A hair, a hair, my freedom for a hair

In a turn of events that surprises approximately nobody, “Pharma Bro” Martin Shkreli has been sent to jail after his $5 million bail was revoked. Not content to just shut up for a bit while awaiting sentencing for his fraud conviction, Shkreli instead used Facebook to offer $5,000 for a strand of hair from Hilary Clinton. A federal judge found he presented a threat to the community due to this action, and everyone presumably nodded along vigorously, desperate for an excuse to finally throw him behind bars for good. To be hair fair, this isn’t the first time he’s advocated for assault on Facebook. Just last year he raffled off the chance to punch him in his smug face.

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Even Gandhi would hate this

In the US, you have roughly a 1-in-10 chance of having the Toxoplasma gondii parasite (that equates to about 10,000 Insight City readers). BTW, in France the prevalence is 84%. Granted this study was published in 2000 and references 1974 data, but wow. The CDC considers Toxoplasmosis a “Neglected Parasitic Infection,” a group of five parasitic diseases that have been targeted for public health action. Why should you care? First, it’s a parasite, that’s bad enough. Second, a recent study published in Scientific Reports says that Toxoplasma gondii or T. gondii (as the cool kids would say) has “identified associations between the parasite-brain interactions and epilepsy, movement disorders, Alzheimer’s disease, and cancer.” The good news is researchers have more to consider for potential cures/delays in neurological disorders. Go science!

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Gambling, drugs, and a smart lawyer

If Albert Einstein was right and “creativity is intelligence having fun” then there is one happy lawyer at Allergan. Last week Allergan, using a move John Grisham would be proud of, transferred its patents on a best-selling eye drug (Restasis) to the Saint Regis Mohawk Tribe in New York. The tribe will then lease the patents back to Allergan. Yep, you read that right. Not bad, first gambling, now patent laundering (you heard that phrase here first). Allergan will pay the tribe $13.75M upfront plus $15M annually as long as the patents remain valid. FYI, Restasis sales were $1.4 billion last year. Obviously, the Mohawk Tribe has no reservations about the transaction. If we are being honest, it’ll be kind of funny when Indian generics companies start suing Indian tribes.

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Not that kind of drug registry

Have you ever looked at the online sex offender registry for your neighborhood? Not reassuring, right? Well, it looks like the state of California may soon have a similar system for drug makers. On Governor Jerry Brown’s desk is a law that would require drug manufacturers to give the state notice of price increases so that these can be posted on the internet. Even the slightest of cynics would wonder if this is being done simply to increase public (and media) pressure on a drug company that might otherwise be tempted to act like a total Shkreli. While this seems like a slam dunk for a left-leaning state like California, recall the ballot initiative that failed last November that would have capped the cost of certain drugs at the price paid by the US Department of Veterans Affairs. Strange days.

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Harden not your heart

Possibly some bad news for members of the Vape Nation; a recent study has identified that e-cigarettes containing nicotine can temporarily cause increased arterial stiffness, as well as an increase in blood pressure and heart rate. NB: “containing nicotine” is pretty important there, as that’s likely what’s causing those adverse effects. So competitive vapers may not have to worry about this particular research. While the study was pretty small—15 young adults—it still provides some insight into using vapes as a way to quit smoking. The insight is groundbreaking: the healthiest way to not be affected by smoking chemicals is to ingest them at all. Wait, haven’t we heard this argument before…

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Can’t we all just get along

You gotta love the pharma industry. For a bunch of smart people, we are pretty dumb sometimes. All it takes is one study published on drug development costs and suddenly everybody’s up-in-arms. The study, released in JAMA (The Journal of the American Medical Association) attempts to debunk the widely held notion that it costs ~$2B to bring a drug to market–at least that is how the media is picking up the story. The study says it more like $750M, a big difference. Know what else makes a big difference? Your sample, that’s what. In this most recent assessment the authors looked at 10 small companies that had successfully commercialized a cancer product. Knock knock. Who’s there? Bias, that’s who. Let’s count the ways: (1) only selected 10 companies, (2) only selected cancer compounds, (3) only selected small companies, and (4) only selected companies that won the drug development lottery and successfully brought a cancer drug to market. According to BIO, 95% of cancer drugs fail to make it to market. Where are those R&D costs included? Thought so.

Just to be clear, we have no idea what it costs to bring a drug to market, and to some degree we do care what the number is, but only a little. The point is, don’t publish a clearly biased study. What we won’t discuss is that the article goes on to state how profitable those companies were/are. Super. The same day the study was released, Dr. Scott Gottlieb (FDA Commissioner) spoke at the RAPS 2017 Regulatory Convergence Conference and said “There’s been criticism of the various estimates of how much it costs to develop a new drug. But we know some drug programs can easily top $1 billion, just in direct outlays.” Correct.

The industry and the public may not want to go crazy over drug development costs or pharma profits or drug pricing or CEO pay, because it all comes down to innovation. We probably want our best and brightest looking for new treatments, right? If so, then the reward has to be big enough to make up for the risk of failure. Like it or not, a lot of the innovation (we don’t know exactly how much) in the pharma industry is coming from smaller companies like the ones analyzed in the JAMA article. Again, it comes back to economics; risk, reward, supply, and demand. It’s why you don’t see hundreds of new automobile companies starting (and failing) each year, because single-digit returns on capital aren’t worth the risk of failure.

To sum this up, InsightCity asks; Why does R&D expense have to be linked to drug prices or to corporate profitability? We don’t care what it costs Ford to design, make, and market a car, we just know that it costs about $35,000. Buy it or not. Until the healthcare market says “no,” treatment costs will rise – that’s the consequence for living in a free market. Deal with it. Again, we don’t support high drug development costs, but drug development is the ultimate game of portfolio theory. As the great Ebby Calvin “Nuke” LaLoosh said “sometimes you win, sometimes you lose, and sometimes it rains.”

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