5 ms·

What is preventing legislation that simply opens borders / trade for filling prescriptions?

by beambot 10y ago

Retric 10y ago
Corruption. However, the line is generally described as: If companies can't discount per country then all countries end up paying high prices without discounts. However, if they can discount prices in some countries then that maximizes profits which increasing the customer base.
- Thriptic 10y ago
  It's much more complicated than that. Sales in the US where they can charge more are what actually offer pharma companies good ROI. Effectively the US is subsidizing R&D for the rest of the world.
  - irln 10y ago
    Agreed. Pharma is managing their expenses and profitability based upon the ability to charge much higher prices in the US. Take that away and suddenly everyone outside the US will have to pay more -or- Pharma will have to rethink their business model. The more this connection is obfuscated the easier it is to confuse decision makers.
    - Retric 10y ago
      Pharmaceutical companies do a lot more than just R&D making said subsides horribly inefficient and thus a lie. But, yes that's the line used.
  - deleted 10y ago
    [deleted]
  - bjshepard 10y ago
    This is a lie.
    - kybernetikos 10y ago
      Saying it's a lie makes it sound like you think it's deliberately mendacious. In fact, it seems more likely that the poster believes it. It might be more constructive and interesting to say something like 'this is incorrect because/as this reference shows...'
  - shanusmagnus 10y ago
    The implication of the 'subsidy' argument is that there's a certain level of profit required to drive a certain amount of product development and innovation. In other words, to get the current level of drug discovery / development / etc., pharma requires the current level of return. The question for me is how how inelastic this relationship is. The pharma companies would have you believe that if some kind of price controls of some kind were put in place, and the total amount of profit to be had was reduced, then the inexorable result would be a scaling down of the whole process: a sinking tide lowering all ships. Is that a realistic model? I don't know. Is there way to know? I don't know that either. It's easy to make religious claims from either side, but it would be nice to have a better sense of the system dynamics here.
  - athenot 10y ago
    Not for European drug companies (and there are quite a few of them) who must negociate price in Europe, yet still cover all their R&D. Those same comapnies then sell the same drug with pure profit (minus marketing & regulatory cost) in the US, for 4x the price because they have a monopily on it.
JacobJans 10y ago
This ammendment almost made it to the floor: https://www.congress.gov/amendment/115th-congress/senate-amendment/178/actions https://www.congress.gov/amendment/115th-congress/senate-ame... You can see who voted for / against it: https://www.congress.gov/amendment/115th-congress/senate-amendment/178/actions https://www.congress.gov/amendment/115th-congress/senate-ame...
- icantdrive55 10y ago
  40 Rebublicans said No 12 Democrats said No Feinstein (D), Sessions (R) refused to vote. (Roughly)
edblarney 10y ago
"What is preventing legislation that simply opens borders / trade for filling prescriptions?" US suppliers sell to Canada at a different price than they sell in the US. If 'borders were open' - the price in US would go down, the price in Canada would go up, roughly to the same price. I understand that it seems odd, but I reject the idea that it's 'corrupt' to sell to one country at a different price than another. Drugs are essentially IP, so it would be like the US selling Canada the 'Superbowl' and then Canada selling and broadcasting it to the rest of the world at a discount. I think something should be done about that - but drugs are not like most goods. And of course, many goods have different controls and regimes. Another aspect: it's not really 'free trade' when a government entirely regulates the economy for a good. So when gov of Canada 'sets prices' for a good, it kind of flies in the face of regular trade rules and potentially gives one side or another advantages, so it really doesn't fit well under things like WTO or NAFTA. Surely we could have some new thinking about this though ...
refurb 10y ago
Why would drug companies allow it? When a lot of Americans were filling their prescriptions in Canada, the drug companies simply applied quotas to their shipments to Canada. They know how big the markets are, so why would they ship 500% of estimated demand to Canada knowing it would flow back into the US? As a result, a lot of pharmacies (and some gov'ts) restricted sales to out-of-country patients to prevent shortages in their own countries.
rayiner 10y ago
A complex tango between drug companies that want to maintain their margins, and European governments that want to drive drug prices artificially low to force American payers to make up the difference.
- chimeracoder 10y ago
  You're getting downvoted, but you're right. Currently, the US is implicitly subsidizing other countries in this regard. If we removed the trade barriers for prescription drugs, US prices would fall and other countries would end up paying more.
  - spangry 10y ago
    An alternative scenario might be that drugs would get cheaper in the US, European drug prices stay the same and pharmaceutical companies somehow scrape by with lower (but still positive) profit levels. Seriously, if drug companies were making a net loss in European and other countries, they'd just stop supplying in those countries and subsequently enjoy higher profits. Unless you're suggesting companies like Pfizer and Merck & Co do it anyway out of the goodness of their hearts. And prices the US pay are in no way related to what other countries pay: it's simply a function of market power and being in a much weaker bargaining position. Most of these countries have 'single buyers': essentially a panel of medical practitioners and economists who negotiate prices on the basis of cost-benefit ratio on behalf of the entire country. So the lower drug prices in European countries (and other single buyer/universal insurance countries like Britain, Australia, Canada etc.) is simply drug companies supplying the market at the price it will bear. They are price takers in such countries, because those countries are monoponsy markets. I realise Pfizer (net income: $7.74 billion) and Merck & Co (net income: $4.44 billion) are really doing it tough, but I think they'll be OK if Americans realise it's insane to pay close to double (>15%) the OECD average (7-8%, medical spending as a % of GDP). Although I hear US medical treatment is top notch if you're rich, otherwise statistically (and conservatively) 25% of the time it will send you bankrupt, assuming you make it out of the waiting room alive (compared to, say, the UK where medical costs account for %5 of households that report 'financial difficulty'). [0] It truly baffles me when I hear Americans talk about this issue, as they always argue it's actually really a good thing that they're getting rogered by most of the private medical industry in their country (hey, they're nice people, we cuddle afterwards). There's some crazy mental gymnastics going on if you truly believe that paying double the 'rich country club' average on health care costs for basically the same outcomes (apart from the much higher bankruptcy rate) is in some way a good thing. It's almost like some weird form of buyers' remorse: 'Yeah, but we treat cancer better that anyone. USA #1!' [0] http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-year-due-to-medical-bills/ http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-y...

What is preventing legislation that simply opens borders / trade for filling prescriptions?

by beambot 10y ago

What is preventing legislation that simply opens borders / trade for filling prescriptions?

Corruption. However, the line is generally described as: If companies can't discount per country then all countries end up paying high prices without discounts. However, if they can discount prices in some countries then that maximizes profits which increasing the customer base.

Thriptic 10y ago
It's much more complicated than that. Sales in the US where they can charge more are what actually offer pharma companies good ROI. Effectively the US is subsidizing R&D for the rest of the world.
- irln 10y ago
  Agreed. Pharma is managing their expenses and profitability based upon the ability to charge much higher prices in the US. Take that away and suddenly everyone outside the US will have to pay more -or- Pharma will have to rethink their business model. The more this connection is obfuscated the easier it is to confuse decision makers.
  - Retric 10y ago
    Pharmaceutical companies do a lot more than just R&D making said subsides horribly inefficient and thus a lie. But, yes that's the line used.
- deleted 10y ago
  [deleted]
- bjshepard 10y ago
  This is a lie.
  - kybernetikos 10y ago
    Saying it's a lie makes it sound like you think it's deliberately mendacious. In fact, it seems more likely that the poster believes it. It might be more constructive and interesting to say something like 'this is incorrect because/as this reference shows...'
- shanusmagnus 10y ago
  The implication of the 'subsidy' argument is that there's a certain level of profit required to drive a certain amount of product development and innovation. In other words, to get the current level of drug discovery / development / etc., pharma requires the current level of return. The question for me is how how inelastic this relationship is. The pharma companies would have you believe that if some kind of price controls of some kind were put in place, and the total amount of profit to be had was reduced, then the inexorable result would be a scaling down of the whole process: a sinking tide lowering all ships. Is that a realistic model? I don't know. Is there way to know? I don't know that either. It's easy to make religious claims from either side, but it would be nice to have a better sense of the system dynamics here.
- athenot 10y ago
  Not for European drug companies (and there are quite a few of them) who must negociate price in Europe, yet still cover all their R&D. Those same comapnies then sell the same drug with pure profit (minus marketing & regulatory cost) in the US, for 4x the price because they have a monopily on it.

JacobJans 10y ago

This ammendment almost made it to the floor: https://www.congress.gov/amendment/115th-congress/senate-amendment/178/actions https://www.congress.gov/amendment/115th-congress/senate-ame... You can see who voted for / against it: https://www.congress.gov/amendment/115th-congress/senate-amendment/178/actions https://www.congress.gov/amendment/115th-congress/senate-ame...

icantdrive55 10y ago
40 Rebublicans said No 12 Democrats said No Feinstein (D), Sessions (R) refused to vote. (Roughly)

edblarney 10y ago

"What is preventing legislation that simply opens borders / trade for filling prescriptions?" US suppliers sell to Canada at a different price than they sell in the US. If 'borders were open' - the price in US would go down, the price in Canada would go up, roughly to the same price. I understand that it seems odd, but I reject the idea that it's 'corrupt' to sell to one country at a different price than another. Drugs are essentially IP, so it would be like the US selling Canada the 'Superbowl' and then Canada selling and broadcasting it to the rest of the world at a discount. I think something should be done about that - but drugs are not like most goods. And of course, many goods have different controls and regimes. Another aspect: it's not really 'free trade' when a government entirely regulates the economy for a good. So when gov of Canada 'sets prices' for a good, it kind of flies in the face of regular trade rules and potentially gives one side or another advantages, so it really doesn't fit well under things like WTO or NAFTA. Surely we could have some new thinking about this though ...

refurb 10y ago

Why would drug companies allow it? When a lot of Americans were filling their prescriptions in Canada, the drug companies simply applied quotas to their shipments to Canada. They know how big the markets are, so why would they ship 500% of estimated demand to Canada knowing it would flow back into the US? As a result, a lot of pharmacies (and some gov'ts) restricted sales to out-of-country patients to prevent shortages in their own countries.

rayiner 10y ago

A complex tango between drug companies that want to maintain their margins, and European governments that want to drive drug prices artificially low to force American payers to make up the difference.

chimeracoder 10y ago
You're getting downvoted, but you're right. Currently, the US is implicitly subsidizing other countries in this regard. If we removed the trade barriers for prescription drugs, US prices would fall and other countries would end up paying more.
- spangry 10y ago
  An alternative scenario might be that drugs would get cheaper in the US, European drug prices stay the same and pharmaceutical companies somehow scrape by with lower (but still positive) profit levels. Seriously, if drug companies were making a net loss in European and other countries, they'd just stop supplying in those countries and subsequently enjoy higher profits. Unless you're suggesting companies like Pfizer and Merck & Co do it anyway out of the goodness of their hearts. And prices the US pay are in no way related to what other countries pay: it's simply a function of market power and being in a much weaker bargaining position. Most of these countries have 'single buyers': essentially a panel of medical practitioners and economists who negotiate prices on the basis of cost-benefit ratio on behalf of the entire country. So the lower drug prices in European countries (and other single buyer/universal insurance countries like Britain, Australia, Canada etc.) is simply drug companies supplying the market at the price it will bear. They are price takers in such countries, because those countries are monoponsy markets. I realise Pfizer (net income: $7.74 billion) and Merck & Co (net income: $4.44 billion) are really doing it tough, but I think they'll be OK if Americans realise it's insane to pay close to double (>15%) the OECD average (7-8%, medical spending as a % of GDP). Although I hear US medical treatment is top notch if you're rich, otherwise statistically (and conservatively) 25% of the time it will send you bankrupt, assuming you make it out of the waiting room alive (compared to, say, the UK where medical costs account for %5 of households that report 'financial difficulty'). [0] It truly baffles me when I hear Americans talk about this issue, as they always argue it's actually really a good thing that they're getting rogered by most of the private medical industry in their country (hey, they're nice people, we cuddle afterwards). There's some crazy mental gymnastics going on if you truly believe that paying double the 'rich country club' average on health care costs for basically the same outcomes (apart from the much higher bankruptcy rate) is in some way a good thing. It's almost like some weird form of buyers' remorse: 'Yeah, but we treat cancer better that anyone. USA #1!' [0] http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-year-due-to-medical-bills/ http://www.snopes.com/643000-bankruptcies-in-the-u-s-every-y...