Critics warn new medicines could be lost by reducing out-of-pocket costs. But there are good reasons to be optimistic about future medical research.

It is a harrowing proposition: that in trying to control drug prices for 67 million Medicare patients now, we might inadvertently prevent the development of future drugs that could save lives. Implied, if not stated outright, is that we’re putting a cure for cancer or Alzheimer’s or some other intractable disease in jeopardy.

But we have good reasons to believe that the current policy won’t have such a trade-off any time soon. For one, pharma is hugely profitable, and these negotiated prices, while potentially chipping away at profit margins, should hardly entirely dampen the incentive to innovate, according to a couple of key studies of the industry. Two, if we are worried about future innovation, we should be focused on making it cheaper to develop drugs – and this is actually one area where AI is showing promise. By identifying the best candidates for possible treatments early in the research process, we could speed up development and continue to reduce costs — without losing out on tomorrow’s breakthroughs. …

  • circuscritic
    25•4 months ago

    The correct answer is neither.

    Miracle drugs are almost exclusively funded, or heavily subsidized, by the public sector. Typically through NIH grants, or other public funding mechanisms through the University system.

    R&D budgets for a big pharma go to things like reformulating existing brand name drugs, to prevent them going generic as they are supposed to under current law. Or other high return, reduced effort, drugs i.e. new dick pills, narcotics, etc.

    Executive pay and bonuses are not going anywhere, no matter what happens with these drug prices. They will cut their company to the bone, and then collude with private equity to take them private and gut it, before they ever considered cutting down their bonuses or stock options.

    • @____@infosec.pub
      13•4 months ago

      I benefit from an orphan drug, and the R&D was most definitely subsidised by the public purse.

      My insurance pays a few grand a month for it.

      The mfg coupon covers most of the rest, minus a copay.

      This is the second iteration of the original drug. The first hasn’t meaningfully fallen in price and only the original company can manufacture and distribute the generic even under the name of competitors.

      There was no breakthrough in the second iteration, and the logic to solve the “problem” they solved was straightforward. So now I pay more, for an anecdotally less effective version that addresses a risk irrelevant to me but present in the original.

      There is yet a third iteration on the way.

      Shock revelations:

      • pharma companies are greedy and will double dip against both government subsidies and patients/insurance at every opportunity.
      • XX Pharma didn’t pay for the original R&D, my gov did.
      • if one replaces Na with a/several similar elements, one still ends up with a salt, often resulting in a drug variant that “doesn’t affect blood pressure” and offers no other real benefits, nor risks.
      • Clinical trials for said alternative salt are broadly leas expensive than for the original. That does not result in lower prices.

      Nationalise pharma research, if not the manufacturers.

      Also, generics are often manufactured in countries with, shall we say, fewer controls and regulations. Know who makes those pills and where. If you can’t stomach the FDA reports on that manufacturer, find a pharmacy who will sell you something else…