4 ms·

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 subsid

by 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.

by 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.