Reddit reviews Drugs: From Discovery to Approval

>But the first doesn't logically follow from the second.

In my limited experience (undergraduate classes in drug development in a BS in Biology, and Drug Development textbooks), it does follow. The cost of generating new pharmaceuticals is ridiculous. My Intro to Drug Development text claims modern averages of $1 billion dollars and 7-12 years to whittle an average of 10,000 drug candidates down into 1 FDA approved drug. The question isn't the country that the company resides in, but rather the wealth of the affected population. Can the people who need your drug afford a cost that recoups your investment? For orphan diseases (US Law defines orphan disease as affecting fewer than 200,000 people total) and tropical diseases, the group of affected people who can also afford the cost of the treatment isn't generally big enough to recoup cost. (10,000 treatments at $10,000/pop is $100,000,000 revenue, or 1/10 the average cost of development. So 100,000 treatments at $10,000/pop 'recoups' the $1billion dollar investment with zero profit, using very generalized and thus inaccurate numbers. Do we think that the people of Uganda or Guinea can afford 100,000 separate $10,000 treatments of a drug that could be technically produced at-cost for $10/pop?)

Text in question: http://www.amazon.com/Drugs-Discovery-Approval-Rick-Ng/dp/047019510X Amazon has the ability to read the first chapter, and Chapter 1 Page 5 is where my information (besides my back of envelope math) above comes from. All of Chapter 1 will provide a great high-view of the FDA and the drug development process.

Another source from 2001: http://www.medscape.com/viewarticle/405869_4

Considering a 10 year, 1 billion dollar price tag, the profitability question quickly drops for tropical and orphan diseases. This is why the US government and other Western Governments devote a lot of money in the form of incentives for companies to engage in long-term traditionally unprofitable research.

>some entrepreneurial pharmacologist could start one, and then make a ton of money by being the only vendor of tropical medications. (Or, an existing company could send researchers to the tropics and develop its own drugs, until the tropical market was no longer underserved.)

This falls under the assumption "meeting the markets needs can be profitable" but no pharmaceutical company has, to my knowledge, found a way to cure orphan and tropical diseases with profitability. Remember, tropical diseases ravage places that cannot afford the $1000 treatment (or 10,000, or 100,000. Depends on the orphan or tropical disease and how many people it affects), and call it human rights crimes when the drug is not sold at manufacturing cost (typically several orders of magnitude lower than the full cost of discovery and pre-trialing the other 9,999 average failed drug candidates per 1 approved drug). This is a dilemma: it is "immoral" to sell drugs at a cost that recoups investment (and cannot be afforded by the peoples of tropical nations), or impossible to profit from investing in new drugs while selling said drugs at cost.

This isn't my topic of expertise, so I don't want to run afoul of rules, but ideas like the Health Impact Fund (http://en.wikipedia.org/wiki/Health_Impact_Fund) are designed to introduce profit incentives to orphan and tropical diseases so that this very problem can be solved using the current market infrastructure. Such plans would be unnecessary if tropical diseases could be cured profitably as is.