Cost of developing new drugs may be lower than industry claims: trial

Original Article ↗ Hacker News Discussion ↗

Scope of Drug Development Costs

  • Major debate on whether you should divide R&D costs only across successful drugs or also include all failed candidates and abandoned programs.
  • One side: you must amortize failures; otherwise you understate true economic cost. Discovery is an ecosystem with many losers funding a few winners.
  • Other side: “failure” also generates knowledge, and companies over-attribute broad portfolio and corporate costs (M&A, lobbying, marketing, executive pay) to justify very high per‑drug figures.

Role of Public Funding vs Private R&D

  • Many comments note that universities and government (e.g., NIH) fund a large share of basic research and early discovery.
  • Counterpoint: academia usually stops at cell/animal work; the most expensive parts are optimization, manufacturing scale-up, and human clinical trials, which are largely privately funded.
  • Disagreement over how to count public vs private dollars and whether M&A spending should be treated as R&D.

Drug Pricing, Patents, and Market Structure

  • Strong focus on the gap between marginal manufacturing cost and US retail prices (e.g., semaglutide, insulin, HIV prophylaxis, biologics).
  • Patents and regulatory exclusivity create temporary monopolies, especially for life-saving drugs with inelastic demand.
  • Examples of price discrimination: same drug much cheaper in Europe/other “sane countries,” with claims that US buyers effectively subsidize lower foreign prices.
  • Practices like pay‑for‑delay and patent gaming are cited as ways to extend monopoly rents.

Ethics, Access, and Regulation

  • Some argue high prices and strong IP are necessary to incentivize risky, long-horizon R&D; without large upside, fewer drugs would be developed.
  • Others argue health care is not a normal consumer market; life-or-death needs justify price caps, compulsory licensing, public drug development, or state IP buyouts.
  • Personal anecdotes highlight avoidable deaths and severe hardship from unaffordable insulin or other drugs, used to argue the current system is morally unacceptable.

Critiques of the TB Trial Cost Example

  • The showcased €34m TB trial combined older, already-approved small-molecule drugs, used off-the-shelf generics, and was run in lower-cost countries.
  • Critics say comparing this to headline “$3B per drug” industry figures is apples-to-oranges, since it omits discovery, failed programs, high-cost indications, and Western regulatory demands.
  • Supporters still see value in transparent, itemized trial-cost reporting as a benchmark and accountability tool.