5 ms·

Drugs are cheaper and largely subsidized by governments with high incidence of HIV. I'm South African, antiretrovirals are free.* Almost got it right: Drugs e

Drugs are cheaper and largely subsidized by governments with high incidence of HIV. I'm South African, antiretrovirals are free.* Almost got it right: Drugs elsewhere are cheaper and largely subsidized by USA citizens. Those drugs cost a fortune to make and the companies make their money in USA https://www.reuters.com/article/us-pharmaceuticals-usa-comparison/exclusive-transatlantic-divide-how-u-s-pays-three-times-more-for-drugs-idUSKCN0S61KU20151012 https://www.reuters.com/article/us-pharmaceuticals-usa-compa...

tertius 9y ago
> Almost got it right: Drugs elsewhere are cheaper and largely subsidized by USA citizens. * Correction, by U.S. government (through law). > Those drugs cost a fortune to make and the companies make their money in USA. Yes R&D is expensive, but pharma is extremely profitable. Here in the U.S. and abroad.
- tryingagainbro 9y ago
  The difference in pricing is STAGGERING. http://timesofindia.indiatimes.com/india/New-Hepatitis-C-drug-99-cheaper-in-India/articleshow/39719323.cms http://timesofindia.indiatimes.com/india/New-Hepatitis-C-dru... The blockbuster hepatitis C drug will cost about $900 (around Rs 54,000) in India for a 12-week course of treatment. That would be a fraction of the $84,000 (over Rs 50 lakh) price tag for the same treatment in US. I'm sure that they wouldn't be that profitable if USA paid $900 for that drug, especially the first few years. https://www.nytimes.com/2015/02/04/business/sales-of-sovaldi-new-gilead-hepatitis-c-drug-soar-to-10-3-billion.html https://www.nytimes.com/2015/02/04/business/sales-of-sovaldi... 140,000 patients in USA and going to 250,000
  - tertius 9y ago
    Drugs are cheapest in India. Let's normalize. I.e. far end of the pricing bell curve. But the answer is still, yes, there is profitability. Just not as much as with the hyper inflated prices in the US. In short: Does the extreme cost for drugs in the US cause groundbreaking research to benefit the whole world? No, same results could be had with way less profit. Money to fund moonshot research is still important though.
    - pkaye 9y ago
      Given the lower labor costs and people consider drugs to be so profitable, I don't know why other countries don't do as much research and drug development. Just a few countries carry the lion share of this effort.
      - refurb 9y ago
        That would be my response. If someone else can improve R&D and lower the cost of drugs, they are more than welcome to. Interestingly, I haven't seen any takers.
        tertius 9y ago
        This is constantly done... Find some new discoveries in basic science. Get finding. Develop a drug. Test and redevelop. Market. Profit.
        refurb 9y ago
        Based on lowering the costs of R&D? I've yet to see it.
        tertius 9y ago
        Yes, many people bring their work out of academia and have much lower cost of R&D because they don't have to pay for any of the pre-work. Reagents are getting cheaper and better as well. Yesteryears low hanging fruit costs the same as today's low hanging fruit. They are harder to solve though. And no, I'm not saying everyone single biotech startup is like this or every single researcher does this. And yes many fail, but that's the cost of doing business and it's something that makes things progress.
      - tertius 9y ago
        Drug development is expensive.
- refurb 9y ago
  pharma is extremely profitable That's survivorship bias. Yes, the successful pharma companies are quite profitable, but there are 10 failed companies for every successful one. I remember reading a paper that said the overall returns for the industry are either single digit or negative.
  - tertius 9y ago
    This is business in general. The big ones buy up the small generic producers and single new drug companies and get slightly bigger. The ones who can't pass trials fail. That's business, especially in R&D.
FabHK 9y ago
And yet, reportedly US pharmaceuticals spend more money on marketing and promotion (i.e. coddling up to the doctors who prescribe their products) than R&D. https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/ https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p... https://www.sciencedaily.com/releases/2008/01/080105140107.htm https://www.sciencedaily.com/releases/2008/01/080105140107.h...
- refurb 9y ago
  God I wish this myth would die. First off, that's not sales and marketing expense. It's what accountants called "sales and general administration" which yes, marketing falls into, but so do a number of other items. It's not 100% marketing. Second, the only reason why a company would spend money on promotion is if the return is >100%. So, if drug companies were to stop all promotion, their profit would actually fall, not go up. So it's not going to reduce the cost of drugs. Third, I've talked to a number of physicians would appreciate the marketing that drug companies do. They don't have time to keep up on the latest, so a 15 minute chat with a drug rep might save them a lot of time. Of course, they know the marketing is biased, but it at least gives them a sense as to what's out there.
  - philwelch 9y ago
    > Second, the only reason why a company would spend money on promotion is if the return is >100%. So, if drug companies were to stop all promotion, their profit would actually fall, not go up. So it's not going to reduce the cost of drugs. Not necessarily. Advertising is often a negative-sum game. To give a simplified, quasi-hypothetical example, if neither Coke nor Pepsi advertised, they would still have very similar market shares and revenues. But then Pepsi realizes they can spend $1MM advertising to swing $1.25MM of revenue from Coke, and Coke spends $1MM to swing $1.25MM revenue back, and now both companies are $1MM in the hole for no gain. In this case, everyone—Coke, Pepsi, and the consumer—is better off if the government just banned soda advertising. Well, maybe not the ad agencies, TV networks, and celebrity sponsors, but there’s still a net economic loss to society. Lots of drug advertising is of this useless, competitive type. If no one advertised erection drugs, people would just go to the doctor and take whatever was prescribed to them. But if Cialis blankets the airwaves, they can swing market share from Viagra.

tertius 9y ago

> Almost got it right: Drugs elsewhere are cheaper and largely subsidized by USA citizens. * Correction, by U.S. government (through law). > Those drugs cost a fortune to make and the companies make their money in USA. Yes R&D is expensive, but pharma is extremely profitable. Here in the U.S. and abroad.

tryingagainbro 9y ago
The difference in pricing is STAGGERING. http://timesofindia.indiatimes.com/india/New-Hepatitis-C-drug-99-cheaper-in-India/articleshow/39719323.cms http://timesofindia.indiatimes.com/india/New-Hepatitis-C-dru... The blockbuster hepatitis C drug will cost about $900 (around Rs 54,000) in India for a 12-week course of treatment. That would be a fraction of the $84,000 (over Rs 50 lakh) price tag for the same treatment in US. I'm sure that they wouldn't be that profitable if USA paid $900 for that drug, especially the first few years. https://www.nytimes.com/2015/02/04/business/sales-of-sovaldi-new-gilead-hepatitis-c-drug-soar-to-10-3-billion.html https://www.nytimes.com/2015/02/04/business/sales-of-sovaldi... 140,000 patients in USA and going to 250,000
- tertius 9y ago
  Drugs are cheapest in India. Let's normalize. I.e. far end of the pricing bell curve. But the answer is still, yes, there is profitability. Just not as much as with the hyper inflated prices in the US. In short: Does the extreme cost for drugs in the US cause groundbreaking research to benefit the whole world? No, same results could be had with way less profit. Money to fund moonshot research is still important though.
  - pkaye 9y ago
    Given the lower labor costs and people consider drugs to be so profitable, I don't know why other countries don't do as much research and drug development. Just a few countries carry the lion share of this effort.
    - refurb 9y ago
      That would be my response. If someone else can improve R&D and lower the cost of drugs, they are more than welcome to. Interestingly, I haven't seen any takers.
      - tertius 9y ago
        This is constantly done... Find some new discoveries in basic science. Get finding. Develop a drug. Test and redevelop. Market. Profit.
        refurb 9y ago
        Based on lowering the costs of R&D? I've yet to see it.
        tertius 9y ago
        Yes, many people bring their work out of academia and have much lower cost of R&D because they don't have to pay for any of the pre-work. Reagents are getting cheaper and better as well. Yesteryears low hanging fruit costs the same as today's low hanging fruit. They are harder to solve though. And no, I'm not saying everyone single biotech startup is like this or every single researcher does this. And yes many fail, but that's the cost of doing business and it's something that makes things progress.
    - tertius 9y ago
      Drug development is expensive.
refurb 9y ago
pharma is extremely profitable That's survivorship bias. Yes, the successful pharma companies are quite profitable, but there are 10 failed companies for every successful one. I remember reading a paper that said the overall returns for the industry are either single digit or negative.
- tertius 9y ago
  This is business in general. The big ones buy up the small generic producers and single new drug companies and get slightly bigger. The ones who can't pass trials fail. That's business, especially in R&D.

FabHK 9y ago

And yet, reportedly US pharmaceuticals spend more money on marketing and promotion (i.e. coddling up to the doctors who prescribe their products) than R&D. https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/ https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p... https://www.sciencedaily.com/releases/2008/01/080105140107.htm https://www.sciencedaily.com/releases/2008/01/080105140107.h...

refurb 9y ago
God I wish this myth would die. First off, that's not sales and marketing expense. It's what accountants called "sales and general administration" which yes, marketing falls into, but so do a number of other items. It's not 100% marketing. Second, the only reason why a company would spend money on promotion is if the return is >100%. So, if drug companies were to stop all promotion, their profit would actually fall, not go up. So it's not going to reduce the cost of drugs. Third, I've talked to a number of physicians would appreciate the marketing that drug companies do. They don't have time to keep up on the latest, so a 15 minute chat with a drug rep might save them a lot of time. Of course, they know the marketing is biased, but it at least gives them a sense as to what's out there.
- philwelch 9y ago
  > Second, the only reason why a company would spend money on promotion is if the return is >100%. So, if drug companies were to stop all promotion, their profit would actually fall, not go up. So it's not going to reduce the cost of drugs. Not necessarily. Advertising is often a negative-sum game. To give a simplified, quasi-hypothetical example, if neither Coke nor Pepsi advertised, they would still have very similar market shares and revenues. But then Pepsi realizes they can spend $1MM advertising to swing $1.25MM of revenue from Coke, and Coke spends $1MM to swing $1.25MM revenue back, and now both companies are $1MM in the hole for no gain. In this case, everyone—Coke, Pepsi, and the consumer—is better off if the government just banned soda advertising. Well, maybe not the ad agencies, TV networks, and celebrity sponsors, but there’s still a net economic loss to society. Lots of drug advertising is of this useless, competitive type. If no one advertised erection drugs, people would just go to the doctor and take whatever was prescribed to them. But if Cialis blankets the airwaves, they can swing market share from Viagra.