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>All the big pharma companies are laying off scientist every week because even with uncapped prices the returns are so low that it is not worth spending the mon

>All the big pharma companies are laying off scientist every week because even with uncapped prices the returns are so low that it is not worth spending the money to develop new drugs. You paint such a sad, desperate picture, but based on their numbers, it sounds like they are doing it to save a buck. Look at those profit margins. 10-43 percent on billions of investment. I should be so lucky. http://www.bbc.com/news/business-28212223 http://www.bbc.com/news/business-28212223 Did you know the US government isn't allowed to negotiate drug prices for medicare and medicaid? They (we) just pay whatever the companies want to charge.

danieltillett 9y ago
Yes they are making lots of money by killing their research pipeline and laying off their scientists. The reason they are doing this is they can't justify spending the money given the returns on offer. I am no defender of pharma companies, but they are doing exactly what the economic incentives encourage them to do. We need to change the incentives, not just rant about high prices and greed. Edit. Yes I know that the US government is not allowed to negotiate with drug companies over pricing (it is a little more complex than this in practice), but even with pricing uncapped the profit margins don't justify them spending more on R&D. We agree on the problem, just disagree on the solution. You should also read the part two of the article you quoted [0]. Unfortunately all the solutions provided are little more than a sugar pill for the real problem - R&D costs. 0. http://www.bbc.com/news/business-29659537 http://www.bbc.com/news/business-29659537
maxerickson 9y ago
Medicare drug prices are negotiated by the private companies that administer most of the drug coverage. There is a clause in the law establishing Part D that says the government can't interfere with those negotiations, but this is different than the prices not being negotiated at all. http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2017/12/policy-proposal-allow-medicare-to-negotiate-drug-prices-in-part-d http://www.pewtrusts.org/en/research-and-analysis/fact-sheet... Medicaid prices aren't negotiated, but the government dictates that they get near the lowest prices the manufacturer sells the drug for.
- refurb 9y ago
  This is all correct, and, research has found that sometimes the Part D plans actually negotiate a lower price for their Medicare patients than commercial. Also, Medicaid does not only get the lowest price ("best price"), they also get another 23% knocked off. So to be entirely accurate, the US gov't doesn't negotiate drug prices for Medicaid, it creates it's own discounts and tell the company to screw off if they won't accept them.

danieltillett 9y ago

Yes they are making lots of money by killing their research pipeline and laying off their scientists. The reason they are doing this is they can't justify spending the money given the returns on offer. I am no defender of pharma companies, but they are doing exactly what the economic incentives encourage them to do. We need to change the incentives, not just rant about high prices and greed. Edit. Yes I know that the US government is not allowed to negotiate with drug companies over pricing (it is a little more complex than this in practice), but even with pricing uncapped the profit margins don't justify them spending more on R&D. We agree on the problem, just disagree on the solution. You should also read the part two of the article you quoted [0]. Unfortunately all the solutions provided are little more than a sugar pill for the real problem - R&D costs. 0. http://www.bbc.com/news/business-29659537 http://www.bbc.com/news/business-29659537

maxerickson 9y ago

Medicare drug prices are negotiated by the private companies that administer most of the drug coverage. There is a clause in the law establishing Part D that says the government can't interfere with those negotiations, but this is different than the prices not being negotiated at all. http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2017/12/policy-proposal-allow-medicare-to-negotiate-drug-prices-in-part-d http://www.pewtrusts.org/en/research-and-analysis/fact-sheet... Medicaid prices aren't negotiated, but the government dictates that they get near the lowest prices the manufacturer sells the drug for.

refurb 9y ago
This is all correct, and, research has found that sometimes the Part D plans actually negotiate a lower price for their Medicare patients than commercial. Also, Medicaid does not only get the lowest price ("best price"), they also get another 23% knocked off. So to be entirely accurate, the US gov't doesn't negotiate drug prices for Medicaid, it creates it's own discounts and tell the company to screw off if they won't accept them.