Sunday School

[UnseenParticipant]

TheEncogitationer wrote:

Reg,

I think it is disgraceful the way that pharmaceutical based medicine is run as an industry.

Well industry is what funds the Research & Development that makes the medicine possible, as well as does the mass production of the medicine.

The government plays a huge role in pharmaceutical research and development but then doesn’t participate beyond handing that work product over the the industry, which is proving not to be in the public’s interest. Here is what I discovered about the mind-boggling extent of the government’s role:

The U.S. government plays a significant role in funding pharmaceutical research through various agencies and programs. Here are some key ways in which the government participates in this funding:

National Institutes of Health (NIH):

Grants and Funding: The NIH is the largest public funder of biomedical research in the world. It provides grants to universities, research institutions, and private companies for basic and applied research. The NIH funds a wide range of research from basic science to clinical trials.
Intramural Research: The NIH also conducts its own research through its intramural programs, which involve scientists working within NIH facilities.

Biomedical Advanced Research and Development Authority (BARDA):

Public-Private Partnerships: BARDA provides funding and support for the development of medical countermeasures, such as vaccines, drugs, and diagnostics, particularly for public health emergencies. This often involves partnerships with private pharmaceutical companies.

Defense Advanced Research Projects Agency (DARPA):

Innovative Research: DARPA funds high-risk, high-reward biomedical research that can have applications in defense and national security, including advanced pharmaceutical research.

Centers for Disease Control and Prevention (CDC):

Research Grants: The CDC provides funding for research related to public health, including epidemiological studies and the development of treatments for infectious diseases.

Food and Drug Administration (FDA):

Regulatory Science Research: The FDA funds research to support the development of regulatory science, which helps improve the efficiency and effectiveness of the drug approval process.
Small Business Innovation Research (SBIR) and Small Business

Technology Transfer (STTR) Programs:

Support for Small Businesses: These programs provide funding to small businesses to engage in research and development with the potential for commercialization. This includes early-stage pharmaceutical research.

Department of Veterans Affairs (VA):

Clinical Trials and Research: The VA conducts and funds research to improve the health care of veterans, including clinical trials for new pharmaceuticals.

National Science Foundation (NSF):

Basic Research: While not directly focused on pharmaceuticals, NSF funds basic research in the life sciences, which can lead to new drug discoveries and innovations.

The government’s funding support helps drive innovation in the pharmaceutical industry by providing resources for early-stage research, supporting high-risk projects, and facilitating public-private partnerships. This funding is critical for the development of new treatments and technologies that might not otherwise be possible through private investment alone.

All that universal heath care does is place the subsidy and distribution of the industry-made medicine in the hands of the government, which means lines or rationing for the so-called “free” medicine and overworked Physcians (sic) and Nurses when the number of patients outstrips the supply. And overwork also leads people to reconsider entering or staying in the medical profession, making supply of service even less.

The government could take the significantly smaller profits it makes and apply it to stabilizing the situation and alleviating or eliminating those issues. The situation could hardly be worse.

Look at how the industry has treated diabetics, for example, until recently when the government intervened, insulin, not a terribly expensive-to-manufacture drug, was costing diabetics without significant insurance coverage many hundreds of dollars a month.

Insulin is not inherently expensive to manufacture. The actual production cost of insulin, particularly older forms of insulin like human insulin, is relatively low. However, several factors contribute to the high price that patients and insurers end up paying for insulin. Here’s an overview of these factors:

Research and Development Costs:

While the initial development of insulin was costly, most current insulin formulations are based on decades-old technology. However, companies argue that they invest heavily in R&D for newer, more effective insulin analogs and delivery systems.

Patent and Market Exclusivity:

Pharmaceutical companies hold patents on newer insulin analogs, which prevents generic competition and allows them to set higher prices.

Practices like “evergreening” extend market exclusivity beyond the original patent period, maintaining high prices by making minor modifications to existing drugs.

Regulatory and Approval Processes:

The regulatory process for biosimilar insulin (equivalent to generics for biologics) is complex and costly, deterring the entry of cheaper alternatives into the market.

The FDA’s approval process for new and biosimilar insulins is rigorous, requiring substantial investment.

Market Dynamics and Competition:

The insulin market is dominated by three major companies (Eli Lilly, Novo Nordisk, and Sanofi), leading to an oligopoly where competition is limited.

These companies have the power to set high prices due to lack of significant competition.

Distribution and Middlemen:

The involvement of pharmacy benefit managers (PBMs) and the complex rebate system contribute to higher list prices. Manufacturers may raise prices to offer larger rebates, which benefit PBMs but do not necessarily lower patient costs.

The supply chain includes multiple intermediaries, each adding to the final cost paid by consumers.

Pricing Strategies:

Insulin manufacturers often employ pricing strategies that maximize profits, such as setting high initial prices and then offering rebates and discounts to insurers and PBMs.

These strategies result in high out-of-pocket costs for patients, especially those without insurance or with high-deductible plans.

Limited Availability of Generics:

Unlike many small-molecule drugs, biologics like insulin face significant hurdles for generic competition. The development of biosimilars is more expensive and complicated than for traditional generics, limiting their market entry.

Research and Marketing Costs:

Companies invest heavily in marketing their products to healthcare providers and patients, which is factored into the pricing.
Continuous innovation and development of new insulin delivery methods (e.g., insulin pens, pumps) also incur costs.

In summary, while the production cost of insulin itself is relatively low, a combination of factors including R&D, market exclusivity, regulatory barriers, market dynamics, and distribution complexities lead to the high prices seen by consumers. These factors contribute to the perception and reality of insulin as an expensive drug.

[TheEncogitationerParticipant]

Unseen,

It would be ridiculous to think that pharmaceutical firms wouldn’t do Research and Development without government support. After all, they want as many revenue streams as possible in the form of effective drugs, and every business wants live customers as well.

And all of the government support of Research and Development comes from taxes paid by private enterprise. Doesn’t this make Research and Development subject to lobbying and political pressure? Doesn’t government subsidy of medical Research and development also take away revenue from other possible products that could assist diabetics, such as production of new sugarless sweeteners, new exercise equipment, etc.?

And why would anyone need analog insulin if there was a plentiful supply of the real thing in the form of human or xeno-derived pancreas transplants, vat-grown pancreases, or regeneration of existing pancreases in the form of stem cell repairs? It will take private enterprise to develop these innovations and the freer and less taxed these enterprises are, the better for all who seek better health.

[UnseenParticipant]

@ Enco

And yet, the pharma giants can afford to peddle their wares at a half, a third, or less what they cost here in other countries.

I suppose in countries where people can afford less or where insurance is stingier, they can sell them and still make a profit.

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