4 ms·

well in some countries they don't allow prices that high for services and drugs. no idea what problems that caused but ATM prices charged for various services a

well in some countries they don't allow prices that high for services and drugs. no idea what problems that caused but ATM prices charged for various services and drugs in the USA are 3x to 10x some other countries

AnthonyMouse 8y ago
> well in some countries they don't allow prices that high for services and drugs. no idea what problems that caused but ATM prices charged for various services and drugs in the USA are 3x to 10x some other countries The problem it caused is that there is correspondingly less drug R&D and more people die world-wide because they're not paying their share of the research costs.
- deogeo 8y ago
  Given that pharmaceutical companies spend more on marketing than they do on R&D [1], isn't it more accurate to say that the rest of the world isn't paying their share of drug ads? How small would the fraction of revenue pharma spends on R&D for new drugs (excluding generics, which the analysis in [1] doesn't) before higher prices are no longer justified? [1] https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/ https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
  - AnthonyMouse 8y ago
    https://news.ycombinator.com/item?id=19659888 https://news.ycombinator.com/item?id=19659888
    - deogeo 8y ago
      > marketing increases the number of "customers" by more than the cost of the marketing (or why do it?), and the extra money is what both encourages and pays for more R&D. Does it increase the number, or does it just reallocate customers from one company to another? And I'll repeat my question - how high do drug prices have to get, before further increases can no longer be justified because some scrap of the revenue goes towards R&D?
      - AnthonyMouse 8y ago
        > Does it increase the number, or does it just reallocate customers from one company to another? The advertising is typically done by companies with a patent, where the competition is an existing generic with no real incentive to advertise, and a much smaller profit margin (leaving less for future R&D). > And I'll repeat my question - how high do drug prices have to get, before further increases can no longer be justified because some scrap of the revenue goes towards R&D? The premise of the patent system is that the customer decides this. You have a monopoly on the thing that wouldn't exist if you hadn't put in the money to research it, then the customer chooses whether that's worth your price over the alternatives. Without your research your option wouldn't exist, so the customer can't be worse off with it as a (temporarily) expensive alternative than the status quo which they still have the option to choose. This is completely broken by low deductible insurance, because now the patient wants the insurance company to pay infinity dollars for only a small marginal benefit, and the drug company is happy to charge that much, and the insurance company gets flack for denying coverage. But how does Medicare fix it, since it's still low/zero deductible insurance? There is no "negotiate prices" with single payer, it's just regulating prices. Which you could do regardless, but the whole point of the patent system is to let the market set prices so that the things most important to people get funded instead of the things most important to lobbyists. If you're going to regulate prices you might as well get rid of the patent system and replace it with X prizes or something like that. And then you no longer have high drug prices even with private insurance, but you are also effectively having the government choosing what research gets done rather than the market, and suffer the consequences when they decide to divert the money to something else.
        deogeo 8y ago
        > You have a monopoly on the thing that wouldn't exist if you hadn't put in the money to research it, My question was how expensive would drugs have to get before we could stop claiming they wouldn't exist otherwise. Is your answer infinity dollars? > There is no "negotiate prices" with single payer, it's just regulating prices. There's no "negotiate prices" with a single company having a patent/license to manufacture the drug either. Yet you were happy to count that under "market working as it should", but when people join together to bargain collectively (in the form of government), then the market is broken. How curious that the Market is only said to work when corporations have all the advantages and consumers have none.
  - ZhuanXia 8y ago
    Pharmaceutical research is very broken. It is startling how ineffective all but a few drugs are. Medical Nihilism by Jacob Stegenga is a great book on the topic.
    - 0xcde4c3db 8y ago
      > It is startling how ineffective all but a few drugs are. Presumably partly for this reason, a bunch of "new" drugs are minor modifications to some existing drug to secure a new patent and create a new branded product whose modest advantages over the old drug (if any) are inflated by the marketing machine into being some kind of revolutionary advance.

AnthonyMouse 8y ago

> well in some countries they don't allow prices that high for services and drugs. no idea what problems that caused but ATM prices charged for various services and drugs in the USA are 3x to 10x some other countries The problem it caused is that there is correspondingly less drug R&D and more people die world-wide because they're not paying their share of the research costs.

deogeo 8y ago
Given that pharmaceutical companies spend more on marketing than they do on R&D [1], isn't it more accurate to say that the rest of the world isn't paying their share of drug ads? How small would the fraction of revenue pharma spends on R&D for new drugs (excluding generics, which the analysis in [1] doesn't) before higher prices are no longer justified? [1] https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/ https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
- AnthonyMouse 8y ago
  https://news.ycombinator.com/item?id=19659888 https://news.ycombinator.com/item?id=19659888
  - deogeo 8y ago
    > marketing increases the number of "customers" by more than the cost of the marketing (or why do it?), and the extra money is what both encourages and pays for more R&D. Does it increase the number, or does it just reallocate customers from one company to another? And I'll repeat my question - how high do drug prices have to get, before further increases can no longer be justified because some scrap of the revenue goes towards R&D?
    - AnthonyMouse 8y ago
      > Does it increase the number, or does it just reallocate customers from one company to another? The advertising is typically done by companies with a patent, where the competition is an existing generic with no real incentive to advertise, and a much smaller profit margin (leaving less for future R&D). > And I'll repeat my question - how high do drug prices have to get, before further increases can no longer be justified because some scrap of the revenue goes towards R&D? The premise of the patent system is that the customer decides this. You have a monopoly on the thing that wouldn't exist if you hadn't put in the money to research it, then the customer chooses whether that's worth your price over the alternatives. Without your research your option wouldn't exist, so the customer can't be worse off with it as a (temporarily) expensive alternative than the status quo which they still have the option to choose. This is completely broken by low deductible insurance, because now the patient wants the insurance company to pay infinity dollars for only a small marginal benefit, and the drug company is happy to charge that much, and the insurance company gets flack for denying coverage. But how does Medicare fix it, since it's still low/zero deductible insurance? There is no "negotiate prices" with single payer, it's just regulating prices. Which you could do regardless, but the whole point of the patent system is to let the market set prices so that the things most important to people get funded instead of the things most important to lobbyists. If you're going to regulate prices you might as well get rid of the patent system and replace it with X prizes or something like that. And then you no longer have high drug prices even with private insurance, but you are also effectively having the government choosing what research gets done rather than the market, and suffer the consequences when they decide to divert the money to something else.
      - deogeo 8y ago
        > You have a monopoly on the thing that wouldn't exist if you hadn't put in the money to research it, My question was how expensive would drugs have to get before we could stop claiming they wouldn't exist otherwise. Is your answer infinity dollars? > There is no "negotiate prices" with single payer, it's just regulating prices. There's no "negotiate prices" with a single company having a patent/license to manufacture the drug either. Yet you were happy to count that under "market working as it should", but when people join together to bargain collectively (in the form of government), then the market is broken. How curious that the Market is only said to work when corporations have all the advantages and consumers have none.
- ZhuanXia 8y ago
  Pharmaceutical research is very broken. It is startling how ineffective all but a few drugs are. Medical Nihilism by Jacob Stegenga is a great book on the topic.
  - 0xcde4c3db 8y ago
    > It is startling how ineffective all but a few drugs are. Presumably partly for this reason, a bunch of "new" drugs are minor modifications to some existing drug to secure a new patent and create a new branded product whose modest advantages over the old drug (if any) are inflated by the marketing machine into being some kind of revolutionary advance.