How much public funding is required to cause successful drug development? Models from 2 economics papers

This is interesting!

I don’t think we can rely on the market incentives to fix anything. There are no incentives to find cures, because the market of pharma doesn’t bear the cost of people being sick. Rather, they profit off of people staying sick.

Pharma only has an incentive to act when academia has gotten so close to the goal that there is an immediate advantage to being first to market. At that point, they will buy the patents and jack up the price as high as possible.

If there are discoveries in more mature fields, they have some incentives to shelve newer and better products, unless they are so much better that they will make the competitors redundant. Even then, it might still be profitable to keep selling the old products instead.

Private health insurance on the other hand, profits on people dying as soon as possible.
 
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Utsikt said:
There are no incentives to find cures, because the market of pharma doesn’t bear the cost of people being sick. Rather, they profit of people staying sick.
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I often see this argument, and I find it an overstatement. People will pay massive amounts of money for a cure. Even if many companies are profiting off 'maintenance drugs' (and yes, there's incentive for that), there's still an incentive for other companies to find a better drug that actually cures.
 
Siebe said:
I often see this argument, and I find it an overstatement. People will pay massive amounts of money for a cure. Even if many companies are profiting off 'maintenance drugs' (and yes, there's incentive for that), there's still an incentive for other companies to find a better drug that actually cures.
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Not if all of the companies have their own maintenance drugs. This is essentially how oligopolies work.

Besides, most people can’t afford to pay massive amounts for any cures.
 
Siebe said:
I often see this argument, and I find it an overstatement. People will pay massive amounts of money for a cure. Even if many companies are profiting off 'maintenance drugs' (and yes, there's incentive for that), there's still an incentive for other companies to find a better drug that actually cures.
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It is the reality. When we first showed the result of rituximab in RA to a USA advisory board the 'key opinion leader' physician said nobody in the US would be interested because they wanted drugs you could charge for giving fortnightly. I know of drugs that look as if they give longer remissions quietly left on shelves having been bought up by big pharma companies.

The answer to your question is none, really. For my pilot study of rituximab in RA, which provided results that made it impossible for the company not to do a full trial, I bought the drug out of my bank account and a gift from my father and put up the IV infusions myself and sat with the patients monitoring their pulse myself. I was lucky as an academic to be allowed to do that instead of writing grant applications or doing routine clinics, but the cost to public funding was zero. Oystein Fluge and Olav Mella have taken a very similar approach in recent years, despite bureaucracy having made things harder.

A university was paying my salary, but not specifically for drug studies.

I personally don't think this sort of calculation goes anywhere. The critical factors are unique to every case and don't have a lot to do with money.
 
Siebe said:
there's still an incentive for other companies to find a better drug that actually cures.
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I'd say the opposite.

There's a huge incentive not to cure them. Cured people are customers lost.

Ask the guys who developed antibiotic treatment for h. pylori what they were up against. Curing people inside a week meant companies producing antacids that need to be taken daily—for years on end—stood to lose vast revenues.
 
Utsikt said:
This is interesting!

I don’t think we can rely on the market incentives to fix anything. There are no incentives to find cures, because the market of pharma doesn’t bear the cost of people being sick. Rather, they profit off of people staying sick.

Pharma only has an incentive to act when academia has gotten so close to the goal that there is an immediate advantage to being first to market. At that point, they will buy the patents and jack up the price as high as possible.
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Pharma is making fairly minimal amounts from ME/CFS patients now. A lot of the drugs that are used are generic, where there are minimal profits while most drugs with patents are taken by low percentages of patients.

It may be the case that pharma has no incentives to find cures. But cures aren’t the only thing most patients want. Improvements, whether small, medium or large, from drugs that need to be taken regularly are also useful, especially if some other entity such as the public health system foots the bill.

But I agree that pharma needs to be helped by research progress funded from other sources (taxpayer-funded and raised privately) so the cost-benefit analysis eventually favours them spending money on drug trials (which can be very expensive).
 
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Dolphin said:
Pharma is making fairly minimal amounts from ME/CFS patients now.
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That’s because there are no effective treatments or cures, and there have not been any plausible targets.
Dolphin said:
But I agree that pharma needs to be helped by research progress funded from other sources (taxpayer-funded and raised privately) so the cost-benefit analysis eventually favours them spending money on drug trials (which can be very expensive).
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I would go much further and say that pharma shouldn’t be involved at all. They should compete with their manufacturing expertise, and the taxpayer-funded knowledge should be open and free.

Giving pharma patents essentially gave them the power to dictate healthcare policies in ways that only benefit the shareholders and creates further inequality.

This would mean that the taxpayers would have to fund the trials, but that would cost far less in total than the current system does.
 
Jonathan Edwards said:
It is the reality. When we first showed the result of rituximab in RA to a USA advisory board the 'key opinion leader' physician said nobody in the US would be interested because they wanted drugs you could charge for giving fortnightly. I know of drugs that look as if they give longer remissions quietly left on shelves having been bought up by big pharma companies.
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I'm trying to think of drugs that actually cure things, and the only ones I can think of are for conditions that kill you (cancer, infections), rather than chronic disease. Are there any chronic disease drugs that are curative, and if so, how did they come about in a way that managed to dodge the profit motive?

Wondering how we can break the mould and go straight to a curative drug for ME/CFS, if the biology is possible, without falling foul of Big Pharma...
 
Sasha said:
Wondering how we can break the mould and go straight to a curative drug for ME/CFS, if the biology is possible, without falling foul of Big Pharma...
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Isn’t that what we’re already doing? Pharma isn’t involved at all so far, and they won’t be able to burry the results if Fluge, Mella, Ponting, Armstrong etc. are involved in the trials, because the patients are too in the know with those groups.
 
Utsikt said:
Isn’t that what we’re already doing? Pharma isn’t involved at all so far, and they won’t be able to burry the results if Fluge, Mella, Ponting, Armstrong etc. are involved in the trials, because the patients are too in the know with those groups.
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But we don't know that any of those people are going to come up with something curative. The mab drugs don't cure rheumatoid arthritis, for example, and there's no reason to think that dara would cure ME/CFS. What if the curative drug would be something that isn't already available and would have to be invented?
 
Sasha said:
But we don't know that any of those people are going to come up with something curative. The mab drugs don't cure rheumatoid arthritis, for example, and there's no reason to think that dara would cure ME/CFS. What if the curative drug would be something that isn't already available and would have to be invented?
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I thought most of the actual inventions were done by academia, but I might be mistaken there?

Pharma has the capabilities to substantially speed things up, but they will never have the incentives to do so in a short term profit driven system.
 
Utsikt said:
I thought most of the actual inventions were done by academia, but I might be mistaken there?
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I'm not sure myself, but I have the impression new compounds often are developed by pharma companies, perhaps with input from academia about potential targets.

Academia seems good at fathoming out potential new uses for existing compounds. I guess some treatments and devices might also be brought to market by newish companies that are spin-offs from academic departments?
 
I am not sure that there is anything worth arguing about here. The problem for ME/CFS has been a shortage of ideas and motivation, not money. And you only need one curative drug. The number of drugs is of no interest. The one drug will appear at some point and to what extent you attribute that to 'public funding' will be entirely arbitrary.
 
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