If someone or a Company develops a cure for AIDS, how much should they profit from their discovery?

[BrentWil]

The interplay between the administration and the Drug companies during the Health Care debate was highly interesting. Personally, I think alot of the profits from drug companies come from creating more "sickness" then there really is. They do good research and develop a product that could help a small amount of people. They then run ads, and make a ton of people think they have something. Then their profit goes up.

However, an interesting question because what happens when they do cure an awful illness. They have invested money into the product during the R&D process. This is normally not a small amount. However, on the other side, someone that is going to die will pay whatever they can not to die. The question then becomes, how do you balance the two? If someone does create a cure for AIDs, how much should they profit from it?

[HuckleB]

1. I think the question in the title of your thread is worth discussion.

(I don't buy your assertion in your first paragraph at all.)

However, there are problems with the research equation. For starters:

Data shows declining productivity in drug R&D
http://www.reuters.com/article/idUSTRE65Q3IM20100627

combined with...

The Effect of Pharmaceutical Patent Term Length on R&D and Drug Expenditures in Canada
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2585455/

and...

Pharmaceutical Marketing and Research Spending:
The Evidence Does Not Support PhRMA’s Claims
http://dcc2.bumc.bu.edu/hs/sager/pdfs/020402/Pharmaceutical%20Marketing%20and%20Research%20Spending%20APHA%2021%20Oct%2001.pdf

as well as many other factors, makes the equation quite convoluted.

In my mind, federal regulation is needed to address the issue, and more leadership from the NIH, etc... would help.

[BrentWil]

3. What don't you buy about the first paragraph?

What sort of regulation?


It is sort of a no win situation if you are looking for profits. There are a limited amount of illness out there and there are some very effective drugs for most on the market.

[HuckleB]

9. I don't buy it because I'm in health care, and I don't see what your saying.

Regulation would have to be complex, and it would have cover how much can go to direct profit, how much can go to marketing, and how much must go to future research, as a start.

[BrentWil]

15. What will that cost them...

Won't that have an effect on their rational for R&D anyway?

[HuckleB]

17. Maybe, maybe not.

As my links showed, they're not putting what they should into R & D now, which is part of the reason regulation is needed. If the drug companies won't do the R & D, then NIH will have to step up, but any deals for production with drug companies will have to reimburse NIH for that research, and not just the research that is successful. I know. I know. I'm talking about socialism. It's horrible, right?

:hi:

[BrentWil]

18. While unpopular, the problems in your articles could be solved by taking out the 7 year period to 15

The problem is with how to make money off of it. If less drugs make it through R&D, the cost of the Drug companies are up. Increasing the period from 7 to 15 years would solve it.

It isn't "awful" However, it does produce less innovation.

[HuckleB]

21. Right now, part of the issue is that innovation is not the priority it once was for the drug co's.

Sometimes regulation is needed to kick an industry into gear.

Health care costs are a big issue, so keeping drugs at inflated initial is not necessarily the best option, IMO.

[BrentWil]

24. I wonder if that could be fixed by a government reward system?

Let the Government set up an award. You come up with an AIDS vaccine that is 99 percent effective, you get 1 billion dollars, for example. That would focus private industry on the problems that are needed the most instead of a decision model based only on which drugs will make the most money in the private market.

[HuckleB]

25. Perhaps, but that would be difficult to offer if three or four cures were found.

Who gets the reward, or who determines which vaccine is most viable with the fewest side effects, etc... in order to give the reward.

But, yeah, I think that your idea is worth exploring.

[BrentWil]

26. Wouldn't just be a race to be first?

I mean, I don't care if a company doesn't get it. I care that they had the economic rational to try. That is the higher societal purpose.

[HuckleB]

27. It could be, but then there's the question of whether such a race is the best use of resources.

If several companies are putting their eggs into one basket, and they all come close, or come up with four or five of same basic remedy, what could they have done if some of them were focused on other illnesses, other needs? This is another area where regulation could help.

Then there is also the issue where one company could rush an inferior product to market to get the prize, while another company offers something of much higher quality because it took the time to do things right.

[BrentWil]

29. That wouldn't be the problem of the race

I mean, not dividing the prize is what could keep some out of it. If you don't think you have a chance to win, why try?

With that being said, wouldn't you just rank the problems you want to go after and allocate money based on that? In other words, you would have multiple awards for multiple diease, based on what you think is important.

[HuckleB]

32. Yes, one would have to do that.

However, if we want to use our resources to the most effective ends, it's probably wise to have things directed a bit more than they are right now. Copycat drugs have made the drug co's lots of money, but they haven't added much to the care of patients, while the R & D for those drugs could have gone in other directions. In other words, sometimes the free market isn't very efficient. That might be fine for some areas of life, but I don't think that's the way to go with health care.

Anyway, I'm getting very sleepy. It's been a fun conversation!

Cheers!

:toast:

[BrentWil]

33. Cheers. NT

[HuckleB]

23. Also, the patent life is 20 years, though that's 20 years from the time of drug approval.

http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2010/08/patent-expiration-pediatric-exclusivity-and-generic-drug-approval-some-interesting-tensions-between-.html

Still, drug companies have far more than seven years to get big money.

[Imagevision]

5. Probably $100,000 per tablet...

[HuckleB]

10. .

:shrug:

[MadMaddie]

2. How did they do it when they found the cure from the iron lung

disiese? For the life of me I can't think of it through my headache....

[uppityperson]

6. polio?

[Ozymanithrax]

4. They own the patent which is good for up to seven years.

So they can recoup their development costs and make a very high profit. They should profit for no more than seven years, as the law allows.

[BrentWil]

7. So it is okay that people die in year 4 of their period that they "recoup" their cost? NT

[Ozymanithrax]

8. If they don't invent a cure everyone will die...

Would it be better if they simply did not try to find a cure, that way no moral hazard arises from allowing everyone to die? I mean, another Viagra would be more profitable, why make a pill that causes moral hazard from the practice of profiting from it?

[BrentWil]

13. Just point out how iffy the logic of 7 years is...

I mean, why not 4? WOuld help out more people in the short term. Why not 10? WOuld produce more reasons for the Drug companies to develop drugs.

[Ozymanithrax]

19. I did not write the legislation, and that was what I found.

Profiting doesn't make it unavailable, it only makes it more expensive. And I recall, that the drugs used in the cocktail they developed for treatment were sold as generics much earlier in Africa after those countries made certain demands.

I don't see any problem with people profiting from their labor, and that includes the people who own Pharmaceutical companies who fund such research. The good of having cures outweighs the bad of letting disease go uncured.

I have a bigger problem with big Pharma deciding what research to fund based only on profit prediction. There are many illnesses that no one researches because there are not enough people suffering from it to make it worth a companies investment. I would like to see the U.S. fund more research at universities so that the "cure" would be owned by universities and the government that funded them. But big Pharma, while making egregious profits, does perform a small service of finding cures. And their right to profit from those cures are limited, so that it does eventually serve the greater good of the community.

[BrentWil]

22. I wonder if some of that could be solved by an award system?

Let the Government set up an award. You come up with an AIDS vaccine that is 99 percent effective, you get 1 billion dollars, for example. That would focus private industry on the problems that are needed the most.

[Ozymanithrax]

28. Sort of like the X prize, but funded by the Government.

That could work.

But it would be a drop in the bucket. The U.S. Government spends 17 billion or more a year on Aids, which is 2/3rd the budget of the NIH. So a billion would probably not even begin to cover things.

[BrentWil]

30. Well, the question would be...

If you made that money (17 billion) the award, would the research have advanced further? I mean, that is the real question. Will profit seeking research be better at finding answers because it has another motivator?

[Ozymanithrax]

41. That is 17 billion a year...

so even a 17 billion dollar award would be small. I have no problem with increasing the funding that the U.S. government dedicates to researching AIDS. Neither do I have a problem with Pharama profiting from their own possible discovery of a cure for aids. The point is to find a cure.

[BrentWil]

45. A 17 billion dollar reward would not be small

That is way more then the profits of most drug companies.

[BrentWil]

31. Well, the question would be...

If you made that money (17 billion) the award, would the research have advanced further? I mean, that is the real question. Will profit seeking research be better at finding answers because it has another motivator?

[sakabatou]

11. If they do try to profit, that company would be evil

[BrentWil]

12. If you take away the the ability to profit from it, you may have no drug?

Does saving the life of people have benefit, even if someone makes money from it? Is that really "evil"?

[Ozymanithrax]

14. So then you oppose anyone profiting from their labor? n/t

[BrentWil]

16. I didn't say that...

I really don't know how I feel about this issue.

edit: Sorry, wasn't a response to me

[Ozymanithrax]

20. No problem, I do that all the time. n/t

[flvegan]

34. As much as they can, so long as nobody that needs it, can't get it.

In other words...

whatever an insurance company will pay, they should get (without raising rates).

whatever Medicare/Medicaid will pay, they should get (without abusing the system).

whatever an uninsured person can pay without any hardship (ie: quite possibly nothing), they should get.

[BrentWil]

35. Then they won't get their R&D cost back and will go out of business.

That is the reality.

[Lyric]

37. Much of their R&D is subsidized by the government.

That's grant money that comes from OUR pockets--they aren't actually "losing" anything.

[BrentWil]

38. Depends. Most of the time they do lose R&D cost if the drug isn't approved by the FDA.. NT

[Lyric]

40. I fail to see how that's relevant to whether or not they'd lose money selling a drug cheaply.

If they're selling a drug at ALL, then it was approved by the FDA.

Example:

Pfizer has a brand-new drug (let's call it "Vivacure") that is hailed as a "cure" for HIV. The research and clinical testing phase ends, the FDA approves Vivacure to treat HIV infection, and Pfizer starts to sell it. However, most of the people who desperately NEED this drug are impoverished (largely due to previous medical bills) and are unable to afford it. The government steps in as a humanitarian intervention and sets a price cap, forcing Pfizer to sell Vivacure cheaply so that everyone who needs it can get it.

Does Pfizer lose any money in that situation? No, they don't. Most of the R&D costs were reimbursed by the government via grant money after the FDA approved the drug. Pfizer is still profiting--just not quite as *much* as they would have been profiting without the price cap.

So to answer your original question--they should make some profit, but they should also be required to make the drug available cheaply to people who can't afford it. If Pfizer takes government R&D money, then they are in debt to society, and the way to satisfy that debt is to make sure that people are not dying for the sake of profit.

Or at least, that's how it SHOULD be.

[BrentWil]

44. You spend alot of money on drugs that never come to market

You have to make up those R&D cost and also make money.

[flvegan]

39. I sincerely doubt that.

[leeroysphitz]

36. The contribution that their discovery adds to the well being of human kind should make them very

VERY wealthy but that wealth would come easily and therefore MUST come without exploitation.

Could you make higher profits with a long term monthly treatment as opposed to a one time cure? Of course. Should you choose that profit if you had the means to produce either? Only a piece of sub-human garbage, who was begging to be the first "up against the wall", would think so.

Read your history, rich folks, we will only tolerate son much bullshit from you. You might not think that our torches and pitch forks will be effective against your ar-15's but the fact is you have the guns but we have the NUMBERS.

[Luminous Animal]

42. Much of research is funded by government grants. Stupid government doesn't require anything

in return.

As for profit? One of my heroes is Salk who looked not towards profit but for the satisfaction of a cure.

[Donald Ian Rankin]

43. Their patent should be valid, and states should buy the drug.

Essentially, a cure for AIDS should give one a licence to gouge state governments for the duration of the patent. Individuals shouldn't die when a cure is available, but ensuring that is the responsibility of the government, not the company.