3 ms·

Its not ridiculous. How can you "negotiate" when you have 0 leverage? There is no "negotiation", ever. Even calling it that is disingenuous because it implies t

Its not ridiculous. How can you "negotiate" when you have 0 leverage? There is no "negotiation", ever. Even calling it that is disingenuous because it implies that some low cost could be reached if it were not for those darn evil corrupt capitalists. To illustrate how absurd it is, think of a scenario in which a woman with a gun robs a jewelry store and then boasts she got a 99% discount due to her "negotiation" skills. The clerks have 0 leverage in that situation, so it is not a "negotiation" in any way. The only option the company has is to sell. If they don't, they lose all their investor money and go bankrupt. The reason other countries get away with obscenely low prices is because the good'ol USA is paying for it, and the companies are better off getting anything other than 0. If you look at how well industries are doing, you would also see that you would actually make more money investing in a burger chain than in the pharma sector. These high prices exist because of the incentives the insurance model creates (i.e. save people at any cost), not because companies are super greedy or evil and make 1.99$ million profit on a 2$ mill drug(which they do not).

tareqak 7y ago
That doesn't make sense to me. Why would a company sell anything at a loss without some kind of complementary benefit? That's something that would lose all their investors money and have the company go bankrupt. The companies have some leverage. They can hire PR firms to basically say, "Our new drug X treats disease Y. Your country Z doesn't want to pay to help those suffering from Y". If people afflicted by Y can garner enough influence to pressure their government's health department to get X, then they might get that. If you want proof whether or not big pharmaceutical companies lose money by selling to countries outside the US, then try to find out if they would support a bill that forbids US pharmaceutical companies from selling at a price below what they charge Medicare. The comparison to a burger chain is interesting: I remember reading that McDonald's makes money from real estate as opposed to burgers here on HN a while back [0][1]. [0] http://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-beyond-the-burger/ http://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-beyo... [1] https://news.ycombinator.com/item?id=14158772 https://news.ycombinator.com/item?id=14158772
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protastus 7y ago
> Its not ridiculous. How can you "negotiate" when you have 0 leverage? There is no "negotiation", ever. Why zero leverage? Government contracts contemplate volume purchasing agreements for suppliers. Many medications include alternative suppliers which can be used as leverage. As noted by others, extremely expensive treatments for rare conditions are often not offered in socialized systems. When they are, it's often the result of a court order forcing the government to make it happen. Better pricing could allow a treatment being provided as an option to the population (by default, without necessitating a court order), which can be interesting to the pharma company due to increased sales volume.

tareqak 7y ago

That doesn't make sense to me. Why would a company sell anything at a loss without some kind of complementary benefit? That's something that would lose all their investors money and have the company go bankrupt. The companies have some leverage. They can hire PR firms to basically say, "Our new drug X treats disease Y. Your country Z doesn't want to pay to help those suffering from Y". If people afflicted by Y can garner enough influence to pressure their government's health department to get X, then they might get that. If you want proof whether or not big pharmaceutical companies lose money by selling to countries outside the US, then try to find out if they would support a bill that forbids US pharmaceutical companies from selling at a price below what they charge Medicare. The comparison to a burger chain is interesting: I remember reading that McDonald's makes money from real estate as opposed to burgers here on HN a while back [0][1]. [0] http://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-beyond-the-burger/ http://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-beyo... [1] https://news.ycombinator.com/item?id=14158772 https://news.ycombinator.com/item?id=14158772

deleted 7y ago

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protastus 7y ago

> Its not ridiculous. How can you "negotiate" when you have 0 leverage? There is no "negotiation", ever. Why zero leverage? Government contracts contemplate volume purchasing agreements for suppliers. Many medications include alternative suppliers which can be used as leverage. As noted by others, extremely expensive treatments for rare conditions are often not offered in socialized systems. When they are, it's often the result of a court order forcing the government to make it happen. Better pricing could allow a treatment being provided as an option to the population (by default, without necessitating a court order), which can be interesting to the pharma company due to increased sales volume.