Thursday, April 10, 2014
Recently the Biotech sector has been affected by Congress questioning why Gilead thinks they can charge $1000 per pill for a regimen of treatment for Hepatitis C. Yes, the nucleotide based drug is a breakthrough that cost a lot of money to develop and take through the maze of FDA testing. Today, we see Jim Cramer and Celgene CEO proclaiming how we, the little people and our insurance companies, just have to pay up at the pharmacy counter because these drugs "cost so much" to develop.
However, if you examine the history in this case, you will see that Gilead acquired the drug in an acquisition of VRUS which they paid up in an historic $11 Billion buyout. Now had VRUS been left alone to complete the development, how much more would they have had to spend? maybe $100 Million dollars ?
Well my point is that just because GILD paid too much for VRUS, does not mean that exorbitant prices at the pharmacy counter should go unquestioned.
I think that Congress is right to question it and look into it further because a single pill costing $1000 a pop when Gilead overpaid for VRUS is passing bad business practice onto consumers.
They overpaid for VRUS with apparently bad business decisions. Why should we the consumer pay for their bad decisions?
I am saying the actual costs for the development would have been a LOT lower than the $11 Billion that Gilead paid up for to buyout VRUS.
instead of $1000 a pill , maybe it would be a profit maker at $100 per pill if Gilead had not stepped in?
It all bears further review in my view.
ALL in my humble opinion, scroll down and read more..
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Posted by Spider j jones