Nick Anthis (the Texas A&M biochem grad who broke the George Deutsch graduation story) and Jim Hu comment on the recent NYT article about the price Genentech charges for Avastin. Nick claims this is an example of drug companies sticking it to the poor, while Jim follows up with a reminder of how long Avastin has been in development.

Avastin is a monoclonal antibody (mAb) treatment (something I've written about before). These mAb's are now usually produced in cell culture by hybridomas with humanized mouse B lymphocytes. So we are talking about a drug that will be more complex, more delicate and therefore more costly to produce than traditional organic syntheses. It's also worth noting that Avastin is not a miracle drug for colon cancer, but it does increase survival.

In all, I'm inclined to side with Jim on this. I think the whole debate about drug costs comes down to how much an individual trusts market forces. And while it's a bit touchy to apply this line of thinking to cases of life-or-death, there still are some fundamental economic reasons for letting the market decide the costs of goods.

For example, if Genentech makes a "killing" by selling Avastin, then Genentech makes a large profit. The shareholders of Genentech are intelligent people, and they know that it would be smart to parlay that profit into other drugs that also make profits, rather than to take the money and run. Those not afraid of capitalism know that the one virtue of free markets is that they keep people working on profitable ventures. In the case of drug companies, this means that healthy profits lead to more drugs, and also more competitors making other drugs. Unless the company is poorly managed, I can't justify how this is bad.

To make pharmaceuticals unprofitable would be a solution that's worse than the problem. But, as Jim says, "No one complains about the cost of things that don't exist."