About 16,000 biotect executives and scientists are convening in Washington DC this week for their annaul meeting, the first in the nation's capital since 1990, amid excitement amoung cancer patients and investers about the potential of these new drugs. These drugs are the product of public and private investments in genetic research that is revealing the molecular secrects of tumors,and molecular substances, giving scientists new ideas about how to attack them, and creating the tools to exploit these ideas.

We have, to name a few, FluMist, Rebif, Viread, Amevive, Cardizem, Proleukin, Zevalin, Renagel, Aranesp, and finally Avastin.
Recently approved or under developement these drugs are expected to contribute to the rising fortunes of the top biotech companies in the near future.</p> Should these company's be allowed to price treatments, costing anywhere from $10,000 to $50,000 a year, or asking a fair market price for the drug while NOT paying for the combined efforts of all who forged their way to help since 1953, Watson and Crick figured out the structure of a molecule called deoyribonucleic acid...?

I see life and death in the balance for many people in the world with this great leap in medical science but also see the potential for a diaster if the prices aren't based on a real prodution cost.

What are your feelings about this subject IronWorkers?

These new drugs may prove a boon not just for headline grabbing diseases such as cancer, but for a whole rangs of auto-immune conditions. For example, Amevive seems to offer hopef as a a potential method of managing psoriasis.

Just how we as supposedly "civilised" societies balance the rights of the developers to profit from their research with the needs of disease sufferers will be interesting.

I firmly believe that health is a right to anyone, whether they can pay for it or not.

However one must also remember that R&D for drugs is extremely costly and risky. I am a biotechnology student, and I have had some experience with lab work: everything costs a fortune. It's not that uncommon to burn some thousand dollars if you flunk an experiment, and those things happen. And if you get them right, the cost isn't any lower. Take a peek if you wish to the prices on the catalogues of stratagene, biorad, sigma aldritch and so on. You will notice most of those thing cost more than your wedding ring.

So the point is: if you force companies to sell their products at unreasonably low prices, they will stop researching, and you will stop gettind brand new drugs designed to save your life. On the other side, if you let them do whatever they want, aspirin will rise to 100 dollars a tab.

My opinion is that some kind of public institute should monitor the production processes - it's actually quite easy to estimate the production cost of anything - and punish exploitations. Who should monitor the institute, well, that's another matter... And what does exactly exploit mean?...

The trick is in the patenting of the drugs. This is the payback the R&D folks get, as their company (or the company they sell to) will get a monopoly for a limited time (I think it's around 20 years for drugs).

The health effect on this is that the drug is prohibitively expensive for the first 20 years, then plummets in price as generics are made. It is good, IMO, when it plummets in price and we should never let the BigDrugCo's sell us on the notion that generics are bad. They are, in effect, the return of the system to the free market that would have existed absent the patent.

Of course, if you're poor, this just means you have to figure you can't afford any new drug you need until it's been around for 20 years. By which time your health has certainly been permanently affected. Therein lies the rub. :( And, BigDrugCo tossing a few million at this charity or that charity may make BigDrugCo look and feel better, but it really doesn't address this problem.

Nice to meet you B-part and good luck in your study's! I am using the word as meaning "to try everything". Mixing this with that and see what happens basically. Tweaking genetic compounds to offer the best potential results using drug cocktails. Although someone has to try these drugs not really knowing what the long term effects on their body will be. In that sense the word could be taken in that context also.

Great idea Mouse. I am not sure of what the outcome of Imclone will be but I hope safeguards will be setup because of this early warning sign that something needs to be put in place. With Idec and Biogen merging into the 3rd largest Biotech firm out there what is likely to happen in the future suggests to me that compition in this field will get brutal and patients will start paying for that also. Just a thought. Amevive manipulates your T-cells and supresses them as in Aids treatments. Mybe some of you here at IW know that I have a touch of psoriasis and would welcome something that would work besides mythotrexate. Yes, I took that for awhile and it cleared up my skin as long as I was on it. It really made my body go crazy thow. I don't feel as thow I am ready to try this Biogen to clear up from what I went through, and still feel sometimes, for a few red patches of dry skin. The sun seems to really help so i will stay will that for now.

Good point Timber. I guess in medicine research the well to do can do as they please. I wish it wasn't that way.

Thanks :D

Not sure what meds you are on just now, but in my experience, Dovobet is about the most effective topical treatment atm ;) I'm also interested in seeing what effect two weeks of full-on sunshine in Lanzarote will have in July.

Don't curse the R&D guys making a profit. That's where the true cost of drugs is. All those scientists and huge labs cost a pretty penny you know.

From a business perspective, there are at least four kinds of costs to be considered. From top to bottom, they are:

Facility costs -- the cost of having a plant or facility to make or do anything.

Product costs -- the cost to make a product, including tooling and R&D

Batch costs -- the cost to make a batch of product, including setup and trial runs until the process is controlled

Unit costs -- the cost to make an additional unit of product. This is typically the raw material and production labor

Traditionally, facility and product costs are thought of as fixed, and batch and unit costs are thought of as variable.

To make a drug, companies incur substantial product costs -- the research involved in creating the drug and finding out whether it's useful or not. The company generates no revenue until it can sell some product, or starts to incur unit costs. If it never sells anything, it never makes any revenue.

So, the complaint about drug prices is about the price versus the unit cost, as opposed to the price versus the total cost. Each additional pill or treatment sold should cover its own unit cost and a portion of its batch cost, and any money left over starts to cover the product and facilities costs.

Eventually, enough product has been sold to cover the product costs. At that point, the money that covered the product cost is now pure (or mostly pure) profit.

Should companies be allowed to make a fair profit? Absolutely. Should they be rewarded for investing their money to develop products that may or may not succeed? Yep, as long as the market decides. Should they raise the price to what they think the market will bear? Well, here's the nutter between capitalism (yes) and socialism (no). There are no right answers for this one, just ways of being.

I say let 'em charge what the market will bear. That already happens, with negotiations between insurance companies and providers; the same thing will happen with the drug companies.

And now, I've gotta run, so I'll come back later for any toasty responses :D

I am convinced of how the costs can go to the roof when experimenting with these drugs and also the time, hard work, and investment it takes to do so. My dissapointment is how companies may dictate "what drugs" to pursue based on the profits rather then the cures or treatments. (Points well taken Sir K, and Bungleau. ;) )

I have tried Dovnex but not Dovobet Mouse. I will check up on that thank you! Lanzarote sounds good to me also. Couldn't be much worst then what kind of day we are having here. Code Red - Blah! ;) </p>*\Conan/*

Mytothrexate kills indiscriminately all the proliferating cells: it affects DNA synthesis, a process which occurs only in dividing cells and not in the terminally differentiated cells of your body. That's the reason why it is used in anti tumor treatments.

Psoriasis is thought to be caused by T-lymphocites attacking your skin cells. T-cells proliferate when activated against a threat (true or presumed), so methotrexate kills them. The problem is, proliferating cells are responsible for replacing your blood, producing gametes and other functions, which get disrupted by methotrexate. Hence the side effects.

According to biogen, amevive acts only on t cells. So that should reduce side effects, since the other cell types in your body should be unaffacted. The problem is, T cells proliferate whenever they sense a danger, and that also happens when the body gets infected by viruses and bacteria. So the side effects include "sore throat, dizziness, increased cough, nausea, itching, muscle aches, chills, injection site pain, injection site inflammation, and accidental injury.", because your immune system is messed up

Maybe you should talk to your doctor and see whether a "touch of psoriasis" is really worth this.

Sun is a great cure, though, and perhaps the best you can get with no, or few, side effects. And also some positive ones - hey dad i need to cure my psoriasis, give me money to go to the sea with my friends... :D

For a definitive cure which ails the ilness and doesn't only reduce the symptoms, you will need to wait further investigation on T cells activation pathways, which are far from understood, then further research on the drugs required to stop that process. BAsed on what I've learned in my immunology courses, you will have to wait a long time... :(

[ 06-25-2003, 09:42 AM: Message edited by: B_part ]

Thank you B-part! The baby boomers will be counting on you in the future!</p> Here is an article appropriate for the thread;

The Wrong Prescription for Pricing Drugs

_____Live Online_____

• Wednesday, 11 a.m. ET: Steven Pearlstein will be online to talk about prescription drug prices.




By Steven Pearlstein
Wednesday, June 25, 2003; Page E01


With money-making drugs finally on the market, potential blockbusters in the pipeline and stock prices soaring, the biotech industry is over at the convention center this week celebrating its long-awaited deliverance to the vital center of health care.

But for all the good news, a cursory review of the recent headlines suggests that there's big trouble brewing for biotech and its rich cousins in the pharmaceutical industry:

Supreme Court backs Maine's drug- pricing law. AstraZeneca cops a plea to conspiring with docs to bilk Medicaid. The government joins two whistle-blower suits against Merck-Medco alleging that it substituted its more expensive drugs for cheaper ones. Congress debates a law that pretends to make it legal to import lower-priced drugs from Canada and Mexico.

The common thread here is drug pricing, a highly secretive and cynical game being played with increasing sophistication by doctors, hospitals, drugmakers and pharmacy benefit managers. Unless the rules of the game are fixed, over time it is likely to either bankrupt the health care system or turn out such perverse results that we finally opt for a regime of innovation-stifling government price controls.

What makes drug prices such a black box is that (1) they have nothing to do with costs, (2) they are negotiated in strict secrecy, and (3) they depend largely on the buying clout of the health plan or country on the other side of the bargaining table.

The result is that for most drugs, there is no one price, but a wide range of prices, from the very low (for poor countries where the government negotiates on behalf of all of its citizens) to very high (what pharmacies charge Americans without insurance).

It is fashionable for American politicians to rant and rave about how drugs developed and manufactured in the United States are cheaper just across the border in Canada and Mexico. But this is not a problem. This kind of "price discrimination" is a good thing in terms of both economic efficiency and social outcomes, getting useful products to the largest number of people at the lowest overall cost. If drug companies were required to charge Americans the same as they charge Canadians, their profit-maximizing response would be to raise prices in Canada, which wouldn't do much for Grandma in Minneapolis.

On the hand, there are plenty of things we could do to make the market work more fairly and efficiently, starting with a requirement that drug companies dispense with their fictitious wholesale price lists and reveal the range of prices actually paid.

It is also absurd that those without insurance coverage -- generally a low-income group -- should pay the highest prices for drugs. The new Medicare bill solves that problem for seniors. For the other 40 million, there's no reason why every state shouldn't follow Maine's example and extend Medicaid's price list to them.

Maine also has a better idea in Democratic Rep. Tom Allen's proposal to authorize the National Institutes of Health to come up with scientific standards for analyzing the cost-effectiveness of new drugs -- an area now so open to varying assumptions and interpretations that any drug can be justified at just about any price.

The industry is fighting this tooth and nail behind the scenes, with good reason. They know that such standards will arm the government and health insurers with the objective criteria they now lack to refuse to pay for drugs like those little purple pills that deliver little or no extra benefit.

And in the case of truly breakthrough drugs, such research will establish an upper limit on what the rest of society is willing to pay to give an asthmatic the ability to walk a mile or to extend the life of terminal cancer patients for a year.

If that sounds like a backdoor form of rationing, so be it. However imperfect, it would be a far sight better than letting drug companies keep the upper hand in a marketplace where too often they can manipulate demand and dictate prices.

Steven Pearlstein will host a live online discussion at 11 a.m. today at washingtonpost.com. He can be reached at pearlsteins@washpost.com.