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[Politics] The price of medicines



Harry Wilson's tackle

Harry Wilson's Tackle
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Oct 8, 2003
49,337
Faversham
Listening to the latest spat in the run up to the election over the costs of medicines it is worth mentioning that there is a great deal of old bollocks being spoken about patents, charges and 'generics'. I have an interest in this because of my various jobs, so feel inclined to comment.

First question - where do new medicines come from? To hear some commentators and politicians talk you'd thing that a medicine is a natural gift from God, waiting to be discovered rather like a hoard of Viking gold, in a field somewhere, using nothing more than a spade and a bit of luck.

The reality is it is a chemical that is invented by the chemists and biologists (and others) working for a pharmaceutical (drug) company. They invented it, they own it, they sell it.

So what is all this bollocks about 'patents preventing others from selling generic versions'? What is a generic version? The answer is it is a counterfeit version. Well, it would be counterfeit if it were made and sold while the inventor still had some life in their patent.

What is a patent? It is a legal arrangement that allows the inventor of something to have a monopoly on their invention. It is time limited, and the time limit varies for different products. I think that Paul McCartney still owns a patent on his records so they can't be copied and sold without him getting a royalty, more than 50 years after they were written.

With a drug you get only 10 or 12 year's patent protection. After that 'generics' can be made and sold legally. Thus Neurofen is the trade name of ibuprofen, manufactured by the inventor, whereas tesco sells 'generic' ibuprofen, manufactured in China or India and sold at a fraction of the price.

So generics are great then, no?

No. Where did the drug originally come from? It was invented, at great cost, by a drug company. What sort of great cost?

From the original idea to making the drug, testing it in animals, then in a clinical trial, doing the legal work and the marketing it costs an insane amount. The typical investment for a novel drug these days is over one billion pounds.

And the risks are massive - a drug may not work in humans because of side effects, a need to lower the dose, and the dose then being too low to provide benefit. Then there is no drug and no income from it - but the costs are the same. This is so high risk that drug companies have been merging and shrinking for decades. Pfizer shut their operation in Sandwich having invented (taken successfully to market) no new drugs in 10 years.

And to even spend these insane amounts of money you need an infrastructure - a company with premises and people. Expertise. History. (OK some times companies buy half-developed drugs off small operators, often working in academia on a small budget of 1-2 million quid, but the big company is still needed to take the idea on, and the total costs will be the same. But I digress.)

So what gives a small scale chemical synthesis lab the right to copy a new drug and flog it off cheap? That's theft, surely? They haven't spent the billion quid plus to invent the drug.

Ah, you might say, but the inventors overcharge don't they? Well, no, they don't. They charge as much as they can get, sure - that's capitalism. They may try to rig the market, just as we see in any sector. But without the income generated there would be no viable companies, no investment in inventing new drugs, no new drugs, no progress. Yes, limit profiteering by laws, but it is no different than any other sector in the main - prices are set by the market. Unless all drug companies are nationalised and internationalised (one big company and no competition) this has to be the way. (I rather like the latter and have argued it could ve a viable model, but it is as yet anathema).

So, personally, I think that only 10 years' patent protection is shitty and unfair to the companies. If the companies were given longer protection, say 50 years (like Paul McCartney who, I think, was given 56 years and has now extended via courts) they would not need to push drugs through to the market too quickly (risking failed trials), and would have longer to select the correct dosage, and recoup their investment, and - get this - they could afford to charge less (much less) per unit item. And this would make drug hunting a more stable and less bonkers activity.

So I get very irritated with all the crap in the media spouted by right and left (in this case, especially the left) about drug pricing and generics.

Much as I hate Boris, from what I gather the yanks just want to extend their patent protection - from 10 to 12 years - as part of trade discussions. This is neither immoral nor is it unreasonable. It saddens me to see labour types gobbing off as if American companies are stealing our heritage by delaying the entry of generics via patent protection. That said, the tories pay lip service to the same nonsense and could have fixed all this years ago if they had any brains or balls. They are supposed to be the party of business FFS.

Mods, please leave this thread alive for a couple of days as it is quite nuanced, before merging it with the election thread if this is you preference :thumbsup:
 




vegster

Sanity Clause
May 5, 2008
27,867
I'm pretty much up to speed on the costs of developing and producing new drugs,there are some variables in that it all comes down to sales by volume. If you come up with a drug that can control Migraines it is going to have a much higher demand than some of the very type specific drugs that can treat rare conditions

. The length of the patent is the time when the originator of a new drug gets their cash back and some before the patent runs out and generics can be produced at cheaper cost, it seems the Americans like the idea of longer patent times in order to get MORE cash back. No surprise there !
 




knocky1

Well-known member
Jan 20, 2010
12,946
"With a drug you get only 10 or 12 year's patent protection. After that 'generics' can be made and sold legally. Thus Neurofen is the trade name of ibuprofen, manufactured by the inventor, whereas tesco sells 'generic' ibuprofen, manufactured in China or India and sold at a fraction of the price."

HWT there is the marketing of Brand names during and once the patent has expired. Huge financial outlays are spent to keep the Brand up there and keep the price high. The generics are cheap after patent because they sell the ingredient not because they are made in China or India. Nurofen is a perfect example.
 




D

Deleted member 2719

Guest
Why start another Political thread?

Mods please merge this thread and tell Harry he is a sad ****. punk:
 


Harry Wilson's tackle

Harry Wilson's Tackle
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Oct 8, 2003
49,337
Faversham
Malcolm Gladwell on Politics Live said generics were cheaper in the US than here. True?

The short answer is this has nothing to do with the issue. Since a generic, by definition, is something anyone can make and sell, the cost will be determined entirely by local market forces.
 


Harry Wilson's tackle

Harry Wilson's Tackle
NSC Patreon
Oct 8, 2003
49,337
Faversham
"With a drug you get only 10 or 12 year's patent protection. After that 'generics' can be made and sold legally. Thus Neurofen is the trade name of ibuprofen, manufactured by the inventor, whereas tesco sells 'generic' ibuprofen, manufactured in China or India and sold at a fraction of the price."

HWT there is the marketing of Brand names during and once the patent has expired. Huge financial outlays are spent to keep the Brand up there and keep the price high. The generics are cheap after patent because they sell the ingredient not because they are made in China or India. Nurofen is a perfect example.

You have a point but you are conflating two issues, investment costs and maintainence of Brand profile costs.

Let's use Valium (the brand name of diazepam used by its inventor, Roche) and diazepam. Valium was the only available diazepam till the patent ran out. Then you could buy (well, the NHS could buy - it is restricted) generic diazepam. Once Valium had established its brand name, people would ask for it by name. Doctors prescribed it by name. Parients did not want their nice yellow pill replaced by a different looking pill. There is also a perception of quality (cheap generics can disintegrate in the bottle or dissolve in the mouth insted of in the gut, etc). Thus the Brand is about product identification, confidence etc. The chemicals are of course the same and the effect should also be the same (ADME permitting - absorption and distribution anyway, if not metabolism or eliminaion).

So you are right about the money spent keeping a brand name alive being a factor I have disregarded, but this is costs after you have invented the drug, used to maximise the lifetime of the income. This has nothing to do with my point about patents and generics. And you are not entirely correct about the reason why generics are cheap. It absolutely is primarily because the only costs for the genric manufacturer/seller are the manufacture (and marketing) costs, and you don't need to do much if any marketing when you are 'generic' and one tenth the cost of the named brand. Yes the Brand name owner will spend loads to promote their brand using the brand name (e.g., Neurofen), but this is entirely to protect the income after all the investment (development costs that the generic does not incur) after the patent has expired.

If Heinz katsup were £1.50 Tesco katsup was 15 p, only a fool would buy Heinz. Moreover there reaches a point when the amount Heinz spends promoting their brand would start to become a significant contributor for the need to charge £1.50, but this would not be the case when the patent was in place....and is therefore not relevant to my original points.

Right, back to the footy :)
 




knocky1

Well-known member
Jan 20, 2010
12,946
You have a point but you are conflating two issues, investment costs and maintainence of Brand profile costs.

Let's use Valium (the brand name of diazepam used by its inventor, Roche) and diazepam. Valium was the only available diazepam till the patent ran out. Then you could buy (well, the NHS could buy - it is restricted) generic diazepam. Once Valium had established its brand name, people would ask for it by name. Doctors prescribed it by name. Parients did not want their nice yellow pill replaced by a different looking pill. There is also a perception of quality (cheap generics can disintegrate in the bottle or dissolve in the mouth insted of in the gut, etc). Thus the Brand is about product identification, confidence etc. The chemicals are of course the same and the effect should also be the same (ADME permitting - absorption and distribution anyway, if not metabolism or eliminaion).

So you are right about the money spent keeping a brand name alive being a factor I have disregarded, but this is costs after you have invented the drug, used to maximise the lifetime of the income. This has nothing to do with my point about patents and generics. And you are not entirely correct about the reason why generics are cheap. It absolutely is primarily because the only costs for the genric manufacturer/seller are the manufacture (and marketing) costs, and you don't need to do much if any marketing when you are 'generic' and one tenth the cost of the named brand. Yes the Brand name owner will spend loads to promote their brand using the brand name (e.g., Neurofen), but this is entirely to protect the income after all the investment (development costs that the generic does not incur) after the patent has expired.

If Heinz katsup were £1.50 Tesco katsup was 15 p, only a fool would buy Heinz. Moreover there reaches a point when the amount Heinz spends promoting their brand would start to become a significant contributor for the need to charge £1.50, but this would not be the case when the patent was in place....and is therefore not relevant to my original points.

Right, back to the footy :)

Got a First on my report on Hoffman La Roche in 1982. . Drug companies still hold monopoly power and so does the NHS. Who is in control is an interesting topic?

More important I gave you a chance but you’re still getting neurofen wrong.:lolol::lolol:
 


Publius Ovidius

Well-known member
Jul 5, 2003
45,919
at home
Barry Gardner being ripped many new ones by Andrew neal on bbc 2. Regarding these documents about American discussions!
 


Harry Wilson's tackle

Harry Wilson's Tackle
NSC Patreon
Oct 8, 2003
49,337
Faversham
Got a First on my report on Hoffman La Roche in 1982. . Drug companies still hold monopoly power and so does the NHS. Who is in control is an interesting topic?

More important I gave you a chance but you’re still getting neurofen wrong.:lolol::lolol:

Don't quibble. Neurofen isn't important to my original rant, as you well know :wink:
 




Herr Tubthumper

Well-known member
NSC Patreon
Jul 11, 2003
59,198
The Fatherland
And as I have said before, the cost of medicines will increase if the U.K. doesn’t have 100% alignment with EU regulations post Brexit and submissions have to be submitted separately to the EU. This will be on top of the costs already incurred to protect against a hard Brexit. This is further on top of the business the U.K. has lost due to Brexit.
 


FatSuperman

Well-known member
Feb 25, 2016
2,829
I get what you are saying HWT, but I don’t think they are the beacons of virtue that they (and you) might suggest.

In the first half of this financial year, Pfizer have made about $26 billion in sales, earning roughly $9 billion in profit. In HALF a year!
They are estimating to spend a total of $8 billion on research across the whole year, but much more on marketing - $13.5 billion. And this represents a bad year for Pfizer. In 2017 their profits were double 2018 (lower due to tax implications).

They closed Sandwich as a cost cutting measure, and for no other reason. They discovered viagra there For Christ’s sake. Whilst I appreciate the face of pharma was changing, but they didn’t try that hard to keep it open did they - despite mental profits. Rather ironic that a few short years after leaving the U.K. they tried to buy Glaxo. Blatantly to save tax and not for much else. They were promising not to cut jobs or move sites (but wouldn’t legally promise that of course... just like Cadbury’s).
Speaking of tax, let’s not forget the significant tax benefits from the R&D they so graciously perform.

Full disclosure; I used to work for Pfizer, at Sandwich. Although I moved on long before the closure.

Let’s not pick on Pfizer. The top 20 pharma companies worldwide have revenues of over $600 billion each year. SIX HUNDRED BILLION. EVERY YEAR. And many of them are MORE profitable (%) than Pfizer

You’ll understand I’m sure why our hearts are not quite bleeding
 


Wardy's twin

Well-known member
Oct 21, 2014
8,402
Got a First on my report on Hoffman La Roche in 1982. . Drug companies still hold monopoly power and so does the NHS. Who is in control is an interesting topic?

More important I gave you a chance but you’re still getting neurofen wrong.:lolol::lolol:

is monopoly power the same has holding the patent? What was the issue with neurofen?
 




FatSuperman

Well-known member
Feb 25, 2016
2,829
If Heinz katsup were £1.50 Tesco katsup was 15 p, only a fool would buy Heinz. Moreover there reaches a point when the amount Heinz spends promoting their brand would start to become a significant contributor for the need to charge £1.50, but this would not be the case when the patent was in place....and is therefore not relevant to my original points.

Right, back to the footy :)

But people don’t buy £3.85 Nurofen gel caps over 18p Boots Ibuprofen because it tastes better. They buy it because of the massive marketing spend and the sexy purpley silver packaging. It is functionally identical. Which isn’t the case for food / condiments / clothing. Some people swear by Levi jeans, others are happy with Asda‘a George brand.

Have you ever looked at the price the pharma forms charge for Diabetes drugs? People in the US literally dying because they can’t afford it on their insurance. Others fly to Mexico to buy the exact same thing for a fraction of the price. Modern insulin prices have gone through the roof, especially in the US. A $700 box of insulin pens in the States would be less than $50 in Taiwan. Same brand, same thing.

Our lives are their profits.
 


FatSuperman

Well-known member
Feb 25, 2016
2,829
Malcolm Gladwell on Politics Live said generics were cheaper in the US than here. True?

But that doesn’t really matter, generics are so cheap as it’s a competitive market. Lots of stuff in the US is cheaper due to many reasons... often due to market volumes, but also helped by more lax regulations (and thus quality)

I don’t understand why people buy branded painkillers. I guess they just don’t realise plain label generics are exactly the same. You could buy 20 times as many ibuprofen if you avoid the brand. Not that you’d be allowed more than two boxes of course
 


Bakero

Languidly clinical
Oct 9, 2010
13,679
Almería
But that doesn’t really matter, generics are so cheap as it’s a competitive market. Lots of stuff in the US is cheaper due to many reasons... often due to market volumes, but also helped by more lax regulations (and thus quality)

I don’t understand why people buy branded painkillers. I guess they just don’t realise plain label generics are exactly the same. You could buy 20 times as many ibuprofen if you avoid the brand. Not that you’d be allowed more than two boxes of course

That's exactly why. No one is advertising the generics, obviously. Do doctors give people this info?
 








beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,264
Have you ever looked at the price the pharma forms charge for Diabetes drugs? People in the US literally dying because they can’t afford it on their insurance. Others fly to Mexico to buy the exact same thing for a fraction of the price. Modern insulin prices have gone through the roof, especially in the US. A $700 box of insulin pens in the States would be less than $50 in Taiwan. Same brand, same thing.

bit of an edge case with insulin, its not under patent, its licenced differently in the US due to being a biological rather than a small molecule drug.
 



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