Where is the main cost of niche medicine that makes it so extremely expensive (in the range $100k-$1000k for a single patient) ?
Is the production of the medicine that complicated? Or is it the medical companies charging for the research that went into it, when the actual posterior cost of producing it is minimal?
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Clinical trials and approval supporting studies.
Research, trials and most importantly, the approval process.
People will typically do anything to survive. Supply and demand, charging what the market will bare. Big Pharma can hire more than a few accountants to calculate that.
Is the profit excessive despite the costs though?
most of the costs that drug companies are trying to recoup are advertising costs, not R&D
hell, for many drugs, the company didn't even pay for the R&D in the first place. someone else's company did, and then their company was bought
also most of the basic science research that goes into drug development is funded by government grants, not by in-house research by the pharmaceutical company. small companies get spun off a lab to commercialize a promising drug candidate that the drug has found, then get bought by a big company
Niche and orphan drugs don't tend to have the marketing requirement.
Sure there is overhead but only the bean counters and upper management, board of directors, shareholders know for sure.
I think it's like any industry that can exploit patents, copyright law or cartel like behavior. If there is a big enough demand it's a license to print money in any denomination you like.
>Is the profit excessive despite the costs though?
It is hard to tell. Low hanging fruits have been picked already so now we see a lot of ever increasing duration research projects that too often result in recall of scandals (Vioxx is not the only one).
So yes, you have to pay for the research. You also have to pay for the compensation to the victims as well as beefy bonuses to the killer management.
It is hard to know how much each contribute.
You might want to google "Patent cliff". It is a huge topic.
its probably all of it, altough big pharma is well known to jack up their prices by ridiculous amount.
for example, some medicines that have been objectively proven to be possible to be produced at a couple of cents per pill, big pharma sells it at a couple hundred bucks per pill.
thats america for you folks, take it or leave it
Cost of production isn't the issue, it's the cost of the initial r&d, the failed r&d for the other products that didn't make it, the license enabling studies, the license enabling studies for products that didn't get approved, continuing QC and phase 4 studies.
>is it the medical companies charging for the research that went into it, when the actual posterior cost of producing it is minimal?
This. They have to make back their money or it wasn't worth it.
Also these.
nah, its just capitalist greed. Well done eating into those shitty excuses
thats bullshit, some medicine that has already been researched and well thought of, is like 0,0001 dollars in cuba and 1000 dollars in the us
nothing but capitalist greed, keep merifating merifats
pnhp.org
>Data from companies, the United States National Science Foundation, and government reports indicate that companies have been spending only 1.3% of revenues on basic research to discover new molecules, net of taxpayer subsidies.
>More than four fifths of all funds for basic research to discover new drugs and vaccines come from public sources.
>However, although reported research and development costs rose substantially between 1995 and 2010, by $34.2bn, revenues increased six times faster, by $200.4bn. Companies exaggerate costs of development by focusing on their self reported increase in costs and by not mentioning this extraordinary revenue return. Net profits after taxes consistently remain substantially higher than profits for all other Fortune 500 companies.
No, pharmaceutical pricing is just straight-up greed. There is literally no other reason for medication to be as expensive as it is.
A claim supported by the pharmaceutical pricing everywhere else.
It's called "what the market will bear". Thanks to insurance, there's medicine that will cost upwards of $10k per CC. Weapons grade plutonium isn't worth that much. I think the only substance that might come close to that would be anti-matter, if you could put a price tag on it (or maybe an SD chip with all the most expensive retail software ever made loaded onto it). Suffice to say, no process involved in the medicine's creation, even including R&D and trails, comes anywhere near justifying the end product costing that much.
If it weren't for pharma pushing insurance companies to accept this insanity, these things wouldn't cost even a hundredth of what they sometimes do. But, so long as insurance will bear the burden of the cost, the cost will continue to skyrocket.
Which is among the reasons why contacts are cheaper than glasses. More tests, more trials, more R&D, more advanced machinery to create - but - much less often covered by insurance. The out of pocket market simply won't put up with the insanity that the insurance companies will.
The basic research is the cheap part.
ok
Yes. After the drug goes off patent the price is expected to drop and the profit margin drips by 80 percent easily.
The US spends twice per capita of Europe on health yet has a lower life expectancy. I have not seen any good explanation for this but the short of it is that the US citizens get a rough deal here.
There have been mass firings recently. One company fired 2000 researchers. expect salary levels to increase as pharmaceutical research looks less inviting as a career. This will mean a 20 year period of little progress in drugs development,
Companies want to cover r&d costs, however they are greedy so they do it so they cover r&d costs, then get a profit of how much it costs to make it, then times that by 5000 to get price
>One company fired 2000 researchers.
Which was this? Any particular field? And was it a true firing or a conversion into fixed term contracts.
You know the system is fucked when the cost of regular drugs is soaring for no good reason.
> soaring for no good reason
> not because they can corner the market because everyone else is a fucking retard who can't follow a patent
also
> epipens
> regular drugs
"being legally allowed to" is not a good reason to raise a drug's price
human health should never have been made a free market
But mostly because the government will hold up any competitors medication from passing FDA trials for decades, for an ample fee.