Drug Goes From $13.50 a Tablet to $750 overnight after buy out by hedge fund start up

[two sheds]

So Diamond you've had a while to digest this. We've learned that 'Closed distribution' is the reason that a generic version of the drug won't be easy to make, and with VP's very clear definition:

"Closed distribution" is what happens with some haz-chems. It usually means that the distribution chain goes "manufacturer - courier - end-user". In terms of pharmaceuticals that may or may not include a pharmacy - I'm aware of some companies having done deliveries direct-to-patient for non-volatile novel HIV medications in the past.

E2A: The obvious reason here for use of closed distribution is to make infiltration and substitution by rivals harder, and to make tracking/tracing any material leakage of the pharmaceuticals much simpler.

It seems that your post saying "it will be extremely easy for others to enter this market"

He sounds like a bit of a self-publicist to be honest.

If the drug doesn't have adequate patent protection - and it sounds like there can literally be no molecular patent because it will be way, way beyond any kind of patent term validity - then this move will be murdered by the generics very, very quickly if it is profitable in any way whatsoever.

That's probably why he's hiked the price so absurdly high - he knows that generics will plough into the market very quickly when he's set the new price as, presumably, the primary supplier so this is probably a move to make the most money as quickly as possible by manipulating the market for as long as possible.

But his argument that he's going to plough his profits into new R&D is laughable. On average it takes around a billion euros to bring a new drug to market. He is not going to make a billion euros from this and he categorically does not have the ability of Pfizer or GSK to develop a new treatment.

So, in sum, he's a complete dickhead for what he's doing but it's not quite as bad as it might seem because it will be extremely easy for others to enter this market by just reading the relevant patents and reproducing what is described there.

is wrong, and Manter's reply correcting you:

Nope.

Not even sure where to start tbh.

Patents are based on active ingredient and formulation, plus usage. That may or may not be molecular. Cf Norovir which has three formulations patented and usages that come off patent at different times.

Generic manufacturers don't just leap in and make drugs on a whim- they still have to complete the abbreviated new drug application process (anda) that takes up to 2 years. It tests bio equivalence, efficacy, manufacturing conditions, strength, dosage, method of administration etc. generics are usually tee-ed up long in advance- see the fda website for a list of what generics are approved but not yet available- they are basically waiting for patents to expire.

This drug is used on less than 200,000 people a year. It isn't a prime target.

There is no agreed cost for r&d for a new drug. The Tufts estimate- $2.6bn is hotly debated, with numbers between $1.15 and $5bn tossed around depending on who you talk to. There are so many variables- large or small molecule, innovator compound or patent extension, codification of off label use. Do you include regulatory costs, failure costs? And these days when so many discoveries are initiated outside the big pharma firms and then bought as incubators, how much of that cost do you include?

Pfizer and GSK are not brilliant at R&D at the moment. They are outstanding at refining and then nursing drugs through the regulatory process- so much so that they are slashing r&d spending and instead setting up their own hedge funds that basically buy ideas from universities, biotech, start up etc

The pharma industry doesn't work on the normal rules of competition bringing down price- it's one of the conundrums and issues with it.

saying "The pharma industry doesn't work on the normal rules of competition bringing down price"

is correct. Any thoughts?

 

[Dowie]

Funny you should say that ... The Master Plan of Martin Shkreli

yup - though I'd still be skeptical that he intended this to all unfold exactly as it had, I wouldn't credit this with being his 'masterplan' just that the big drop in big pharam stocks probably benefited him given his previous history of shorting them. I assumed it was quite likely he did have some short positions and it seems he indeed does. Also the author of that blog is a bit confused about how people make money from that - he makes money from the drop itself not from the price coming back weeks or months later.

 

[equationgirl]

He sounds like a grasping cunt happy to fuck people over.

I briefly read about this last night and think this approach wouldn't work in the UK as once a drug patent lapses, anyone can make it, and the price is usually a lot cheaper. I hope that is correct and this story is just a peculiarity of the US system. But a shitty thing to do for what seems like an essential drug.

I read that a doctor said the drug worked well enough and they didn't need new treatments so the R & D line might be questionable.

That's the case when any patent lapses. A drug company can lose the profit associated with a patented drug within 6 months of the patent expiring.

 

[equationgirl]

Yes patents can be extended - here by using a Supplementary Protection Certificate (SPC) and potentially a paediatric extension (where applicable - but neither of those will be relevant here. I haven't done the relevant patent searches because I don't have access to the relevant databases at present but I would be extremely surprised if the medicine benefits from any meaningful patent protection whatsoever.

And to state that you are treated as a patent holder when you are simply the only guy on the market who doesn't hold any patents is completely wrong. You simply don't have any IP in that situation - fundamentally, you cannot seek an injunction against market entrants.

I really wish you would stop making out you are expert on topics where you clearly aren't.

Also a manufacturer is unlikely to have no iP even if they do not own a patent. They are highly likely to have manufacturing know how, process know how and their own brand names and trade marks for the generics they make.

 

[Diamond]

So Diamond you've had a while to digest this. We've learned that 'Closed distribution' is the reason that a generic version of the drug won't be easy to make, and with VP's very clear definition:



It seems that your post saying "it will be extremely easy for others to enter this market"



is wrong, and Manter's reply correcting you:



saying "The pharma industry doesn't work on the normal rules of competition bringing down price"

is correct. Any thoughts?

I still don't understand why "closed distribution", which seems to be just a simple exclusive vertical restraint, as far as I understand it, should restrict market entrants unless there are such peculiar dynamics to the market that they render market entry totally unprofitable.

And yes, obviously the pharma industry doesn't simply work on "the normal rules of competition bringing down price" for a couple of reasons (among others):

First, "the normal rules of competition" are not restricted to "bringing down price"; for instance the "normal rules of competition" should encourage both efficiency (price) and innovation (new products) among other things.

Second, as part of that process IP encourages that innovation by providing monopoly rights in exchange for publication, which, being monopoly rights, are always going to change the way that pricing operates in the sector as against, say, the pricing of a can of coke. This is a major issue that many competition regulators are still trying to get their head around.

 

[Diamond]

I really wish you would stop making out you are expert on topics where you clearly aren't.

Also a manufacturer is unlikely to have no iP even if they do not own a patent. They are highly likely to have manufacturing know how, process know how and their own brand names and trade marks for the generics they make.

Know-how is not an IPR.

And you think that brand names and trade marks are anywhere near as valuable as patent protection in this sector?

If so, you clearly have no idea whatsoever about commercial IP...

 

[8den]

Know-how is not an IPR.

And you think that brand names and trade marks are anywhere near as valuable as patent protection in this sector?

If so, you clearly have no idea whatsoever about commercial IP...

God he's still at it

 

[equationgirl]

Know-how is not an IPR.

And you think that brand names and trade marks are anywhere near as valuable as patent protection in this sector?

If so, you clearly have no idea whatsoever about commercial IP...

I didn't say it was an intellectual property RIGHT, I said it was intellectual property. A subtle difference I suggest you spend some time understanding.

I don't pretend to be a pharma IP expert because it's not my area of expertise. It's not yours either.

Brand names can be very valuable in the US pharma sector, primarily because advertising in e.g. magazines is allowed - 'ask your doctor about X ' is common in US advertising therefore building brand recognition is very important to the pharma industry.

All sorts of ip bundled together form the valuable asset to the owner. A patent may not be the only part, or the most valuable part, of this bundle.

 

[Diamond]

I didn't say it was an intellectual property RIGHT, I said it was intellectual property. A subtle difference I suggest you spend some time understanding.

I don't pretend to be a pharma IP expert because it's not my area of expertise. It's not yours either.

Brand names can be very valuable in the US pharma sector, primarily because advertising in e.g. magazines is allowed - 'ask your doctor about X ' is common in US advertising therefore building brand recognition is very important to the pharma industry.

All sorts of ip bundled together form the valuable asset to the owner. A patent may not be the only part, or the most valuable part, of this bundle.

Know-how is not enforceable IP though is it?

Would you argue that goodwill or confidential information constitute IP?

And I could be wrong but I don't think this is a drug that relies on any kind of brand to stand it up.

 

[equationgirl]

Know-how is not enforceable IP though is it?

Would you argue that goodwill or confidential information constitute IP?

And I could be wrong but I don't think this is a drug that relies on any kind of brand to stand it up.

As you hold yourself out to be an expert practitioner in this field, perhaps you should answer your questions instead of attempting to goad others into answering.

I'll give you a hint - think about intellectual assets rather than intellectual property rights.

 

[Diamond]

As you hold yourself out to be an expert practitioner in this field, perhaps you should answer your questions instead of attempting to goad others into answering.

I'll give you a hint - think about intellectual assets rather than intellectual property rights.

I think you mean intangible assets rather than intellectual assets...

 

[Manter]

Diaprim is a brand. The active ingredient itself is pyrimethamine.

 

[equationgirl]

I think you mean intangible assets rather than intellectual assets...

I know what I mean.

 

[equationgirl]

Know-how is not enforceable IP though is it?

Would you argue that goodwill or confidential information constitute IP?

And I could be wrong but I don't think this is a drug that relies on any kind of brand to stand it up.

And you're wrong about this drug not relying upon a distinct brand (it does as Manter has pointed out), but don't let that stop you.

 

[Idris2002]

Oh- and closed distribution is an anti tampering/counterfeiting measure. V simply, it is manufacturer>distributor>pharmacy with every step tracked and recorded. Highly regulated but ultimately means that a pill you as a patient take can be traced back through every step of its life, right back to ingredients. its where some of the really interesting work on RFiDs is going on too. There are lots of regs about re-importation etc that as well as cutting out counterfeiting cuts out the grey market and the ability for rivals, research labs etc to get large volumes of the drug.

Do you have any sources that lay out in detail how all this works? I'm interested in its potential relevance to the Ebola crisis.

 

[Manter]

Do you have any sources that lay out in detail how all this works? I'm interested in its potential relevance to the Ebola crisis.

If you look up gsk fda they wrote an opinion on it for the fda which is in their open source docs. I'll search for it in a mo- mid bath time and should be supervising toothbrushing not pissing about on my phone

 

[Idris2002]

If you look up gsk fda they wrote an opinion on it for the fda which is in their open source docs. I'll search for it in a mo- mid bath time and should be supervising toothbrushing not pissing about on my phone

Many thanks!

 

[Manter]

Many thanks!

Did you find it? The tiny dictator is now asleep so I can look if not

 

[Manter]

http://www.fda.gov/ohrms/dockets/dailys/03/Nov03/110503/03N-0361-emc-000018-01.doc

That was easy I'd bookmarked it

 

[Idris2002]

I

Did you find it? The tiny dictator is now asleep so I can look if not

I was already at home, and phone bound, so I couldn't look: But when I'm in work next I'll download it. Thanks again.

 

[two sheds]

So, a summary of your contribution to this thread, Diamond. You started out with a confident (but incorrect) legal assertion:

it will be extremely easy for others to enter this market by just reading the relevant patents and reproducing what is described there.

Manter corrected you perfectly politely, explaining:

The pharma industry doesn't work on the normal rules of competition bringing down price- it's one of the conundrums and issues with it.

You countered that she and/or her position was 'absurd', 'completely wrong', 'singularly uninformed about the law', and 'ridiculously ignorant'. She repeatedly replied correcting you – increasingly exasperated but again perfectly politely, up to:

Jesus - you have no idea what you are talking about in a legal perspective, do you?

Cue several irrelevant technical sounding questions from you to demonstrate your superiority and then full patronizing mode:

So no idea then.

It's easy to explain in a simple sentence.

Shall I give you some help?

<snip>

Or perhaps you aren't interested because you don't really understand what we're dealing with here...

And the delicious statement in response to other people telling you that you were wrong.

The herd mentality that sometimes occurs here would be amusing if it wasn't so hypocritical, coming from "original" or "independent" thinkers.

We then find (it took a 10-minute web search) that there's a specific reason – closed distribution – that other companies can't make the drug easily. You admitted that you had no idea what this was supposed to be, but you thought it might be illegal.

So despite spending “two years working on one of these cases so I'm fairly sure that I'm on pretty firm ground here” and having “worked for months on this sort of stuff in very demanding environments” you were completely wrong. I hope this was some of your much publicized pro bono work because if you were charging £150 or more an hour then your client got a lot of very expensive and ultimately useless and possibly harmful advice.

You attacked Manter's (correct) advice and also attacked her personally. Unless my reasoning above is wrong, you owe Manter a fucking apology.

 

[flypanam]

Found this report in Gawker, that some San Deigo company is going to produce the drug for a fraction of the price.

Heroic Pharmaceutical Company Savagely Undercuts Martin Shkreli's Pill Scam

 

[two sheds]

bastard

 

[sim667]

Found this report in Gawker, that some San Deigo company is going to produce the drug for a fraction of the price.

Heroic Pharmaceutical Company Savagely Undercuts Martin Shkreli's Pill Scam

I was just coming to post this

It essentially could mean he spent $55Million on a worthless company. No doubt there will be some law suits, and for some unknown reason the court will side with pharma bro, but at least someones trying to send a chill up his spine.

 

[teqniq]

Price-Gouging Pharma CEO Fuming As Rival Creates $1 Alternative AIDS Drug

 

[equationgirl]

Price-Gouging Pharma CEO Fuming As Rival Creates $1 Alternative AIDS Drug

serves the guy right for being so greedy. I suspect that had he left well alone no company would have bothered looking at an alternative.

 

[teqniq]

The company owned by 'the most hated man on the internet' has lost $15million

 

[DotCommunist]

if he'd kept it shut and gouged on the sly he might have got away with it. Instead he mouths off on twitter and generally acts like someone who is in the grip of a cocaine habit

 

[Dowie]

The company owned by 'the most hated man on the internet' has lost $15million

unfortunately he still made money from the price hike, his 'loss' seems to be more related to investing in R&D for other products

 

[Dowie]

bump....

the turbo-cunt is at it again:

http://www.nytimes.com/2015/12/12/b...ply-raise-drug-price-prompts-outcry.html?_r=0

Martin Shkreli is once again provoking alarm with a plan to sharply increase the price of a decades-old drug for a serious infectious disease. This time the drug treats Chagas disease, a parasitic infection that can cause potentially lethal heart problems.“It’s caused a lot of angst in the Chagas community,” said Dr. Sheba Meymandi, a professor at the University of California, Los Angeles, and director of a Chagas treatment center at Olive View-UCLA Medical Center. “Everyone’s in an uproar.”

The plan also is upsetting some organizations that supply drugs for neglected diseases because Mr. Shkreli has said he wants to take advantage of a federal program intended to encourage companies to develop such drugs. The program awards vouchers that can be sold to other companies for hundreds of millions of dollars.

Mr. Shkreli has said he hopes to obtain such a voucher by getting the Chagas disease drug approved by the Food and Drug Administration for sale in the United States. Critics say that it would be another case of the system being abused by awarding a voucher not for developing a new drug but merely for obtaining F.D.A. approval of a drug already used in tropical countries.