Why are drug prices so high?
Drug development is the most high risk/high reward industry possible. It costs roughly 2 billion USD to take a drug from conception to market. The vast majority of drugs never make it to market. Each of those failures costs some fraction of 2 billion USD. Many of those failures are weeded out only at the end when all of that investment has already been made. For those failures, the company makes back 0 of it’s investment. It’s not like a phone that doesn’t sell as spectacularly well as hoped. It’s no product at all. You can’t even learn much from those failures. It’s years of people lives (sometimes 10 or more) and huge amounts of money that just evaporate. It’s crushing.
This is why the drugs that work have to be expensive. They have to pay the company back and more for all the failures. Interestingly, most companies making drugs aren’t huge. Most are quite small:
Here’s an anecdote that represents a typical trajectory of a drug in development. It’s an entirely true story but the numbers are best approximations:
Small company starts with idea, raises 10 million from venture capital, hires 5 people. 99 of 100 of those investments go nowhere, so the investors want a HUGE stake to make it worthwhile. At least 51%. You’d be reckless to ask for less. But hey, you now have a company doing innovative science where before you had nothing. So anywho, they lease lab space and equipment and develop the idea and it shows promise. Round 2 of financing comes in, another 50 million at the cost of another 30% stake, they hire 30 more people, lease a larger space and buy more necessary equipment. It’s getting to be an expensive company to run and it so far has nothing to sell. It starts to ‘burn’ money at a rate that means the doors can only stay open for maybe another year. The idea continues to show promise. It works in cells, it works in mice, it works in primates, it’s time for clinic. Round 3 of funding comes in with 100 million, and that costs 15% of the remaining stake. Company hires 20 more people, this time mostly bureaucrats to set up a proposal for an ‘Investigational New Drug’ application. This is what you need to convince the FDA to allow you to start clinical trials on humans. Right now, the original owners retain only 4% of the original stake.
So, time for clinical trials. Phase 1 begins with 30 healthy adults. This is just to show that the drug is safe. It costs 10 million USD. The company has zero profits so far and has been paying 60 people for years, so it has to pay for this cost by leveraging 3% of the final stake. Eventually, the ‘burn’ rate means that it has to fire 90% of their scientists as they can’t afford salaries anymore. That’s OK though, because this startup has succeeded. You see, Phase 1 clinical trial pass (the drug is safe) and it’s onto phase 2 (which asks ‘is it effective?). This costs 40 million USD more but no more money is left. What to do? Only one option. The investors who now control 99% of the company decide to sell everything to a company like Novartis/Merck/GSK, etc. The company sells for 500 million USD on the expected promise of the new drug. Original founders walk away with 5 million USD due to having a 1% stake. Everyone else is out on their ass looking for a new startup. This is considered a HUGE success in the startup world. It’s what everyone hoped for.
Now, Merck or whoever takes over development of drug X. Drug passes Phase 2 but fails in Phase 3 Trials.
And that’s how you lose 1 billion USD over 10 years with 100s of cumulative years of human work down the drain.
THIS is why developing drugs is expensive and THIS is why the drugs that work are expensive.
To anyone saying that Universities should make drugs instead of industry: There are very, very few universities that could afford this. Harvard maybe. Most universities would spend their entire endowment on a 9 to 1 shot. Universities like bonds for a reason. You don’t play roulette with your endowment. This is a job for people willing to risk billions. And this, my friends is why drug development is so centralized in the US. Fucking cowboy investors are the best route forward here.
And for those who think this is cynical, please recall that for the actual people who founded this company and for the scientists doing the research, they are most often driven by a desire to cure horrific diseases and change the world. The money aspect is a necessary evil that good people need to navigate. Consider that a typical PhD scientist makes about 1/4 as much as a physician and spends a similar amount of time in education (13 years for me from BS to end of postdoc). The people actually researching new drugs are doing it because they are passionate about human health. Not because they are ‘shills’.
How did Germany take France so easily in WW2?
It was a combination of factors.
One thing that’s very overplayed is the Maginot Line; the line of fortifications that France built along its border with Germany. In the popular imagination people often say that the French sat behind the Maginot Line and the Germans went around it through Belgium, but that’s just completely false. The French in fact built the Maginot Line to force the Germans to go through Belgium. The French sent their best forces and tanks to Belgium when the Germans attacked.
But what happened is that the Germans took a big gamble that paid off. Belgium can be roughly divided into two parts:
- The northern plains, where most of the people live. Good roads, good tank country.
- The Ardennes forest, which is less populated. It’s not just a forest—it’s also got tons of hills and cliffs. Poor roads.
So the French assumed that the Germans would attack through the northern plains. It was the sensible thing to do—the French knew that the Germans were very good at tank warfare, and it made sense for the Germans to attack on good tank terrain. Also, a German army officer carrying the original German attack plans—through northern Belgium—had to do an emergency landing in Belgium, and the Belgians managed to get a hold of these plans and send them over to the French.
The Germans in the end decided to send their main attack through the Ardennes; to fool the French, however, they started by attacking northern Belgium to make it look like it was their main attack. The French didn’t figure out the trick, so they sent their best forces to meet the fake German attack; in the meantime the best of the German forces went through the Ardennes mostly unopposed and ended up attacking the worst of the French forces, the ones defending the sector that the French assumed was the safest.
That part of the explanation is called strategic surprise; the Germans managed to fool the French about their plans, and the French Army’s best forces just ended up in the wrong place. A powerful army is no good if it’s in the wrong place at the wrong time.
But what most people don’t understand is that if the French had figured out the Ardennes trick in time, the Germans would have looked like total morons. The Germans’ Ardennes move, for example, caused the worst traffic jam that the world had ever seen up to that point. Most German officers hated the plan. Hitler did like it; Halder (the military boss at the time, who’d been plotting against Hitler) thought privately that the attack on France was stupid, and that he’d rather pursue a plan that meant either quick success or quick defeat, instead of the northern plan which would mean a long war that he thought the Germans would lose at enormous cost.
Strategic surprise isn’t the whole story, however. People often say that the French were trying to fight World War I again. (Our misguided friend Amarkov in another reply here says so, for example, along with the Maginot Line error.) That’s not quite true, but it’s at least aiming at a general problem. Both sides knew that the war was going to be different than WWI: tanks and airplanes. But for the most part the officers in neither side knew exactly how it would be different. However, the German Army’s training was better suited for these new situations. German training emphasized improvisation and initiative, while French training emphasized following orders.
So the Battle of France was a bunch of unexpected situations for both sides; the thing is that the Germans were able to improvise, while the French basically became paralyzed and unable to counterattack effectively once their grand plan to stop the Germans in northern Belgium was shown to be less than relevant. (Paralysis actually also happened to the Germans briefly; at one point one general managed to convince Hitler that the army was advancing too fast, and Hitler ordered them to stop for a day or so. Without this pause, the British might have never escaped from the battle.)
The French also had the problem that they had to coordinate with the British and the Belgians. Bad communication prevented some counterattack plans that might have saved France.
Another one: the French had more powerful tanks, but the Germans knew how to use their tanks better. One big aspect of this is that nearly all German tanks had radios, but the French didn’t.
Yet another one: the Germans had better close air support. German army officers could much more easily radio in requests for bombers to come and strike targets of their choice. The French held a lot of their air force in reserve for the fight, while the Germans went all out with theirs.
What is Existentialism?
Existentialism is a belief that everyone should seriously consider as a way of living. Jean-Paul Sartre, a French philosopher, elegantly summarized existentialism in 3 words:
Existence precedes essence.
It’s a mouthful, but read on and it will become clear.
Consider a pen. A pen is created to enable us to write. The inventor first had an idea of a tool with a handle and a pointy end that can be used to transfer ink onto paper. Once the purpose was clear, the tool was produced.
This doesn’t only apply to pens, but to all other objects: You conceive the idea/purpose first before you manifest it in real world. Essence before existence.
Now consider yourself:
You were brought into this world first, before you can even think, read, walk, talk, or do anything substantial. But as you grow older, you learn to do all of those things. And eventually, you become self-sufficient and you decide your life and your values yourself.
Unlike a pen, your existence comes first before your essence.
Existentialism is powerful because it puts your life in your own hand. If you become successful, it’s all you. If you fail, it’s all you. Scary, but liberating.
But some people think like they are pens, that their lives have already been decided for them. By doing so, they take the agency away from themselves and absolve themselves of any responsibilities. Anything good and bad that happens to them are out of their control. “It’s fate,” or so they say.
Existentialists don’t believe in fate or destiny or any idea that tries to convince you that your whole life has been decided and scripted before you came into this world. Because if you do believe in destiny, then even the act of rolling a die already has a predetermined result. It’s out of your hand.
Existentialists also don’t subscribe to stereotypes or any other societal expectations and labels that have been arbitrarily attributed to themselves. They are free and responsible for themselves, and define themselves through their actions.
Lawrence Kurniawan
What is a typical inmate day (or week) like in San Quentin Prison? What’s the schedule?
There is no such thing as a ‘typical day’ in prison. Things differ drastically from prison-to-prison, person-to-person, and from day-to-day. There’s a popular saying amongst inmates about a prison’s program: ”The only thing consistent about prison is change.” That change often happens without notice and at the drop of a dime.
For instance, it can be a beautiful day outside, guys may be working out, playing sports, cards, or just enjoying the fresh air; and in the blink of an eye we’re in the middle of a full scale riot. Paying attention is a MUST HAVE trait in prison; it can literally mean/make the difference between life and death.
Although San Quentin State Prison is known for its notorious past, currently it happens to be the most stable and consistent of all the prisons, at least in my opinion. Here is a typical day for me:
5:30-6:30 AM: Breakfast, a.k.a. ‘chow time’, and the start of most guys’ day. The breakfast isn’t good, so I skip it and sleep in during that hour, which is much needed as you will see.
6:30-7:15 AM: Start day with a morning prayer and devotional reading.
7:15-8:00 AM: Breakfast in my cell and prepare for work. My breakfast usually consists of a bowl of oatmeal or a Danish and a cup of coffee, all of which are sold from the prison’s commissary, a.k.a. inmate canteen.
8:00 AM-2:00 PM: Work. I work in the prison’s general maintenance shop as a metal-fabricator/welder. I make 32 cents an hour. Yep, you read it right, a whopping 32 cents per hour.
2:00-3:00 PM: Shower grab a bite to eat and prepare for either a self-help group or college class.
3:00-5:00 PM: Self-help group or college class.
5:00-6:00 PM: Dinner. It tends to be better than the breakfast so I go.
6:00-8:00 PM: Another self-help group or college class.
8:00-9:00 PM: Socialize with friends or use the prison phone to talk to my loved ones.
9:00 PM: All inmates are locked in their cells or dorm until breakfast. There is no lights out policy.
9:00-11:00 PM: Watch T.V., listen to music or write a letter, and fix something to eat.
11 PM-12:30 AM: Homework, including play-writing for chapel.
12:30-6:30 AM: Sleep
There is a perception in society that inmates spend all day doing nothing. As you can see that is not always true. I am no exception to the rule. There are more guys spending their time doing something productive than those who are not, especially in a prison like San Quentin that offers programs.
How one spends his time—be it in prison or out—is what makes the difference between success and failure. I choose to stay busy and focused because I have chosen to be a future success story.
– James JC Cavitt, Inmate San Quentin
How do you tell that a news source is credible?
Look at it as the credibility of a news item as well as the credibility of the news source.
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If the news source is generally well respected, credibility of any news item goes up. One indicator of general respectedness is whether it was around before the web, another indicator is whether there is a print edition (these are NOT exclusive, just indicators).
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If the news source is using language seeking to analyze and inform, rather than inflame or anger, credibility goes up (compare HuffPo and Breitbart to the Economist and WaPo, even to the National Review). If you get really angry reading the article, or think someone on the other side might, credibility goes down.
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If the news source is TV or cable, look elsewhere for confirmation.
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If the news item is being reported by multiple sources which have some amount of respectability, credibility goes up.
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If the news item is not a breaking news item but something that has been discussed across a broad swath of media for a period of time, credibility goes up.
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If the news item’s sources are well-documented and relatively credible themselves, credibility goes up.
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If the news item is about events or ideas rather than people’s individual behavior, then credibility goes up.
– CarelessChemicals
What’s it like to have your film flop at the box office?
When you work “above the line” on a movie (writer, director, actor, producer, etc.) watching it flop at the box office is devastating. I had such an experience during the opening weekend of Conan the Barbarian 3D.
A movie’s opening day is analogous to a political election night. Although I’ve never worked in politics, I remember having similar feelings of disappointment and disillusionment when my candidate lost a presidential bid, so I imagine that working as a speechwriter or a fundraiser for the losing campaign would feel about the same as working on an unsuccessful film.
One joins a movie production, the same way one might join a campaign, years before the actual release/election, and in the beginning one is filled with hope, enthusiasm and belief. I joined the Conan team, having loved the character in comic books and the stories of Robert E. Howard, filled with the same kind of raw energy and drive that one needs in politics.
Any film production, like a long grueling campaign over months and years, is filled with crisis, compromise, exhaustion, conflict, elation, and blind faith that if one just works harder, the results will turn out all right in the end. During that process whatever anger, frustration, or disagreement you have with the candidate/film you keep to yourself. Privately you may oppose various decisions, strategies, or compromises; you may learn things about the candidate that cloud your resolve and shake your confidence, but you soldier on, committed to the end. You rationalize it along the way by imagining that the struggle will be worth it when the candidate wins.
A few months before release, “tracking numbers” play the role in movies that polls play in politics. It’s easy to get caught up in this excitement, like a college volunteer handing out fliers for Howard Dean. (Months before Conan was released many close to the production believed it would open like last year’sThe Expendables.) As the release date approaches and the the tracking numbers start to fall, you start adjusting expectations, but always with a kind of desperate optimism. “I don’t believe the polls,” say the smiling candidates.
You hope that advertising and word of mouth will improve the numbers, and even as the numbers get tighter and the omens get darker, you keep telling yourself that things will turn around, that your guy will surprise the experts and pollsters. You stay optimistic. You begin selectively ignoring bad news and highlighting the good. You make the best of it. You believe.
In the days before the release, you get all sorts of enthusiastic congratulations from friends and family. Everyone seems to believe it will go well, and everyone has something positive to say, so you allow yourself to get swept up in it.
You tell yourself to just enjoy the process. That whether you succeed or fail, win or lose, it will be fine. You pretend to be Zen. You adopt detachment, and ironic humor, while secretly praying for a miracle.
The Friday night of the release is like the Tuesday night of an election. “Exit polls” are taken of people leaving the theater, and estimated box office numbers start leaking out in the afternoon, like early ballot returns. You are glued to your computer, clicking wildly over websites, chatting nonstop with peers, and calling anyone and everyone to find out what they’ve heard. Have any numbers come back yet? That’s when your stomach starts to drop.
By about 9 PM it’s clear when your “candidate” has lost by a startlingly wide margin, more than you or even the most pessimistic political observers could have predicted. With a movie its much the same: trade magazines like Variety and Hollywood Reporter call the weekend winners and losers based on projections. That’s when the reality of the loss sinks in, and you don’t sleep the rest of the night.
For the next couple of days, you walk in a daze, and your friends and family offer kind words, but mostly avoid the subject. Since you had planned (ardently believed, despite it all) that success would propel you to new appointments and opportunities, you find yourself at a loss about what to do next. It can all seem very grim.
You make light of it, of course. You joke and shrug. But the blow to your ego and reputation can’t be brushed off. Reviewers, even when they were positive, mocked Conan The Barbarian for its lack of story, lack of characterization, and lack of wit. This doesn’t speak well of the screenwriting – and any filmmaker who tells you s/he “doesn’t read reviews” just doesn’t want to admit how much they sting.
But one thought this morning has lightened my mood:
My father is a retired trumpet player. I remember, when I was a boy, watching him spend months preparing for an audition with a famous philharmonic. Trumpet positions in major orchestras only become available once every few years. Hundreds of world class players will fly in to try out for these positions from all over the world. I remember my dad coming home from this competition, one that he desperately wanted to win, one that he desperatelyneeded to win because work was so hard to come by. Out of hundreds of candidates and days of auditions and callbacks, my father came in….second.
It was devastating for him. He looked completely numb. To come that close and lose tore out his heart. But the next morning, at 6:00 AM, the same way he had done every morning since the age of 12, he did his mouthpiece drills. He did his warm ups. He practiced his usual routines, the same ones he tells his students they need to play every single day. He didn’t take the morning off. He just went on. He was and is a trumpet player and that’s what trumpet players do, come success or failure.
Less than a year later, he went on to win a position with the Los Angeles Philharmonic, where he played for three decades. Good thing he kept practicing.
So with my father’s example in mind, here I sit, coffee steaming in its mug and dog asleep at my feet, starting my work for the day, revising yet another script, working out yet another pitch, thinking of the future (the next project, the next election) because I’m a screenwriter, and that’s just what screenwriters do.
On to the next campaign…
– Sean Hood
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