7 ms·

I care. Just like about the bailouts. Socializing the funding/losses and privatizing the profits is just pure corruption.

_Microft 6y ago
The nominal world economy 'GDP' was $90T in 2019 [0]. An economic contraction of 5% because of the pandemic would mean a loss of $4500B. If a vaccine helps to avoid that, even a cost of dozens of billion dollars for it would be peanuts in comparison. This is only the economic cost avoided let alone the human tragedies. Edit: german Wikipedia suggest that the contraction is only expected to be 3% but because of the numbers involved even that doesn't really matter for the argument. [0] https://en.wikipedia.org/wiki/World_economy https://en.wikipedia.org/wiki/World_economy
- strgcmc 6y ago
  This is also how criminal mobs operate, in terms of protection money, extortion, ransom, etc. The underlying economic principle is the same ("gee, sure would be a shame if this expensive thing X were to break..."). Beware of relying on this as the only reason to justify the cost. Hopefully there is some other significant differentiating characteristic or attribute to justify this state of affairs between society and big pharma, that would distinguish it from the same analysis you would use to pay a ransom or protection fee.
  - _Microft 6y ago
    This is not a good argument. We are talking about a company providing a service. They might not have invented the vaccine but they are providing the means to bring it from proof of concept into mass production. The commenter seemed to think that this isn't worth money. I argue that you get quite a bang for the buck.
    - Retric 6y ago
      The question is not if it’s valuable, the question is if it’s subsided. Farmers producing corn add some value to the process, but in western countries ~100% of their profits are from government subsidies. This does incentivize them to be more efficient, but it also means their constantly looking for a larger handout. In the case of farm subsidies it’s grown to the point of being actively unhealthy both in economic terms and the actual root cause of the obesity epidemic. Without sufficient calories you can’t have an obese population due to physics. Medical subsidies have resulted in a host of related problems not just in economic costs, but also in what research gets done and how efficient that is. The cost of Medical studies in the US has grown wildly out of proportion because their a profit center. This perversely slows down the rate of medical research, even in the case of emergencies like covid 19.
      - JoeAltmaier 6y ago
        citation? That seems very unlikely. US farmers constantly look for greater efficiencies. They are also among the most conservative about land policy i.e. erosion, chemical application etc because it costs them money.
        Retric 6y ago
        Citation for what? On average your looking at ~90B in net profits from farming, the subsidies however are much harder to track down. Ethanol subsides for example are often excluded as are insurance, tariffs etc.
        JoeAltmaier 6y ago
        So, just talking thru the hat were we? As you say, you can't point to support for that statement about '100% of profits'.
        Retric 6y ago
        Ahh, no it simply wasn’t clear what you where asking about. There are a lot of ways to slice this up. “Overall agricultural subsidies in 2010 were estimated at $172 billion by a European agricultural industry association; however, the majority of this estimate consists of food stamps and other consumer subsidies, so it is not comparable to the 2005 estimate.” https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St... One example of this is Americans for example pay 3 billion dollars more for sugar than international market rates. But, only a fraction of that directly ends up in farmers pockets. You can either take the full 3 billion as a government subsidy or exclude most of it. Similarly, propaganda and what’s allowed in food lunch programs gets tricky. So, I am not endorsing any specific estimate, just saying the total industry profits are approximately the same as the total subsidy. Add up just direct federal subsidies gets you lower numbers especially if you try an exclude state, ethanol, R&D, loans, Education, tax breaks, and other less obvious handouts. PS: Silly me, I forgot about all the little exceptions in environmental, immigration, labor laws, use of federal lands, etc.
    - strgcmc 6y ago
      It's not an "argument" per se, as in whether we should or shouldn't pay the pharma companies. Of course we should pay pharma for this for COVID, and of course it is "worth it." There is no argument (from me at least) about that tactical decision. My larger point is that for-profit pharma/healthcare is not a healthy marketplace (... or at best, it's an immature one). In the not-so-distant past (in America, up until the Civil War or thereabouts), firefighting was mostly privatized (meaning not government-run) [0], and brigades would compete (literally sometimes fighting in the streets, covering the hydrant to impede rival brigades, etc.) to claim the prize of the insurance payout for saving a building [1], which doesn't really serve the interests of the victims of fires. I think the incentives of for-profit firefighters are not all that dissimilar from the incentives of modern pharma companies today (i.e. pay us to save your building from this fire, vs pay us to research this vaccine), and I would hope to evolve this pharma industry and this marketplace (of "demand" for life/health, vs "supply" of pharma research and resources) into something more mature and with fewer perverse incentives in the long-run. --- [0] https://en.wikipedia.org/wiki/History_of_firefighting#United_States https://en.wikipedia.org/wiki/History_of_firefighting#United... [1] https://en.wikipedia.org/wiki/History_of_firefighting#Modern_development https://en.wikipedia.org/wiki/History_of_firefighting#Modern...
      - _Microft 6y ago
        I was not familiar with the history of firefighting until now and this is pretty wild. Thank you for clarifying what you meant with your earlier comment. I agree that for-profit healthcare and pharma is a huge problem, exactly because of the misaligned incentives for companies and patients.
- akie 6y ago
  You missed the point that we already paid for the development of this vaccine by paying taxes. We should now only pay for the production, not for the intellectual property rights.
- bdavisx 6y ago
  OR we could look at it as if the pandemic has already cost us 4.5T based on your figures, and that's enough. We come together and defeat the virus without anyone profiting - we all lose, we've all lost already, ffs, let's let people profit off of the death, because why not?
tomp 6y ago
If "we" gave you $20B to move a vaccine from proof-of-concept to production, could you do it? I know I couldn't... That's a service, it's worth money, it's worth paying for. Edit: people don't seem to understand that there are several stages in pharma development... (1) research, (2) trials, (3) scaling production. It sounds to me that even if (1) and (2) are "paid for" (with public money), (3) is still non-trivial and therefore expensive.
- flyingfences 6y ago
  > it's worth paying for And "we" are already paying for it. Let's not let them double-dip.
  - reegnz 6y ago
    No, we're only paying for part of 'it'. The cure isn't just research, it's also logistics and there does not exist a capable non-profit to do the logistics part of it in such a short time. Also you underestimate how much it costs to build such a supply chain capable of producing and shipping that many vaccines around the world. Hint: the research costs are just a fraction of the logistics cost, you just don't see that up front because it's also used to ship other stuff besides vaccines. These things cost money, and you assume your taxes are covering them in full. They don't.
    - teucris 6y ago
      I think the key desire is that the intellectual property, built from publicly funded research, should not be owned by a single corporation. Production and distribution are of tremendous value and these companies should be rewarded for providing that value. But the vaccine itself? Why not let others invest capital and try to produce & distribute the vaccine?
- fock 6y ago
  especially to the shareholders ... holding shares and getting dividends (and no, for a 100 year old company these people didn't invest at all in the business case. They invested in a financial product.)
leemcalilly 6y ago
This is not corrupt. It’s money well spent. The benefits to us all are most likely more valuable than anything we’ve spent on vaccine research. Government balance sheets also probably come out ahead on that investment given that the alternative is an economy with a raging pandemic and resulting lower tax base. Then there is the logistical effort of manufacturing the vaccine at the scale and speed required. There are huge capital investments and risks associated with doing that. If a company wants to do that and seek the profits from that, great. Literally everyone comes out ahead. You, me, the government, the manufacturer, distributor, and every other business or person in the economy. What is the alternative? We create a government agency that specializes in manufacturing and distributing pharma products?
- komali2 6y ago
  > What is the alternative? We create a government agency that specializes in manufacturing and distributing pharma products? Yes. Why don't you think that would work?
  - vxNsr 6y ago
    Because the government hasn't been able to do anything right for 270 years, why do you think they're suddenly gonna wake up a figure out mass manufacturing? We can't educate our kids at an acceptable level without billions of dollars being donated on top of all the tax collected, we can't figure out how to make medicare work responsibly despite literally being able to control costs, what do you think makes drug manufacturing any different?
    - guptaneil 6y ago
      In the US, one party has dedicated itself to making sure the government is dysfunctional for a _long_ time so that it can run on the platform that government doesn’t work and we should privatize everything. This is not a fact of nature, it’s a willful decision. For example, the US used to be a leader in education. The thing that changed since then is one party started defunding education and moving that money to private prisons and defense. If we as a people collectively agreed that we are as smart as other countries, there’s no reason we can’t have a functional government that can handle public education and vaccine efforts and keep us safe and maintain our infrastructure and everything else we expect our government to do for us.
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dicomdan 6y ago
Would you rather hold on to your anti-corporate principles or have a safe and effective vaccine to protect the most vulnerable in the world? These public-private partnerships aren't ideal, but there hasn't been any other way in history to develop safe vaccines on such short timeline.
tathougies 6y ago
How is this any different than a government bond program meant to finance the projects? Whether the profit is derived via increased stock price, or derived from interest paid by the government directly through taxes, how is it fundamentally different? The government can't typically just print money (to keep the economy okay). It has to either derive tax to get the funds, or borrow, which again privatizes the profit (in the form of interest).
ksk 6y ago
You don't get it. Developing vaccines is nothing like making cars. Our understanding of how the human body works is comical compared to our understanding of materials science and engineering, design and other aspects of making cars. Developing vaccines is a long, treacherous journey on a narrow ledge with cliffs on either side from start to finish. Infectious diseases research has seen a sharp decline in funding and commercial interest in general. Because of how little we know about the body, most research doesn't generate results that can be turned into money. The only way to continue to support research is via public funds and grants. The public funding of science has been a major contributing factor for our advancements in this kind of research.

_Microft 6y ago

The nominal world economy 'GDP' was $90T in 2019 [0]. An economic contraction of 5% because of the pandemic would mean a loss of $4500B. If a vaccine helps to avoid that, even a cost of dozens of billion dollars for it would be peanuts in comparison. This is only the economic cost avoided let alone the human tragedies. Edit: german Wikipedia suggest that the contraction is only expected to be 3% but because of the numbers involved even that doesn't really matter for the argument. [0] https://en.wikipedia.org/wiki/World_economy https://en.wikipedia.org/wiki/World_economy

strgcmc 6y ago
This is also how criminal mobs operate, in terms of protection money, extortion, ransom, etc. The underlying economic principle is the same ("gee, sure would be a shame if this expensive thing X were to break..."). Beware of relying on this as the only reason to justify the cost. Hopefully there is some other significant differentiating characteristic or attribute to justify this state of affairs between society and big pharma, that would distinguish it from the same analysis you would use to pay a ransom or protection fee.
- _Microft 6y ago
  This is not a good argument. We are talking about a company providing a service. They might not have invented the vaccine but they are providing the means to bring it from proof of concept into mass production. The commenter seemed to think that this isn't worth money. I argue that you get quite a bang for the buck.
  - Retric 6y ago
    The question is not if it’s valuable, the question is if it’s subsided. Farmers producing corn add some value to the process, but in western countries ~100% of their profits are from government subsidies. This does incentivize them to be more efficient, but it also means their constantly looking for a larger handout. In the case of farm subsidies it’s grown to the point of being actively unhealthy both in economic terms and the actual root cause of the obesity epidemic. Without sufficient calories you can’t have an obese population due to physics. Medical subsidies have resulted in a host of related problems not just in economic costs, but also in what research gets done and how efficient that is. The cost of Medical studies in the US has grown wildly out of proportion because their a profit center. This perversely slows down the rate of medical research, even in the case of emergencies like covid 19.
    - JoeAltmaier 6y ago
      citation? That seems very unlikely. US farmers constantly look for greater efficiencies. They are also among the most conservative about land policy i.e. erosion, chemical application etc because it costs them money.
      - Retric 6y ago
        Citation for what? On average your looking at ~90B in net profits from farming, the subsidies however are much harder to track down. Ethanol subsides for example are often excluded as are insurance, tariffs etc.
        JoeAltmaier 6y ago
        So, just talking thru the hat were we? As you say, you can't point to support for that statement about '100% of profits'.
        Retric 6y ago
        Ahh, no it simply wasn’t clear what you where asking about. There are a lot of ways to slice this up. “Overall agricultural subsidies in 2010 were estimated at $172 billion by a European agricultural industry association; however, the majority of this estimate consists of food stamps and other consumer subsidies, so it is not comparable to the 2005 estimate.” https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States https://en.wikipedia.org/wiki/Agricultural_subsidy#United_St... One example of this is Americans for example pay 3 billion dollars more for sugar than international market rates. But, only a fraction of that directly ends up in farmers pockets. You can either take the full 3 billion as a government subsidy or exclude most of it. Similarly, propaganda and what’s allowed in food lunch programs gets tricky. So, I am not endorsing any specific estimate, just saying the total industry profits are approximately the same as the total subsidy. Add up just direct federal subsidies gets you lower numbers especially if you try an exclude state, ethanol, R&D, loans, Education, tax breaks, and other less obvious handouts. PS: Silly me, I forgot about all the little exceptions in environmental, immigration, labor laws, use of federal lands, etc.
  - strgcmc 6y ago
    It's not an "argument" per se, as in whether we should or shouldn't pay the pharma companies. Of course we should pay pharma for this for COVID, and of course it is "worth it." There is no argument (from me at least) about that tactical decision. My larger point is that for-profit pharma/healthcare is not a healthy marketplace (... or at best, it's an immature one). In the not-so-distant past (in America, up until the Civil War or thereabouts), firefighting was mostly privatized (meaning not government-run) [0], and brigades would compete (literally sometimes fighting in the streets, covering the hydrant to impede rival brigades, etc.) to claim the prize of the insurance payout for saving a building [1], which doesn't really serve the interests of the victims of fires. I think the incentives of for-profit firefighters are not all that dissimilar from the incentives of modern pharma companies today (i.e. pay us to save your building from this fire, vs pay us to research this vaccine), and I would hope to evolve this pharma industry and this marketplace (of "demand" for life/health, vs "supply" of pharma research and resources) into something more mature and with fewer perverse incentives in the long-run. --- [0] https://en.wikipedia.org/wiki/History_of_firefighting#United_States https://en.wikipedia.org/wiki/History_of_firefighting#United... [1] https://en.wikipedia.org/wiki/History_of_firefighting#Modern_development https://en.wikipedia.org/wiki/History_of_firefighting#Modern...
    - _Microft 6y ago
      I was not familiar with the history of firefighting until now and this is pretty wild. Thank you for clarifying what you meant with your earlier comment. I agree that for-profit healthcare and pharma is a huge problem, exactly because of the misaligned incentives for companies and patients.
akie 6y ago
You missed the point that we already paid for the development of this vaccine by paying taxes. We should now only pay for the production, not for the intellectual property rights.
bdavisx 6y ago
OR we could look at it as if the pandemic has already cost us 4.5T based on your figures, and that's enough. We come together and defeat the virus without anyone profiting - we all lose, we've all lost already, ffs, let's let people profit off of the death, because why not?

tomp 6y ago

If "we" gave you $20B to move a vaccine from proof-of-concept to production, could you do it? I know I couldn't... That's a service, it's worth money, it's worth paying for. Edit: people don't seem to understand that there are several stages in pharma development... (1) research, (2) trials, (3) scaling production. It sounds to me that even if (1) and (2) are "paid for" (with public money), (3) is still non-trivial and therefore expensive.

flyingfences 6y ago
> it's worth paying for And "we" are already paying for it. Let's not let them double-dip.
- reegnz 6y ago
  No, we're only paying for part of 'it'. The cure isn't just research, it's also logistics and there does not exist a capable non-profit to do the logistics part of it in such a short time. Also you underestimate how much it costs to build such a supply chain capable of producing and shipping that many vaccines around the world. Hint: the research costs are just a fraction of the logistics cost, you just don't see that up front because it's also used to ship other stuff besides vaccines. These things cost money, and you assume your taxes are covering them in full. They don't.
  - teucris 6y ago
    I think the key desire is that the intellectual property, built from publicly funded research, should not be owned by a single corporation. Production and distribution are of tremendous value and these companies should be rewarded for providing that value. But the vaccine itself? Why not let others invest capital and try to produce & distribute the vaccine?
fock 6y ago
especially to the shareholders ... holding shares and getting dividends (and no, for a 100 year old company these people didn't invest at all in the business case. They invested in a financial product.)

leemcalilly 6y ago

This is not corrupt. It’s money well spent. The benefits to us all are most likely more valuable than anything we’ve spent on vaccine research. Government balance sheets also probably come out ahead on that investment given that the alternative is an economy with a raging pandemic and resulting lower tax base. Then there is the logistical effort of manufacturing the vaccine at the scale and speed required. There are huge capital investments and risks associated with doing that. If a company wants to do that and seek the profits from that, great. Literally everyone comes out ahead. You, me, the government, the manufacturer, distributor, and every other business or person in the economy. What is the alternative? We create a government agency that specializes in manufacturing and distributing pharma products?

komali2 6y ago
> What is the alternative? We create a government agency that specializes in manufacturing and distributing pharma products? Yes. Why don't you think that would work?
- vxNsr 6y ago
  Because the government hasn't been able to do anything right for 270 years, why do you think they're suddenly gonna wake up a figure out mass manufacturing? We can't educate our kids at an acceptable level without billions of dollars being donated on top of all the tax collected, we can't figure out how to make medicare work responsibly despite literally being able to control costs, what do you think makes drug manufacturing any different?
  - guptaneil 6y ago
    In the US, one party has dedicated itself to making sure the government is dysfunctional for a _long_ time so that it can run on the platform that government doesn’t work and we should privatize everything. This is not a fact of nature, it’s a willful decision. For example, the US used to be a leader in education. The thing that changed since then is one party started defunding education and moving that money to private prisons and defense. If we as a people collectively agreed that we are as smart as other countries, there’s no reason we can’t have a functional government that can handle public education and vaccine efforts and keep us safe and maintain our infrastructure and everything else we expect our government to do for us.

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dicomdan 6y ago

Would you rather hold on to your anti-corporate principles or have a safe and effective vaccine to protect the most vulnerable in the world? These public-private partnerships aren't ideal, but there hasn't been any other way in history to develop safe vaccines on such short timeline.

tathougies 6y ago

How is this any different than a government bond program meant to finance the projects? Whether the profit is derived via increased stock price, or derived from interest paid by the government directly through taxes, how is it fundamentally different? The government can't typically just print money (to keep the economy okay). It has to either derive tax to get the funds, or borrow, which again privatizes the profit (in the form of interest).

ksk 6y ago

You don't get it. Developing vaccines is nothing like making cars. Our understanding of how the human body works is comical compared to our understanding of materials science and engineering, design and other aspects of making cars. Developing vaccines is a long, treacherous journey on a narrow ledge with cliffs on either side from start to finish. Infectious diseases research has seen a sharp decline in funding and commercial interest in general. Because of how little we know about the body, most research doesn't generate results that can be turned into money. The only way to continue to support research is via public funds and grants. The public funding of science has been a major contributing factor for our advancements in this kind of research.