3 ms·

You define it as better healthcare outcomes (life expectancy, infant mortality, etc.) at 50% of the cost (UK). Or, in one extreme case - the same healthcare ou

• paulmd 11y ago
  Cuba is a really interesting example because it demonstrates the importance of least-common-denominator care. You're not getting high-tech imaging or brand new drugs, but they deliver a basic level of care pretty uniformly across its population. And the outcomes speak for themselves - on average they're just as good as the US. The problem with US outcomes is really disparity. A lot of people have very little access to health care and that drags our averages down like crazy. If we could get these kind of "solved-problem" drugs out to everyone who needs them, our average outcomes would jump quite a bit. Cost is a whole different situation, and that's a much more difficult one to solve. Everyone from manufacturer to insurer to doctor wants their cut, the elasticity of demand for a good without which you will die is zero, so there's very little incentive to keep cost down. There's a few places you can point that are particularly excessive (direct-to-patient marketing, excessive spending on terminal patients circling the drain, etc), but in general it's the death of a million cuts. Pumping generics is one of those cases that's clearly abusive. With regard to the specific problem, if you try to limit their profits pharmas will simply take their ball and go home - they won't produce it. For a real-world example of this, you can no longer get the Lyme Disease vaccine for humans - nobody makes it anymore, you can only get it for the veterinary market. Evergreening is a similar problem. In such cases the government really needs to either contract out production of a supply, at-cost (including interest, distribution, etc). If no one will do it, bite the bullet and make it ourselves. If our national labs can figure out how to manufacture high-quality biological or chemical agents, we can figure out how to make high-quality vaccines and drugs as well. Public health is a matter of national security when you get right down to it. Shouldn't we be able to ramp up production of an Ebola vaccine if we really needed it?
  • crdoconnor 11y ago
    >Pumping generics is one of those cases that's clearly abusive. With regard to the specific problem, if you try to limit their profits pharmas will simply take their ball and go home - they won't produce it. For a real-world example of this, you can no longer get the Lyme Disease vaccine for humans - nobody makes it anymore, you can only get it for the veterinary market. Pharma needs outright nationalization or competition from the public sector at the very least. We've played these games before where monopolistic private companies threaten to flip the switch on critical services. The solution to this one is the same as it was to companies that refused to provide mail service or electricity when it "wasn't profitable enough". Nationalize them and provide it at cost. It's simple and proven. Hell, it's likely that the mere threat of it would be enough to panic pharma execs into playing ball. A great deal of pharma profits comes from taking research from the public sector and commercializing it anyway. Cutting the fat from the process (executive salaries, marketing, bribes to doctors) would be vastly improve the efficiency of the system. Even if research done in the private sector were 40% less efficient than that done by Pharma companies (and there's no evidence that it's any less efficient), by slashing marketing costs to zero we'd still come out ahead by nationalizing them.
    • paulmd 11y ago
      I tend to agree with you - I'd like to see an NSF-style grant system where promising drugs are taken all the way from blue-sky to market. There they should be sold at-cost, where "cost" includes licensed production as well as amortizing the cost of development for the drug (or the average total cost of the the whole pool of drugs) over say 25 years. Apart from these issues there's simply a lot of diseases that <1K people get worldwide, and nobody in their right mind brings those to market unless they can steal your wallet. It's a case of utter and total market failure in all respects. The thing with marketing is that it's a win-win for the person doing the marketing. Direct-to-patient marketing has real-world returns (ask your doctor today if the purple pill is right for you!) and a rational player will put money into that investment until returns no longer exceed costs. However on the whole it drives up costs for everyone since people who don't actually need it seek treatment, and then get prescriptions. Regardless of anything else you do, you just need to outlaw direct-to-patient marketing. It's a perverse incentive and we're the only nation that allows it.