7 ms·

>The interesting thing to note that the company in the article, Alexion, is not even an unusually lucrative company. In 2015 its operating income was $536 milli

>The interesting thing to note that the company in the article, Alexion, is not even an unusually lucrative company. In 2015 its operating income was $536 million on 2.6 billion of revenue, or about a 20% operating profit margin. ...what. 20% margin isn't good nowadays? And why on earth are we comparing this company to a tech giant, they're not in the same world when it comes to how they operate. Of course google's going to look better in a lot of these terms, it's google (and i'd argue a monopoly). I mean at what point do we say, actually these biotech companies are plenty profitable? There's so much handwringing about how if we hurt these companies in anyway then all these sick people will die. It's just not true. Why don't we take the S&P 500, a Biotech Index and ALXN and put them on a chart: https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1495669925719&chddm=624036&chls=IntervalBasedLine&cmpto=NASDAQ:ALXN;INDEXSP:.INX&cmptdms=0;0&q=INDEXSP:SPSIBI&ntsp=0&ei=nRwmWfHyE5vM2AaR9ZuQDw https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&... Well damn, looks like despite all their huge R&D costs, only 20% margins, so on and so on they are doing pretty damn well. Honestly, are we looking at the same chart? These companies are MILKING sick people and we're afraid to intervene. Markets don't work in life and death scenarios because people would pay anything. This is a case that begs for regulation and even with it these companies are going to be just fine.

tuna-piano 9y ago
In a world where investors invest in photo sharing apps and social media websites because of the potential billion dollar payouts - why would you limit the potential drug payouts without limiting the social media app payouts? Over time, would limiting the potential profits in life-saving drugs increase or decrease the number of life-saving drugs developed? In an economy where people can choose to work in any field, and investors can choose to invest their money in any field - what better way is there to allocate the people and money resources than by letting people voice how valuable something is with their wallets? Do you want to force someone to buy a third car instead of buying a new drug treatment? If you understand the invisible hand theory (actually understand it, not just the everyman's definition) I think it's difficult to (a) argue against in general and (b) argue against for certain life-saving industries especially.
- frgtpsswrdlame 9y ago
  Actually, horror of horrors, if I could I'd take a giant antitrust bat to about half the technology sector (which would hurt profits). I urge urge urge you to reevaluate your understanding of economics as well. I recently made a book recommendation on here, I'd like to make it again. 23 Things They Don't Tell You About Capitalism by Ha-Joon Chang Economism by James Kwak And no it's not at all hard to argue against the invisible hand theory although I'd really like to not do that here. But just consider how far physics has advanced since the 18th century, why don't you think economics has done the same? Just think about what you're actually proposing for a second. There are no scenarios where the invisible hand works against laypeople? I think that's incredibly naive.
  - deleted 9y ago
    [deleted]
  - kevinnk 9y ago
    I've recommended to plenty of people that they read "Principles of Macroeconomics" by Greg Mankiw, but weirdly enough no one has. Maybe I just didn't urge urge urge them enough? Actually, if you believe economics hasn't changed since the 18th century you really should read it. Who knows, maybe you'll even reevaluate your understanding of economics.
    - frgtpsswrdlame 9y ago
      Principles is the exact wrong thing for someone casually interested in economics to read. It's the proliferation of the belief that Econ 101 is "real econ" when it's anything but. You can get an undergrad degree in Econ and still have no real understanding of how the economy works. Sure you'll have a simple model but that model will fail over and over again because it's far too simplified. That's why I recommend Economism. It's inoculation to Econ 101.
      - cgmg 9y ago
        Please enlighten us as to how your non-mainstream model is superior. The burden of proof is on you. Also, your claim that economics hasn't advanced since the 18th century is absurd and betrays an ignorance of the subject.
deleted 9y ago
[deleted]
lacker 9y ago
It's not that 20% isn't good. It's that, this drug costs $389,000 a year and they are only making 20% margins. So, even if they were a nonprofit they would still have to be charging $311,000 a year to break even. You can argue they shouldn't be profitable, and OK even if that is granted, that still wouldn't make these rare drugs cheap.
- mjevans 9y ago
  When money shouldn't be an object in the equation it should be removed from the equation. This is work that should be done for public benefit by public benefit organizations. In other words, universities should be where this kind of treatment is developed and tested, AND the regulations that make normal drugs so expensive should apply differently (and relate heavily to a LOT MORE public disclosure and real peer review).
  - brownbat 9y ago
    > When money shouldn't be an object in the equation it should be removed from the equation. We all believe it's important to save lives. If it costs $300k to save one life, but in other disciplines or other areas of medicine you can save a life for $5k, then you have a problem that is not solved by simply ignoring money.
  - arcbyte 9y ago
    It doesnt matter where you move the money, its always in the equation.
  - replicatorblog 9y ago
    That's a good hypothesis. How about someone suggests that Harvard, with its $36B endowment, tests it out? Pick a rare disease, ask Harvard, or any similar institution, to tackle it with their world class medical school and research capabilities. Offer them gov't matching funds. Or threaten their tax-exempt status if they don't do it. And let's see how they do. Maybe a socialized or non-profit R&D program would do better than big biotech companies, but before we legislate this idea, how about we test it? My concern is that a non-profit/gov't drug development program will work as well as the ACA's $2B website. I get hives whenever someone suggests pharma companies are "too" profitable. My daughter is alive today because these "greedy" pharma companies have developed chemotherapies that beat leukemia 90+% of the time. A 20% margin for these companies that regularly produce miracle drugs seems totally fair. Pharma is the closest thing we have to magic in the modern world. I'm open to the idea there are better possible systems, but the burden of proof is on your side, not the side that regularly cranks out life-saving medicines like the goose that lays the golden eggs.

tuna-piano 9y ago

In a world where investors invest in photo sharing apps and social media websites because of the potential billion dollar payouts - why would you limit the potential drug payouts without limiting the social media app payouts? Over time, would limiting the potential profits in life-saving drugs increase or decrease the number of life-saving drugs developed? In an economy where people can choose to work in any field, and investors can choose to invest their money in any field - what better way is there to allocate the people and money resources than by letting people voice how valuable something is with their wallets? Do you want to force someone to buy a third car instead of buying a new drug treatment? If you understand the invisible hand theory (actually understand it, not just the everyman's definition) I think it's difficult to (a) argue against in general and (b) argue against for certain life-saving industries especially.

frgtpsswrdlame 9y ago
Actually, horror of horrors, if I could I'd take a giant antitrust bat to about half the technology sector (which would hurt profits). I urge urge urge you to reevaluate your understanding of economics as well. I recently made a book recommendation on here, I'd like to make it again. 23 Things They Don't Tell You About Capitalism by Ha-Joon Chang Economism by James Kwak And no it's not at all hard to argue against the invisible hand theory although I'd really like to not do that here. But just consider how far physics has advanced since the 18th century, why don't you think economics has done the same? Just think about what you're actually proposing for a second. There are no scenarios where the invisible hand works against laypeople? I think that's incredibly naive.
- deleted 9y ago
  [deleted]
- kevinnk 9y ago
  I've recommended to plenty of people that they read "Principles of Macroeconomics" by Greg Mankiw, but weirdly enough no one has. Maybe I just didn't urge urge urge them enough? Actually, if you believe economics hasn't changed since the 18th century you really should read it. Who knows, maybe you'll even reevaluate your understanding of economics.
  - frgtpsswrdlame 9y ago
    Principles is the exact wrong thing for someone casually interested in economics to read. It's the proliferation of the belief that Econ 101 is "real econ" when it's anything but. You can get an undergrad degree in Econ and still have no real understanding of how the economy works. Sure you'll have a simple model but that model will fail over and over again because it's far too simplified. That's why I recommend Economism. It's inoculation to Econ 101.
    - cgmg 9y ago
      Please enlighten us as to how your non-mainstream model is superior. The burden of proof is on you. Also, your claim that economics hasn't advanced since the 18th century is absurd and betrays an ignorance of the subject.

deleted 9y ago

[deleted]

lacker 9y ago

It's not that 20% isn't good. It's that, this drug costs $389,000 a year and they are only making 20% margins. So, even if they were a nonprofit they would still have to be charging $311,000 a year to break even. You can argue they shouldn't be profitable, and OK even if that is granted, that still wouldn't make these rare drugs cheap.

mjevans 9y ago
When money shouldn't be an object in the equation it should be removed from the equation. This is work that should be done for public benefit by public benefit organizations. In other words, universities should be where this kind of treatment is developed and tested, AND the regulations that make normal drugs so expensive should apply differently (and relate heavily to a LOT MORE public disclosure and real peer review).
- brownbat 9y ago
  > When money shouldn't be an object in the equation it should be removed from the equation. We all believe it's important to save lives. If it costs $300k to save one life, but in other disciplines or other areas of medicine you can save a life for $5k, then you have a problem that is not solved by simply ignoring money.
- arcbyte 9y ago
  It doesnt matter where you move the money, its always in the equation.
- replicatorblog 9y ago
  That's a good hypothesis. How about someone suggests that Harvard, with its $36B endowment, tests it out? Pick a rare disease, ask Harvard, or any similar institution, to tackle it with their world class medical school and research capabilities. Offer them gov't matching funds. Or threaten their tax-exempt status if they don't do it. And let's see how they do. Maybe a socialized or non-profit R&D program would do better than big biotech companies, but before we legislate this idea, how about we test it? My concern is that a non-profit/gov't drug development program will work as well as the ACA's $2B website. I get hives whenever someone suggests pharma companies are "too" profitable. My daughter is alive today because these "greedy" pharma companies have developed chemotherapies that beat leukemia 90+% of the time. A 20% margin for these companies that regularly produce miracle drugs seems totally fair. Pharma is the closest thing we have to magic in the modern world. I'm open to the idea there are better possible systems, but the burden of proof is on your side, not the side that regularly cranks out life-saving medicines like the goose that lays the golden eggs.