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What is to stop the Government from saying "we will buy this medicine at X$", where X is a fair price they could negotiate. And if negotiations fail just go "ri

What is to stop the Government from saying "we will buy this medicine at X$", where X is a fair price they could negotiate. And if negotiations fail just go "right, you are taking X$, or we are taking your patent in the name of public intrest". I know this is a big no-no in American culture (and other parts of the world), but it is close to what say India and China are doing by ignoring patents on medicine that is needed but not affordable. To me, this is a much preferable solution to "death panels". Some would argue that, for economic reasons, this would lead to less research or pharmaceuticals pulling out of the US market. But history has shown the opposite to be true. Again look at China and some of the heavy restrictions it puts on foreign companies there. Do they hurt their bottom-line compared to the 'American approach'? probably. Do they still turn a profit despite them? yes. And that's why many companies still try to get into the Chinese market. profit is profit and as long as they can get some, even if it's pennies, they'll stay in a market. Let's also not forget that profits in the pharmaceutical industry are insanely high, even when taking into account the cost of research.

mirimir 10y ago
The cost of research is far lower than claimed. Tufts Center for the Study of Drug Development is heavily influenced by the pharmaceutical industry. Their estimates of drug development costs are arguably inflated. Or at least, they don't question the industry's creative accounting methods. In reality, it's arguably promotion and advertising that take the biggest chunk from profits.
- refurb 10y ago
  promotion and advertising that take the biggest chunk from profits Are you saying that if a drug company didn't promote or advertise their profits would go up? That makes no sense at all. Why would a drug company spend money on promotion and advertising unless they got a positive return from it.
  - mirimir 10y ago
    Well, without promotion and advertising, they arguably would not have very much profit. But "take the biggest chunk from profits" wasn't clear. What I meant is that promotion and advertising comprise a substantially larger share of revenue than research and development do.
    - refurb 10y ago
      But if they do get a positive return from advertising, that increases overall revenue, which would mean more R&D?
      - mirimir 10y ago
        True. But it undercuts the argument that R&D costs are the primary driver for high drug prices. It's promotion and advertising that create the demand necessary for high prices. edit: There are obviously sweet spots for all of those expenditures to maximize profits.
imh 10y ago
It simply sounds really hard to do it right. In the short term, it would be really easy to resolve disputes by just taking the IP, but that could lead to long term troubles as people drop out of the market. Disagreements between the best short term and long term strategies sound like a recipe for trouble. I'd bet it could work in theory, but I doubt we could get it right.

mirimir 10y ago

The cost of research is far lower than claimed. Tufts Center for the Study of Drug Development is heavily influenced by the pharmaceutical industry. Their estimates of drug development costs are arguably inflated. Or at least, they don't question the industry's creative accounting methods. In reality, it's arguably promotion and advertising that take the biggest chunk from profits.

refurb 10y ago
promotion and advertising that take the biggest chunk from profits Are you saying that if a drug company didn't promote or advertise their profits would go up? That makes no sense at all. Why would a drug company spend money on promotion and advertising unless they got a positive return from it.
- mirimir 10y ago
  Well, without promotion and advertising, they arguably would not have very much profit. But "take the biggest chunk from profits" wasn't clear. What I meant is that promotion and advertising comprise a substantially larger share of revenue than research and development do.
  - refurb 10y ago
    But if they do get a positive return from advertising, that increases overall revenue, which would mean more R&D?
    - mirimir 10y ago
      True. But it undercuts the argument that R&D costs are the primary driver for high drug prices. It's promotion and advertising that create the demand necessary for high prices. edit: There are obviously sweet spots for all of those expenditures to maximize profits.

imh 10y ago

It simply sounds really hard to do it right. In the short term, it would be really easy to resolve disputes by just taking the IP, but that could lead to long term troubles as people drop out of the market. Disagreements between the best short term and long term strategies sound like a recipe for trouble. I'd bet it could work in theory, but I doubt we could get it right.