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> In return we regulate the prices they can charge. And then you don't get the expensive drugs. Suppose there are 50,000 people with a fatal condition. Research

> In return we regulate the prices they can charge. And then you don't get the expensive drugs. Suppose there are 50,000 people with a fatal condition. Researching a cure and getting it approved would cost $5B. Therefore each person needs to pay at least $100,000, or there isn't enough money to fund the research. If you say they can only charge $10,000/patient, no cure. Whatever price you set as the max they can charge, that's the value you're assigning to a human life. With just a few minor word substitutions, what you just said could as easily be the speech a bank robber, trapped in the bank with a dozen hostages. If that $10,000 reflects the profit motive taken to an extreme rather than anything related to the cost of the drug, then it’s the company placing a number on human life. Specifically they’re saying, “It’s only worth our time if you pay us enough for us to 100x+ our margins.”

AnthonyMouse 8y ago
Can you point to any major pharmaceutical research company with 99% net margins? In order for that to happen, you would need something that affects a nontrivial number of people for which it's possible to inexpensively find a treatment and yet only one company and no government has bothered to do so.
- Pharmakon 8y ago
  Remember our friend Shkreli? How about insulin formulation, and Truvada (PREP) that’s $200 a year generic, and $1300 a month in the US. There are many more, and to their credit pharma companies have accountants thst would make Hollywood blush, so it takes some digging past the claims of R&D (dwarfed by marketing budgets in many cases) being the cost driver, and not record profits. Unless... you put “research” in there as a confounding factor to be cute?
  - AnthonyMouse 8y ago
    > Remember our friend Shkreli? How about insulin formulation, and Truvada (PREP) that’s $200 a year generic, and $1300 a month in the US. Those are prices, not net margins. How much did the research cost, including the failed attempts before they found one that worked? This is why "research" is a necessary qualifier. If you just find the occasional schmuck who got a good deal on a patent that was worth more than the seller anticipated, that isn't telling you much. The likes of Pfizer and Merck are public companies, you can go find their net margins from their financial statements. They're not 99%. > There are many more, their credit pharma companies have accountants thst would make Hollywood blush, so it takes some digging past the claims of R&D (dwarfed by marketing budgets in many cases) being the cost driver, and not record profits. The marketing budgets are a byproduct of insurance. Typically to make $100 in revenue you have to convince a customer to pay $100 for something that provides $110 in value to them. Throw in insurance and you make $1000 in revenue because the patient pays $100 for $110 in value while the insurance pays $900 more, which makes it much more valuable to advertise, so they advertise much more. Insurance and patents are basically incompatible. The idea of patents is that you give someone a temporary monopoly and the market (i.e. the customer) decides how much the product is worth before they refuse to buy. The idea of insurance is that there is a low probability high cost event that the insurance pays whatever is necessary for if it comes to pass. But if the insurance pays whatever is necessary, and the seller has a monopoly, the seller can charge arbitrarily high prices. Or the price is limited by the patient's copay percentage, i.e. the insurance does nothing but raise the price by the exact amount the insurance covers, because the patient discounts the price by that amount when choosing whether to purchase. People would pay a lot less in total, i.e. about the same amount for drugs and far less in premiums, if insurance companies would stop covering patented drugs whatsoever.

AnthonyMouse 8y ago

Can you point to any major pharmaceutical research company with 99% net margins? In order for that to happen, you would need something that affects a nontrivial number of people for which it's possible to inexpensively find a treatment and yet only one company and no government has bothered to do so.

Pharmakon 8y ago
Remember our friend Shkreli? How about insulin formulation, and Truvada (PREP) that’s $200 a year generic, and $1300 a month in the US. There are many more, and to their credit pharma companies have accountants thst would make Hollywood blush, so it takes some digging past the claims of R&D (dwarfed by marketing budgets in many cases) being the cost driver, and not record profits. Unless... you put “research” in there as a confounding factor to be cute?
- AnthonyMouse 8y ago
  > Remember our friend Shkreli? How about insulin formulation, and Truvada (PREP) that’s $200 a year generic, and $1300 a month in the US. Those are prices, not net margins. How much did the research cost, including the failed attempts before they found one that worked? This is why "research" is a necessary qualifier. If you just find the occasional schmuck who got a good deal on a patent that was worth more than the seller anticipated, that isn't telling you much. The likes of Pfizer and Merck are public companies, you can go find their net margins from their financial statements. They're not 99%. > There are many more, their credit pharma companies have accountants thst would make Hollywood blush, so it takes some digging past the claims of R&D (dwarfed by marketing budgets in many cases) being the cost driver, and not record profits. The marketing budgets are a byproduct of insurance. Typically to make $100 in revenue you have to convince a customer to pay $100 for something that provides $110 in value to them. Throw in insurance and you make $1000 in revenue because the patient pays $100 for $110 in value while the insurance pays $900 more, which makes it much more valuable to advertise, so they advertise much more. Insurance and patents are basically incompatible. The idea of patents is that you give someone a temporary monopoly and the market (i.e. the customer) decides how much the product is worth before they refuse to buy. The idea of insurance is that there is a low probability high cost event that the insurance pays whatever is necessary for if it comes to pass. But if the insurance pays whatever is necessary, and the seller has a monopoly, the seller can charge arbitrarily high prices. Or the price is limited by the patient's copay percentage, i.e. the insurance does nothing but raise the price by the exact amount the insurance covers, because the patient discounts the price by that amount when choosing whether to purchase. People would pay a lot less in total, i.e. about the same amount for drugs and far less in premiums, if insurance companies would stop covering patented drugs whatsoever.