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> R&D companies submit proposals to the FDA for new drugs they want to develop. The FDA can also send out RFPs for drugs they'd like to prioritize. So I'm Pfiz

> R&D companies submit proposals to the FDA for new drugs they want to develop. The FDA can also send out RFPs for drugs they'd like to prioritize. So I'm Pfizer, and I think I've identified a compound to treat hypertension. I get all the way to phase 1 (which isn't cheap), only to find out that it doesn't actually work better than alternatives. What I do find out is that it's great at stimulating erections. A la peanut butter sandwiches, now we have Viagra. > The math for insurance costs and premiums would change because retails prices for most drugs would drop. That would make insurance cheaper, and some of those savings would probably need to go towards a tax for the FDA's R&D funding. Total US spend for pharmaceuticals is on the order of 10% of all spending. Since you can't actually zero that out, you're probably not looking at as much money as you think.

DougWebb 6y ago
For the viagra example, what's your point? R&D has research right in the name, and research can turn up unanticipated results. If the FDA is funding research into a compound that might be good for hypertension, and it turns out to be good at stimulating erections instead, that's fine. There's a valid medical need for that sort of drug, and there would be no problem finding manufacturers who want to pay for a license to produce it. The total US spend for pharmaceuticals include tens, hundreds, or thousands of dollar-per-dose retail cost that patients are paying either out-of-pocket or through their insurance. Those high prices are justified by two things: the cost of R&D (both for the specific drug and to cover losses from drugs that don't make it to market) and advertising/marketing. My proposal nationalizes the R&D cost so it's spread out over both the full spectrum of drugs being developed instead of just one company's drugs, and over the full taxpaying population of the US rather than just over the patients purchasing the drug. As for the advertising and marketing cost, there'd be much less incentive to push drugs as hard as they're pushed today, because there'd be no need for the manufacturing company to try to recoup the R&D cost. So long as their earnings are greater than the actual manufacturing cost and the FDA licensing fee, they're making a profit. And they'd have the whole FDA catalog to choose from when they're deciding which drugs they can manufacture and sell at a profit. I also think it would be reasonable for the FDA licensing terms to include a reasonable limit on margins and profits, so that costs for the patients are reasonable. So, nothing has to be zeroed out. So long as this setup reduces the retail cost, it'll reduce costs for the insurance companies, and so premiums can drop. That puts more money into everyone's pockets, which will make any additional taxes needed for this scheme less painful (so long as the tax is less than the premium reduction.)

DougWebb 6y ago

For the viagra example, what's your point? R&D has research right in the name, and research can turn up unanticipated results. If the FDA is funding research into a compound that might be good for hypertension, and it turns out to be good at stimulating erections instead, that's fine. There's a valid medical need for that sort of drug, and there would be no problem finding manufacturers who want to pay for a license to produce it. The total US spend for pharmaceuticals include tens, hundreds, or thousands of dollar-per-dose retail cost that patients are paying either out-of-pocket or through their insurance. Those high prices are justified by two things: the cost of R&D (both for the specific drug and to cover losses from drugs that don't make it to market) and advertising/marketing. My proposal nationalizes the R&D cost so it's spread out over both the full spectrum of drugs being developed instead of just one company's drugs, and over the full taxpaying population of the US rather than just over the patients purchasing the drug. As for the advertising and marketing cost, there'd be much less incentive to push drugs as hard as they're pushed today, because there'd be no need for the manufacturing company to try to recoup the R&D cost. So long as their earnings are greater than the actual manufacturing cost and the FDA licensing fee, they're making a profit. And they'd have the whole FDA catalog to choose from when they're deciding which drugs they can manufacture and sell at a profit. I also think it would be reasonable for the FDA licensing terms to include a reasonable limit on margins and profits, so that costs for the patients are reasonable. So, nothing has to be zeroed out. So long as this setup reduces the retail cost, it'll reduce costs for the insurance companies, and so premiums can drop. That puts more money into everyone's pockets, which will make any additional taxes needed for this scheme less painful (so long as the tax is less than the premium reduction.)