Nov 18, 2014 | Business, Politics, Sci-Tech
- R&D costs of 106 new drugs were obtained from a survey of 10 biopharmaceutical firms.
- Costs for compounds that were abandoned were linked to costs of approved compounds.
- Pre-tax out-of-pocket per approval is $1395 million (2013 dollars).
- Pre-tax capitalized per approval is $2558 million (2013 dollars).
- Total capitalized costs were found to have increased at a real annual rate of 8.5%.
- With post-approval R&D costs the estimate increases to $2870 million (2013 dollars).
From the press release:BOSTON – Nov. 18, 2014 – Developing a new prescription medicine that gains marketing approval, a process often lasting longer than a decade, is estimated to cost $2,558 million, according to a new study by the Tufts Center for the Study of Drug Development. The $2,558 million figure per approved compound is based on estimated:- Average out-of-pocket cost of $1,395 million
- Time costs (expected returns that investors forego while a drug is in development) of $1,163 million
- Estimated average cost of post-approval R&D—studies to test new indications, new formulations, new dosage strengths and regimens, and to monitor safety and long-term side effects in patients required by the U.S. Food and Drug Administration as a condition of approval—of $312 million boosts the full product lifecycle cost per approved drug to $2,870 million.
All figures are expressed in 2013 dollars.The new analysis, which updates similar Tufts CSDD analyses, was developed from information provided by 10 pharmaceutical companies on 106 randomly selected drugs that were first tested in human subjects anywhere in the world from 1995 to 2007.“Drug development remains a costly undertaking despite ongoing efforts across the full spectrum of pharmaceutical and biotech companies to rein in growing R&D costs,” said Joseph A. DiMasi, director of economic analysis at Tufts CSDD and principal investigator for the study. He added, “Because the R&D process is marked by substantial technical risks, with expenditures incurred for many development projects that fail to result in a marketed product, our estimate links the costs of unsuccessful projects to those that are successful in obtaining marketing approval from regulatory authorities.”In a study published in 2003, Tufts CSDD estimated the cost per approved new drug to be $802 million (in 2000 dollars) for drugs first tested in human subjects from 1983 to 1994, based on average out-of-pocket costs of $403 million and capital costs of $401 million. The $802 million, equal to $1,044 million in 2013 dollars, indicates that the cost to develop and win marketing approval for a new drug has increased by 145% between the two study periods, or at a compound annual growth rate of 8.5%. According to DiMasi, rising drug development costs have been driven mainly by increases in out-of-pocket costs for individual drugs and higher failure rates for drugs tested in human subjects.Factors that likely have boosted out-of-pocket clinical costs include increased clinical trial complexity, larger clinical trial sizes, higher cost of inputs from the medical sector used for development, greater focus on targeting chronic and degenerative diseases, changes in protocol design to include efforts to gather health technology assessment information, and testing on comparator drugs to accommodate payer demands for comparative effectiveness data. Lengthening development and approval times were not responsible for driving up development costs, according to DiMasi. “In fact,” DiMasi said, “changes in the overall time profile for development and regulatory approval phases had a modest moderating effect on the increase in R&D costs. As a result, the time cost share of total cost declined from approximately 50% in previous studies to 45% for this study.”The study was authored by DiMasi, Henry G. Grabowski of the Duke University Department of Economics, and Ronald W. Hansen at the Simon Business School at the University of Rochester.
From the abstract:The research and development costs of 106 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug and biologics development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per approved new compound is $1395 million (2013 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 10.5% yields a total pre-approval cost estimate of $2558 million (2013 dollars). When compared to the results of the previous study in this series, total capitalized costs were shown to have increased at an annual rate of 8.5% above general price inflation. Adding an estimate of post-approval R&D costs increases the cost estimate to $2870 million (2013 dollars).
Aug 29, 2014 | Business, Philosophy, Politics
Fred Siegel has a culturally relevant essay “Ferguson fury: Activists, journalists stuck in 1960s racial resentments” on why the riots and protests in Ferguson have little to do with the death of Michael Brown and the “sad drama of resentment and revenge” that “cultivate[s] a community that excels in resentment.”Quoting from Ferguson fury: Activists, journalists stuck in 1960s racial resentments | Fox News:The American understanding of riots and racial violence was shaped a half-century ago, during the insurrections of the 1960s. To judge by the responses to the current rioting in Ferguson, Missouri, a suburb of St. Louis, little has changed since then.After riots have wrought their physical and psychic damage, some invariably declare that the unrest was constructive.Patricia Bynes, a Democratic committeewoman for Ferguson, rationalized that the events in Ferguson would benefit the entire metropolitan area because, she said, “St. Louis never has had its true race moment, where they had to confront this.”
A “race moment” is where people group together by their race to riot against other races.She was topped by Missouri Highway Patrol captain Ron Johnson, who has been leading the police response in Ferguson. Speaking to a unity rally at a local church, Johnson suggested that, somehow, Brown’s death was “going to make it better for our sons to be better black men.”
Bear in mind that 90% plus of Black killings are by other “black men.”[…] The virtue of disruption, academics and observers argue, is that it gives African-Americans a crisis with which to bargain. But after 50 years, what has this bargain achieved, except to cultivate a community that excels in resentment?It’s not just African-Americans who are stuck in the sixties. Reporters are still seeking out the Kerner Commission’s white racists, who are ultimately to blame for all racial problems.Historians and sociologists are offering structural explanations for the violence; whites in general, and small businesses in particular, have little to say but simply flee to safer climes.In Ferguson, after a week of unrest that included looting and rioting, we know very little about the incident that resulted in Michael Brown’s death, despite the release of the first pathology report. The officer involved is in seclusion and has given no public statements. The Grand Jury, should one be convened, will likely have only a vague picture of what happened.When Trayvon Martin was killed in 2012, the media constructed a racial narrative around the case—especially NBC news, which doctored tapes of George Zimmerman’s 911 call. It wasn’t until much later that pictures were shown of Zimmerman’s dark-skinned, Peruvian mother. Had those pictures been publicized earlier, the public might have understood that Trayvon Martin’s tragic death was not an example of a Klan-like murder.In Ferguson, the media’s preferred narrative—a “gentle giant” of a young black man gunned down for no reason by a racist cop—was short-circuited by a videotape, taken minutes before his death, depicting Michael Brown strong-arming a diminutive store clerk who’d caught him stealing a box of cigarillos.Deflated, CNN’s Wolf Blitzer described the video as a “smear.” Does he think the tape should have been suppressed?[…]Riots bring but one certainty—enormous economic and social costs. Businesses flee, taking jobs and tax revenues with them. Home values decline for all races, but particularly for blacks. Insurance costs rise and civic morale collapses. The black and white middle classes move out. […]The story is similar in Detroit, which lost half its residents between 1967 and 2000. Civic authority was never restored after the late 1960s riots, which never really ended; they just continued in slow motion. “It got decided a long time ago in Detroit,” explained Adolph Mongo, advisor to the jailed former “hip-hop mayor,” Kwame Kilpatrick, that “the city belongs to the black man. The white man was a convenient target until there were no white men left in Detroit.”
Siegel concludes that it “persists in part because so many journalists and academics, not to mention black activists, have so much invested in it. It’s the conceptual air that they breathe.” [emphasis added]Siegel goes to on to elaborate and provide clues to what that concept, or philosophical principle is, but he does not explicitly identify it.The “conceptual air” they breathe, the philosophy that the rioters, community activists, and CNN-MSNBC media clan cling to and hold dear, is racism.May 30, 2014 | Business, Politics
Bill Frezza revives the Gibson Guitars case in a piece published in Forbes. The whole affair stands as an appalling example of the law run amok. The owners believe they suffered heavy-handed treatment from the feds due to the “protectionist” interests of labor unions and environmentalists. But when the law can be warped to satisfy the whim of any bureaucrat or power-holder, that’s not protectionism, that’s tyranny. More specifically, the Gibson Guitars case epitomizes the tyranny of non-objective law.While 30 men in SWAT attire dispatched from Homeland Security and the U.S. Fish and Wildlife Service cart away about half a million dollars of wood and guitars, seven armed agents interrogate an employee without benefit of a lawyer. The next day Juszkiewicz receives a letter warning that he cannot touch any guitar left in the plant, under threat of being charged with a separate federal offense for each “violation,” punishable by a jail term.Up until that point Gibson had not received so much as a postcard telling the company it might be doing something wrong. Thus began a five-year saga, extensively covered by the press, with reputation-destroying leaks and shady allegations that Gibson was illegally importing wood from endangered tree species. In the end, formal charges were never filed, but the disruption to Gibson’s business and the mounting legal fees and threat of imprisonment induced Juszkiewicz to settle for $250,000—with an additional $50,000 “donation” piled on to pay off an environmental activist group.
You can read the rest here.Apr 3, 2014 | Business, Philosophy, Politics
Writes Charles Koch is chairman and CEO of Koch Industries in I’m Fighting to Restore a Free Society – WSJ.com:
[…] The central belief and fatal conceit of the current administration is that you are incapable of running your own life, but those in power are capable of running it for you. This is the essence of big government and collectivism.More than 200 years ago, Thomas Jefferson warned that this could happen. “The natural progress of things,” Jefferson wrote, “is for liberty to yield and government to gain ground.” He knew that no government could possibly run citizens’ lives for the better. The more government tries to control, the greater the disaster, as shown by the current health-care debacle. Collectivists (those who stand for government control of the means of production and how people live their lives) promise heaven but deliver hell. For them, the promised end justifies the means.Instead of encouraging free and open debate, collectivists strive to discredit and intimidate opponents. They engage in character assassination. (I should know, as the almost daily target of their attacks.) […]Rather than try to understand my vision for a free society or accurately report the facts about Koch Industries, our critics would have you believe we’re “un-American” and trying to “rig the system,” that we’re against “environmental protection” or eager to “end workplace safety standards.” These falsehoods remind me of the late Sen. Daniel Patrick Moynihan’s observation, “Everyone is entitled to his own opinion, but not to his own facts.” Here are some facts about my philosophy and our company:Koch companies employ 60,000 Americans, who make many thousands of products that Americans want and need. According to government figures, our employees and the 143,000 additional American jobs they support generate nearly $11.7 billion in compensation and benefits. About one-third of our U.S.-based employees are union members.[…]
Instead of fostering a system that enables people to help themselves, America is now saddled with a system that destroys value, raises costs, hinders innovation and relegates millions of citizens to a life of poverty, dependency and hopelessness. This is what happens when elected officials believe that people’s lives are better run by politicians and regulators than by the people themselves. Those in power fail to see that more government means less liberty, and liberty is the essence of what it means to be American. Love of liberty is the American ideal.If more businesses (and elected officials) were to embrace a vision of creating real value for people in a principled way, our nation would be far better off—not just today, but for generations to come. I’m dedicated to fighting for that vision. I’m convinced most Americans believe it’s worth fighting for, too.
Mar 21, 2014 | Business, Politics
From Larry Page Lays Out His Plan for Your Future | Wired Business | Wired.com
Running through [Larry] Page’s plans for Google was theme picked up on by Rose: a faith that business is the best way to build his version of a better future. Rose asked him about a sentiment that Page had apparently voiced before that rather than leave his fortune to a cause, that he might just give it to Elon Musk [founder of Tesla, SpaceX and Solar City]. Page agreed, calling Musk’s aspiration to send humans to Mars “to back up humanity” a worthy goal. “That’s a company, and that’s philanthropical,” he said.
Mar 7, 2014 | Business, Politics, Sci-Tech
From Wired Business:
Steve Perlman is ready to give you a personal cell phone signal that follows you from place to place, a signal that’s about 1,000 times faster than what you have today because you needn’t share it with anyone else.Perlman — the iconic Silicon Valley inventor best known for selling his web TV company to Microsoft for half a billion dollars — started work on this new-age cellular technology a decade ago, and on Wednesday morning, he’ll give the first public demonstration at Columbia University in New York, his alma mater. Previously known as DIDO, the technology is now called pCell — short for “personal cell” — and judging from the demo Perlman gave us at his lab in San Francisco last week, it works as advertised, streaming video and other data to phones with a speed and a smoothness you’re unlikely to achieve over current cell networks.“It’s a complete rewrite of the wireless rulebook,” says Perlman, who also helped Apple create QuickTime, the technology that brought video to the Macintosh. “Since the invention of wireless, people have moved around the coverage area. Now, the coverage area follows you.”
[…]One thing’s for sure: the idea is a complete departure from the current way of doing things, the sort of invention Perlman is known for. His San Francisco lab is called Rearden — a nod to Hank Rearden, the fictional magnate in Ayn Rand’s Atlas Shrugged who invents an alloy that’s stronger than steel — and this tiny tech incubator is always looking for ways of overturning the status quo. It has already given rise to OnLive, a service that lets you streams game and other software over the internet rather than installing it on local devices, and Mova, which helped transform movie and game effects by providing a means of digitally capturing facial expressions, and now, it hopes to turn the wireless industry on its head.With today’s networks, each antenna — perched atop a building or tower — creates a massive “cell” of wireless signal. This is essentially an enormous cone of radio waves that spans several city blocks, and it’s shared by all phones in the area. But Perlman’s invention discards the arrangement, giving each phone its own tiny cell, a bubble of signal that goes wherever the phone goes. This “personal cell” provides just as much network bandwidth as today’s cells, Perlman says, but you needn’t share the bandwidth with anyone else. The result is a significantly faster signal. [This Man Says He Can Speed Cell Data 1,000-Fold. Will Carriers Listen?]
