Let me give you a simple example: were I to cut off all of the oxygen to your lungs, you might be willing to pay me a ridiculous sum of money to let you breathe again. And it would be "worth it" to you given the downstream benefits.
And, I'm sure, the day that Gilead begins injecting patients with the Hep C virus so they can extort money for treatment, we'll be able to return to your analogy here and reflect on how relevant it was. Until then, it's not constructive and only serves to illustrate how little you understand about healthcare policy, the pharmaceutical industry, and business financing in general.
Is it opportunistic to charge $84k for a life-saving healthcare therapy? Sure. Is it unethical to do so in Western markets where payers (governments, insurance companies, assistance programs) can afford it? No, it's not. Especially when the cost of the drug is negated by the savings to the system long-term. And especially when they're offering the drug for $300 in emerging markets that can't afford the price!
I'll encourage you to continue your research. You have a lot to learn about the dynamics between the market, pharmaceutical companies, payers, regulators.
Actually, we discussed this very issue just a few weeks ago. And I still disagree with you. You have your economics wrong.
My economics, in this specific case, were guided by the Institute for Clinical and Economic Review. If you're not aware, these are independent academics who do the pharmacoeconomic reviews for public/private payers to determine whether or not a drug is worth paying for. You're welcome to read the report at the link below, but I'll summarize with a quick line: The findings of our model suggest that the increased costs of simeprevir and sofosbuvir are offset by downstream savings from reductions in liver‐related complications and greater numbers of patients achieving SVR.
Furthermore, I (having studied pharmacoeconomics) can tell you that their estimates of cost savings are not only conservative in the dollars sense, but don't take into account the quality-of-life benefits of the new treatment. The old interferon-based injection treatment is particularly nasty on the body, compared to the new oral medication. So, there's that.
"The reward"? A reward maybe, but *not* an excessive reward that will kill others when they could be saved for very little.
So who decides the reward, then? Admittedly, Gilead does have stellar profit margins to lean on. That said, their stock did take a bit of a dive late last year when they announced they would be dropping the price of a course of sofosbuvir treatment in India to $300. That point of note seems to have been omitted in Moody's article. As far as "killing others when they could be saved", it's worth knowing that the Bill & Melinda Gates Foundation's Access to Medicines Index ranked Gilead is for making medicines accessible to people who need it.
What I'm getting at here, Mike, is that the sensationalist perspective of big pharma companies denying people the right to life is overblown by people (in this case like you) who don't bother to take the time to really dive into the facts. I really like your work, and generally agree with you positions (I'm here, aren't I!), but in this case you're just not well-informed.
I doubt any of the other commenters have studied pharmacoeconomics, because the issue of life-years gained hasn't come up once. Let's put this in context - Gilead's new drug cures Hep C. Cures it. No more wasting away from liver failure (and other related comorbidities) in a hospital, costing taxpayers/private payers hundreds of thousands of dollars over the course of a single patient's illness. As context, in Canada a hospital bed costs $1k a DAY. It's likely higher in the US. So a drug company has come up with a CURE that costs $84k for a full treatment course.
At the time, Gilead made a massive investment on an unapproved treatment, and they struck oil (so to speak). This product is not a fancy new blender - this will save hundreds of thousands of lives, and in a relative sense will cost the system far less. In my opinion, they deserve the reward for taking on the risk.
Feel free to disagree with me, but if you don't have a basic understanding of how the industry works please read about it first. Things are not always what they seem.
I can add some insight here. The misleading part is that the analysis is incomplete without ‘weighting’ availability against real subscription numbers. To be honest, the consultants should have known better.
Consider this: the study says that 95% of titles are on Hulu Plus and 17% are on Netflix. What if we layered on data to show that only 1.6% of the population uses Hulu Plus, but 10% use Netflix. By weighting the calculation you realize that to the general population, the 95+% availability really doesn’t mean very much in terms of absolute access to content. Not to mention that when you consider that most people will only want to pay for a few subscriptions (at most), saying content is available in at least 1/34 services is not conclusive enough to be able to call it 'widely available'.
It would have been far more insightful if we saw availability by service, or weighted availability against total subscriptions. Otherwise, I have to agree that the conclusion is misleading.
Techdirt has not posted any stories submitted by Andrew G.
Re: Re: Re: Re:
And, I'm sure, the day that Gilead begins injecting patients with the Hep C virus so they can extort money for treatment, we'll be able to return to your analogy here and reflect on how relevant it was. Until then, it's not constructive and only serves to illustrate how little you understand about healthcare policy, the pharmaceutical industry, and business financing in general.
Is it opportunistic to charge $84k for a life-saving healthcare therapy? Sure. Is it unethical to do so in Western markets where payers (governments, insurance companies, assistance programs) can afford it? No, it's not. Especially when the cost of the drug is negated by the savings to the system long-term. And especially when they're offering the drug for $300 in emerging markets that can't afford the price!
I'll encourage you to continue your research. You have a lot to learn about the dynamics between the market, pharmaceutical companies, payers, regulators.
Re: Re:
My economics, in this specific case, were guided by the Institute for Clinical and Economic Review. If you're not aware, these are independent academics who do the pharmacoeconomic reviews for public/private payers to determine whether or not a drug is worth paying for. You're welcome to read the report at the link below, but I'll summarize with a quick line: The findings of our model suggest that the increased costs of simeprevir and sofosbuvir are offset by downstream savings from reductions in liver‐related complications and greater numbers of patients achieving SVR.
http://www.ctaf.org/sites/default/files/u119/CTAF_Hep_C_Apr14_final.pdf
Furthermore, I (having studied pharmacoeconomics) can tell you that their estimates of cost savings are not only conservative in the dollars sense, but don't take into account the quality-of-life benefits of the new treatment. The old interferon-based injection treatment is particularly nasty on the body, compared to the new oral medication. So, there's that.
"The reward"? A reward maybe, but *not* an excessive reward that will kill others when they could be saved for very little.
So who decides the reward, then? Admittedly, Gilead does have stellar profit margins to lean on. That said, their stock did take a bit of a dive late last year when they announced they would be dropping the price of a course of sofosbuvir treatment in India to $300. That point of note seems to have been omitted in Moody's article. As far as "killing others when they could be saved", it's worth knowing that the Bill & Melinda Gates Foundation's Access to Medicines Index ranked Gilead is for making medicines accessible to people who need it.
What I'm getting at here, Mike, is that the sensationalist perspective of big pharma companies denying people the right to life is overblown by people (in this case like you) who don't bother to take the time to really dive into the facts. I really like your work, and generally agree with you positions (I'm here, aren't I!), but in this case you're just not well-informed.
Re: Re:
(untitled comment)
At the time, Gilead made a massive investment on an unapproved treatment, and they struck oil (so to speak). This product is not a fancy new blender - this will save hundreds of thousands of lives, and in a relative sense will cost the system far less. In my opinion, they deserve the reward for taking on the risk.
Feel free to disagree with me, but if you don't have a basic understanding of how the industry works please read about it first. Things are not always what they seem.
Re: Re: Re: Re: Re:
Consider this: the study says that 95% of titles are on Hulu Plus and 17% are on Netflix. What if we layered on data to show that only 1.6% of the population uses Hulu Plus, but 10% use Netflix. By weighting the calculation you realize that to the general population, the 95+% availability really doesn’t mean very much in terms of absolute access to content. Not to mention that when you consider that most people will only want to pay for a few subscriptions (at most), saying content is available in at least 1/34 services is not conclusive enough to be able to call it 'widely available'.
It would have been far more insightful if we saw availability by service, or weighted availability against total subscriptions. Otherwise, I have to agree that the conclusion is misleading.
Techdirt has not posted any stories submitted by Andrew G.
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