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  •  Drug Research Financing and the Lottery. (1+ / 0-)
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    elfling

    There is a big problem with how we finance drugs.  We have private companies work to get patents who then sell drugs for whatever the market will bear.

    The are a number of problems with this.  

    One is that at the foundation of the whole biotech industry is public funding for basic science research.  Industry takes chemistry already brought just short of being ready for market in universities, and then does research and safety tests that take the final step, yet get all the profits.

    Another is that very often, government is the primary consumer.  With Medicare Part D (drug coverage) we are very close to a single payer system for all drugs directed at the elderly.  Medicaid overwhelmingly, although not quite entirely, pays for health care for those with long term disabilities, like cystic fibrosis and Down's syndrome.  Even when government doesn't pay for the drugs themselves, it often pays for the long term care made necessary by the lack of good drugs.  About 70% of nursing home care is paid for by Medicaid.

    Particularly in the case of drugs for geriactric illnesses, the government (which also does an excellent job of controlling senior executive pay in large organizations and doesn't make a profit) would be better off simply commissioning research on drugs, rather than waiting for private industry to do so and paying a premium for government created patent based profits.  Government should own the patents to many of these drugs in the first place.

    Another aspect of drug research, the reason that drugs like those mentioned get invented at all, is health problems we must urgently want to fix, and health problems we know how to fix, often don't match up.  Ritalin was developed as a diet drug, but the side effect turned out to be more valuable.  The best bang for your buck heart drug today is asprin, again something it was not designed to cure.  Drug research is glorified playing around with chemicals and finding out what they do to people, with a little targetting at the most promising prospects.

    Insurance is designed to deal with differences in risks between patients.  But, in the area of drug research, one of the better reasons for public funding as opposed to private research, is that the real risk issue is over what conditions we end up finding cures.  

    Drugs like Remodulin® were the product of generalized research on circulatory system drugs.  PAH sufferers got lucky.  One of the things that R&D ended up being able to cure was PAH.  It could have been the blood clots people get on long airplane drives.  It could have been hemaphillia.  It could have been strokes in people with high cholesterol.  Everybody pays in, in the hope that somebody is going to win the lottery and have a disease that they suffer from cured.  But, it is more a product of accounting rules than scientific fact that the R&D cost was allocated to PAH sufferers, instead of someone else.  Making the pills themselves isn't all that expensive.  $100,000 a year drug prices are amortization concepts in action.  But, sometimes, it would make better sense to finance drug R&D the same way we finance the lottery.  All potential winners pay in a little on a regular basis.  Now and then, somebody gets a big payoff.  People who participate think the payoff is a good thing.  So the game continues.  And, unlike the lottery, coming out behind in the drug research game isn't a near statistical certainty.

    "Those who can make you believe absurdities can make you commit atrocities" -- Voltaire

    by ohwilleke on Fri Jul 21, 2006 at 09:49:01 AM PDT

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