It is wrong to paint all pharma companies with the same brush

Drug discovery is a very high-risk and expensive business, according to recent data, it takes more than 1 billion USD  and almost 12 to 13 years to launch a new, successful drug in the market. One can debate and discuss why this process is so low-yielding, expensive, and inefficient, but people who work in this area know that it is not that easy to point out any single factor responsible for this bleak scenario. It is also true that we need new drugs to stay ahead in our battle against many bugs and deadly diseases like infectious diseases and cancer. Industry and academia are equally engaged in the research aspect of drug discovery, many initial leads come from academia that result in small biotech firms which then go on to develop some novel drugs in that therapeutic area. Even though industry and academia are both equally involved in basic research, commercialization, and drug development part of drug discovery is exclusively with industry. One of the main reasons is that it is a very expensive and tedious process with a very high failure rate and only industry has funds and resources to handle this process. So what is my point behind mentioning all these things? The point is the question of "drug pricing," an ever-debated and very controversial topic all over the world, especially, in America. I think everyone will agree that people should be able to access life-saving drugs if they need them, but the question is who will pay if they can't afford them? If we look at the pricing of some of the new drugs in developed countries, especially in the USA, then one can easily understand what I am talking about. For example, the price of Gilead's new hepatitis-C drug Sovaldi is 84000$ for a 12-week course, almost 1000$ per pill. No doubt, it is an expensive drug by any standards, but it is also a very effective and lifesaving drug that has changed the treatment regime for that disease remarkably. This drug is just one example to show how effective and expensive some of these medicines are. Drug development is a profit-making business and like any other business, this industry also tries to make as much profit as they can from their products. There are shareholders and a stock market and each pharma company has to make sure that it stays ahead in the game by making as much profit to its shareholders as it can.

It is always debated what can be the optimal pricing for any life-saving drug? Who can decide how much a drug company should or can charge for their new lifesaving drug? How expensive is too expensive? How about third-world countries where most people can not pay for such expensive drugs but need them as much as people from any developed country? There are many questions like this but hardly any satisfactory answers. In the US there is a very good drug discovery culture and basically, they subsidize drug discovery for the rest of the world. In most developing countries like India, drug discovery is considered a waste of money and there is no proper mechanism to encourage it. So, basically whole world is dependent on a few handful countries for the development of new drugs in any therapeutic area. Hopefully, this scenario might change, but currently, only developed countries are expected to carry the financial burden of developing new drugs. And as the pharma sector is also a business and like all other businesses, it also needs investments and has to generate enough profits to attract those investments. So, all factors that play a major role in any other commercial industry also play a part in this industry also. Whatever is not financially attractive is not pursued no matter how important it might be, the recent exit of most major pharma companies from the antibiotic sector is one very good example of this. It is very expensive to develop new drugs, and above that it is very risky, only 1 in 10 drugs that enter in clinical phase get FDA approval, and someone has to pay for all those failures. The industry has to recover all the money lost during the development of other drugs that failed from that one successful drug. This is one of the major reasons why some of the drugs are so expensive. However, this is not an attempt to justify the high pricing of all the drugs, but just an effort to explain things so that people know the other side of the coin also.

I am sure everyone will agree that the best possible scenario will be to have affordable drugs for all major illnesses available all over the world. They should be accessible to every patient who needs them, irrespective of their nationality or financial status, but we all know that this feat is not possible to achieve in the near future. With increased life expectancy all over the world, we are going to see many more people who will need some sort of medicine to maintain their health. There are no easy solutions for this very complicated problem, but maybe if we try to understand the cause of this problem then we can understand the position of the pharma industry a little better. It is wrong to paint all of them as villains and accuse them of being insensitive and selfish money-mongers. Drug discovery is a business so like all other businesses it needs to be profitable, it needs to compete with other businesses to attract talented and hard-working people so that innovative ideas keep on coming. This business also needs to adjust and survive different pressures and trends of a market-based economy. Society, the government, and all companies need to devise some formula that can make medicines more affordable for everyone. The Pharma industry is just one part of this complicated puzzle of drug pricing. At the same time, any sort of criticism should be welcomed by industry insiders as it will make them correct some of their mistakes, but it is unfair just to blame them or target them every time. It is wrong to look at only one side of the problem and draw final conclusions. Please try to study every angle of this issue before coming out with any final conclusion. I am sure it can be possible to keep on inventing new drugs and make them affordable also, we just need a proper system and political and corporate desire to achieve this goal.

Thanks for reading and please share your views on this topic.

[Copyright: Vinay Thakur. Please contact the author for re-posting or publishing]

Overhead costs and NPOs

Recently I heard a TED talk by Dan Pallotta, about how the way we look at our charity is totally wrong and how we use double standards while looking at profit organizations (PO) and non-profit organizations (NPO). This talk was very informative and sort of an eye-opener for me. I am guilty of doing one of the things that he mentioned in his talk, I also used to judge any charitable organization based on how little they spend on overheads. I used to think overhead spending was a total waste of donated money, every donated penny should be used for the cause for which it was donated. People donate their hard-earned money towards causes they like because they want to see that change in society but can't devote enough time towards that cause therefore, they donate to some organizations to work towards such causes. This all requires a lot of infrastructure and people to make things work, and this is where this talk is very helpful, Dan does a really great job in explaining to us how we need to look at the spending of these NPOs.

I loved this talk not only because it demonstrated how flawed my attitude was but also because he made a very strong case about problems of non-profit organizations because of some unreasonable expectations from donors. Every donor has a full right to know how their money is spent and how it helped the cause for which they donated. At the same time, they all also need to understand that these organizations also need to hire talented and motivated people to work for them, for this they must compete with all these profit-making organizations to attract this talent and if donors expect them to work well then we need to accept that they are bound to have some overhead costs. We need to judge them based on their performance and not how much they spend. If they are working very well towards achieving their goals and spending reasonable money as overhead cost then we should not complain. In today's world social work can be a profession and like all professions, it also requires a lot of hard work, dedication, and commitment to become successful. People working with NGOs also need to have a normal life, they also need to have their own families and look after their needs and whether we like it or not this all requires some amount of money, and if they are engaged in full-time social work this work needs to generate that money for them and we must remember this context while looking at the overhead costs.

This talk has changed my outlook towards NGOs and all other socially active organizations. I do care about how much they pay to their employees and if it's a reasonable amount I don't feel cheated or feel that they are wasting my money. I do understand that they need talented and hard-working people to do this job and it's not easy to attract good talent without having a good or at least reasonable package. At the same time, these organizations need to be careful about how they spend their money as people like to see most of their money being used for the cause to which they donate. This can be a tricky exercise but these organizations need to do it to keep all donors invested in the mission. I hope this talk will help many people to understand better how these NPOs use or can use their money in a somewhat better or more efficient way by hiring talent that would work hard towards their missions.

Thanks for reading and please share your opinion about this topic.

[Copyright: Vinay Thakur. Please contact the author for re-posting or publishing]

Links:
1. TED talk of Dan Pallotta