AIDS export says what I've been saying for ages

[yesthattom]

http://www.cnn.com/2005/HEALTH/conditions/12/25/aids.vaccine.ap/index.html I hate the way the world works.

Comments

[lilbjorn.livejournal.com]

In fact, they have a strong disincentive to create a vaccine. Right now they have the best of all possible worlds. Expensive medications that people have to use for the rest of their miserable lives. Why would anyone want to piss of the wealthy and powerful stockholders by destroying that gravy train?

[stitchinthyme.livejournal.com]

I was just going to say something very much like this. Once a vaccine is created, the disease will slowly be eradicated, and eventually neither treatment nor vaccine will be necessary, and the drug companies won't make money off it anymore. This is one reason why having private companies solely responsible for such research is terminally stupid -- they act in their own best interests, not the public's.

[barking-iguana.livejournal.com]

Well, that is mitigated some by having multiple companies compete with each other. They've each got to trust that the others aren't about to develop a vaccine. Unfortunately, that trust is a lot easier to achieve than the libertarian fundamentalists would have us believe.

[gulfie.livejournal.com]

It's not mitigated at all by other companies. It would be mitigated some by a non profit, medical institution, but not much.

The basic facts are economic.

Think about it like cigarettes. Back when a pack of cigarettes cost a dollar.

A reoccurring cost of $1 /day is worth ~ 365 /year, or about as much as a $7300 in the bank at 5% interest.

Every customer of a cigarette company was basicly worth, $7300 to that company. Like chattel, or human capital. Why would a cigarette company stop selling cigarettes?


Now an AIDS patient on antiretrovirals spends about $30/day, or is an asset of about $220,000 to whichever drug company has the patient. You can argue that the patent runs out after 20 years, that will change the math down to an asset value of $100,000 or so, minus overhead.


Unless the potential profit, is at least $100,000 per cured person... as a for profit corporation, operated for the benefit of its investors, it is almost illegal to for the company officers to make the cure.

Illegal? Yes, illegal. The officers of the company have a financial responsibility to maximize profits for the share holders. Curring people, and destroying the corporations revenue stream is not in line with
this responsibility. So it is not going to happen, and if it did happen, the shareholders would be well within there rights to file legal claims against the officers.

So the corporations that own the patents are not going to poop in there own koy pond, but what about other companies with cheaper antiretrovirals, or even a cure?

Examine the ROI choice between developing another maintenance therapy, vs a cure. A therapy, gets maybe $100,000 through the life of a patient. A cure might get what? $5000? $10,000? Surely not $100,000. The medical insurance company executives would be rioting in the streets if they had to fork over $100,000 per person.

A very simple ROI analysis concludes that when the cost of developing a cure or a therapy... develop a therapy. For profit corporations are legally bound to do 'the right thing'.


A notes about AIDS funding:
$700 million sounds like a lot.
But...

it's about $2 / american.
it's equivalent to a 23 day supply of antiretrovirals for the 1 million Americans with AIDS.

But it is $700 / american with aids.
But it could be $2 / american who would never get aids.


Sometimes the invisible hand of the market, is all to visible, and probably not doing what is best for us.

[barking-iguana.livejournal.com]

First of all, we were discussing a vaccine, not a cure. A vaccine will probably be administered to orders of magnitude more people than therapies are administered to.

Secondly, you're simply not taking into account that one company can change the market for all the others. Even considering cures: if Pfizer develops a cure, Merck loses most of its market for therapies. (I don't actually know who's in the market, I'm just picking Big Pharma names at random.) If Merck thinks that Pfizer might develop a cure, than Merck would likely do so itself, not to get totally boxed out of the market. The real-world problem is that Merck bosses probably hang out with Pfizer bosses and they all let each other know just how well they're dragging their feet.

Also, though it's a relatively minor point, you need to take into account the discounted value of future money.

[gulfie.livejournal.com]

For all intents and purposes a vaccine is a cure, well not for the .6 % currently positive but for the other 99.4 %. But yes it does change the math , but only superficially. Full vaccination costs less than 1 - current % * population * cost.

For the hypothetical $100,000 aid maintenance case. There are 300 or so not infected. $100,000 / 300 = $330 $330 at best in america. The cost per person goes up as vaccination rates go down. 100% vaccination isn't needed to stem an outbreak. But even at $330, as a prophylactic measure, is going to he a very hard sell to patients who can rationalize away that they are not ever going to need it.


I'm not saying that a company could not 'take' revenue from another company, I'm asking 'why would they'? Economics and business tactics agree. Fighting, or competition in the market, does not serve the interests of the shareholders. Even without collusion, players in the market can come to the same conclusion that economic combat only wares down the economic machine and lowers profits. In market that is open ended there is little reason to fight, not much profit in it.


As to the discounted value of future money, sure. It's an actuarial problem balancing any decrease in production cost vs inflation for the 20 + year life cycle of the patented therapy vs the spread of the epidemic. Insurance companies run this sort of problem all the time. Medical companies have the understanding of it. Currently they are on the winning side. The time value of an epidemic is that it will grow.


My hope for an AIDS cure/vaccine is based in Asia. eventually a large and funded government will step in and attempt to solve the problem.

[tim1965.livejournal.com]

Non-profit, non-schmofit. Non-profits act just like any for-profit. They have "excess income" rather than profit. And they distribute this profit to officers and the company in the form of mega-high salaries, perks, kick-back contracts to Board members, conflict-of-interest contracts with Board members, etc. -- rather than to shareholders.

Almost every study of non-profits shows that they are as inefficient and corrupt as for-profits.