6 ms·

One of the biggest reasons is that the US essentially subsidizes drugs for many other countries, such as Canada, that impose price controls, and threaten to all

One of the biggest reasons is that the US essentially subsidizes drugs for many other countries, such as Canada, that impose price controls, and threaten to allow other manufacturers to provide the drugs in their countries if the companies don't accept the imposed price. This enables these countries to get access to new medicine without paying the cost of developing the new medicine. Its time to end the trade war on medicines.

danShumway 9y ago
This argument always strikes me as kind of odd. As far as I can tell, it boils down to "other countries like Canada are better negotiators than us, and our companies give them better prices." But if that's the case, it just seems like really good evidence that squeezing drug companies and making aggressive demands drives down drug costs and encourages them to move R&D costs out of the country. Why wouldn't the US be all over that? I dunno, I just always feel like I'm missing something when I see this. Other countries have better health care than us, but we can't use their tactics, even though they seem to be working really well, because... we're nice, and we don't want their drugs to cost more? If we accept that having R&D based out of the US is a bad thing, then why are we fighting to keep it here? Shouldn't we increase regulation until all the pharmaceuticals move to Canada?
- dasil003 9y ago
  I think the argument is that the drugs would simply not be developed at all. Personally I'm inclined to call the bluff as it's not clear that the profit motive has led to the most effective drug development—there's a huge sales culture in pharmaceuticals that incentivizes prescription drugs beyond the balance that doctors and patients would naturally arrive at.
- SilasX 8y ago
  What if you framed it in terms of the damage Walmart (arguably) does to markets? I mean, they force suppliers to take losses “because of their negotiating power”, right? So maybe every retailer should band together with them and force all supplier profit margins to the same bare minimum for all products. Otherwise you’re leaving money “on the table”, right?
- d0lph 8y ago
  Wouldn't this cause the US to just end up subsidizing medicines for other countries?
sitharus 9y ago
Assuming that's true do you think that removing other countries ability to bulk purchase drugs would cause the prices in the US to actually drop? Also given a capitalistic marketplace you'd think US drug consumers would also band together to bulk purchase and drive down the rates. You'd be crazy to make a law to prevent that kind of thing.
betaby 9y ago
Citation needed
jerrysievert 9y ago
are you sure that the cost of development is the real issue? the last numbers I saw, 2015, showed marketing budgets for medicine to be often times twice what was being spent on R&D in the US. currently, only four countries allow this time of marketing: New Zealand, Brazil, Hong Kong, and United States. it sounds like the US isn't necessarily subsidizing drug R&D, and instead is subsidizing marketing.
- aaavl2821 9y ago
  it costs aver $2.7B to get a drug approved based on the most accepted estimates. biggest cost is cost of failure. r&d is hard, highly regulated and expensive
  - jerrysievert 9y ago
    I'm not arguing that it isn't expensive, but when, for instance Johnson & Johnson spends $8.2B/yr on R&D, and spends $17.5B that same year on marketing those same drugs, it's hard to argue that the cost of R&D is the major issue here. edited to add: especially when you look at the US R&D tax credit, available under section 41 of the tax code.
    - maxerickson 9y ago
      You're counting ads for baby shampoo and band aids as drug marketing. I'm sure Johnson & Johnson does spend an awful lot on marketing drugs, but boy do the details hidden in SGA sure get hand waved away.
    - aaavl2821 8y ago
      as another commenter said, that marketing spend also includes JNJs massive consumer products business and med device business Also, pharma increasingly buys new products through acquisitions rather than develop them in house these days. So you have to look at the balance sheet, not just the p&l. Note that JNJ spent $30B buying actelion last year among other smaller acquisitions
- AnthonyMouse 9y ago
Theodores 9y ago
I think you will find that this is what Big Pharma and their sockpuppets in Washington want you to believe. Through reading up on the 'opioid epidemic' you realise that a lot of this 'innovation' is not that great. Slow release tablets? There is no big deal there. Furthermore a lot of this 'research' is backwards, i.e. create a molecule that can be patented, see how much of it kills rats and then try and find some medical benefit for this 'new molecule'. If it treats cancer then is that because it kind of prolonged someone's life by a week even if the others in the trial were essentially killed by the 'new molecule'? This went on with AMGEN and Johnson + Johnson with the EPO drug that Lance Armstrong so enjoyed. They sold this drug into many, many 'off label' side markets - could the same molecule be good for stroke victims too? No trial data, but with profits to be made this sort of thing happens. You can market a drug a dozen ways even if it is only paracetemol. Back pain? You can buy this tablet. Hangover? This one mixed with caffeine. Kids version? Brightly coloured with a lower dose per pill. Easy. Then there are those drugs sold with the 'dating website' business model. The 'dating website' business model is to have a few success stories but have everyone else paying their subscription as long as possible. Statins are sold like this, the Big Pharma scam is to have people on these things for life. The rest of the world - Canada included - care about healthcare more than money. In the UK healthcare is a service, not a business first and foremost. The NHS has to balance the books but not be putting profit before people. In the US it is backwards. The rest of the world would do better without U.S. Big Pharma stifling innovation and sponging off their citizens.
- chrisbennet 8y ago
  But statins increase life expectancy from -5 to +19 days [1], surely that is worth the side effects and cost? [1] The effect of statins on average survival in randomised trials, an analysis of end point postponement http://bmjopen.bmj.com/content/5/9/e007118 http://bmjopen.bmj.com/content/5/9/e007118
rasz 9y ago
Like that time US subsidized Ebola Vaccine? By buying rights for 200K from publicly funded Canadian Uni research.
- refurb 9y ago
  You completely demolished that argument by picking an extreme example. Well done!
peterashford 9y ago
How do you propose to force other countries to pay more for medicines than they do currently? What I find odd is that no-one is forcing these companies to sell their products at a lower price - if they weren't profiting, they wouldn't sell their product.
- disordinary 9y ago
  Somehow forcing others to pay more rather than forcing the companies to charge less for everyone is the free market at work...
  - peterashford 9y ago
    sorry, not sure what point you're trying to make?
    - disordinary 9y ago
      I was agreeing with you. Trump want's the rest of the world to pay more for US pharmacuticals by stopping the free market (which is how those countries get good deals, by going out to tender), but he doesn't want to do anything to make things better in the US because of the free market.
      - peterashford 8y ago
        Ah... gotcha. Sorry, I find I often misread people in text so I appreciate you expanding on your point
disordinary 9y ago
That's not true. If the US had a centralised health system like other developed countries they would have the same bargaining power. In NZ we have Pharmac who bulk purchases drugs for the country, they can get good deals because they operate in a free market and can play the pharma companies off each other. Don't blame other countries for your own governments inability to bargain. Pharma companies still have patents and exclusivity deals. They will price the drug at a point where it's profitable, and countries will buy those drugs if they work.
- refurb 9y ago
  it's not about negotiation at all. NZ has a population of 5M. The largest private health insurer in the US, United Health, cover 40M people. They can, and do, negotiate drug prices. Who do you think would get a better deal?
  - disordinary 9y ago
    Is it the health insurer that negotiates though or the individual private health care providers and pharmacy chains (drug stores)?
    - refurb 9y ago
      It's the insurer who negotiates with the drug companies directly. And they do negotiate hard! United healthcare has over 100 products on it's exclusion list which means they told the drug company "no, we won't pay for your drug."
      - disordinary 8y ago
        Then it must be about added regulations that the US has.
  - p1necone 8y ago
    We don't need to speculate on who gets a better deal, we can already see that people in NZ pay far, far (like an order of magnitude) less for drugs.

danShumway 9y ago

This argument always strikes me as kind of odd. As far as I can tell, it boils down to "other countries like Canada are better negotiators than us, and our companies give them better prices." But if that's the case, it just seems like really good evidence that squeezing drug companies and making aggressive demands drives down drug costs and encourages them to move R&D costs out of the country. Why wouldn't the US be all over that? I dunno, I just always feel like I'm missing something when I see this. Other countries have better health care than us, but we can't use their tactics, even though they seem to be working really well, because... we're nice, and we don't want their drugs to cost more? If we accept that having R&D based out of the US is a bad thing, then why are we fighting to keep it here? Shouldn't we increase regulation until all the pharmaceuticals move to Canada?

dasil003 9y ago
I think the argument is that the drugs would simply not be developed at all. Personally I'm inclined to call the bluff as it's not clear that the profit motive has led to the most effective drug development—there's a huge sales culture in pharmaceuticals that incentivizes prescription drugs beyond the balance that doctors and patients would naturally arrive at.
SilasX 8y ago
What if you framed it in terms of the damage Walmart (arguably) does to markets? I mean, they force suppliers to take losses “because of their negotiating power”, right? So maybe every retailer should band together with them and force all supplier profit margins to the same bare minimum for all products. Otherwise you’re leaving money “on the table”, right?
d0lph 8y ago
Wouldn't this cause the US to just end up subsidizing medicines for other countries?

sitharus 9y ago

Assuming that's true do you think that removing other countries ability to bulk purchase drugs would cause the prices in the US to actually drop? Also given a capitalistic marketplace you'd think US drug consumers would also band together to bulk purchase and drive down the rates. You'd be crazy to make a law to prevent that kind of thing.

betaby 9y ago

Citation needed

jerrysievert 9y ago

are you sure that the cost of development is the real issue? the last numbers I saw, 2015, showed marketing budgets for medicine to be often times twice what was being spent on R&D in the US. currently, only four countries allow this time of marketing: New Zealand, Brazil, Hong Kong, and United States. it sounds like the US isn't necessarily subsidizing drug R&D, and instead is subsidizing marketing.

aaavl2821 9y ago
it costs aver $2.7B to get a drug approved based on the most accepted estimates. biggest cost is cost of failure. r&d is hard, highly regulated and expensive
- jerrysievert 9y ago
  I'm not arguing that it isn't expensive, but when, for instance Johnson & Johnson spends $8.2B/yr on R&D, and spends $17.5B that same year on marketing those same drugs, it's hard to argue that the cost of R&D is the major issue here. edited to add: especially when you look at the US R&D tax credit, available under section 41 of the tax code.
  - maxerickson 9y ago
    You're counting ads for baby shampoo and band aids as drug marketing. I'm sure Johnson & Johnson does spend an awful lot on marketing drugs, but boy do the details hidden in SGA sure get hand waved away.
  - aaavl2821 8y ago
    as another commenter said, that marketing spend also includes JNJs massive consumer products business and med device business Also, pharma increasingly buys new products through acquisitions rather than develop them in house these days. So you have to look at the balance sheet, not just the p&l. Note that JNJ spent $30B buying actelion last year among other smaller acquisitions
AnthonyMouse 9y ago

Theodores 9y ago

I think you will find that this is what Big Pharma and their sockpuppets in Washington want you to believe. Through reading up on the 'opioid epidemic' you realise that a lot of this 'innovation' is not that great. Slow release tablets? There is no big deal there. Furthermore a lot of this 'research' is backwards, i.e. create a molecule that can be patented, see how much of it kills rats and then try and find some medical benefit for this 'new molecule'. If it treats cancer then is that because it kind of prolonged someone's life by a week even if the others in the trial were essentially killed by the 'new molecule'? This went on with AMGEN and Johnson + Johnson with the EPO drug that Lance Armstrong so enjoyed. They sold this drug into many, many 'off label' side markets - could the same molecule be good for stroke victims too? No trial data, but with profits to be made this sort of thing happens. You can market a drug a dozen ways even if it is only paracetemol. Back pain? You can buy this tablet. Hangover? This one mixed with caffeine. Kids version? Brightly coloured with a lower dose per pill. Easy. Then there are those drugs sold with the 'dating website' business model. The 'dating website' business model is to have a few success stories but have everyone else paying their subscription as long as possible. Statins are sold like this, the Big Pharma scam is to have people on these things for life. The rest of the world - Canada included - care about healthcare more than money. In the UK healthcare is a service, not a business first and foremost. The NHS has to balance the books but not be putting profit before people. In the US it is backwards. The rest of the world would do better without U.S. Big Pharma stifling innovation and sponging off their citizens.

chrisbennet 8y ago
But statins increase life expectancy from -5 to +19 days [1], surely that is worth the side effects and cost? [1] The effect of statins on average survival in randomised trials, an analysis of end point postponement http://bmjopen.bmj.com/content/5/9/e007118 http://bmjopen.bmj.com/content/5/9/e007118

rasz 9y ago

Like that time US subsidized Ebola Vaccine? By buying rights for 200K from publicly funded Canadian Uni research.

refurb 9y ago
You completely demolished that argument by picking an extreme example. Well done!

peterashford 9y ago

How do you propose to force other countries to pay more for medicines than they do currently? What I find odd is that no-one is forcing these companies to sell their products at a lower price - if they weren't profiting, they wouldn't sell their product.

disordinary 9y ago
Somehow forcing others to pay more rather than forcing the companies to charge less for everyone is the free market at work...
- peterashford 9y ago
  sorry, not sure what point you're trying to make?
  - disordinary 9y ago
    I was agreeing with you. Trump want's the rest of the world to pay more for US pharmacuticals by stopping the free market (which is how those countries get good deals, by going out to tender), but he doesn't want to do anything to make things better in the US because of the free market.
    - peterashford 8y ago
      Ah... gotcha. Sorry, I find I often misread people in text so I appreciate you expanding on your point

disordinary 9y ago

That's not true. If the US had a centralised health system like other developed countries they would have the same bargaining power. In NZ we have Pharmac who bulk purchases drugs for the country, they can get good deals because they operate in a free market and can play the pharma companies off each other. Don't blame other countries for your own governments inability to bargain. Pharma companies still have patents and exclusivity deals. They will price the drug at a point where it's profitable, and countries will buy those drugs if they work.

refurb 9y ago
it's not about negotiation at all. NZ has a population of 5M. The largest private health insurer in the US, United Health, cover 40M people. They can, and do, negotiate drug prices. Who do you think would get a better deal?
- disordinary 9y ago
  Is it the health insurer that negotiates though or the individual private health care providers and pharmacy chains (drug stores)?
  - refurb 9y ago
    It's the insurer who negotiates with the drug companies directly. And they do negotiate hard! United healthcare has over 100 products on it's exclusion list which means they told the drug company "no, we won't pay for your drug."
    - disordinary 8y ago
      Then it must be about added regulations that the US has.
- p1necone 8y ago
  We don't need to speculate on who gets a better deal, we can already see that people in NZ pay far, far (like an order of magnitude) less for drugs.