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points by moregrist 2 days ago | 0 comments
The cost of manufacturing drugs is not where pharma makes it’s profits. Look at the margins for competitive generic drugs and over the counter medicine. Margins are tight.

Pharma makes bank on drugs that are patent protected. Squeezing the manufacturing cost is a small gain on top of that.

[–] somenameforme 2 days ago
Yip, drugs are similar to software in this regard. Expensive to develop, very cheap to replicate. It'd make vastly more sense as a nationalized industry, because I think a profit motive is not only unnecessary, but actively harmful because the drugs that help society the most, and the drugs that make the most money, have little overlap.

If a big pharma had the choice between an expensive treatment that could help treat any cancer, or an extremely cheap treatment that could prevent any cancer - which would they pick? The answer when you're motivated by profit is unfortunately different than the one when you're motivated by social benefit. And this is more than just a thought experiment because this issue is going to drive which type of treatments are pursued.

[–] wuschel 1 day ago
Hard disagree on the oversimplification. Drugs with R&D, certification and production belong to the most complex and hard product classes.. they are nothing like software.

Picking the right drug is a lottery game in itself that involves portfolio strategy, biologic modeling of your product efficacy and safety, optimization of yields, and "field testing". Then you still have to build the right distribution channels to the patient and find someone to pay for your product. Even reproducing drugs is not a trivial thing, as you need to re-certify production plants. In the case of biologics it is even more complicated.

Unless we burn enormous amounts of cash or set up specific incentives, there is not way we can bring primary socially motivated drugs to the market with the current risk structure of the industry.

Pharma is one of the most complex playing fields there is. The sad thing is that we might strongly overstimate the ability to significantly improve the development of new drugs through AI in the next 10 years.

[–] somenameforme 1 day ago
I mean that the economics are similar to software. All of the complexities you mention are about initially creating a drug, replicating that drug once that's wrapped up with is, relatively, very cheap and simple. This is in comparison to 'normal' industries where there's often a huge cost and complexity involved, even once a product has been completely finalized.
[–] Ekaros 1 day ago
Problem with those expensive treatments is that there are not that many cases. So profit from each is big but overall they add up to less. Getting everyone who can afford it on planet on some relatively cheap drug would be lot more profitable overall.

Get million out of thousand people or ten out of billion people... Later would be preferable.

[–] somenameforme 1 day ago
Well there's also the third option of get a million out of a billion people. And that's only one side of the perverse equation. The other is rent-seeking. A treatment that needs to be redone or repeatedly boosted is far more profitable than a treatment that simply solves something once and for all, especially if that 'solving' treatment can be done cheaply.
[–] azan_ 1 day ago
> Look at the margins for competitive generic drugs and over the counter medicine. Margins are tight.

Yes, and reducing manufacturing cost if you have tight margin has huge potential for profit.