6 ms·

I'm all for universal coverage too. But reducing the profits of pharmaceutical companies well reduce the money they have for r&d dramatically. This will slow

I'm all for universal coverage too. But reducing the profits of pharmaceutical companies well reduce the money they have for r&d dramatically. This will slow down the speed of pharmaceutical development. So I think it needs to be paired with reforms to the FDA to reduce the go to market costs for drugs.

rndgermandude 8y ago
What kind of evidence do you have for this claim?
- mtgx 8y ago
  There is none. People just like to parrot that Big Pharma line because it "sounds like it makes sense, so I guess it does?!" Big Pharma already abuses the patent system so much, like inventing something and then when the 20 year monopoly has passed they create a new patent that says "this same drug can be used for Y purpose, too" - and bam, another 20 year monopoly on the exact same or very slightly tweaked recipe. Tens of thousands are already dying every year in the US because they can't afford healthcare. If the argument is that "if we reduce the Big Pharma profits then it would be even worse!", I'm sorry, I just don't buy it. If drugs were cheaper, a large portion of those people could be saved (yes, I realize there are problems with the healthcare system, too, but those would also be fixed by Medicare for all).
- JamesBarney 8y ago
  Evidence that if the profits of new drug drops significantly that the money spent on R&D on those new drugs will also drop? Imagine the government decides to tax 80% of all revenue from all technology companies forever. Do you think funding for startups would increase, stay the same, or drop? The obvious answer is drop, but what type of evidence would you expect to support this statement. A study of people taxing technology companies @ 80%? Or are you arguing with the premise that investment rates are correlated with profitability?
  - rndgermandude 8y ago
    Worst straw man I saw in a long while. PS: >The obvious answer is drop No. You "feel" it is "right" and "obvious" even, and it might as well be if we really did that experiment, but humans are pretty bad at predictions.
    - JamesBarney 8y ago
      What is your argument that it wouldn't affect R&D spending?
      - rndgermandude 8y ago
        One scenario that might happen is that the increased competition might lead to more R&D spending as companies might try to make up for the "lost" profits of their current portfolio by bringing new (patented) drugs to market. The idea that competition leads to innovation is not exactly new.
        JamesBarney 8y ago
        Why would a decrease in price drive an increase in competition?
- refurb 8y ago
  Orphan drugs are a great example. Back in the 1970's, there was no research into orphan diseases because the return on investment wasn't there. The Orphan Drug Act (in the US), combined with a tolerance for very high prices (hundreds of thousands of dollar per year) resulted in an explosion of research into orphan drugs.
gregcrv 8y ago
From https://en.m.wikipedia.org/wiki/Prescription_costs https://en.m.wikipedia.org/wiki/Prescription_costs “A study has placed the amount spent on drug marketing at 2-19 times that on drug research” Maybe this should be reduced first?
- rayiner 8y ago
  The wikipedia article misstates the figure in the underlying paper. The underlying paper is talking about "basic research" not R&D. I.e. it doesn't count money spent on e.g. making improvements to use of known molecules, it doesn't count the cost of bringing a new molecule to market, it doesn't count the cost of testing, etc. That's a non-sequitur. Companies have no incentive to spend any more on marketing than they have to. Tech companies also spend more on marketing than R&D--would innovation increase if the government forced that number downward?
  - toomuchtodo 8y ago
    Only in America and New Zealand are pharmaceuticals permitted to be marketed directly to consumers. Does the rest of the world not innovate? We’ve tried the free market way, let’s try it the “rest of the developed world way” next.
    - chimeracoder 8y ago
      > Only in America and New Zealand are pharmaceuticals permitted to be marketed directly to consumers. Marketing does not only include direct-to-consumer advertising. > Does the rest of the world not innovate? Pharmaceuticals are a global market. As it turns out, European pharmaceutical companies make a disproportionate share of their revenues from pharmaceutical sales in the US. But to answer your question: statistically, no, the rest of the world doesn't innovate. Half of all pharmaceutical R&D costs in the entire world are funded by the US. That share has dropped slightly in recent years, but not because the "rest of the developed world" has been increasing their funding: it's because India and China have been rapidly expanding their R&D.
AWildC182 8y ago
They'll do just fine. The money doesn't all go to R&D, it goes to execs and shareholders. If you force them to compete then you streamline cashflows.
makotech222 8y ago
This is a big lie perpetuated by big pharma. Most of the expensive parts of doing research are done by public universities. Big pharma just purchases the research and produces the drug at a huge markup. The real fix to this is to nationalize the pharm industry, so that there is no profit motive, and drugs can be produced at the lowest cost possible.
milesvp 8y ago
I’ve never bought this argument about r&d for drug companies, and I have even less faith in the argument after learning recently that much of this r&d is used to modify an existing drug, not to make it better, but to essentially earn another patent on said drug and keep it out of the public domain for longer. Couple this with the fact that there is a large focus on designer drugs, and dependency rather than curative drugs, and there’s snake oil being sold by drug companies that they absolutely need a regional monopoly to bring us new and life changing drugs.
- JamesBarney 8y ago
  One reason there isn't a focus on curative drugs is the current drug system won't pay for it. In an ideal world if it costs 10 million dollars to treat an HIV patient over ten years we should be willing to spend 5 million on a curative drug. But when this actually happens as seen with a hepatitis cure everyone freaks out about the price drug. And thus we can't have nice things.
  - cwkoss 8y ago
    In an ideal world, the creator would be happy with a fair salary for their work and stop trying to rent-seek a fortune to satisfy their own greed.
EliRivers 8y ago
I wonder if, even with a reduction in new drug development, cheaper healthcare would nonetheless work out as a net win. If all the drugs that currently exist getting much cheaper would improve people's lives (both now and into the future) to a degree that outweighed the benefits of continuing R&D at the current pace.
- JamesBarney 8y ago
  For sure and this is my point. Not that reducing pharmaceutical costs is bad, just that it isn't a free lunch.
- mywittyname 8y ago
  We can supplement this by improving funding for research in public universities. This will probably provide a better bang for the buck than our current method anyway.
  - tzs 8y ago
    Why specifically public universities? Why not also universities such as Harvard, Stanford, MIT, Caltech, etc.?
    - mywittyname 8y ago
      So that the resulting patents are made available to the public for free. My impression is that those universities you listed make a great deal of money from the co-ownership of patents produced by their staff. I'm not saying they should be excluded, but I don't think they would be willing to participate if it meant giving up a cash cow. I could be wrong though.
      - tzs 8y ago
        > My impression is that those universities you listed make a great deal of money from the co-ownership of patents produced by their staff. So do public universities.
cletus 8y ago
Pharmaceutical companies spend way more on marketing than research. If drug companies are willing to sell the exact same drug in Canada or the UK or Germany or France for less than a percent (in some cases) of what they sell it here for then why can't US insurance companies, hospitals and consumers buy it for that price? There's no reason other than an artificial monopoly. You'll note that I didn't say "anywhere" and that was deliberate. India, for example, has decided that drug companies largely (it's complicated) don't get monopolies from patents and thus you can buy a lot of low-cost high-quality generics in India because no drug company is getting paid. Obviously this is untenable at the global scale. And before anyone lambasts India for not respecting patents here, countries do this sort of thing all the time. In the US, for example, you can't patent nuclear technology as a matter of national security.
- aantix 8y ago
  >Pharmaceutical companies spend way more on marketing than research. Because who cares if you've made a breakthrough product and no one knows about it? >why can't US insurance companies, hospitals and consumers buy it for that price Because profits for future R&D has to come from somewhere? And if everyone is lined up for a discount, future R&D will suffer.
- chimeracoder 8y ago
  > If drug companies are willing to sell the exact same drug in Canada or the UK or Germany or France for less than a percent (in some cases) of what they sell it here for then why can't US insurance companies, hospitals and consumers buy it for that price? There's no reason other than an artificial monopoly. They're willing to do that because the US is a much larger market than any of those countries. Most pharmaceutical companies - including European companies - make the lion's share of their profits from the US market. If they couldn't, you'd certainly see the costs for essential medicines increase in European countries. > You'll note that I didn't say "anywhere" and that was deliberate. India, for example, has decided that drug companies largely (it's complicated) don't get monopolies from patents and thus you can buy a lot of low-cost high-quality generics in India because no drug company is getting paid. India has pretty solid reasons for not honoring drug patents that don't apply to the US or Europe.
deleted 8y ago
[deleted]
deogeo 8y ago
Going by this logic, is there a limit to how extortionate drug pricing can get? After all, some fraction will go towards R&D!
cannonedhamster 8y ago
Most basic research is funded by the government as there's no inherent profit motive. Research to make use of the foundational discoveries is funded by profit motive, as they get a monopoly on any working product. I'm pretty sure R&D is safe as there will always be profit to be made. You're also assuming congress isn't in bed with the industries, the ones who massively fund their campaigns and offer nice lobbying jobs afterwards.

rndgermandude 8y ago

What kind of evidence do you have for this claim?

mtgx 8y ago
There is none. People just like to parrot that Big Pharma line because it "sounds like it makes sense, so I guess it does?!" Big Pharma already abuses the patent system so much, like inventing something and then when the 20 year monopoly has passed they create a new patent that says "this same drug can be used for Y purpose, too" - and bam, another 20 year monopoly on the exact same or very slightly tweaked recipe. Tens of thousands are already dying every year in the US because they can't afford healthcare. If the argument is that "if we reduce the Big Pharma profits then it would be even worse!", I'm sorry, I just don't buy it. If drugs were cheaper, a large portion of those people could be saved (yes, I realize there are problems with the healthcare system, too, but those would also be fixed by Medicare for all).
JamesBarney 8y ago
Evidence that if the profits of new drug drops significantly that the money spent on R&D on those new drugs will also drop? Imagine the government decides to tax 80% of all revenue from all technology companies forever. Do you think funding for startups would increase, stay the same, or drop? The obvious answer is drop, but what type of evidence would you expect to support this statement. A study of people taxing technology companies @ 80%? Or are you arguing with the premise that investment rates are correlated with profitability?
- rndgermandude 8y ago
  Worst straw man I saw in a long while. PS: >The obvious answer is drop No. You "feel" it is "right" and "obvious" even, and it might as well be if we really did that experiment, but humans are pretty bad at predictions.
  - JamesBarney 8y ago
    What is your argument that it wouldn't affect R&D spending?
    - rndgermandude 8y ago
      One scenario that might happen is that the increased competition might lead to more R&D spending as companies might try to make up for the "lost" profits of their current portfolio by bringing new (patented) drugs to market. The idea that competition leads to innovation is not exactly new.
      - JamesBarney 8y ago
        Why would a decrease in price drive an increase in competition?
refurb 8y ago
Orphan drugs are a great example. Back in the 1970's, there was no research into orphan diseases because the return on investment wasn't there. The Orphan Drug Act (in the US), combined with a tolerance for very high prices (hundreds of thousands of dollar per year) resulted in an explosion of research into orphan drugs.

gregcrv 8y ago

From https://en.m.wikipedia.org/wiki/Prescription_costs https://en.m.wikipedia.org/wiki/Prescription_costs “A study has placed the amount spent on drug marketing at 2-19 times that on drug research” Maybe this should be reduced first?

rayiner 8y ago
The wikipedia article misstates the figure in the underlying paper. The underlying paper is talking about "basic research" not R&D. I.e. it doesn't count money spent on e.g. making improvements to use of known molecules, it doesn't count the cost of bringing a new molecule to market, it doesn't count the cost of testing, etc. That's a non-sequitur. Companies have no incentive to spend any more on marketing than they have to. Tech companies also spend more on marketing than R&D--would innovation increase if the government forced that number downward?
- toomuchtodo 8y ago
  Only in America and New Zealand are pharmaceuticals permitted to be marketed directly to consumers. Does the rest of the world not innovate? We’ve tried the free market way, let’s try it the “rest of the developed world way” next.
  - chimeracoder 8y ago
    > Only in America and New Zealand are pharmaceuticals permitted to be marketed directly to consumers. Marketing does not only include direct-to-consumer advertising. > Does the rest of the world not innovate? Pharmaceuticals are a global market. As it turns out, European pharmaceutical companies make a disproportionate share of their revenues from pharmaceutical sales in the US. But to answer your question: statistically, no, the rest of the world doesn't innovate. Half of all pharmaceutical R&D costs in the entire world are funded by the US. That share has dropped slightly in recent years, but not because the "rest of the developed world" has been increasing their funding: it's because India and China have been rapidly expanding their R&D.

AWildC182 8y ago

They'll do just fine. The money doesn't all go to R&D, it goes to execs and shareholders. If you force them to compete then you streamline cashflows.

makotech222 8y ago

This is a big lie perpetuated by big pharma. Most of the expensive parts of doing research are done by public universities. Big pharma just purchases the research and produces the drug at a huge markup. The real fix to this is to nationalize the pharm industry, so that there is no profit motive, and drugs can be produced at the lowest cost possible.

milesvp 8y ago

I’ve never bought this argument about r&d for drug companies, and I have even less faith in the argument after learning recently that much of this r&d is used to modify an existing drug, not to make it better, but to essentially earn another patent on said drug and keep it out of the public domain for longer. Couple this with the fact that there is a large focus on designer drugs, and dependency rather than curative drugs, and there’s snake oil being sold by drug companies that they absolutely need a regional monopoly to bring us new and life changing drugs.

JamesBarney 8y ago
One reason there isn't a focus on curative drugs is the current drug system won't pay for it. In an ideal world if it costs 10 million dollars to treat an HIV patient over ten years we should be willing to spend 5 million on a curative drug. But when this actually happens as seen with a hepatitis cure everyone freaks out about the price drug. And thus we can't have nice things.
- cwkoss 8y ago
  In an ideal world, the creator would be happy with a fair salary for their work and stop trying to rent-seek a fortune to satisfy their own greed.

EliRivers 8y ago

I wonder if, even with a reduction in new drug development, cheaper healthcare would nonetheless work out as a net win. If all the drugs that currently exist getting much cheaper would improve people's lives (both now and into the future) to a degree that outweighed the benefits of continuing R&D at the current pace.

JamesBarney 8y ago
For sure and this is my point. Not that reducing pharmaceutical costs is bad, just that it isn't a free lunch.
mywittyname 8y ago
We can supplement this by improving funding for research in public universities. This will probably provide a better bang for the buck than our current method anyway.
- tzs 8y ago
  Why specifically public universities? Why not also universities such as Harvard, Stanford, MIT, Caltech, etc.?
  - mywittyname 8y ago
    So that the resulting patents are made available to the public for free. My impression is that those universities you listed make a great deal of money from the co-ownership of patents produced by their staff. I'm not saying they should be excluded, but I don't think they would be willing to participate if it meant giving up a cash cow. I could be wrong though.
    - tzs 8y ago
      > My impression is that those universities you listed make a great deal of money from the co-ownership of patents produced by their staff. So do public universities.

cletus 8y ago

Pharmaceutical companies spend way more on marketing than research. If drug companies are willing to sell the exact same drug in Canada or the UK or Germany or France for less than a percent (in some cases) of what they sell it here for then why can't US insurance companies, hospitals and consumers buy it for that price? There's no reason other than an artificial monopoly. You'll note that I didn't say "anywhere" and that was deliberate. India, for example, has decided that drug companies largely (it's complicated) don't get monopolies from patents and thus you can buy a lot of low-cost high-quality generics in India because no drug company is getting paid. Obviously this is untenable at the global scale. And before anyone lambasts India for not respecting patents here, countries do this sort of thing all the time. In the US, for example, you can't patent nuclear technology as a matter of national security.

aantix 8y ago
>Pharmaceutical companies spend way more on marketing than research. Because who cares if you've made a breakthrough product and no one knows about it? >why can't US insurance companies, hospitals and consumers buy it for that price Because profits for future R&D has to come from somewhere? And if everyone is lined up for a discount, future R&D will suffer.
chimeracoder 8y ago
> If drug companies are willing to sell the exact same drug in Canada or the UK or Germany or France for less than a percent (in some cases) of what they sell it here for then why can't US insurance companies, hospitals and consumers buy it for that price? There's no reason other than an artificial monopoly. They're willing to do that because the US is a much larger market than any of those countries. Most pharmaceutical companies - including European companies - make the lion's share of their profits from the US market. If they couldn't, you'd certainly see the costs for essential medicines increase in European countries. > You'll note that I didn't say "anywhere" and that was deliberate. India, for example, has decided that drug companies largely (it's complicated) don't get monopolies from patents and thus you can buy a lot of low-cost high-quality generics in India because no drug company is getting paid. India has pretty solid reasons for not honoring drug patents that don't apply to the US or Europe.

deleted 8y ago

[deleted]

deogeo 8y ago

Going by this logic, is there a limit to how extortionate drug pricing can get? After all, some fraction will go towards R&D!

cannonedhamster 8y ago

Most basic research is funded by the government as there's no inherent profit motive. Research to make use of the foundational discoveries is funded by profit motive, as they get a monopoly on any working product. I'm pretty sure R&D is safe as there will always be profit to be made. You're also assuming congress isn't in bed with the industries, the ones who massively fund their campaigns and offer nice lobbying jobs afterwards.