They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion.
Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies which did not previously exist, saving and improving people’s lives.
You can debate the profit motive (as your link mentions) but the Foundation considers this a massive win for their ability to fight CF and make CF sufferers lives better.
[1] Some economic reductionism here: if you know the cash flow, you can project the value and the other way around. So if someone offers you 3 billion and you know the effect of the medicine and the number of patients, you can infer the price of the medicine. This to establish the (moral) link between the selling of the IP and the price.
This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment.
So the CF Foundation is “forcing donatations” from the healthy populace through increased insurance premiums to bankroll their continued investments in treatments and such.
I don’t know if that makes it any more or less ethical, but certainly if it were mostly individual CF patients on the hook for the $300k (in aggregate that is — I’m not saying that never happens) then it would make less sense for the CF Foundation as a strategy.
Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?
This is a _myth_
Big Pharma is an insanely inefficient structure for turning money into useful R&D results.
Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money via taxes and/or insurance programs.
R&D should be paid by government funds. Testing should be transparent and open. Production should be done by private companies. This would be a significantly more efficient use of our money. It would also align R&D expenditures much better with actual costs to society for medical issues.
Are you contending that the non-profit CF Foundation is going to take their $3B and not do something useful with it to serve the CF population?
> For well over a decade, CFF has employed a venture philanthropy model that provides upfront funding to pharmaceutical companies to help reduce the financial risk associated with the development of drugs to treat CF. As a result, the organization has a pipeline of drugs in various phases of development and reinvests the funds from any royalties it owns to advance drug discovery and efforts to find a cure.
> The proceeds of the sale will dramatically accelerate and expand the foundation’s research, care, and patient programs and significantly boost its funding of research targeting the genetic cause of CF. The organization also plans to use the funds to strengthen the specialized care and support that people with CF and their families receive at more than one hundred and twenty centers across the country and to expand its resources for people with CF and their families.
That is also a myth, perpetuated by people who do not understand how to read an income statement. Please provide a source for that, and if the source is or is using the SG&A line from an income statement, it's wrong.
If a company could increase its bottom line by cancelling marketing spend, that's an easy equation to figure out.
Or... maybe (profit after marketing - marketing spend) > (profit without marketing).
And as (in a reasonable stable company) the research spend will be related to profit... marketing spend likely does result in more money being available for research.
The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits. They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people. There is also the fact that in a system like the U.S. where people have large out of pocket expenses at the point of contact with the health care system having companies maximize profits for a particular life saving drug causes some people to view said maximization with disgust.
