5 ms·

Having lived in both the UK and US I find the cost of medicines very hard to understand here. For example in the UK I can buy a ventolin inhaler for £10 over th

by kar1181 10y ago

Having lived in both the UK and US I find the cost of medicines very hard to understand here. For example in the UK I can buy a ventolin inhaler for £10 over the counter (if I went to the Doctor it would be free). But in the US, an inhaler costs me $60 (with insurance). Why is it that much more expensive here?

drzaiusapelord 10y ago
Single payer systems negotiate as one. US insurers negotiate as separate entities, so you'll get a better rate with single-payer as its a more powerful negotiator, have less waste, and better outcomes. Why Trump supporters think they can have the benefits of single-payer while attacking it and proposing a ridiculous healthcare bill is beyond me.
lukasm 10y ago
In UK government has almost a monopoly for buying drugs, so they have a leverage in negotiation and there is a lower overhead with paper work. Americans subsidize drugs for the rest of the world.
- tdb7893 10y ago
  Fun fact: this situation is also called monopsony (i.e. when there is only one buyer in the market)
- arethuza 10y ago
  "I can buy a ventolin inhaler for £10 over the counter" Ventolin inhalers are apparently available over the counter in pharmacies in the UK - where does the government enter into that?
  - mastax 10y ago
    This part: > if I went to the Doctor it would be free probably reduces what people are willing to pay.
    - arethuza 10y ago
      But nobody is forcing pharmacies to sell them at a loss so they must presumably be making a decent commercial return on them at £10? [NB Prescription charges aren't the same throughout the UK and where you do pay there is a long list of people who are exempt from paying]
- FireBeyond 10y ago
  Yeah. That's not so accurate. Top 10 pharma companies, 5/10 are US (2 UK, 2 Swiss, 1 French). 4 of the top 6 for profit margins (from 43%(!) to 19%) are US (Merck is the only outlier, 9th, at 10%). 4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US. 3 of the bottom 5 for R&D spend (as a percentage of revenue) are US. I think I see a little fat that can be trimmed in the name of our so-called subsidization... Source: http://www.bbc.com/news/business-28212223 http://www.bbc.com/news/business-28212223
  - kgwgk 10y ago
    For all those companies the largest and more profitable market is the US, the country of domicile doesn't have much relevance for this discussion.
    - ebalit 10y ago
      It's not the case for Sanofi if I understand the table on page 5 of this document correctly: http://www.eucope.org/lib/downloads/basic_facts_about_the_eu_pharma_market.pdf http://www.eucope.org/lib/downloads/basic_facts_about_the_eu...
      - kgwgk 10y ago
        These figures are pretty old. See for example: http://en.sanofi.com/Images/40647_GlobalGBUs_NewGeo_2015.xls http://en.sanofi.com/Images/40647_GlobalGBUs_NewGeo_2015.xls
  - SilasX 10y ago
    I don't know why you think the home country of the drug maker contradicts the claim that Americans are effectively subsidizing drugs. The fact that the company is "Swiss" doesn't change the fact that it's getting disproportionate revenue from ("subsidized by") the US. >4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US. >3 of the bottom 5 for R&D spend (as a percentage of revenue) are US. Say that $1 of marketing increases profits (exclusive of that $1) by $1.01. And you can do it 5 billion times before the effects cancel. In that case, it looks like virtually all of your money went to marketing, and yet there's no fat that can be trimmed.
- Chestofdraw 10y ago
  > Americans subsidize drugs for the rest of the world. Complete nonsense. I see this regurgitated again and again with nothing to back it up and it falls apart under the slightest inspection.
  - wyldfire 10y ago
    I have believed this "nonsense" for a while so I went looking for evidence that supports the claim. I'd always assumed it was just regional market segmentation that allowed them to change a lot more here in the US. One of the Quora answers [1] to this question has lots of evidence and ultimately boils down to mostly marketing budgets (drugs are advertised directly to consumers here in the US and not elsewhere). [1] https://www.quora.com/Does-the-US-subsidize-health-care-in-the-rest-of-the-world-by-doing-most-of-the-drug-research https://www.quora.com/Does-the-US-subsidize-health-care-in-t...
- maxxxxx 10y ago
  "Americans subsidize drugs for the rest of the world" Don't believe this one second. It's just self-serving nonsense to justify overcharging Americans.
- DanBC 10y ago
  > Americans subsidize drugs for the rest of the world. This keeps being said, but I've never seen any support for it. It's probably true to say that Americans subsidise the massive advertising budgets.
jostmey 10y ago
The US pays an unfair burden to cover the cost of developing new drugs. That said, many drug companies seem more concerned with selling drugs that are barely better than a placebo and have cut back on research efforts.
- FireBeyond 10y ago
  Not really. The top two spending R&D pharma firms are the Swiss Novartis, and Hoffman-La Roche. J&J, despite having 40% higher revenues ($70B vs $50B) spent nearly $2B less ($8.2B versus $9.9B) on R&D.
  - maxerickson 10y ago
    They market drugs in the US though. (I don't think the 'the US bears the burden' argument is especially compelling, I'm just saying that the country where a business is located doesn't reveal where it gets revenue)
    - FireBeyond 10y ago
      Right, and that's really what I'm getting at. The only country in the world (except maybe NZ, who was in the process of phasing it out, and only allowed it as part of a trade deal with the US) where Rx meds are advertised to consumers. Even with marketing spends of 20-25% of revenue, and R&D spends of 10% (and profit margins of typically 20%+), pharma has still managed to convince many Americans that they are struggling, and Americans are feeling the burden, of the US subsidizing the world's drug research (even though the two largest researching firms in the world aren't the US).
      - maxerickson 10y ago
        By "market", I meant selling them, not just advertising. A Swiss company can get revenue from the US just as well as a US company. The location of their research lab won't reveal where they make their profits.
  - 10y ago
Houshalter 10y ago
Not inhalers, but here is an interesting article on epipens https://slatestarcodex.com/2016/08/29/reverse-voxsplaining-drugs-vs-chairs/ https://slatestarcodex.com/2016/08/29/reverse-voxsplaining-d... Europe has 8 different competing companies that make epipens, but the US only has only approved 2. And the second one has to be specifically prescribed or you get the more expensive name brand. And the company that makes it apparently gives bribes to generic manufacturers to keep them from competing. And spends lots lobbying congress to let them keep doing this.
maxerickson 10y ago
Corporatism.

by kar1181 10y ago

drzaiusapelord 10y ago

Single payer systems negotiate as one. US insurers negotiate as separate entities, so you'll get a better rate with single-payer as its a more powerful negotiator, have less waste, and better outcomes. Why Trump supporters think they can have the benefits of single-payer while attacking it and proposing a ridiculous healthcare bill is beyond me.

lukasm 10y ago

In UK government has almost a monopoly for buying drugs, so they have a leverage in negotiation and there is a lower overhead with paper work. Americans subsidize drugs for the rest of the world.

tdb7893 10y ago
Fun fact: this situation is also called monopsony (i.e. when there is only one buyer in the market)
arethuza 10y ago
"I can buy a ventolin inhaler for £10 over the counter" Ventolin inhalers are apparently available over the counter in pharmacies in the UK - where does the government enter into that?
- mastax 10y ago
  This part: > if I went to the Doctor it would be free probably reduces what people are willing to pay.
  - arethuza 10y ago
    But nobody is forcing pharmacies to sell them at a loss so they must presumably be making a decent commercial return on them at £10? [NB Prescription charges aren't the same throughout the UK and where you do pay there is a long list of people who are exempt from paying]
FireBeyond 10y ago
Yeah. That's not so accurate. Top 10 pharma companies, 5/10 are US (2 UK, 2 Swiss, 1 French). 4 of the top 6 for profit margins (from 43%(!) to 19%) are US (Merck is the only outlier, 9th, at 10%). 4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US. 3 of the bottom 5 for R&D spend (as a percentage of revenue) are US. I think I see a little fat that can be trimmed in the name of our so-called subsidization... Source: http://www.bbc.com/news/business-28212223 http://www.bbc.com/news/business-28212223
- kgwgk 10y ago
  For all those companies the largest and more profitable market is the US, the country of domicile doesn't have much relevance for this discussion.
  - ebalit 10y ago
    It's not the case for Sanofi if I understand the table on page 5 of this document correctly: http://www.eucope.org/lib/downloads/basic_facts_about_the_eu_pharma_market.pdf http://www.eucope.org/lib/downloads/basic_facts_about_the_eu...
    - kgwgk 10y ago
      These figures are pretty old. See for example: http://en.sanofi.com/Images/40647_GlobalGBUs_NewGeo_2015.xls http://en.sanofi.com/Images/40647_GlobalGBUs_NewGeo_2015.xls
- SilasX 10y ago
  I don't know why you think the home country of the drug maker contradicts the claim that Americans are effectively subsidizing drugs. The fact that the company is "Swiss" doesn't change the fact that it's getting disproportionate revenue from ("subsidized by") the US. >4 of the top 5 for Sales and Marketing Spend (both on raw dollars and as a percentage of revenue) are US. >3 of the bottom 5 for R&D spend (as a percentage of revenue) are US. Say that $1 of marketing increases profits (exclusive of that $1) by $1.01. And you can do it 5 billion times before the effects cancel. In that case, it looks like virtually all of your money went to marketing, and yet there's no fat that can be trimmed.
Chestofdraw 10y ago
> Americans subsidize drugs for the rest of the world. Complete nonsense. I see this regurgitated again and again with nothing to back it up and it falls apart under the slightest inspection.
- wyldfire 10y ago
  I have believed this "nonsense" for a while so I went looking for evidence that supports the claim. I'd always assumed it was just regional market segmentation that allowed them to change a lot more here in the US. One of the Quora answers [1] to this question has lots of evidence and ultimately boils down to mostly marketing budgets (drugs are advertised directly to consumers here in the US and not elsewhere). [1] https://www.quora.com/Does-the-US-subsidize-health-care-in-the-rest-of-the-world-by-doing-most-of-the-drug-research https://www.quora.com/Does-the-US-subsidize-health-care-in-t...
maxxxxx 10y ago
"Americans subsidize drugs for the rest of the world" Don't believe this one second. It's just self-serving nonsense to justify overcharging Americans.
DanBC 10y ago
> Americans subsidize drugs for the rest of the world. This keeps being said, but I've never seen any support for it. It's probably true to say that Americans subsidise the massive advertising budgets.

jostmey 10y ago

The US pays an unfair burden to cover the cost of developing new drugs. That said, many drug companies seem more concerned with selling drugs that are barely better than a placebo and have cut back on research efforts.

FireBeyond 10y ago
Not really. The top two spending R&D pharma firms are the Swiss Novartis, and Hoffman-La Roche. J&J, despite having 40% higher revenues ($70B vs $50B) spent nearly $2B less ($8.2B versus $9.9B) on R&D.
- maxerickson 10y ago
  They market drugs in the US though. (I don't think the 'the US bears the burden' argument is especially compelling, I'm just saying that the country where a business is located doesn't reveal where it gets revenue)
  - FireBeyond 10y ago
    Right, and that's really what I'm getting at. The only country in the world (except maybe NZ, who was in the process of phasing it out, and only allowed it as part of a trade deal with the US) where Rx meds are advertised to consumers. Even with marketing spends of 20-25% of revenue, and R&D spends of 10% (and profit margins of typically 20%+), pharma has still managed to convince many Americans that they are struggling, and Americans are feeling the burden, of the US subsidizing the world's drug research (even though the two largest researching firms in the world aren't the US).
    - maxerickson 10y ago
      By "market", I meant selling them, not just advertising. A Swiss company can get revenue from the US just as well as a US company. The location of their research lab won't reveal where they make their profits.
- 10y ago

Houshalter 10y ago

Not inhalers, but here is an interesting article on epipens https://slatestarcodex.com/2016/08/29/reverse-voxsplaining-drugs-vs-chairs/ https://slatestarcodex.com/2016/08/29/reverse-voxsplaining-d... Europe has 8 different competing companies that make epipens, but the US only has only approved 2. And the second one has to be specifically prescribed or you get the more expensive name brand. And the company that makes it apparently gives bribes to generic manufacturers to keep them from competing. And spends lots lobbying congress to let them keep doing this.

maxerickson 10y ago

Corporatism.