4 ms·

Regarding risk and most investors losing money, that makes government funding actually more attractive because it pools risk in basically the largest pool possi

Regarding risk and most investors losing money, that makes government funding actually more attractive because it pools risk in basically the largest pool possible. Additionally regarding the private industry paying $X while the NIH pays $Y, private industry would not have $X for funding (minus the money spent on new drug companies) without at least the prospect of consumers paying for those drugs - that is, the funding is still coming from taxpayers' insurance / Medicare / Medicaid / pocketbooks. If we ignore insurance (because that may introduce a lot more factors), this configuration can only be desirable if we determine that, dollar for dollar, government R&D is less effective than private industry's R&D + all other costs regarding marketing/executive comp/profit that wouldn't already be incurred from their drugs' manufacturing. I'm in favor of letting industry compete with itself in a market as a way to keep things efficient - except this only works if things really resemble a market. The use of exclusive drug IP to extract money resembles a monopoly even more than regional hospital oligopolies, as need/choice of drug is not typically up to the user. If there were no private IP, nobody would develop new drugs, so why not just eliminate IP and pay for development with the money that taxpayers were going to be spending on R&D anyway?

aaavl2821 8y ago
My premise is that drugs are expensive because it costs a lot of money to get a drug developed, not because IP enables companies to collect value they didn't create. IP is a mechanism that incentivizes investment into a field that is publicly valuable. And it's not that great of an incentive because even with IP most drug r&d is not a great investment But most importantly, nationalizing drug research would probably make healthcare more expensive, not less. It's a red herring in the healthcare cost debate. Honestly my tinfoil hat theory is that hospitals, which have a ton of political clout (AHA lobby spends about as much as Phrma lobby, but hospitals are top employers in most areas so have a ton of soft political power), drive the drug pricing narrative to distract from the bad stuff they get away with. Tinfoil theory but I don't think it's too crazy That aside, US spends like $320B on rx drugs. Let's say that goes to zero with your plan. Then we increase NIH budget by $150-200B -- assuming government is just as efficient as private industry. That just covers R&D. You still need infrastructure covering prescription processing, drug manufacturing, distribution, quality control, etc. you'd need to set all that up from scratch, because you wouldn't have a private infrastructure. Could that be $100B? Maybe. So you're breaking even And if government is half as efficient as private industry? If it's an order of magnitude less efficient? Ouch My reasoning may be off bc it's Friday night but I think it's directionally correct. But more importantly: why are we focusing on this in the first place? Do we actually think we can pass legislation to quintuple the NIH budget even if we should (And I don't think we should) Wouldn't our efforts be better spent addressing the largest source of healthcare spend and biggest source of rent seeking behavior?
tomcam 8y ago
Your theory seems good at first blush. However, we all know the US is the only major industrialized country without socialized medicine, correct? So doesn’t that mean that other countries should have succeeded in developing new medicines according to your theory? It appears the vast majority of effective drugs are coming out of the USA. This is a difficult problem.

aaavl2821 8y ago

My premise is that drugs are expensive because it costs a lot of money to get a drug developed, not because IP enables companies to collect value they didn't create. IP is a mechanism that incentivizes investment into a field that is publicly valuable. And it's not that great of an incentive because even with IP most drug r&d is not a great investment But most importantly, nationalizing drug research would probably make healthcare more expensive, not less. It's a red herring in the healthcare cost debate. Honestly my tinfoil hat theory is that hospitals, which have a ton of political clout (AHA lobby spends about as much as Phrma lobby, but hospitals are top employers in most areas so have a ton of soft political power), drive the drug pricing narrative to distract from the bad stuff they get away with. Tinfoil theory but I don't think it's too crazy That aside, US spends like $320B on rx drugs. Let's say that goes to zero with your plan. Then we increase NIH budget by $150-200B -- assuming government is just as efficient as private industry. That just covers R&D. You still need infrastructure covering prescription processing, drug manufacturing, distribution, quality control, etc. you'd need to set all that up from scratch, because you wouldn't have a private infrastructure. Could that be $100B? Maybe. So you're breaking even And if government is half as efficient as private industry? If it's an order of magnitude less efficient? Ouch My reasoning may be off bc it's Friday night but I think it's directionally correct. But more importantly: why are we focusing on this in the first place? Do we actually think we can pass legislation to quintuple the NIH budget even if we should (And I don't think we should) Wouldn't our efforts be better spent addressing the largest source of healthcare spend and biggest source of rent seeking behavior?

tomcam 8y ago

Your theory seems good at first blush. However, we all know the US is the only major industrialized country without socialized medicine, correct? So doesn’t that mean that other countries should have succeeded in developing new medicines according to your theory? It appears the vast majority of effective drugs are coming out of the USA. This is a difficult problem.