The GLP-1 drugs (the -tide drugs) are not the sort of medicine that a person takes until the cough goes away. All the known facts, so far, suggest that signing up for one of them is a lifelong commitment. As the healthcare reporter Josh Nathan-Kazis phrased it for Barron’s, “[B]ecause these medicines aren’t curative, patients will probably need to take them for a long time, expanding the drugs’ earnings potential.”
For The Wall Street Journal, columnist David Wainer wrote,
To find a true parallel to the bonanza now getting started, one probably has to look back to the cholesterol-drug revolution starting in the 1990s. Statins… created a new category of medicine and generated billions of dollars for their manufacturers because the market was huge… and millions of people have been on them for decades.
The only reason this is not a bigger problem is that, after a certain number of years, a drug’s developer loses the patent and competitors can then sell a generic equivalent. However, every new drug that is approved is entitled to the same protection of their ability to make back the research and development costs, and a whole lot more.
The vetting process has plenty of fancy wrinkles, including a prize unofficially called the golden ticket, which is explained at length by author Robert Cyran for Reuters, but the main point is: “Cutting just several months off the approval process could yield $30 billion in additional value.”
How does this happen? The granting of exceptions started off with good intentions:
Almost two decades ago, some Duke University economists noticed pharmaceutical companies avoided developing drugs to cure tropical diseases because the market is small, but the cost and uncertainty of producing them is high…. The program was implemented and expanded to cover rare pediatric diseases and biological warfare threats.
There is a lot more to it, of course, but according to one point of view, with all things considered, giving a break to the weight-loss drug makers is not the most effective incentive, and is not conducive to real progress. There is also the separate matter of granting exclusivity to patent holders for a number of years, which apparently is also negotiable.
Mention of the approval process is a reminder of another example of how language can hide more than it reveals. One headline, for instance, read “Analysis of New Drug Approvals Suggests Reliance on Less Rigorous Standards.” Some people will interpret that as meaning, “Finally the government will loosen its grip on the reins of power, and make it easier for people to get the meds they need.” Others will read it as “The government just wants to help the corporations rush their products to market so they can make millions.”
Thrashing out the differences between various viewpoints is one reason why bureaucracy thrives. In any given situation, it can be our best friend or worst enemy.
Your responses and feedback are welcome!
Source: “Weight-Loss Drugs Will Be Blockbusters. Here’s the Stock to Buy,” Barrons.com, 05/04/23
Source: “Obesity Could Be Pharma’s Biggest Blockbuster Yet,” WSJ.com, 05/05/23
Source: “Eli Lilly’s golden ticket is a regrettable winner,” Reuters.com, 05/03/23
Image by Paul O’Rear/CC BY-SA 2.0
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