Yes, pharmaceuticals make healthy profits, and yes, there is plenty of “gravy” in the industry. But even if drugs were developed by nonprofits, they’d still be really expensive – maybe $40,000 instead of $50,000 for a course.
The other major determinant of pricing is the patent system. If you double the patent window, drug costs would be halved (all else being equal). But then you delay the availability of cheap generics.
In fact, cancer drugs are so profitable to make and sell that there are drug shortages all over the place. It’s like when a new Playstation comes out and they deliberately do a short first run to really get demand up.
Seriously, I have idea what complex reasons have caused this crisis, but I can guarantee you if they were making money hand-over-fist on these drugs, there would be no shortage. It’s true that the drug companies are in it for a profit, but these are generics that aren’t being made by Pfizer or GlaxoSmithKlein. The drug companies aren’t saints, and they have IMO poorly mismanaged their resources. Like it or not, some drugs actually are expensive to make. They are also extremely expensive to discover.
Most chemotherapy drugs do the same thing, which is prevent cells from replicating and dividing. Chemotherapy drugs have a lot in common with antibiotics, they prevent the replication of cells except they target our own cells rather than bacterial cells. But antibiotics are dirt cheap despite then finding a wide variety of targets to prevent cells from dividing. I don’t see why it would matter if there are 200+ kinds of cancer, there are 200+ kinds of bacterial infections too. But chemotherapy drugs that prevent human cells from dividing in the 200+ forms of cancer are far more expensive than antibiotics that prevent prokaryote cells from dividing in the 200+ bacterial infections. So why are chemotherapy drugs more expensive than anti-biotics?
Shouldn’t most chemotherapy drugs be off patent by now though? And the market for chemotherapy seems huge, several million people in the US per year probably require them. Those things should drive down the cost of the on patent medications.
Lipitor may face competition from drugs like zocor or all the other off patent statins. But various chemo agents are off patent too. Cisplatin is about $100, Oxaliplatin is $10,000. That is far bigger than the price difference between generics and on patent medications for most other diseases. Like I said, lipitor is $60 but the other statins are around $4. That is 15x higher, not 100x higher. Outside of cancer meds do meds for other diseases cost 100x more for the on patent version vs the generic?
How do you incentivize people to develop new life saving drugs? Most people won’t do it purely for altruism. Most people, and companies will do it if they can generate wealth from it. This is true for almost all new advances or technologies. If you take away the incentive, very few new advances would be developed.
So, the profit as an incentive is good. Without it, most of the lifesaving drugs we have today probably would have not been invented.
Most of the main-line chemo drugs are off patent, and they really don’t cost that much. A course of treatment with fluorouracil, methotrexate, or vincristine cost maybe tens to hundreds of dollars for just the drugs. That’s more expensive than antibiotics, but not dramatically so.
(Of course the entire cost of chemotherapy also includes many hospital visits and is often accompanied by radiotherapy or surgery – all of that gets very expensive).
The recently developed cancer medications have typically been specific inhibitors of oncogenes, rather than general-purpose inhibitors of metabolism. That generally means the new drugs are only useful for a small subset of patients, but they can have greater success without as many side effects since they target the cancer rather than the whole body. E.g., herceptin which is only indicated for the 30% of metastatic breast cancer patients with increased HER2 expression activity. It costs about $70,000 per treatment course. It will be off patent in four years, but it will be awhile before there are any cheaper generics, since the FDA does not yet know how to regulate generic biologics.
Chemotherapy agents have very little in common with antibiotics. Antibiotics generally are targeted at bacteria, which are in a completely different kingdom than humans. They have different biochemistry which allows us to relatively easily develop drugs which slow their reproduction or kill them without excessive toxicity to humans.
If you simply want all the cells in someone’s body from replicating and dividing, cyanide would do the trick. Cancer cells are defined by their unchecked replication but are not very different from normal cells of the same lineage, particularly early on. Killing them is easy, but killing them and sparing normal cell is relatively difficult.
Oxaliplatin is not the generic version of cisplatin. They are different drugs and are different in many ways. Cisplatin has much, much higher oto and nephrotoxicity and the price differential could be justified on that basis alone.
Plus, with antibiotics we had the fortune of finding most of them in nature. They were already optimized by evolution to inhibit bacterial replication without causing trouble for eukaryotes (specifically the fungi that produce many antibiotics). Once antibiotics were discovered, it was pretty easy to find more and tweak them for our use.
With the earlier chemotheraputics, it was more “let’s find really toxic shit that does slightly more damage to cancer cells”. So chemists took fundamental biomolecules and modified them to jam up the works, and then tested them in animals to see if any were suitable for treating cancer.
(I’m speaking very generally here…)
The more modern rational drug design approach is conceptually much more elegant, but it hasn’t produced as many useful drugs as everyone hoped.
This is one of the reasons pharmaceutical companies are such easy targets of conspiracy theories. You practically need an MD or PhD to understand the drug discovery process. (I say practically, because I’m sure there are BS degrees that understand better than I do.)