Supersonic Man

April 21, 2016

precious substances

Filed under: Hobbyism and Nerdry — Supersonic Man @ 6:38 am

Are there any substances that are worth a million dollars a kilogram?  I don’t just mean stuff that costs a thousand dollars a gram — I mean stuff which it it possible to buy a whole kilogram of.

There are various radioisotopes that cost way over a kilobuck a gram to buy, but often they cost nearly as much to get rid of as they do to obtain, so it’s far from clear that they count as a precious commodity, and collecting a whole kilogram would generally be impossible.  There are rare biological substances with such costs, but these are often scarcely available in whole grams, let alone kilos.  There are materials available by the kilogram at enormous cost, such as moon rocks, but once obtained, it’s not clear that a resale market exists.  Works of art and rare stamps are this valuable, but the value doesn’t relate to their weight.

What’s the most expensive stuff that’s actually traded by weight in kilograms?

A kilo of gold is about $40,000, and if you’re wealthy enough, you can obtain it by the ton.  Platinum is similar, and so are rhodium and iridium.  Rare earths such as europium don’t cost nearly as much.

A gram of cocaine might go for hundreds in some difficult markets, but at the source a whole kilo costs less than $1000. What about LSD? Now we’re getting somewhere: because dosages are so small, prices per gram do reach four digits. And that’s considered a wholesale price! But I’ve heard that people do sometimes make it by the whole kilogram, and it sure doesn’t cost all that much for materials. All these drugs have prices that go very nonlinear as the batch size decreases.

How about gemstones? Cut diamonds cost a lot, but uncut ones might not, depending on size. Abrasive diamond grit costs a few thousand a kilo as far as I can tell, but fat crystals which can be cut go for a lot more. Pricing depends on personally assessing each batch, maybe each rock in the batch, and then haggling — you can’t just get a bag of rocks for a fixed price. But if you average it out, what might the price of a kilo of large rough diamonds be? Hard to say, but if they’re around two carats rough, and of gemstone quality (after selecting for size, most would still be rejected as too yellow or too full of inclusions), yeah, it would be seven digits. I suppose such trades might be made routinely in the gemstone business, but as far as I can tell, they don’t batch them together all that much.

There are gemstones much rarer than diamond, but they don’t have well developed markets. Taaffeite and painite are both rare and precious… but I don’t think it’s possible to buy a kilogram.

Some perfume ingredients are notoriously expensive.  Ambergris, sometimes called “floating gold”, goes for $20,000 to $50,000 a kg, but orris butter (made from iris roots) and oud resin (produced when an aquilaria tree is fighting a bacterial infection) can sometimes fetch much higher prices.  Mind you, that’s only for the best grades.  I’ve heard of some fanatics paying $100,000 to $300,000 a kilogram for particular batches.  But that still doesn’t quite hit our mark.

What about pharmaceuticals? Some are very costly indeed. Soliris, for instance, has a retail price somewhere around $12,000 a gram. The ones with the most shockingly high prices are made in very small batches because they treat diseases that only a few people have, so I doubt they have kilogram availability. But some on a second tier might still be pretty expensive.

One drug which doesn’t have US approval yet is Acthar, which stacks up as follows: daily dosage (as prepared for subcutaneous injection) is a gram or more and costs about $800 retail, and annual sales are nearly $800 million, meaning annual production is at least a ton. A pharmacy chain might well buy a kilogram at a time, but I don’t know what the wholesale price would be. It might be half a million or more? I gather that the profit margins nade by retailers such as pharmacies are typically under 20%.

The most infuriating high-cost pharmaceutical might be Harvoni for hepatitis C, a contagious disease with millions of untreated sufferers. A complete course is around 40 grams at a US price of $2,500 a gram. They’re making a lot of it now — at least a ton a year — but that’s still far short of enough for all those who need it. (And since the company wants to maintain a long term market for it, maybe it’s not in their interest to make enough for everybody… since it actually is a cure, treating everybody who has the infection would wipe out their supply of customers.)

So there’s our winning substance, I guess — available in heavy quantities at a wholesale price that must be at least a million dollars a kilogram.

Meanwhile, in India, where they have chosen to disregard other countries’ drug-patent laws, they make it for $25 a gram retail.

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