4 ms·

Wonderful! So this means I and other Americans will soon legally be able to purchase prescription drugs from other countries where drug companies sell them for

by dfa 16y ago

Wonderful! So this means I and other Americans will soon legally be able to purchase prescription drugs from other countries where drug companies sell them for much less money? Oh, I forgot; "globalization," as meant by multinational corporations and policy makers, doesn't work that way. Globalization is not a two-way street, and while it would certainly be foolish to bet against it when it means American jobs being shipped to other countries where labor is cheaper and the cost of living is lower, betting against consumers being able to import goods from those same countries where multinationals sell their products for cheaper seems, for the time being anyway, to be a pretty safe bet.

dantheman 16y ago
The only problem with globalization is the lack of truly free trade. If countries didn't have to subsidize nonproductive sectors of the economy then the costs of living would equalize much quicker - see farm subsidies, tariffs, and the ban on imports of certain goods.
- dfa 16y ago
  I don't think it's the only problem with globalization, but having recently paid out-of-pocket for an expensive, patented prescription drug, I think it's one of the biggest, and much of the hollow pro-globalization, pro-free trade rhetoric I hear from government and big business never addresses it. I am curious about why others downvoted my original post; do people here really think this sort of protectionist price discrimination is OK?
  - nkurz 16y ago
    I voted it down because I didn't think the tone was constructive. It seemed to be accusing Thiel of not considering the big picture, when in fact Thiel is considering something much, much larger. You're asking about differential pricing of prescription drugs, while he's wondering about the impact of a spot market on human organs. What did you think of that part? Thiel isn't arguing that globalization is a done deal. If anything, he agrees that what we have is astonishingly incomplete: "we stand at a level of globalization that compares with the previous peak year of 1913". Rather, he's asking whether the economic world as we know it could withstand true globalization. But to answer your question: yes, I think it's only to be expected that corporations will seek to maximize their profits through price discrimination. And also to be expected that true globalization will make this more difficult to do. But while it's clear that those paying the higher price would benefit in the short-term from paying a lower price, it's not clear to me who would benefit in the long-term from forcing companies to choose a single set price somewhere in the middle. It probably depends on how this would be enforced.
  - natrius 16y ago
    I think it's only okay in certain circumstances. Many governments participate directly in their healthcare markets, which affects the prices at which pharmaceuticals can be sold in such a country. If goods with manipulated prices are allowed to be traded freely, the prices in other countries will be affected as well. Companies that produce the goods in question will either have to accept lower profit margins or refuse to sell their goods in manipulated markets. Regardless, such a policy would lower the expected value of future technological advances in the field, which would result in less effort being directed to such advances. It is undesirable for technology to advance at a slower pace than would be possible if people were expected to pay market prices for the products the technology would help to improve or create. If you value future advances in technology, you should want your government to minimize manipulation of the markets for such technologies. If, on the other hand, you'd like as many people to benefit from current technology as cheaply as possible, you should want your government to force prices down as much as possible.
    - dfa 16y ago
      If they dislike the price controls and monopsonies that exist in other countries, they can avoid those markets entirely. Once they agree to participate and begin exporting their drugs, we should have every right to import them back at a discount. As large corporations have shown in the past, they have no issue with planned economies, as long as the planning is done in their favor (China, Dubai). It is horribly unjust for Americans, many of whom have no or poor health insurance, to be forced to pay more money than anyone else on earth for prescription drugs. If Big Pharma, which spends disproportionate amounts of money on direct marketing to consumers, can't produce the medications we need cheaply and efficiently, that represents a market failure, and the government should step in and take the lead role in drug development. Research could be done through the NIH grant system and the results could be given away, unpatented, to the entire world. We could get the same results for less money, as the NIH doesn't need to make a profit and has no stock holders to answer to. It could even serve to improve our global reputation, showing the US to be a force for good in the world.
      - natrius 16y ago
        > If they dislike the price controls and monopsonies that exist in other countries, they can avoid those markets entirely. Once they agree to participate and begin exporting their drugs, we should have every right to import them back at a discount. As I mentioned, both of those options would make drugs less profitable, which would lead to fewer advances in technology. Prohibiting the reimportation of drugs can be a sensible policy. > It is horribly unjust for Americans, many of whom have no or poor health insurance, to be forced to pay more money than anyone else on earth for prescription drugs. Unfair, perhaps, but unjust? Fixing this problem would either require selling to everyone at American prices (which could also be described as unjust), or selling to everyone at the lowest prices available. Both options would be less profitable that the current system, which would slow the rate of advancement in drug development. > [Maybe] the government should step in and take the lead role in drug development. That can also be a sensible policy, and the American government already does fund a considerable amount of drug development.
- ancornwell 16y ago
  I would say it is being in a state of constant expansion. Kinda hard when you live on earth. Its just so... finite.
byrneseyeview 16y ago
Does Thiel address that point, or argue that there should be exceptions for American pharma companies? Our healthcare industry is psuedo-nationalized, in the sense that we have an inefficient domestic market in order to subsidize our ridiculously expensive regulatory approval process, all of which provides enough excess cash flow to fund lots of good research. Things would be different with fewer trade barriers, but the main result is that either a) the FDA would get weaker, or b) our domestic pharma industry would look a lot like that of e.g. India (cheap stuff derived from other people's research, not as much new stuff). I guess we'd buy the next generation of Lipitor, Prozac, and Viagra from the Swiss.
- c1sc0 16y ago
  You actually already buy a nice chunk of your meds from the Swiss. Switzerland is a nice place to incorporate.

by dfa 16y ago

dantheman 16y ago

The only problem with globalization is the lack of truly free trade. If countries didn't have to subsidize nonproductive sectors of the economy then the costs of living would equalize much quicker - see farm subsidies, tariffs, and the ban on imports of certain goods.

dfa 16y ago
I don't think it's the only problem with globalization, but having recently paid out-of-pocket for an expensive, patented prescription drug, I think it's one of the biggest, and much of the hollow pro-globalization, pro-free trade rhetoric I hear from government and big business never addresses it. I am curious about why others downvoted my original post; do people here really think this sort of protectionist price discrimination is OK?
- nkurz 16y ago
  I voted it down because I didn't think the tone was constructive. It seemed to be accusing Thiel of not considering the big picture, when in fact Thiel is considering something much, much larger. You're asking about differential pricing of prescription drugs, while he's wondering about the impact of a spot market on human organs. What did you think of that part? Thiel isn't arguing that globalization is a done deal. If anything, he agrees that what we have is astonishingly incomplete: "we stand at a level of globalization that compares with the previous peak year of 1913". Rather, he's asking whether the economic world as we know it could withstand true globalization. But to answer your question: yes, I think it's only to be expected that corporations will seek to maximize their profits through price discrimination. And also to be expected that true globalization will make this more difficult to do. But while it's clear that those paying the higher price would benefit in the short-term from paying a lower price, it's not clear to me who would benefit in the long-term from forcing companies to choose a single set price somewhere in the middle. It probably depends on how this would be enforced.
- natrius 16y ago
  I think it's only okay in certain circumstances. Many governments participate directly in their healthcare markets, which affects the prices at which pharmaceuticals can be sold in such a country. If goods with manipulated prices are allowed to be traded freely, the prices in other countries will be affected as well. Companies that produce the goods in question will either have to accept lower profit margins or refuse to sell their goods in manipulated markets. Regardless, such a policy would lower the expected value of future technological advances in the field, which would result in less effort being directed to such advances. It is undesirable for technology to advance at a slower pace than would be possible if people were expected to pay market prices for the products the technology would help to improve or create. If you value future advances in technology, you should want your government to minimize manipulation of the markets for such technologies. If, on the other hand, you'd like as many people to benefit from current technology as cheaply as possible, you should want your government to force prices down as much as possible.
  - dfa 16y ago
    If they dislike the price controls and monopsonies that exist in other countries, they can avoid those markets entirely. Once they agree to participate and begin exporting their drugs, we should have every right to import them back at a discount. As large corporations have shown in the past, they have no issue with planned economies, as long as the planning is done in their favor (China, Dubai). It is horribly unjust for Americans, many of whom have no or poor health insurance, to be forced to pay more money than anyone else on earth for prescription drugs. If Big Pharma, which spends disproportionate amounts of money on direct marketing to consumers, can't produce the medications we need cheaply and efficiently, that represents a market failure, and the government should step in and take the lead role in drug development. Research could be done through the NIH grant system and the results could be given away, unpatented, to the entire world. We could get the same results for less money, as the NIH doesn't need to make a profit and has no stock holders to answer to. It could even serve to improve our global reputation, showing the US to be a force for good in the world.
    - natrius 16y ago
      > If they dislike the price controls and monopsonies that exist in other countries, they can avoid those markets entirely. Once they agree to participate and begin exporting their drugs, we should have every right to import them back at a discount. As I mentioned, both of those options would make drugs less profitable, which would lead to fewer advances in technology. Prohibiting the reimportation of drugs can be a sensible policy. > It is horribly unjust for Americans, many of whom have no or poor health insurance, to be forced to pay more money than anyone else on earth for prescription drugs. Unfair, perhaps, but unjust? Fixing this problem would either require selling to everyone at American prices (which could also be described as unjust), or selling to everyone at the lowest prices available. Both options would be less profitable that the current system, which would slow the rate of advancement in drug development. > [Maybe] the government should step in and take the lead role in drug development. That can also be a sensible policy, and the American government already does fund a considerable amount of drug development.
ancornwell 16y ago
I would say it is being in a state of constant expansion. Kinda hard when you live on earth. Its just so... finite.

byrneseyeview 16y ago

Does Thiel address that point, or argue that there should be exceptions for American pharma companies? Our healthcare industry is psuedo-nationalized, in the sense that we have an inefficient domestic market in order to subsidize our ridiculously expensive regulatory approval process, all of which provides enough excess cash flow to fund lots of good research. Things would be different with fewer trade barriers, but the main result is that either a) the FDA would get weaker, or b) our domestic pharma industry would look a lot like that of e.g. India (cheap stuff derived from other people's research, not as much new stuff). I guess we'd buy the next generation of Lipitor, Prozac, and Viagra from the Swiss.

c1sc0 16y ago
You actually already buy a nice chunk of your meds from the Swiss. Switzerland is a nice place to incorporate.