Hard News by Russell Brown

I watched the programme online. I wonder if the publicity will help or hinder. It will certainly improve awareness and probably demand for the drugs.

I think it helps just having a report that's not driven by drug company PR.

More excellent journalism, this time from a major tv channel. This is really something!

I would have liked to see more discussion about the intellectual property system. There is a tendency here to blame the company for essentially acting as they're required to by the system. It's not good enough to just say it cost $500m to research that drug. Drug research is a high risk endeavour. They certainly spent lots of money on other drugs that never went to market, so they are recouping all their development costs, not just for that drug. If you want to accuse them of greed, look at their total r&d expenditure vs. total profit. I'm sure their profits are still massive, but it's important to understand why.

Intellectual property can only work by denying access to some people who want the product. Creating artificial scarcity is the whole point. You can model this simply in your head. Imagine there are 10 people who need something, but each earns $10 more disposable income than the person below them. {$100, $90, $80, $70 ... $10}. If you have a monopoly, how do you price the product to maximize your return?

- You could get the most customers by charging $10, you get 10 customers but you only get $100 (10 x $100).
- You could get $100 by charging $100 and only having one customer (1 x $100).
- You make the most money by charging $50 and having five customers (5 x $50 = $250).

So you're better off denying access to the rest by pricing the product above their means. Note that in this model, it doesn't matter how much it cost to develop the product. Profit is irrelevant.

So instead of accusing the company of being immoral, we should instead blame ourselves for consenting the the perpetuation of a system that requires the underutilization of information goods. We have a system that requires people to die from a preventable disease in order to incentivise the development of the prevention.

Props to Paul Mason's "Postcapitalism".

Great post Russell - I probably won't watch the programme, but it's great to have discussion on the topic - not only not pushed by the drug companies, but not pushed by those who would wish to mess with Pharmac's decision-making. Or perhaps those two are the same thing?
It must be very hard to know that there's an expensive drug that would help you to live longer, and not be able to get it. There will come a point in life/age though, where I hope that I would be able to say that I didn't want such money spent on me, and that it should be spent instead on younger people.

Watched it here in Vietnam when I heard Chris' story was going to be shown. Up this way, there are also generics crossing from India to Th Philippines because some of the obscene pricing issues they have.

Good to see Ed Gane on sceen. NZ has some outstanding clinicians working in the public health system. He is one.

This could probably have had a follow up.

Pharmac has since funded two of the new Hep C treatments - and appears to get these two at a cost much less than the 90-100k per course. Eg: they show Harvoni (one of the drugs previously sought) as costing 26000 per course.