.

Ah. Like Mr Shkreli's unique talent for gouging desperate people.

Corporations are global, government agencies are replicated in each country. Medical solutions to address particular problems only need to be developed once, or maybe 2 or 3 times so there's some competition, they don't need to be replicated in each country. A few major global corporations that can recover their costs in a global marketplace are going to have more resources to throw at solving medical problems than if every country had its own public agency duplicating the efforts of every other country.

Really? You thought I meant every country would develop it's own drugs?

Furthermore, if a government agency was responsible for developing new drugs, you'd very quickly see its research become politically motivated. Would you want some crazy social conservative to come into power and decide that all medical research is bad since its against god's will and cancel all the funding? Not an impossibility in the US - where almost all new drug development happens currently. Meanwhile, companies are just out there to make a profit, meaning they'll be trying to address problems that the most people are affected by and are willing to pay to be solved, meaning the highest amount of research dollars goes to addressing the medical problems that affect the most people the most strongly, in general.

Oh, we can't waste money curing "politically motivated" diseases, can we? Much better to have drug companies invent new maladies or suddenly discover that rare conditions are really common so they can sell much more. Did you ever notice that drug companies don't come up with drugs for things that affect mostly poor people? But if you're rich, they'll invent whole new diseases just for you!

Much better than helping poor people for political motivations.

Your emotional revulsion at having governments pay corporations to do things that it makes sense for corporations to do is noted.

Your religious zeal for funneling money to sociopath corporate executives and their greedy wealthy shareholders is also noted.

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Oh, we can't waste money curing "politically motivated" diseases, can we? Much better to have drug companies invent new maladies or suddenly discover that rare conditions are really common so they can sell much more. Did you ever notice that drug companies don't come up with drugs for things that affect mostly poor people? But if you're rich, they'll invent whole new diseases just for you!

Nope, never noticed that. Poor people don't get cancer? Poor people don't get depression? Poor people don't get HIV? Which diseases were deliberately invented just to infect rich people so more money could be extracted from them?

Your religious zeal for funneling money to sociopath corporate executives and their greedy wealthy shareholders is also noted.

Actually my only real interest in the field of medical technology would be to make sure that it develops as quickly as possible so that I can live for a good few thousand years :)

As for shareholders... yeah pretty much everyone with a retirement fund, as well as pretty much anyone who invests in index-tracking mutual funds or ETFs. So basically anyone who isn't an idiot. Far from all of them are wealthy.

Edited by Bonam
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The problem with anti-biotic development is that the better a company is at it, the less money they stand to make.

Any good, new antibiotic has to be restricted for the fear of the bacteria quickly developing resistance to it. The drug companies know this will happen if they sell the product they develop such that it is profitable, and as such they will soon have a useless product on their hands.

The alternative is to restrict its use so the resistance takes a far longer time to develop, but then they don't make money from that either. Unless they charge an exhorbitant amount for it.

Either way they are not willing to incur the development costs. In contradiction to the OP, the article I listened to on the subject did state that increased patent protection times were an option the companies were asking for.

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The problem with anti-biotic development is that the better a company is at it, the less money they stand to make.

This is the problem with the entire medical industry. Also the police industry, the defense industry and a bunch of others.

When you pay people a huge amount of money to deal with problems, you shouldn't be surprised if those same people never manage to make those problems entirely go away.

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This is the problem with the entire medical industry. Also the police industry, the defense industry and a bunch of others.

When you pay people a huge amount of money to deal with problems, you shouldn't be surprised if those same people never manage to make those problems entirely go away.

I'm sure. But problems specific to antibiotics make it difficult for a company to justify their development. I'm not one of those who believe a cure for cancer has been found, or a way to run cars on H2O is being hidden by the oil industry.

I can see it as the reason heroin and crystal meth are not being sold in grocery stores, though.

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Nope, never noticed that. Poor people don't get cancer? Poor people don't get depression? Poor people don't get HIV? Which diseases were deliberately invented just to infect rich people so more money could be extracted from them?

I'm old enough to remember a time when hyperactive was a behavior trait you might use to describe a child either episodically or more generally. Now ADHD is a disorder that affects 10% of American kids. There are no shortage of medical experts that consider it to be an invented condition that is just a reflection of ordinary variability of people's ability to concentrate. Look at the symptoms of ADHD. Really? Are there kids who don't have those symptoms? I know quite well 2 people on Ritalin that have never, to my knowledge, exhibited any traits of hyperactivity. I was told they have trouble concentrating. Doesn't everyone? We didn't evolve to sit and focus on one thing for a long period of time. It takes practice and discipline. Or drugs.

Another one is depression, although I would never call it an invented disease. But are all cases really legitimate? The incidence of depression has skyrocketed. According to The American Journal of Psychiatry, the prevalence of depression more than doubled between 1991 and 2002? How is that even possible?? I have an idea. I know people on long term anti-depression medication who binge drink, eat crap and rarely exercise. Wow, maybe the epidemic of obesity and depression are somehow linked? But hey, it's easier and more profitable for the medical industry to just prescribe pills.

Meanwhile, millions in undeveloped countries are dying of tropical diseases and parasites. These conditions attract relatively little attention from the pharmaceutical giants because you can't make money from the desperately poor.

Did you really not know this already? Or is this just a game?

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But problems specific to antibiotics make it difficult for a company to justify their development. I'm not one of those who believe a cure for cancer has been found, or a way to run cars on H2O is being hidden by the oil industry.

I've never seen compelling evidence that either of those things has occurred. However, I would say that the current economic model is not conducive to a cure for cancer being discovered. Not by the drug companies, anyway.

I can see it as the reason heroin and crystal meth are not being sold in grocery stores, though.

I don't follow - are you saying that they have some medicinal value?

I do believe that part of the reason it's taken so long to deal with legalized marijuana is that it can't be patented and it can compete with certain medications, particularly for people with chronic pain.

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I've never seen compelling evidence that either of those things has occurred. However, I would say that the current economic model is not conducive to a cure for cancer being discovered. Not by the drug companies, anyway.

I don't follow - are you saying that they have some medicinal value?

I do believe that part of the reason it's taken so long to deal with legalized marijuana is that it can't be patented and it can compete with certain medications, particularly for people with chronic pain.

No, I subscribe to the theory that the war on drugs keeps so many people gainfully employed that there is no will to win it quickly and completely by legalizing all of them.

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No, I subscribe to the theory that the war on drugs keeps so many people gainfully employed that there is no will to win it quickly and completely by legalizing all of them.

Most people can't accept that what they do for a living is a waste of time or actually counterproductive - law enforcement is no different. The war on drugs will go down as one of the great wastes of people and lives.

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I'm old enough to remember a time when hyperactive was a behavior trait you might use to describe a child either episodically or more generally. Now ADHD is a disorder that affects 10% of American kids. There are no shortage of medical experts that consider it to be an invented condition that is just a reflection of ordinary variability of people's ability to concentrate. Look at the symptoms of ADHD. Really? Are there kids who don't have those symptoms? I know quite well 2 people on Ritalin that have never, to my knowledge, exhibited any traits of hyperactivity. I was told they have trouble concentrating. Doesn't everyone? We didn't evolve to sit and focus on one thing for a long period of time. It takes practice and discipline. Or drugs.

Did you really not know this already? Or is this just a game?

In my experience it's not really big pharma companies pushing to dose up kids on these drugs. Rather it's bad teachers and school systems that can't deal with kids that do anything but mutely sit in their seats in class trying to convince parents that their kids need these drugs. A coworker of mine has a 2nd grade kid that "acted up" twice in class and boom a week later, they are in the principal's office being recommended to put their kid on Ritalin, without even a qualified psychiatrist present.

Another one is depression, although I would never call it an invented disease. But are all cases really legitimate? The incidence of depression has skyrocketed. According to The American Journal of Psychiatry, the prevalence of depression more than doubled between 1991 and 2002? How is that even possible?? I have an idea. I know people on long term anti-depression medication who binge drink, eat crap and rarely exercise. Wow, maybe the epidemic of obesity and depression are somehow linked? But hey, it's easier and more profitable for the medical industry to just prescribe pills.

The lifestyle problems of many people in advanced countries these days are well known. The information on how to improve your lifestyle to help avoid both obesity and depression are also widely known. Nonetheless, many people fail to live a healthy lifestyle. For these people, drugs are available to alleviate some of the resulting symptoms of their poor lifestyle choices. Is that a bad thing?

Meanwhile, millions in undeveloped countries are dying of tropical diseases and parasites. These conditions attract relatively little attention from the pharmaceutical giants because you can't make money from the desperately poor.
Many of these diseases and infections are already treatable. Most parasites certainly are. The problem isn't that the technology to address most of these conditions doesn't exist, but rather that there is no infrastructure, no institutional ability, no money, and in many cases no local will to deploy these solutions. In fact, the overwhelming majority of disease load in tropical developing countries could be solved simply by providing universal access to clean water, hygienic sanitation systems, and adequate nutrition, without any fancy medical technology. And it's not really the role of drug companies to provide these basic necessities of health, but the local governments and people.
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